Fedwire^® Funds Service Market Convention for Dodd-Frank Remittance Transfers

Effective February 7, 2013, Fedwire Funds Service participants that send international funds transfers on behalf of consumers located in the U.S. (“remittance transfers”) may become subject to the remittance transfer requirements contained in the Consumer Financial Protection Bureau’s final rule implementing section 1073 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Section 1073 of the Dodd-Frank Act”) (Off-site).

The Federal Reserve Banks are aware that many of the major U.S. dollar correspondent banks are planning to enter into bilateral agreements with their respondents to facilitate compliance with these new requirements.

For those institutions that enter into bilateral agreements, the Federal Reserve Banks developed a standard practice (market convention) for identifying remittance transfers sent via the Fedwire Funds Service.

Fedwire senders and receivers that have agreed with one another to apply special handling to remittance transfers are advised to follow the market convention.

The crux of the market convention is for banks to identify remittance transfers in a Fedwire customer transfer message by inserting a three-character codeword between slashes (i.e., /CTO/, /CTB/ or /CTS/) at the beginning of any line (preferably line 1) of tag {6500} FI to FI Information.

Read the Fedwire Funds Service Market Convention for Remittance Transfers (PDF).

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