WASHINGTON (6/10/14)--The Credit Union National Association has filed a comment letter with the Consumer Financial Protection Bureau regarding its proposed international remittance rule. The provision permits federally insured credit unions and other depository institutions to estimate certain remittance pricing disclosures.
The current proposal would extend the temporary provision, set to expire July 21, 2015, by an additional five years.
CUNA has long been an advocate for improvements in the CFPB's remittance rule but has numerous concerns with the current rule generally. Primarily, CUNA objects to the 100 transfers per year exemption for international remittances, which it calls "arbitrary and far too low."
According to a survey conducted by CUNA this month, 19 of 39 responding credit unions have reduced or eliminated remittance products due to the CFPB's rule. The respondents represented credit unions ranging in assets from $50 million to $3 billion.
The survey also indicated that while credit unions provide these services as an accommodation to members, many price their transfers only to recoup costs with no additional income and several lose money to provide these services.
A remittance generally is a transfer of money by a worker to an individual in his or her home country.
"As we continuously pointed out, the agency has ample statutory authority to reconsider the international remittance transfer rule's exemption threshold and increase it. We continue to believe the agency can and should invoke its exemption authority in recognition that credit unions are not-for-profit and were not causing any of the abuses that necessitated the rule," the letter reads.
CUNA is also concerned that the proposed clarification of the definition of "error," which is based on a provider's failure to deliver a transfer by the date of availability, could increase regulatory burdens on credit unions. CUNA believes the CFPB should exclude delays related to fraud, screenings and other legal or regulatory requirements from the definition of "error."
However, CUNA supports the following parts of the proposal:
CUNA also stated that the CFPB "should provide a delayed effective date of at least 90 days from the issuance of a final rule to provide adequate time for credit unions and other providers to implement any international remittance transfer rule changes."
Use the resource link to access this and other CUNA comment letters.