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CFPB Issues Final Remittance Rule

On May 11, 2020, the Consumer Financial Protection Bureau (“CFPB”) announced that it will impose stricter reporting requirements on entities that process international money and remittance transfers for consumers. This final rule will take effect on July 21, 2020, replacing a temporary rule that has been in place since 2013. The new rule requires that international money transfer and remittance providers disclose the following information to consumers: exact exchange rates; the total value of transaction fees; and the amount of money expected to be received by the transfer or remittance recipient. For banks and credit unions that process large numbers of transfers, compliance costs and associated oversight policies will remain burdensome.

The new rule, however, augments the safe harbor protections afforded to certain banks and credit unions when reporting the costs of transfers and remittances to consumers. Under the temporary version of Regulation E, which was adopted in 2013, banks and credit unions that provide fewer than 500 remittances or transfers per year were permitted to estimate the costs of remittance transfers to consumers rather than providing exact transaction fees and exchange rates. Preceding the effective date of the temporary regulation, this safe harbor provision only applied to those banks and credit unions that processed fewer than 100 transfers per year. The final rule increases the transfer threshold to 500 transfers per year, making the temporary exemption permanent. In addition, the Bureau adopted a new, permanent exemption for insured institutions to “estimate the exchange rate for a remittance transfer to a particular country if, among other things, the designated recipient will receive funds in the country’s local currency and the insured institution made 1,000 or fewer remittance transfers in the prior calendar year” and the recipients received funds in the country’s local currency.

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CFPB Announces Delayed Effective Date for Remittance Transfer Rules

The CFPB announced yesterday that it will delay the effective date of its rules governing remittance transfer rules beyond the previously set February 7, 2013,effective date. The new effective date will be determined when the bureau finalizes its additional revisions to the rules based on the proposed changes published in late December. The comment period on that proposal closes January 30, 2013.

The bureau’s notice is available here, and the related blog post may be found here.   The bureau’s proposed rule changes are available here.

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CFPB to Amend Remittance Transfer Rules

December 5, 2012


On November 27, 2012, the CFPB announced that it intends to propose adjustments to its rules on international remittances, as well as briefly extend the effective date of the rule. A notice of proposed rulemaking is expected in December, and the bureau stated it intends to “fast track” the rule changes so that the new implementation date will be sometime in the spring of 2013. The rules are currently slated to become effective on February 7, 2013.

In its blog post regarding these plans, the CFPB acknowledged that some entities covered by the rules have identified issues that pose “practical challenges” in implementation. The bureau’s proposed changes will address:

  • Errors resulting from incorrect account numbers provided by consumers sending remittance transfers. The bureau intends to propose that where the remittance transfer provider can demonstrate that the consumer provided incorrect information, the provider must attempt to recover the funds but will not be liable for the funds if it is unable to do so.
  • Disclosure of certain third party fees and foreign taxes. The bureau’s proposal will provide additional flexibility for these disclosure requirements, including allowing remittance transfer providers to base fee disclosures on published bank fee schedules. The bureau also will provide further guidance on foreign tax disclosures where tax rates may be affected by certain variables.
  • Disclosure of sub-national foreign taxes. The bureau plans to propose that the obligation for remittance transfer providers to disclose foreign taxes imposed on remittance transfers is limited to taxes imposed at the national level, and does not include taxes imposed by foreign sub-national jurisdictions.

The CFPB’s bulletin regarding its plans available here, and the bureau’s related blog post is available here.

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CFPB International Remittance Transfer Rules Create Substantial Compliance Hurdles

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.

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