Chase Bank U.s. Cracking Down On International Funds Transfers...

[jfchandler]

I received this online banking message from Chase Bank U.S. earlier this week...

Dear Chase Online Customer,

We've recently made some revisions to the terms and conditions of your online bill payment and transfer services. You're receiving this notice because these changes involve one or more of the online agreements you previously reviewed and accepted.

Unless otherwise stated below, all changes will be in effect and reflected in our online agreements on October 25, 2009.

Here's a brief summary of the changes:

* We have extended the Cutoff Time for scheduling Internal Transfers from 8:00 PM Eastern time to 11:00 PM Eastern time on any Business Day, except for internal transfers to a Chase mortgage, which have a Cutoff Time of 7:30 PM Eastern time on any Business Day.

* Also, if you schedule a bill payment or transfer after the Cutoff Time and the Send On date is the next Business Day, we may begin processing that request immediately and withdraw the funds from your account.

* We have added language to clarify that it is prohibited to use our bill payment and/or transfer services for International ACH transactions.

Maybe they don't like their customers trying to avoid their hefty international wire transfer fees....

[Tim207]

I received this online banking message from Chase Bank U.S. earlier this week...

Maybe they don't like their customers trying to avoid their hefty international wire transfer fees....

I have had Chase change the rules of a credit card unfairly and I would never trust them again. I used one of their low interest teaser rates. I figured 3.99% for the life of the loan so I paid the minimum monthly and used the money for investments. Chase has decided that they want to get these teaser loans off their books and since they can't unilaterally raise the agreed interest rate they instead raised the minimum monthly payment from 2% of the loan to 5% of the loan on any of these loans in which people were just making minimum payments. That is a pretty shady way of doing business in my opinion. I have no intention of using any service of Chase in the future.

Luckily I have a small regional bank that appreciates my business and they now get all of it.

[ballzafire]

They pulled my credit line for non-use last year when all h--l was breaking loose.

Well, I wasn't using it for a reason, too, (uncompetitive rates) and so don't miss it.

[Jingthing]

I have been saying this for a long time. Those of you who depend on schemes to avoid using the SWIFT system for transfers to Thailand should not assume this is going to last. The US government wants these transfers to be SWIFT. They keep an eye on all SWIFT transfers and they like it that way. I wouldn't even blame Chase for this one, and I am no fan of Chase.

[ryladie99]

I received this online banking message from Chase Bank U.S. earlier this week...

Maybe they don't like their customers trying to avoid their hefty international wire transfer fees....

I have had Chase change the rules of a credit card unfairly and I would never trust them again. I used one of their low interest teaser rates. I figured 3.99% for the life of the loan so I paid the minimum monthly and used the money for investments. Chase has decided that they want to get these teaser loans off their books and since they can't unilaterally raise the agreed interest rate they instead raised the minimum monthly payment from 2% of the loan to 5% of the loan on any of these loans in which people were just making minimum payments. That is a pretty shady way of doing business in my opinion. I have no intention of using any service of Chase in the future.

Luckily I have a small regional bank that appreciates my business and they now get all of it.

Go for it my friend....After 911, I know the US Government is monitoring any money activity around the world...Plus the offshore bankings as well. In United States 7500 persons already came forward and took Amnesty recently...Be careful, these banks will do anything for Money to pay back from the last Bail out.....in another sense the American tax payers own the Bailed out Banks..as such Bank of America, Chase, Citi, ...etc...my take and opinion.

[JimGant]

I have been saying this for a long time. Those of you who depend on schemes to avoid using the SWIFT system for transfers to Thailand should not assume this is going to last. The US government wants these transfers to be SWIFT. They keep an eye on all SWIFT transfers and they like it that way.

ACH is not an illegal "scheme" of sending money to Thailand. However, as it was set-up for US domestic electronic funds transfers, its involvement with international funds transfers, using US based foreign banks or US correspondent banks, precluded adequate tracking. So, we have the following:

Effective September 18, 2009, the National Automated Clearing House Association (NACHA) will require a new format for certain ACH transactions. ACH transactions that are part of a payment chain that begins or ends in another country outside of the U.S. must be formatted as a new ACH transaction type, IAT (International ACH Transaction). Transactions that begin as ACH payments destined for other countries will also be classified as IAT transactions. Please note that this change does not affect international wire transfers.

The new IAT format is designed to help law enforcement agencies detect, investigate and prosecute money laundering and other financial crimes by creating and preserving an information trail of entities sending and receiving funds through U.S financial institutions' monetary systems.

Chase -- and probably several others -- are dealing with this by simply saying their BillPay systems are not meant for international transactions -- and, as such, they're certainly not going to reprogram their ACH software to accept the IAT code.

