WASHINGTON (5/1/13)--Oct. 28 will be the effective date for the Consumer Financial Protection Bureau's final remittance regulations, the bureau announced Tuesday.
The Credit Union National Association had urged a substantial delay in the original Feb. 7 effective date of the final rule, and the CFPB's action yesterday, in effect, granted an eight-month delay.
Under the final rule, remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain 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.
CUNA's International Remittances Working Group has met with CFPB Director Richard Cordray and his senior staff and CUNA senior staff have had numerous meetings and telephone conversations with CFPB officials to advocate for credit unions on remittance issues.
"In our several meetings with Director Cordray and his senior staff, we urged flexibility for credit unions using open networks, such as ACH, to send their members' transfers," said Mary Dunn, CUNA deputy general counsel, upon reviewing the rule. "The final provides that by eliminating the requirement that fees charged by recipient institutions should be disclosed unless the institution is acting as the provider's agent."
CUNA also urged no liability when the consumer provides wrong information and the final rule provides for that as it applies to an incorrect account number or recipient institution number. However, the rule does require an investigation must be conducted.
CUNA advocated for a number of other beneficial changes that have been added to the rule. The final rule provides additional flexibility for credit unions and other remittance transfer providers by:
Making optional, in certain circumstances, the requirement to disclose fees imposed by a designated recipient's institution;
Making optional the requirement to disclose taxes collected by a person other than the remittance transfer provider; and
Revising resolution provisions that apply when a remittance transfer is not delivered to a designated recipient due to sender error.
Unfortunately, CUNA noted, the agency did not revisit the 100 transfers-per-year exemption threshold. "We continue to urge the CFPB to revisit these rules and to make additional changes to facilitate remittance transfers for credit unions," Dunn said.
Remittance rule revisions addressing fees and foreign tax disclosures and how financial institutions will cope with account or routing number errors were also released on Tuesday.