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Fed seeks comment on remittance rule changes
WASHINGTON (5/13/11)--The Federal Reserve Board is seeking comment on a proposal to create new protections for consumers who send "remittance transfers" to recipients located in a foreign country. If finalized as proposed, the rule would apply to virtually all cross-border, consumer-initiated electronic funds transfers other than plastic cards, including international wire transfers and international ACH transfers. The Fed’s proposed rule would require that remittance transfer providers make certain disclosures to senders of remittance transfers, including information about fees and the exchange rate, as applicable, and the amount of currency to be received by the recipient. It also would provide error resolution and cancellation rights for senders of remittance transfers. In addition, the proposal states that Article 4A of the Uniform Commercial Code, the law enacted in virtually all states to regulate wire-transfers between depository institutions, would no longer apply to consumer-initiated international wire transfers if the rule is finalized in its current form. The proposal, being made under the Fed’s Regulation E (Electronic Fund Transfers), is in response to new remittance requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which CUNA work to improve prior to its passage last summer. As a result of CUNA lobbying efforts, international wire transfers initated from accounts at federally insured credit unions would be exempt from many of the cost estimate requirements until at least 2015, and credit union international ACH transfers are proposed to be permanently exempted from those requirements. However, credit union international wire and ACH transfers would not be exempted from some of the error resolution and cancellation requirements. CUNA's Consumer Protection Subcommittee, World Leadership Development Committee, and Payments Subcommittee all will review the proposal and provide input for CUNA's comments to the Fed. A CUNA Comment Call will be posted on CUNA's Regulatory Advocacy website, and CUNA plans to pursue credit unions' concerns about this proposal with both the Federal Reserve and with the U.S. Congress. Comments are due to the Fed by July 20. Use resource link below to view the full proposal and for instructions on how to submit a comment.
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