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#306080 - 01/20/05 05:08 PM Foreign Conversion Fees?

All, I'm somewhat ignorant on this topic. I did attend a Compliance seminar which discussed the ongoing litigation surrounding the MasterCard/VISA foreign exchange fee, and I also believe many banks are involved in a NY class action regarding this topic. I've recently been told that MC is going to impose its 1% fee directly to our bank rather than customers (my guess is to insulate itself), so in reaction we are contemplating passing this fee contractually through our CMA. However, some are also suggesting charging a 3% fee... is this a huge area of exposure given the unresolved actions, even if it is properly disclosed?

Thanks in advance for any guidance!

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General Discussion
#306081 - 02/04/05 09:56 PM Re: Foreign Conversion Fees?
Ann Offline
Platinum Poster
Joined: Jul 2001
Posts: 550
South Carolina
I'm bumping this question from Anon back to the top because I need some additional answers as well. I am aware of the generic disclosure notice about the change to foreign currency conversion rates imposed by Visa, but do we have to be more specific in our disclosure about this 1% transaction fee if we plan to pass this on to the customer? How are other banks planning to comply with this Visa rule? BankersSystems says they are not planning to update our Reg E disclosure, but will provide the standard disclosure notice for a one-time mailing to existing customers.

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#306082 - 02/17/05 03:57 PM Re: Foreign Conversion Fees?

For debit cards, will we need a Reg. E disclosure 21 days in advance? We're not really "increasing" the fee, just changing the source of the fee - from VISA passing it on to the debit card hold, to VISA passing it on to us for us to either absorb or pass along to the card holder. I wouldn't think a change in terms notice is needed, but I'm hearing otherwise. Any thoughts on this?

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#306083 - 02/17/05 04:00 PM Re: Foreign Conversion Fees?
pguttormsson Offline
New Poster
Joined: Dec 2004
Posts: 8
My question. Sorry - I forgot to login before posting.

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#306084 - 02/17/05 07:01 PM Re: Foreign Conversion Fees?
Tena Offline
Joined: Jul 2003
Posts: 72
We are also in the processing of implementing this fee and in my opinion: (1) a change in terms notice is required; this is a "new" fee the bank will be charging -- before it was a fee assessed by Visa or Mastercard (not the bank) and (2) for credit cards the fee is a finance charge.

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#306085 - 02/17/05 07:18 PM Re: Foreign Conversion Fees?
Princess Leia Offline
Diamond Poster
Joined: Jun 2004
Posts: 1,975
We are handling it exactly as Tena posted. The terms change notice went out with the last statement. You also need to provide an opt-out period for the customers that decline the change in terms and close their account.
Duct tape is like the force: It has a light side and a dark side and it holds the universe together.

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#306086 - 02/22/05 09:17 PM Re: Foreign Conversion Fees?
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 527
We weren't made aware of this fee until a few weeks ago, and we were told it would only be applied to credit card transactions. Never did we consider the debit card side of things. That being said, the last of our statements with messages will mail on 3/16, just in time for the 15 days required by Reg Z. However, are we going to have an issue since Reg E required 21 days?? I believe our credit card dept just stated that this will be for debit cards as well. UGH!!

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#306087 - 03/11/05 09:42 PM Re: Foreign Conversion Fees? *DELETED*
Joined: Feb 2004
Posts: 67
Post deleted by SHORT STUFF
Last edited by SHORT STUFF; 03/16/05 08:09 PM.
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