Compliance Q&A: Regulation E Remittance Transfer Rule

Does the rule apply to prepaid cards purchased at a CU and sent to someone in a foreign country?

October 20, 2013
Q: Does the Regulation E remittance transfer rule apply to prepaid cards purchased by a member at the credit union and sent to an individual in a foreign country?
A: It depends. The remittance transfer rule will apply if: 1) the credit union is a remittance transfer provider under the rule; 2) a consumer purchases the prepaid card; and, 3) the credit union sends that card to the designated recipient in a foreign country. The rule applies because, at the time of the request, the credit union has knowledge that the prepaid card will be sent to a designated recipient located in a foreign country.
The rule will not apply if the credit union provides the card directly to the member because the credit union won’t know whether the consumer subsequently sends the prepaid card to a recipient in a foreign country, according to “CFPB Official Staff Commentary to Regulation E,” Comment 30(c)-2.iii.
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