According to an essay by Raymond Natter, the Consumer Financial Protection Bureau and the Dodd-Frank Act may cut off payments to conflict-torn areas.
The essay, published Tuesday in a Boston University study of remittances and post-conflict states, says new CFPB regulations that will protect consumers may deny remittances to rebuild countries after a crisis. Natter writes that once the rule takes effect on Oct. 28, regulatory burdens could cause remittance providers to leave the field.
"Post-conflict zones often lack the stable financial institutions and infrastructure needed to track remittance payments with the precision that the CFPB's rules require, the report says," writes American Banker's Chris Cumming. The 2010 Dodd-Frank Act put into place regulations to protect consumers sending remittances from abroad to his or her country of origin. The CFPB released the final rule on remittance payments in May.
"The U.S. regulatory requirement for advance notice and/or publication of consumer fees is certainly not the norm in many parts of the post-conflict world, and the regulatory language does not take that into account," Natter writes.
For the full piece see "CFPB Regs May Cut Off Payments to Conflict-Torn Areas: Report" (may require subscription).