Remittance Transfers Survey

 
Summary:

In February 2012, the Consumer Financial Protection Bureau published amendments to Regulation E (12 CFR Part 1005) to provide new protections to consumers who send remittance transfers to consumers or businesses in foreign countries. The amendments implement Dodd-Frank Act requirements and are scheduled to take effect on February 7, 2013.

The remittance transfer rule covers credit unions, banks and money transmitters that provide remittance transfers (i.e., international money transfers) to consumers. The rule doesn’t apply to institutions that consistently provide 100 or fewer remittance transfers each year; and small dollar transfers of $15 or less are excluded from the rule’s coverage. The amendments are located in Regulation E’s Subpart B.

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1. Credit unions that do more than 100 international remittances will have to comply with new additional customer protection procedures if a CFPB proposal comes to life. Does your CU plan to reduce the number of allowable remittances or stop remittances all together if this is enacted?
Definitions:

A “remittance transfer” is an electronic funds transfer requested by a sender (consumer in the United States) to a designated recipient (in a foreign country) that is sent by a remittance transfer provider. The definition is quite broad, but generally covers EFTs like international wire transfers and cross-border ACH transactions. It also covers transfers where a consumer provides cash or another method of payment to the credit union and requests that funds be sent to a specified location or account in a foreign country. And, under certain circumstances, the definition can also cover electronic bill payments scheduled in advance.

A “remittance transfer provider” is a “person” that provides “remittance transfers” for consumers in the “normal course of business” (regardless of whether the consumer holds an account with such person). Whether a credit union provides remittance transfers in the normal course of business depends on the facts and circumstances, including the total number and frequency of remittance transfers provided by the institution:
  • If an institution provided 100 or fewer remittance transfers in the previous calendar year, and provides 100 or fewer remittance transfers in the current calendar year, then the institution is deemed not to be providing remittance transfers for a consumer in the “normal course of its business” and is exempt from the rule.
  • If an institution crosses the 100-transfer threshold, and is then providing remittance transfers for a consumer in the normal course of its business, the final rule permits a “reasonable time period,” not to exceed six months, to begin complying with the remittance transfer rule.
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