Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.

Bank discontinuance and de-risking of MSBs/MTOs/money transmitters is still a major global problem industry-wide, but we think there has been a slight shift in the discussion with reports, regulations, and statements being published that gives us a sense of the issue moving forward; the small positive steps might seem irrelevant to a number of companies caught with limited or no banking relationships.

The World Bank report entitled, “Report on the G20 Survey on De-Risking Activities in the Remittance Market,” published in November 2015, must be read by everyone. In total, 13 governments, 25 banks, and 82 MTOs completed the survey and, despite the relatively low response rates (mostly on the banks’ side), the MTOs that responded, in terms of market share of the overall remittance market, can be considered quite substantial. One key statement in the report is the fact that, “Neither banks nor MTOs cited AML/CFT-related violations or sanctions by MTOs as one of the top five reasons for account closures.”

In the European case the Revised Directive on Payment Services (PSD2), published in November 2015, contains a very important regulation that cautions banks to provide “. . . payment accounts services on an objective, non-discriminatory and proportionate basis.” It adds that, “Such access shall be sufficiently extensive as to allow payment institutions to provide payment services in an unhindered and efficient manner.” (Check chapters 35 and 36.)

At IMTC WORLD 2015 several speakers provided opinions and insights, from FinCEN Deputy Director, Jamal El-Hindi, to a panel moderated By Leon Isaacs, Antonio Selas major successes in Spain, and comments by remittance expert Manuel Orozco (who subsequently published in December 2015, his document entitled, “Bank Account Closures: Current Trends and Implications for Family Remittances.” There is also some evidence that some smaller banks are opening accounts to industry firms amidst higher costs and strict compliance requirements.

NEW INFORMATION (2/12/15):

1. The US House of Representatives voted Thursday , Feb. 4 to end Operation Choke Point, the Department of Justice initiative to use regulatory agencies to force banks to close the accounts of customers, individuals & businesses suspected of engaging in illegal activity (AML, fraud) without due process and with no need for open accusations or legal charges brought forward. The bill would prevent banking regulators from forcing banks to close the accounts unless they have material cause. The White House might veto the bill and released an Statement of Administrative Policy opposing H.R.766
2. Banco de Mexico spokesman Ricardo Medina informed (see news article) that the country’s central bank will soon unveil an electronic system designed to ease U.S. dollar transfers in the US-Mexico corridor. The central bank’s system, SPID (Sistema de Pagos Interbancarios en Dólares) will provide transparency and anti-money laundering controls. Currently, bank transfers that begin and end in Mexico account for about one-third of the funds moving between the two countries, according to a central bank survey. Much of that money is routed through U.S. correspondent banks,

NEW INFORMATION (2/29/15):

1. The FATF-GAFI Guidance – A Risk-Based Approach for Money or Value Transfer Services hast just come out. It devotes one chapter on the issue of “Access of MVTS to Banking Services” acknowledging the industry’s efforts to denounce the global bank access problem that we face. As Ms. Adeleke states: “This is a timely and helpful addition to the ongoing global conversation about remittance service providers’ access to bank accounts.”The report it gives ample assurance to banks that a proper RBA (Risk-Based Approach) will certainly give the bank information to see each MTVS client as a Financial Institution and that “one of the elements which could act as a risk mitigant is the fact that MVTS providers are regulated financial institutions that are subject to the full range of AML/CFT obligations, supervision and monitoring”. Please read the Blog on this Guidance or the Summary – Full Report (69 pages).

Continue reading The 10 Most Important Issues of the International Money Transfer & Payments Industry for 2015 in this Blog or  To download the PDF go to Download/IMTC Publications.