CFPB Proposes Remittance Changes, Delayed Effective Date
The CFPB also proposed extending the remittance rule implementation period until 90 days after the revised final rule is released. The rule was scheduled to come into effect on Feb. 7.
Under the CFPB's rule, remittance transfer providers would be required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.
The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.
According to the CFPB, the new remittance rule revision proposal would:
provide increased flexibility and guidance with respect to the disclosure of taxes imposed by a foreign country's central government as well as fees imposed by a recipient's institution for receiving a remittance transfer in an account; and
require disclosure of foreign taxes imposed by a country's central government, but eliminate a previous requirement to disclose taxes imposed by foreign regional, provincial, state, or other local governments.
The proposal would also limit remittance provider liability in certain situations. Under the proposal, when the provider can demonstrate that the consumer provided an incorrect account number and certain other conditions are satisfied, the provider would be required to attempt to recover the funds but would not bear the cost of funds that cannot be recovered, the CFPB said.
These changes were among the revisions urged by the Credit Union National Association (CUNA) in several meetings with the bureau held this year.
CUNA has been encouraging the agency to improve the rule so that credit unions will not have to stop offering international remittance services because of the rule's burdens. CUNA's International Remittances Working Group met with CFPB Director Richard Cordray and his senior staff in October and CUNA staff, including President/CEO Bill Cheney, General Counsel Eric Richard and Deputy General Counsel Mary Dunn, have had numerous meetings and telephone conversations with CFPB officials to advocate for a better outcome for credit unions than the final rule approved previously would have achieved.
While CUNA will continue urging for a range of improvements, the association commended the agency for its willingness to open the comment process back up and to consider further changes.
For more on the remittance rule changes, click here.