I use USAA, and it's a simple ACH transfer action on-line (it's not a BillPay) to send money to Bangkok Bank New York's domestic ABA address, for forwarding to my Bangkok Bank account in Thailand. As far as the system knows, this is strictly a domestic transaction. And I'm sure I could send money right now, without having somebody, somewhere, insert the new IAT code. But, I'm now not in compliance with the new law. Same for folks having their pension and Social Security checks direct deposited via Bangkok Bank New York (unless the check issuers know the money ends up in Thailand, which is doubtful, unless so told).

Maybe Bangkok Bank New York will insert the code....... (although everything I've read says this has to be done with the initiator of the transaction).

Anyway, this will all sort out -- eventually. And the Feds now have, in theory at least, a method to keep tabs on international ACH transactions.

But I really dislike spending $35 for a SWIFT transfer (vice $10 for ACH), and having to make a phone call (vice doing an ACH on-line).

Phuck it. Maybe I'll just ignore the new guidance -- as the mechanics for a "domestic" ACH are still in-place....... (What! Ignorance of the law is no excuse! Really? )

[jfchandler]

Jim, I'm not sure I understand any of that announcement you posted above, or what implications it might have for us folks in the U.S. to Thailand ACH business... And I always wonder where you come up with tidbits like this... Quite resourceful, I must say...

At least for Thailand banks, right now, you can't send an international ACH from the U.S. to Thailand. And I think there are few if any similar options for going from Thailand to the U.S., other than a traditional wire. The only way you can do it, at least as far as I know, is things like the BKKB New York route, which at least starts out as a domestic U.S. ACH.

So under this new system, are they going to try to change/re-regulate those kinds of transactions???

(By the way, I differ with you a bit, in that I think the current banking system probably right now can figure out that a ACH sent to the BKKB New York branch probably is destined ultimately for outside the U.S., since that branch location doesn't have any retail accounts of its own, and each recipient info reflects a BKKB Thailand account number).

Or is there some other kind of international ACH activity (maybe between other countries and the U.S.) that doesn't operate here in Thailand???

And regarding Chase's announcement, for example, does that mean they'll do longer allow their U.S. customers to link their accounts for ACH purposes to quasi-foreign banks like BKKB??? Or disconnect those already connected, like BofA did at one point in the past?? Or are they talking about some other kind of thing when they say "transfer services"???

[Carmine6]

People seem to be over interpreting a change of terms and conditions by Chase to mean a change in the law.

The original suspicion that "Maybe they don't like their customers trying to avoid their hefty international wire transfer fees...." seems the correct one to me. Of course legal counsel will probably sign off on it being necessary to meet regulatory requirements related to money laundering and anti-terror laws.

I suspect the real ACH volume they're worried about is going to a South American, Mexican, Bahamiam, or Canadian destination. I also think pension payments will continue to be ok since they're being sent by financial firms to known persons. Pension funds are huge bank customers so annoying them isn't a good move. Annoying pensioners isn't a good pr move either.

Edited October 18, 2009 by Carmine6

[jfchandler]

Carmine, no, I don't interpret any of this (Chase's announcement or Jim's post) as reflecting changes in law. It's all bank policy and/or regulatory stuff.

Re Chase, even though I'm only marginally a customer of theirs, I think I understand the "bill pay" reference. Some banks' online bill pay systems have the capacity to send money not just to companies and businesses, but also to individuals or even family members, by specifying their name, account info and sometimes other stuff. Theoretically, depending on the bank involved, you could specify a bill payment to someone outside the U.S. So I'm assuming Chase is now saying, no, we won't let our Bill Payment system send to anyone outside the U.S. That I can understand.

But the added reference to also not allowing foreign payments via their "transfer services" is what has me perplexed. What kind of transfer do they provide now, other than traditional wires, that reaches foreign destinations??? And if they are referring to things like the BKKB New York method, then, I'd ask again, does that mean they'd try to stop their customers from establishing ABA links to there???

[JimGant]

Jim, I'm not sure I understand any of that announcement you posted above, or what implications it might have for us folks in the U.S. to Thailand ACH business.

It really is a big, confused situation (Google on 'international ACH transactions' if you want an earful).

This new rule applies to all ACH participants and will simplify the process of identifying international transactions by requiring that International ACH Transaction (IAT) entries include specific data elements defined by the Bank Secrecy Act (BSA). This will make it easier for depository financial institutions to comply with U.S. laws, such as requirements by the Office of Foreign Assets Control (OFAC). The new rule will also define new parties to the IAT entry and re-define gateway operator obligations.

Picking the above quote apart, a couple of things stand out. First, this is governed by law -- and there are some pretty stiff fines involved for non compliance. Second, the "re-define gateway operator obligations" probably will impact Bangkok Bank New York -- and your ACH transfer through them will now contain all the information currently required for SWIFT transfers, so called "Travel Rule" information (i.e., originator name/physical address/deposit account number, originator’s depository institution name, payment amount, receiver name/address/account number, and the receiver’s financial institution).

