WASHINGTON (11/5/12)--Credit Union National Association (CUNA) President/CEO Bill Cheney last week reiterated CUNAs' and credit unions' suggestions for fixing pending remittance regulations in a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray.
The letter follows an October meeting of CFPB staff, CUNA and CUNA's International Remittances Transfer Regulation Working Group. Credit union leagues have also had productive meetings with the CFPB and Cordray in recent weeks.
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 bureau's new remittance rule will take effect Feb. 7.
In a letter to Cordray, CUNA said credit unions do not fear losing income as a result of these regulations--credit unions charge minimal fees for these services and some actually lose money on these transfers. However, they do worry that members will be forced to stop using their credit unions for such services and have to rely instead on other providers that will charge them much more.
The regulations could ultimately push members away from their credit unions, CUNA added. "Since credit unions have not caused any problems for consumers regarding these transfers, a rule that would bring even some credit union international remittance programs to a halt seems wholly unreasonable," CUNA said.
In the CFPB meeting, CUNA and working group members focused on three key areas the CFPB could improve for credit unions:
- the exemption level under the final rule;
- disclosure requirements and in particular, requirements regarding foreign taxes; and
- the shift of liability to senders for consumer errors or problems caused by third party servicers that affect the timeliness, amount, or other issues associated with receipt of the funds in a foreign country.
Cordray said the agency would consider CUNA's views. For more detail on CUNA's views, use the resource link.
The Northwest Credit Union Association is one credit union group that met recently with Cordray and CFPB staff during a Washington visit. The Kentucky Credit Union League (KYCUL) and Idaho Credit Union League have also discussed Multi-Featured Open-End Lending programs and other key credit union issues with CFPB staff, and Cordray followed up with the KYCUL following this visit. The KYCUL discussed the burden an unintended consequences regulations can create during their talk with Cordray.
Cheney noted that the California Credit Union League will also meet with Cordray and CFPB staff this month, and other leagues have and will meet with CFPB representatives.
"These sessions are very useful to help reinforce the distinctions between credit unions and for-profit financial institutions," Cheney said.