[Kristin]

Is a collection request where our customer sent a check to a person in London who then deposited the check at their bank and the bank sends the check to us with a request to wire funds back to them considered a remittance transfer?

[rcooper]

Answer by Don Blaine:

No, the situation described above is not considered a “remittance transfer”. While there was a wire transfer eventually involved in the transaction, the “sender” aka “consumer” did not direct a “receiving institution” (likely your bank) to electronically deposit funds into an identified beneficiary’s account into an account at a foreign financial institution. A paper check sent to a person in a foreign county would never meet the definition of a remittal transfer even if funds were settled electronically between financial institutions. The request for electronic funds came from the foreign financial institution rather than from the consumer who mailed the check to a third party in London.

Regulation E’s 1005.30(e) provides the following definition for Remittance transfer -” the electronic transfer of funds requested by a sender to a designated recipient that is sent by a remittance transfer provider.

[Author]

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