CFPB issues remittance transfer rule compliance guide for small businesses


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The CFPB has issued a Small Entity Compliance Guide to assist small businesses in complying with the remittance transfer rule. The final rule takes effect on February 7, 2013. The guide includes a summary of the remittance rule, information to assist a business in determining whether it will be subject to the rule, and details on the rule’s requirements.

Because it was unable to conclude that the remittance transfer rule would not have a significant economic impact on a substantial number of small entities, the CFPB was required by Regulatory Flexibility Act to prepare a final regulatory flexibility analysis. As a result, the CFPB was required by the Small Business Regulatory Enforcement Act (SBREFA) to issue the guide. Under SBREFA, a federal agency must publish a small entity compliance guide for a regulation as to which a final regulatory flexibility analysis is required.

Earlier this month, the CFPB issued a Remittance Rule Safe Harbor Countries List containing a list of the countries that qualify for an exception in the rule that allows the use of an estimated disclosure for certain figures in lieu of an exact amount.

Although the CFPB has adopted a 100 transactions per year exemption, industry members remain concerned about the compliance costs associated with the remittance transfer rule and its impact on small businesses.  In addition, House members have urged the CFPB to extend the rule’s February effective date. Last week,  several industry trade groups, including the American Bankers Association, the Consumer Bankers Association and The Clearing House Association, sent a letter to the CFPB suggesting a phased implementation of the rule. The letter also addressed industry concern with the rule’s provisions on  liability for sender error and the disclosure of foreign taxes and fees charged by recipient banks.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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