Banks Complain to Consumer Watchdog About Money-Transfer Rule

   By Maya Jackson Randall 

WASHINGTON--Banks are asking a federal watchdog for more time to comply with a rule designed to protect consumers who send money abroad from excessive fees.

In a letter to Consumer Financial Protection Bureau Director Richard Cordray Wednesday, banking groups said they need an extra year to comply with key elements.

With the rule set to take effect in a few months, banks are working to track down data on foreign taxes and overhaul their systems in order to provide consumers the required information on fees and exchange rates.

"There will be significant negative consequences for consumers" if banks aren't granted an extension, wrote the Clearing House Association, American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America and NACHA--The Electronic Payments Association.

If banks are forced to comply by Feb. 7, 2013, consumers' access to wire-transfer services will be restricted "and they will no longer be able to reach all the people and places they can reach today," the associations added.

Mr. Cordray this week acknowledged the fee disclosures "are proving to be a difficult requirement" and said the agency will consider ways to help. But one of his staffers said the bureau does not plan to delay the effective date. The CFPB hosted a webinar Tuesday to answer the industry's compliance questions.

The world's 215 million international migrants transferred about $372 billion to developing countries in 2011, up from $332 billion in 2010, says the World Bank

While some banks have grown more interested in tapping into this consumer market, banks' activity pales in comparison with that of Western Union Co. (WU) and MoneyGram International Inc. (MGI), which respectively handled $73.2 billion and $15.3 billion in cash transfers last year, according to Aite Group. Wells Fargo & Co. (WFC), a leading banks in the market, remitted more than $1.8 billion in 2011.

   Write to Maya Jackson Randall at 
   [e-mail] 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires