April 30, 2014

Trades urge CFPB to extend remittance comment time

May 1, 2014 – NAFCU joined The Clearing House Association and other financial trades Wednesday in urging CFPB to extend the comment period for its international remittance transfer proposal by an additional 30 days.

The bureau's proposed rule, out for a 30-day comment period, would extend a reporting exception provided to federally insured credit unions and banks on certain international remittance transfers for another five years, to July 21, 2020. NAFCU has spoken in favor of the proposed extension but has noted ongoing concerns about the overall rule, which increases the regulatory burden and costs for any credit union facilitating more than 100 remittances yearly for members.

In Wednesday's letter, the groups wrote that they appreciate the proposed clarification. However, given the proposal's significant effects on covered transactions and processes, the group urged the CFPB to afford interested parties at least 60 days to review and comment on it.

The bureau is proposing clarifications on a number of issues, including the treatment of U.S. military installations abroad, purpose of transfers in defining rule coverage, permissibility of oral disclosures and error resolution.

The proposed exception would allow remittance transfer providers to estimate certain third-party fees and exchange rates in a remittance transfer if:
  • the provider is a federally insured depository institution, including a credit union;
  • the remittance transfer is sent from the sender's account with the provider; and
  • the provider cannot determine the exact amounts for reasons outside its control.
NAFCU urged this exception in discussions with and comment letters to CFPB leading up to the final rule, which took effect last October. The exception is currently set to expire July 21, 2015, but CFPB has Dodd-Frank Act authority to extend it if its expiration would have a negative impact on institutions' ability to facilitate international remittances.

The comment period for the proposal currently ends on May 27.