Next year, when my son is spending his junior year of college studying in Japan, it’s likely that I’m going to find myself wiring him some money. What’s unlikely is that I’m going to be doing it through my local community bank.

Thank you, Consumer Financial Protection Bureau. You’re about to make this consumer’s life miserable.

The CFPB is looking at wholesale changes to international wire transfers under Regulation E, essentially taking a meat cleaver to the current rules that govern such transfers. In the name of providing better consumer safety, it’s taking a course of action that’s going to result in fewer consumer options, higher costs for consumers, and, in the end, won’t likely do much to fix the perceived problem.

What the CFPB wants to do, naturally, sounds reasonable until actual consideration is given to the notions, such as:

The CFPB wants "remittance transfer providers" – known as RTPs, but essentially the institution responsible for initiating the wire transfer – to provide consumers with up-front disclosure on numerous issues, such as what taxes will be taken out on the receiving end, what the exchange rate will be at the time of acceptance by the receiving party, and what fees will be charged both by the initiating institution and the institution at the other end of the transfer.

The "consumer protection" issues here are ostensibly to ensure that people sending money to someone in a foreign country aren’t nickel-and-dimed out of most of the money.

But it’s hard to see how originating banks – how any kind of originating institution – can keep abreast of the fees charged by the hundreds of thousands of other financial institutions across the globe. How are they to know the funds availability policies of all the potential receiving banks in the world? And if the money is sent while banks are closed (because of time differences) and the exchange rate changes in the interim, what are the originating banks supposed to do?

The CFPB’s proposed new take on international remittance transfers has community bankers across the region scratching their heads. The proposed rule changes are exhaustive, complex and in parts unintelligible. Even if local banks want to comply with all the CFPB’s points, this is money going to people through foreign banks. Those foreign banks don’t give a damn about the CFPB or Reg E. But it is not as if the originating bank designates which foreign banks it will work with. It is the consumer who does that – it’s just the banks that have to live with the consequences, if the transfer goes awry.

That’s why the scuttlebutt going on in the banking community is that local community banks are likely to just stop offering international wire transfers. The fees are too low, the burden too much, and the liability is going to be jarring. It’s just not going to be worth it to them to be in this line of business.

Stacked Deck

So if you’re a consumer who sends money to family in the old country, or to friends and relatives traveling abroad, you had better hope there’s a Bank of America, a Chase Bank or a Wells Fargo somewhere near where you live. They may be the only institutions sizeable enough to justify complying with everything that the CFPB wants.

That, however, is just speculation. Because even the big banks may not be able to meet the proposed requirements. And that may leave consumers wondering who in the world will be willing to wire money internationally.

The CFPB rules don’t become final until early next year, and the organization is looking for input. What they’re getting is a lot of sentiment from consumers, who want to see banks strangled by regulation. But while various banking trade groups have weighed in on the issue, the CFPB hasn’t gotten a lot of feedback from individual banks.

Maybe that’s because the banks are shrugging their shoulders in resignation that the deck is stacked against them. They’d like to offer some common sense changes. But it’s hard to argue for common sense when the CFPB has emotional and impassioned advocates for one side of the issue leading the charge from within.

Usually, when regulators are considering changing the rules, they at least act like they’re dispassionately mulling things over. Not at the CFPB, and certainly not on this issue. Nick Rathod is the CFPB’s assistant director for Intergovernmental and International Affairs. He wrote a personal essay in which he remembered his South Asian parents having difficulties with wiring money back home. He didn’t say who was responsible for those difficulties – whether it was local banks or the ones in Asia – and he didn’t explore the possibilities that the problems might have been caused by senders other than banks (Western Union, anyone?).

No, he just wrote a little tale of his parents wondering if the money was going to arrive safely. He painted a picture of desperate consumers in at both ends, unwary, scared and defenseless. And he posted his reminiscences to the CFPB’s blog, and to the website of the White House.

Last week, the Independent Community Bankers Association sent out an urgent survey to community bankers begging them to speak up about this issue. Many local lenders did indeed answer ICBA’s survey. But it’s still the organization as a whole trying to deal with the CFPB.

It’s unlikely they’re going to get very far, especially when the bureau’s leadership is already blogging about how proud they are with the changes they plan to impose.

So when my son heads out to Japan next year, I’m probably going to either be paying a whopping fee to Bank of America, which will have cornered the market on international consumer wires, or throw up my hands in frustration. Then I’ll stuff a wad of bills in his pocket, and hope he doesn’t get robbed or careless in his travels.

Yeah, that’s a lot better than the situation we have now.

Vincent Michael Valvo is CEO of Agility Resources Group LLC. He can be reached at vvalvo@agilityresourcesgroup.com.