WOCCU to address ACH gateway's effect on CUs
CUNA News Now Reprint
MADISON, Wis. (2/19/04)--The lack of access to
financial service in Mexico and developing
countries may be a hindrance to the Federal
Reserve's new "gateway" service, which lets banks
and credit unions use the automated clearing
house (ACH) to send money to Mexican financial
The Fed introduced the service Tuesday after
piloting the project for a year.
However, unlike Western Union wire service run
First Data Corp. or World Council's international
remittance program, IRnet, the Fed's program
requires that both sender and recipient have a
According to Dave Grace, senior manager,
international trade association at WOCCU, "The
requirement of having a 'bank' is absolutely a
hindrance, as 65% to 85% of Mexicans in Mexico
are unbanked." He said he'll address the issue of
the lack of access in a presentation to the World
Bank staff later this week.
WOCCU and CUNA have been working with the
Fed "for some time. WOCCU/CUNA helped move this
along via our Senate banking committee testimony
in February 2001 and discussions with Senate
staff," says Grace.
"We also provided Fed staff names and contacts
credit unions as potential users of the service,"
"One of my biggest concerns with the system,
however, is that Mexican credit unions do not
have direct access to this payment system in
Mexico. In the U.S., it's unimaginable that U.S.
credit unions should have access to central bank
clearing and settlement systems."
However, "we continue to work with the Fed and
Banco de Mexico on this issue," says Grace.
According to American Banker (Feb. 18), the
Mexican and Canadian services are one-way
channels of funds flowing out of the U.S. The Fed
had planned two-way flows in service to five
European countries, but last fall the Treasury
Department's Office of Foreign Assets Control and
NACHA, the electronic payments association,
raised concerns about screening controls.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.
Contact: Lucía Hughes
Organization: Coast Capital Savings
Phone: (202) 458-3840