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| Monday, January 23, 2012 |
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CFPB Adopts Final Rule on Remittance Transfers
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The Consumer Financial Protection Bureau adopted a final rule requiring remittance transfer providers to disclose to consumers the exchange rate, all fees associated with a transfer, and the amount to be received by the recipient. The rule defines remittance transfers as all consumer-initiated international fund transfers, and it requires remittance transfer providers to investigate disputes and remedy errors.
ICBA opposes the onerous and unworkable disclosure regime, which will cause many banks to exit the consumer international funds transfer business or partner with closed-loop networks, such as Western Union. In a comment letter to the Federal Reserve, which initiated the rulemaking, ICBA called for an open-network exemption and a separate rule tailored to the operational realities of open networks.
The association also urged the Federal Reserve to exclude open-network systems from a provision requiring providers to cancel remittance transfers if requested by senders within one business day of when they make the payment. In its final rule, the CFPB reduced that cancellation period to 30 minutes, thus reducing the delay in sending these transactions.
On a more positive note, the bureau issued a 60-day comment period on whether it should adopt a narrower definition of “remittance transfer provider.” In its comment letter, ICBA advocated exempting community banks that have initiated less than 1,200 remittance transfers per year. Read More from CFPB. Read ICBA Comment Letter.
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