Jan. 31, 2013 – The CFPB’s proposal on international remittances shows an effort to ease credit unions’ burden but would not stop remittances from becoming too costly for providers or make them less confusing for consumers, NAFCU President and CEO Fred Becker told the CFPB Wednesday.
NAFCU’s goal is to end up with a final rule that protects consumers and is not unnecessarily burdensome to credit unions. Becker notes that if credit unions decide they have no choice but to cease remittances – as some already have done – the alternatives will be that much more expensive for consumers.
Becker, in an official comment letter, said NAFCU “believes the proposed rule will create additional consumer confusion and the potential for consumer abuse while significantly adding to the heavy compliance burden credit unions already face.”
NAFCU’s key comments are as follows:
- Rule exemption: All federally regulated credit unions should be exempt from the rule, or CFPB should exempt small institutions consistent with the Small Business Regulatory Enforcement Fairness Act.
- Implementation time: The CFPB should delay implementation of the whole rule until six months after the changes are finalized.
- Database and safe harbor: The CFPB should maintain a database on foreign taxes and fees upon which credit unions and other providers could rely in making disclosures to consumers. Providers relying on that information should get a safe harbor.
- Subnational taxes: NAFCU strongly supports the CFPB’s proposal to remove the requirement for remittance providers to research and disclose subnational taxes.
- Estimated taxes and fees: NAFCU strongly encourages the CFPB to not require that credit unions disclose foreign taxes and recipient institution fees. Even obtaining an estimate of these values is very difficult.
- Transaction errors: Credit unions should not be held responsible for remittance errors arising from inaccurate information provided by the sender. Providers should not be responsible for fees taken during any stage of the transfer.
Last week, NAFCU submitted comments in support of the CFPB's proposal to delay the rule's Feb. 7 effective date. The delay was announced shortly after.