The Consumer Financial Protection Bureau will revise rules for international money transfers after banks complained that the agency’s current plan could push some of them out of the business.
The bureau, which had said final regulations on so-called remittances would take effect Feb. 7, plans to issue a proposed revision in December, according to a statement on Tuesday. The changes will address what should happen if a consumer provides an incorrect account number for a transfer and how remittance providers must disclose third-party fees and foreign taxes.
‘‘We think these changes will make the rule workable, and make it possible for them to keep offering the product,’’ said Janis Bowdler of the National Council of La Raza, who was briefed on the changes by the bureau’s director, Richard Cordray. ‘‘We don’t want to see a mass exodus from the product, but we do want to see industry be responsible,’’ said Bowdler, who directs La Raza’s wealth project.
Cordray had rebuffed bank lobbyists’ request for a delay during an Aug. 10 meeting to discuss the rule. Industry groups then outlined what they saw as problems with the rule in an Oct. 17 letter.
The change announced Tuesday may have been prompted by the Federal Home Loan Bank of New York’s saying it would stop processing international wire transfers for members as a result of the rule, said Robert Rowe, chief counsel of the American Bankers Association. The question is whether the changes come in time to keep other banks from exiting the business, Rowe said.
‘‘The sooner they get something out the better,’’ he said. ‘‘We are starting to get to the point where banks have to fish or cut bait.’’
Cordray’s reversal ‘‘is a prime example of industry, consumer groups, and government coming together to find a positive solution,’’ said the Consumer Bankers Association.
The rule is designed to improve consumers’ understanding of costs. It affects banks that make international transfers, as well as nonbank firms like Western Union. Banks have complained it requires them to tell customers of costs they can’t know, such as local taxes where money is picked up.
The new effective date for the rule will be in the spring.