One provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) that generated comparatively little concern when it was passed was section 1073 entitled “Remittance Transfers.” Closer examination and subsequent issuance of regulations has now drawn scrutiny to this provision, which was already so detailed and lengthy when it was inserted into the Dodd-Frank Act that there was little room for modification by the CFPB when the bureau issued its implementing regulations. To assist Bryan Cave’s client and friends in efforts to comply with the new law and regulations in time for its February 7, 2013 effective date, we’ve prepared a Bryan Cave Client Alert on the Final Remittance Transfer Rules.

The CFPB’s new regulations are clearly “comprehensive.” Among other things, they:

  1. mandate certain disclosures, including the amount of the exchange rate and the amount to be received, prior to and at the time of payment by the consumer for the transfer;
  2. provide for Federal rights regarding consumer cancellation and refund policies;
  3. require remittance transfer providers to investigate disputes and remedy errors regarding remittance transfers; and
  4. establish standards for the liability of remittance transfer providers for the acts of their agents and authorized delegates.

With the recent issuance by the CFPB of some modifications intended to soften the impact of the Remittance Transfers law and implementing regulations (the “Remittance Rules” or “Rules”), we now have the complete and final picture of how these new Remittance Rules will work.

Unfortunately, they will still be exceedingly (and many argue unnecessarily) burdensome to implement as Section 1073 of the Dodd-Frank Act requires specific disclosures and error resolution rights for consumers who send remittance transfers to foreign countries. The Rules’ scope includes certain prepaid card-based international transfers and, to the concern of many banking and depository institutions, also includes international wire transfers, ACH transfers, and even bill pay transactions within its scope.
The purpose of this Client Alert is to assist Bryan Cave’s clients and friends in their efforts to comply with the new law and regulations in time for its February 7, 2013 effective date.

The Client Alert covers:

  • What are “remittance transfer providers” and which remittance transactions are covered?
  • What prepaid card programs are covered by the Rules?
  • When persons use payment cards, such as credit, debit or prepaid cards in a foreign location or at a foreign merchant, would that be a covered remittance?
  • For covered remittance transfers what disclosure requirements apply?
  • How do the Remittance Rules impact disclosures for prepaid card programs?
  • How do the Rules deal with remittance transfer providers who do not have the disclosure data required under the Rules?
  • What procedures are required for resolving errors?
  • How do the Rules address preauthorized transfers?
  • What is the impact of the new supplementary final rule?