CFPB to Propose Changes to Foreign Remittance Transfers

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The Consumer Financial Protection Bureau, or  CFPB, expects to issue a proposal next month to refine three elements of its rule regarding foreign remittance transfers.  The proposal is expected to cover the following topics:

  • Situations in which a sender provides an incorrect account number to a remittance transfer provider.  The proposal will address the way the rule applies to situations in which a sender provides an incorrect account number to a remittance transfer provider resulting in a remittance transfer being deposited into the wrong account. The CFPB intends to propose that where the provider can demonstrate that the consumer provided the incorrect information, the provider would be required to attempt to recover the funds but would not be liable for the funds if those efforts are unsuccessful.
  • Disclosure of third party fees and foreign taxes. The CFPB plans to propose revisions to the rule’s disclosure provisions concerning foreign taxes and fees assessed by the financial institution receiving the transfer. The proposal would provide additional flexibility around these requirements, including by permitting providers to base fee disclosures on published bank fee schedules and by providing further guidance on foreign tax disclosures where certain variables may affect tax rates.
  • Disclosure of regional and local taxes assessed in foreign countries. The CFPB also plans to propose that the obligation for providers to disclose foreign taxes imposed on remittance transfers is limited to taxes imposed at the national level, and does not encompass taxes that may be imposed by foreign, sub-national jurisdictions.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.

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