The Consumer Financial Protection Bureau (CFPB) has issued a Notice of Proposed Rulemaking (NPRM) related to the Remittance Transfer Rule implemented in Regulation E (Electronic Fund Transfers Act). The Remittance Transfer Rule establishes protections for consumers sending international money transfers or remittance transfers by requiring remittance transfer providers to disclose the exact exchange rate that applies, the amount to be received by the recipient, and certain fees and other information associated with the transfer.
The CFPB is proposing to:
- Increase the safe harbor threshold related to whether a company makes remittance transfers in the normal course of its business and is therefore subject to the Rule. Currently a person is deemed to not be providing remittance transfers in the normal course of business if it provided 100 or fewer remittance transfers in the previous calendar year and provides 100 or fewer remittance transfers in the current calendar year. The CFPB is proposing to increase the threshold to 500 annually, meaning companies making 500 or fewer transfers annually in the current and prior calendar years would not be subject to the rule.
- Make a permanent exception that would allow certain insured institutions to disclose estimates of the exchange rate and covered third-party fees to consumers instead of exact amounts. A current and similar statutory exception is set to expire on July 21, 2020.
- The CFPB is proposing a permanent exception that would permit insured institutions to estimate the exchange rate for a remittance transfer to a particular country if, among other things, the designated recipient will receive funds in the country’s local currency and the insured institution made 1,000 or fewer remittance transfers in the prior calendar year to that country when the designated recipients received funds in the country’s local currency.
- The CFPB is proposing a permanent exception that would permit insured institutions to estimate covered third-party fees for a remittance transfer to a particular designated recipient’s institution if, among other things, the insured institution made 500 or fewer remittance transfers to that designated recipient’s institution in the prior calendar year.
The CFPB is also seeking feedback on an existing permanent exception that permits remittance transfer providers to use estimates for transfers to certain countries whose laws do not allow determination of the exact amounts to be disclosed or whose method does not permit a remittance transfer provider to determine the exact amounts that must be disclosed. This exception also applies to specific list of countries determined by the CFPB. As part of its request for suggestions, the CFPB is specifically looking for suggestions regarding criteria by which it adds countries to the list.
Comments must be submitted to the CFPB within 45 days after publication in the Federal Register.
The Proposed Rule is available here.