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Wire Transfer Rules Amended

New Effective Dates Released
FinCEN (Financial Crimes Enforcement Network) and the Federal Reserve Board have issued amendments to the wire transfer rules; extended the effective date of the first rule from April 1 to May 28, 1996; and noted the effective date of the implementation of the travel rule as January 1, 1998.

The first rule requires banks and non-bank financial institutions to collect and retain information about transmittals in the amount of $3,000 or more; it also requires the verification of the identity of non-account holders involved. The second rule, also known as the travel rule, requires the passing along of certain information from and to all financial institutions participating in the transmittal. The amendment clarified certain terms in the first rule, so that they now agree with the terms used in the Uniform Commercial Code. Effective date on the collection of information and verification of identity of non-account holders is May 28,1996.

The effective date for the travel rule will be January 1, 1998 when the new, expanded Fedwire format will be able to accommodate all the information that must be passed from originator all the way through to beneficiary financial institution. Until that time, a "Safe Harbor" provision, now in effect, says financial institutions will be considered in compliance with the travel rule provided they cooperate with one another in reconstructing and providing manually, as necessary, all information otherwise required to be forwarded electronically. This cooperation also extends to responding to formal requests from law enforcement and regulatory authorities.

Copyright © 1996 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 6, No. 6, 4/96




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