CFPB Proposes to Extend Temporary Exemption under Remittance Transfer Rule

more+
less-

The CFPB proposed revisions to its remittance transfer rule finalized and amended several times (see May 14, 2013 Alert). The proposal would amend the remittance rule to extend a temporary exemption and make additional clarifications to the rule. The Electronic Funds Transfer Act allows a remittance transfer provider to estimate certain third party fees and exchange rates associated with a remittance transfer if certain conditions are met: (1) the provider is an insured depository institution or credit union, (2) the transfer is sent from the sender’s account with the provider and (3) the provider cannot determine the exact amount for reasons outside of its control. Citing a need, which was determined after outreach to industry and consumer group stakeholders, to give insured depository institutions that offer remittance services additional time to develop processes by which to provide consumers with exact fees and exchange rates for all remittance disclosures, the proposal seeks to extend a temporary exemption under the EFTA for these institutions to allow them to estimate third-party fees and exchange rates when providing remittance transfers to their accountholders in the event that they are unable to determine the exact amounts. The Dodd-Frank Act permits this exemption until July 21, 2015. The proposal would extend the exemption until July 21, 2020.

The proposal also seeks comments on potential clarifications. In particular, the proposal seeks comment on, among other things: (1) whether the CFPB should clarify how U.S. military installations abroad are treated, (2) whether a transfer from an account is for personal, family or household purposes is determined by ascertaining the purpose for which the account is created and (3) what constitutes an “error” caused by delays related to fraud and related screening and to clarify the remedies for certain errors. Comments on the proposal are due by May 27, 2014.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  Banks, CFPB, EFTA, New Amendments, Remittance Transfer Rule

Published In: Consumer Protection Updates, Finance & Banking Updates, International Trade Updates

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.

© Goodwin Procter LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »