Industry should not expect to see any material changes to the CFPB’s remittance transfer rule, at least not between now and 2018 when the CFPB is required to review the rule. That’s the view of Isaac Boltansky of Compasspoint, who reached that conclusion based in part on a review of the CFPB’s consumer complaint database. Money remittances are one of the products or services about which consumers can submit complaints using the CFPB’s complaint system.
According to Mr. Boltansky, Compasspoint’s review indicated that the majority of money remittance complaints were resolved in a way that suggests industry has successfully implemented the remittance transfer rule, thus making it unlikely industry or the CFPB will push for change. (The rule became effective on October 28, 2013.) Compasspoint found that 74% of the complaints were “closed with explanation” and only 21% were “closed with monetary relief.” Mr. Boltansky considers “closed with explanation” to be one of the best potential outcomes for CFPB complaints because it suggests the company involved was in compliance with applicable rules. In contrast, he considers “closed with monetary relief” to be the worst potential outcome because it suggests that an error was made.
Remarks by Director Cordray earlier this week to the U.S. Conference of Mayors provide support for Mr. Boltansky’s use of complaint data to assess the likelihood of regulatory change. As he has on previous occasions, Mr. Cordray discussed the role of complaints in “informing our work and helping us identify and prioritize problems.” He further stated that “[w]e know that if we begin to see a disturbing trend, we should consider allocating some of our limited resources to combat that particular problem.” Assuming the CFPB draws the same conclusions about industry compliance as Mr. Boltansky from the complaints it has received about remittance transfers, making changes to the remittance transfer rule is not likely to be a CFPB priority anytime soon.
We note, however, that the CFPB will soon have additional data to assess industry compliance. As we reported, the CFPB proposed a rule yesterday that would allow it to supervise nonbank international money transfer providers who qualify as “larger participants.” Once the rule is adopted, CFPB examiners will be able to examine qualifying nonbanks for compliance with all relevant federal consumer financial laws, including the remittance transfer rule.