For about a six-month period, supervisory violations won’t be cited, and enforcement actions won’t be initiated, against certain remittance transfer providers in connection with the expiration of temporary exceptions for cost disclosures, the federal consumer financial protection agency said Friday.
The Consumer Financial Protection Bureau (CFPB) said in a policy statement that it was taking the action out of recognition of “the serious impact that the COVID-19 pandemic is having on consumers and the operations of many entities,” including remittance providers.
“Specifically, the Bureau is announcing that, for remittances that occur on or after July 21, 2020, and before January 1, 2021, the Bureau does not intend to cite in an examination or initiate an enforcement action in connection with the disclosure of actual third-party fees and exchange rates against any insured institution that will be newly required to disclose actual third-party fees and exchange rates after the temporary exception expires,” the statement said.
The CFPB said the expiration of the temporary exception to the remittance rule’s requirement to disclose the exact costs of remittance transfers will deepen the potential impact on customers requesting and receiving remittances.
“Moreover, insured institutions that are remittance transfer providers play a vital role in ensuring that consumers can send money abroad,” the statement said. “This access is especially critical in responding to the dramatic effects on the finances of consumers, both in the United States and abroad, as a result of the coronavirus crisis.”
To deal with that, the agency said, it was issuing the statement to let remittance transfer providers know of the bureau’s “flexible enforcement and supervisory approach” to allow providers to focus time and attention on ensuring that consumers have access to remittance services.
Also in the statement, the agency said it expects to issue a new, final rule on remittances in May. The bureau said that rule may require some insured institutions who currently disclose estimates of third-party fees and exchange rates to commence disclosing actual third-party fees and exchange rate information.
Statement on Supervisory and Enforcement Practices Regarding the Remittance Rule in Light of the COVID-19 Pandemic