WASHINGTON (7/31/12)--New remittance regulations are set to go into effect early next year, and in a letter Monday the Credit Union National Association (CUNA) urged legislators to add their voices to a growing call for regulators to push back the implementation date and study the potential impact of the pending rule.
The Consumer Financial Protection Bureau's (CFPB) final remittance transfer rule, which is scheduled to take effect on Feb. 7, 2013, would require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and fix mistakes.
Reps. Blaine Luetkemeyer (R-Mo.) and Yvette Clarke (D-N.Y.) are circulating a letter that urges CFPB Directgor Richard Cordray and the CFPB to delay remittance rule implementation until Feb. 2015. In the meantime, the agency could "undertake a comprehensive study of how international transfers are used today for all segments of the consumer population, and the impact of the current rule on consumers, pricing for international transfers for a range of dollar amounts, and product accessibility," the legislators' letter suggests.
The American Bankers Association, the Independent Community Bankers of America, the National Association of Federal Credit Unions and the National Bankers Association joined CUNA in urging legislators to co-sign that letter.
While the remittance rules are intended to provide greater transparency and certainty, smooth error resolution procedures, and increase access to low-cost transfer services for consumers who utilize remittances and international wire transfer services, they would add dramatically to the costs of providing these services, and create mandates that are simply not possible for community-based institutions to implement, the joint trade letter said.
"The end result is likely to be fewer and more costly choices for consumers as credit unions and community banks stop offering these services. This is clearly not what Congress intended," the joint trade letter added.
CUNA and these groups noted they strongly support, and historically always ensure, appropriate consumer disclosures of fees and product terms. However, the CFPB remittance rule will make it difficult and costly for financial institutions to continue to offer remittance services. "If not delayed and, hopefully, modified, the CFPB's remittances rule will result in fewer choices and more costs for consumers," the trades wrote.