How to mitigate the impact on remittance providers of next year’s expiration of a remittance rule disclosure exception, and just what firms are subject to the rule itself, is the focus of a Consumer Financial Protection Bureau (CFPB) request for information (RFI) issued Thursday for a 60-day public comment period that concludes June 28.
The RFI comes just one day after the CFPB posted a revised version of the remittance rule assessment report it sent to Congress in October; the bureau said the correction made to the report showed banks conducted more remittance transfers than reported earlier.
The remittance rule, which took effect in 2013 and implements provisions of the Electronic Fund Transfer Act (EFTA), generally requires that, among other things, providers of international remittances (money transfers) for consumers disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient.
The bureau is requesting information on two aspects of the rule. It is seeking information to determine whether to propose changing the remittance transfer providers the rule covers; and information about the expiration, scheduled July 21, 2020, of a temporary exception from the rule’s requirement to estimate the exchange rate and certain fees when sending remittance transfers.
On coverage, the bureau is seeking information about the number of remittance transfers a provider must make to be deemed to provide remittances in the “normal course of business” and thus subject to the rule’s requirements; currently, the rule’s safe harbor excludes institutions making 100 or fewer transfers in the current and previous calendar years from coverage. The bureau is also seeking information on whether an exception for “small financial institutions” would be appropriate.
The temporary exception in the remittance disclosure requirements apply to remittance transfer providers if (i) they are an insured depository institution or insured credit union that makes a transfer from an account that the sender holds with them; and (ii) they are unable to know, for reasons beyond their control, the amount of currency that will be made available to the designated recipient. The EFTA permitted the bureau to extend the exception once, for five years, if its expiration would negatively affect insured institutions’ ability of insured institutions to send remittances to foreign countries. The bureau did this in 2014.
The CFPB, in its notice, says it’s concerned about the negative effects of the exception’s expiration given comments and other feedback it received from providers and their trade associations, as well as the bureau’s own analysis.
This RFI may not be the last on the remittance rule: The CFPB says it has received suggestions for other changes in the remittance rule but is limiting this RFI given next year’s expiration of the disclosures exception.
Request for information (Federal Register notice)