Federal Reserve Board Proposes New Regulatory Scheme for Remittance Transfers


This morning the Federal Reserve Board (“FRB”) published in the Federal Register a proposed rule setting forth an entirely new regulatory scheme for companies that provide remittance transfers, including banks.1 Remittance transfers are electronic transfers of money from U.S. consumers to recipients in foreign countries. The FRB’s proposal would (1) require that specific disclosures be given to each “sender” of a remittance transfer showing how much money will be received by the recipient of the transfer in local currency; (2) enable senders to dispute errors for up to 180 days following a remittance transfer; and (3) impose vicarious liability on remittance transfer providers for the acts or omissions of their agents. Comments on the proposal are due July 22, 2011.

Section 1073 of the Dodd-Frank Act added a new section 919 to the Electronic Fund Transfer Act (“EFTA”) to require certain disclosures and to impose new error resolution provisions with respect to remittance transfers.2 These provisions are to be implemented by rules proposed initially by the FRB, but rulemaking authority will transfer to the Consumer Financial Protection Bureau (“CFPB”) on the Designated Transfer Date – July 21, 2011 – which is the date that administration of the EFTA formally transfers from the FRB to the CFPB. See Dodd-Frank Act § 1084 (amending EFTA by “striking ‘Board’ each place that term appears and inserting ‘Bureau’”). As a practical matter, this means that the FRB has begun the rulemaking process, but the rules will eventually be completed by the CFPB.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

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.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.