WASHINGTON (8/25/14)--A final rule issued by the Consumer Financial Protection Bureau (CFPB) Friday extends a temporary exception to its remittance transfer rule, one which allows credit unions and other depository institutions to estimate certain remittance pricing disclosures when specific pricing information is not available.
A remittance generally is a transfer of money by a worker to an individual in his or her home country.
The CFPB rule extends the temporary exception by five years, until July 21, 2020. The Credit Union National Association strongly supported this and other changes to the bureau's existing rules on remittance transfers.
The CFPB explained that an extension of the exception is currently needed because in an open network, under which insured providers like depository institutions operate, the provider typically does not have control over, or a relationship with, all of the participants in the remittance transfer.
This lack of control can make it difficult to learn all of the potential fees and, in some cases, the exchange rate. During the proposal comment period CUNA and other entities warned that without an extension financial institutions would have been unable to send some transfers to certain parts of the world that they currently serve.
The CFPB makes note, however, that under the Dodd-Frank statute the regulator may not extend the exception beyond the 2020 date. The bureau said it will be working with credit unions and other affected remittance providers for a "more sustainable solution to this problem."
The new remittance final rule also makes a number of technical and clarifying changes related to error resolution procedures and permissible methods of delivering disclosures. Further, the rule clarifies that U.S. military installations abroad are considered to be located in a state for purposes of the remittance rule. The changes in these areas generally reflect requests CUNA made in its comment letter.
Also, the CFPB released a revised version of its compliance guide to reflect the changes finalized in today's rule.
Use the resource links to access the text of the new rule and the new compliance information.