Banks Curtail International Money Transfers – NYTimes.com
Regulation July 14, 2014 Comments Off on Banks Curtail International Money Transfers – NYTimes.com 108JPMorgan stopped its Rapid Cash program in November, partly because the bank grew concerned about some of the risks, a spokeswoman said. As part of its program, JPMorgan had teamed up with the large Mexican bank Banorte. Many people picking up remittances in Mexico sent from Chase branches in the United States were not customers of Banorte, making it more difficult to monitor them.
Last year, Bank of America canceled its SafeSend product, regarded as one of the least expensive ways for immigrants to send money to Mexico. A spokeswoman said the bank canceled the product because of “limited demand” and would not elaborate. A BBVA spokesman declined to comment on the possible sale of its Bancomer Transfer Services unit.
Some banks still make certain wire transfers to Mexico, but the costs of such services can be five times as high as a typical remittance, making it prohibitive for many immigrants.
Even if banks invested in new software to screen for worrisome transactions, they would still have to manually investigate many suspicious activities and report them to regulators. Banks fear that a single mistake could lead to costly penalties like the $1.9 billion settlement that the British bank HSBC agreed to pay over money laundering issues in 2012. HSBC has stopped paying out remittances at its Mexican branches.
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