Now, how all this will be implemented -- and will it be transparent to me -- I don't know. For example, my bank (USAA) gets my request for an ACH transfer to Bangkok Bank New York. It looks just like any other transfer to a domestic ABA address. But now some new data elements (the "Travel Rule" stuff) need to be included. How will USAA know they need to do this? Or will Bangkok Bank New York do it on their end (or message USAA to do it on their's -- thereby slowing the process)? Anyway, sounds like a goat rope. I'll find out soon, as I just fingered in an ACH transfer to Bangkok Bank.

Now for Chase:

We have added language to clarify that it is prohibited to use our bill payment and/or transfer services for International ACH transactions.

Prohibited, ok. But maybe not mechanically preventable, so this message maybe is a legal CYA.

Now, the following from this Chase link: Click Here

* IAT transactions are prohibited on Chase Commercial OnlineSM, PayStream, JPMorgan Insight and JPMorgan Treasury Workstation. If your company uses one of these platforms and needs to make an international payment, please use International Wire Transfers or contact your Chase Commercial Banker to discuss other options for transmitting these transactions.

* PaySource users will be able to schedule IAT ACH transactions beginning September 18, 2009.

* JPMorgan ACCESS users will be able to schedule IAT ACH transactions later this year.

* If your company will use PaySource or JPMorgan ACCESS to submit an IAT ACH transaction, you will be required to revise the data file that will be used for IAT transactions.

Ok, so Chase does have one network (PaySource) up and running to accommodate IATs -- and another one being modified to do so later in the year. But, obviously, at some expense -- probably why not all networks are being modified to the new guidelines for IATs.

And, for those who want to send IATs, you need to modify your applicable ACH data file to comply with the new regulations.

So, I guess when USAA figures all this out, I'll hear from them about some kind of modification/flagging on my 'send' link to Bangkok Bank New York. Or maybe it will easier just to follow Chase's example -- and prohibit IATs.......... Barf!

Clear as mud, no?

[jfchandler]

Jim, thanks for the additional info.... I don't know that all this is bad, but I think it's too early to tell...

Part of this says to me...the U.S. banking system/government is recognizing there is a demand for this kind of online international banking activity in the modern world, and they need to respond to it. So, they're coming up with some kind of new processing/regulating approach to govern it so that the money launderers, etc. don't run wild. That says to me, hopefully, under the new IAT system, more U.S. banks will eventually move to allowing online initiated international transfers.

Citibank already has that capacity. And, as I reported in another thread here back in July, BofA earlier this year added the ability to do online international wire transfers via its online banking module. (In fact, they've said they are no longer going to allow in-branch international wires at all!!!) The BofA online setup is pretty clean, clear and effective, and gives you a choice of what currency you want to send. Unfortunately, being that it IS BofA, their pricing is $45 to send in U.S. $ and $35 to send in foreign currency, where they make more of a profit by doing the exchange.

But the good part of the BofA deal (as much as I hate BofA for its terrible treatment of expats) is that the online international wire transfer functionality is a standard part of their regular online banking module... You don't need to have any special balance or account status to take advantage of it. That and their per wire sending amount limits are HUGE... more money than any expat would ever need to send in a single wire. So that makes it nice...

There is another thread running on TV now by some UK folks talking about HSBC adding online international wires in the UK. But it's not clear from the posts whether they're talking about the same old Premier account features, which allow online transfers among only HSBC accounts in different countries if you have $100,000, or if it's a real online international wires capacity. Since they're talking about HSC charging a 17 pounds fee per wire, I think it's some kind of new capacity similar to Citibank.

But...I can see nothing like that have been added as yet to HSBC accounts in the U.S. Maybe they're waiting for the new IAT stuff to work itself out.

As for the Chase info you posted and linked, that too is interesting... Particularly in that those systems appear to be in their commercial banking module. But I could find no mention of those international systems on their personal banking/consumer services area.

[My Friend Same]

I received this online banking message from Chase Bank U.S. earlier this week...

Maybe they don't like their customers trying to avoid their hefty international wire transfer fees....

I have had Chase change the rules of a credit card unfairly and I would never trust them again. I used one of their low interest teaser rates. I figured 3.99% for the life of the loan so I paid the minimum monthly and used the money for investments. Chase has decided that they want to get these teaser loans off their books and since they can't unilaterally raise the agreed interest rate they instead raised the minimum monthly payment from 2% of the loan to 5% of the loan on any of these loans in which people were just making minimum payments. That is a pretty shady way of doing business in my opinion. I have no intention of using any service of Chase in the future.

Luckily I have a small regional bank that appreciates my business and they now get all of it.

that's strange, I have 4 chase cards with these transfer balance rates on them and they never upped my minimum payment, still at 2%. maybe they thought you were a long term risk