It promises full disclosure to the consumer to prevent hidden fees from being taken out of the remittance amount. While this may seem straight-forward, the current constructs of the banking industry do not make this simple. Banks would prefer that they already had this transparency for transactions as they are processed. A full view of all the costs – lifting fees, bank fees and taxes to be applied could help to eliminate a certain amount of after the fact research and inquiry that is a part of standard processing today.
As it is, Dodd-Frank has brought forward the need to communicate a level of disclosure as accurate as possible. So what must a bank do? The degree of automation with which banks implement the rules will have a significant impact on whether the cost of processing becomes permanently more costly. Is it a one-time event to automate the Dodd-Frank legislation or does the legislation have a lingering effect of requiring more manual intervention per transaction that is ultimately more costly over the long run?
As banks implement these rules, the focus should be on how to do this efficiently. For example, in order to observe the required 30 minute hold time, does a bank operator have to manually monitor the transaction or is it done automatically. Done right, the Dodd-Frank implementation will provide the necessary disclosures and required hold time in an automated, efficient manner. Done right, Dodd-Frank does not ultimately cost the consumer more in the form of increased manual labor fees.