Remittance Transfers

Unless the CFPB extends or removes the expiration of allowing estimates for remittance transfers, financial institutions will need to make sure their disclosures reflect the actual terms of any remittance transfer.

Remind me

The requirements for remittance transfer disclosures, under Regulation E, include the ability to estimate certain information included on the pre-payment, receipt, or combined disclosures required for remittance transfers.  The information that can currently be estimated includes: (1) the exchange rate used by the provider for the remittance transfer; (2) the amount of funds that will be transferred to the designated recipient, in the currency in which the funds will be received; (3) any covered third-party fees, in the currency in which the funds will be received; and, (4) the “Total to Recipient” in the currency in which the funds will be received.  This estimation allowance is set to expire on July 21, 2020.  Unless amendments are made to the Rule, insured depository institutions will need to include exact amounts for these exchange rates and third-party fees.  In many cases, it is hard, if not impossible, to know the exact amounts.

Not my Job

In a Request for Information, issued in April of this year, the CFPB asked for comments that would “mitigate the effects of the expiration,” but not eliminate the requirement.  Included in the Request is “EFTA expressly limits the length of the temporary exception to July 21, 2020 and does not authorize the Bureau to extend this term. Therefore, the exception will expire on July 21, 2020 unless Congress changes the law.” [highlight added]

A September 31, 2019 Letter from members of Congress, seems to point the finger back at the CFPB, “We believe the Bureau has authority to mitigate these consequences and request that the Bureau take every available step to preserve consumers’ access to remittance services.”  The letter directs the CFPB to permanently “…allow insured depository institutions to continue providing estimates of third party fees and exchange rates in cases where exact disclosures are not possible.”

What should I do?

If you are already disclosing accurate figures for these, you are good to go.  If not, you will want to keep an eye on updates to the remittance transfer rules, and have plans to provide accurate figures before July 21, 2020, if the rules do not get changed.



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