Most banks are pessimistic on the likely impact of section 1073 of the Dodd-Frank Act, expecting it to provide little benefit for consumers but with far-reaching negative effects for the payments business, according to Fundtech. The declared aim of 1073 is to provide consumers with transparency into the timeliness and cost of making remittance transfers.
However, a survey of banks carried out last month by the banking software group found that 90% believed that the impact on their payments business would be somewhat negative or extremely negative. Less than 5% were optimistic that 1073 would be beneficial. Asked whether consumers would benefit from 1073, 52% of respondents said that the impact would on balance be negative and only 2% expected the regulation to deliver the intended benefits.
Dodd-Frank 1073 mandates that consumers are given 30 minutes to cancel cross-border transactions, although only 2% of banks state that consumers rescinding orders is a frequent occurrence. Of those banks that knew the frequency, 43% stated that consumers never rescind orders.
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However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.