CFPB publishes remittances exam procedures
Oct. 23, 2013 – The CFPB on Tuesday released procedures for examining institutions that make remittance transfers, as well as an “eRegulations” tool to make the regulations easier to understand.
The CFPB’s final international remittance rule – set to go into effect on Oct. 28 – creates a comprehensive consumer protection regime for remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries. It requires remittance transfer providers to disclose certain fees and taxes, as well as the exchange rate that will apply to the transfer. It also provides consumers with error resolution and cancellation rights.
The CFPB, in finalizing its rule, did take into account some of NAFCU’s recommendations to scale back disclosures of foreign taxes. However, the rule still imposes several costly requirements, and NAFCU remains concerned that many credit unions will either leave the market or sharply reduce their presence.
A Boston University study this month suggests that the rule might have an adverse impact on foreign aid and investment transfers to nations in need.
The CFPB release says, “The remittance transfer rule was designed to bring new levels of transparency to international money transfers. CFPB examiners will use today’s procedures as a guide to ensure that remittance transfer providers are complying with requirements of federal consumer financial law.”
The rule does not apply to credit unions that provide 100 or fewer remittance transfers per year, or to transactions under $15, but NAFCU notes that only allows about eight transfers a month without triggering requirements.