Jan. 16, 2013 – Half of all respondents surveyed for the latest NAFCU Economic & CU Monitor survey will not be protected by the CFPB’s exemption from its international remittance rule, a finding that supports NAFCU’s view that the current threshold is too low.
Currently, the CFPB rule exempts institutions handling no more than 100 remittances a year from the new requirements. NAFCU has suggested that it be raised to 600 transactions a year since the current threshold is likely to force many credit unions to cease offering the service. Of particular concern to the association is that the rule would be exceedingly difficult for financial institutions with open network systems, a fact the CFPB itself has recognized. NAFCU has cautioned the CFPB that the majority of credit unions use open network systems.
The January Monitor, released Tuesday, reports that the median number of remittances per year among respondents was exactly 100; 50 percent of responding credit unions would get no relief.
Other key survey results include:
- 26.9 percent of survey respondents, including one credit union that averages 25,000 remittances a year, said they will drop their remittance programs as a result of the new rule;
- 92.3 percent of respondents said they used open networks prior to the new rule; and
- 15.4 percent said they will switch to third-party providers as a result of the new rule.
The CFPB published its final remittance rule last year with a Feb. 7, 2013, effective date. Yesterday was the bureau’s deadline for comments on the delay in implementation. Jan. 30 is the deadline for comments on a limited number of proposed rule changes. CFPB is proposing to delay implementation of the entire rule until 90 days after the proposed revisions are finalized.
Last fall, CFPB Director Richard Cordray reached out to NAFCU President and CEO Fred Becker to seek input on the regulatory burden the remittance rule posed to credit unions. During that call, Cordray noted particular interest in the extent to which the rule would cause credit unions to cease offering the service.