Saturday, December 29, 2012
CFPB releases remittance changes, delays effective date
Proposed revisions to the Consumer Financial Protection Bureau's (CFPB's) pending regulations governing international money transfers were released Dec. 21, 2012. The proposed revisions, first announced in a CFPB bulletin Nov. 27, 2012, would refine remittance transfer provider (RTP) disclosure requirements regarding foreign exchange rates, fees, and consumer taxes.
The Dodd-Frank Wall Street Act of 2010 required the CFPB to create disclosure and error resolution regulations for international money transfers. CFPB proposes to add a new section to Regulation E of the Electronic Fund Transfer Act requiring RTPs to disclose all costs of remittance transfers to consumers prior to the transaction.
The revisions, created after public feedback on the proposed rules, relax and clarify the proposed disclosure requirements. The proposed revisions make RTPs track and disclose only published bank fee schedules and national taxes. The revisions also release a RTP from liability for non-delivery or late delivery of remittance transfers if it can prove the consumer provided wrong account information. The RTP would still have to make a good faith effort to recover the funds.
The CFPB called the proposed revisions "narrow in focus and intended to preserve the new consumer protections while facilitating compliance with the rule." Implementation of the new rule was originally scheduled for Feb. 7, 2013 but the CFPB said it will now push back implementation to 90 days after the revised rule is published in the Federal Register.
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