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Earlier this month, the CFPB issued a final rule increasing the safe harbor threshold under its remittance rule from 100 transfers in the previous and current calendar year to 500 transfers. NAFCU outlines what credit unions should know about the rule, intended to mitigate the July 2020 expiration of a temporary exception permitting estimates of fee and exchange rate information, in a new Final Regulation Alert.

NAFCU has continuously worked with the bureau to obtain relief for credit unions under the rule and, although the association had advocated for a larger threshold increase, Director of Regulatory Affairs Ann Kossachev called the increase a step in the right direction.

In the alert, NAFCU highlights that the rule:

• adopts new thresholds to permit continued use of estimates when disclosing exchange rate or third-party fee amounts;
• permits estimates of the exchange rate for a remittance transfer to a particular company if certain criteria are met; and
• permits estimates of 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 the designated institution in the prior calendar year.

The alert provides a general overview of the changes and how they impact credit unions. 

The rule was finalized as proposed, and will become effective July 21.

Amid the coronavirus pandemic, the bureau announced that it will suspend supervisory and enforcement action against certain remittance transfer providers under the temporary fee and exchange rate exception, which is set to expire July 21. The final rule provides the replacement framework that will be in place once the exception expires.

NAFCU has shared concerns that the remittance rule's highly burdensome compliance costs have caused many credit unions to stop offering these services and held a call with the bureau in March to discuss these concerns, among other issues.