The Consumer Financial Protection Bureau (CFPB) has issued a Request for Information on its remittance rule, which CUNA has called on the Bureau to revise. CUNA raised this issue on several occasions with new CFPB Director Kathy Kraninger since she took over as agency director, including in a letter when she was first confirmed and in multiple face-to-face meetings.
“CUNA has asked the CFPB for years to finalize substantive amendments to the remittance rule in order to balance necessary consumer protections with a more tailored regulation that allows consumers access to these services,” said CUNA President/CEO Jim Nussle. “We’re thankful to the CFPB for starting this process, and we thank our league and credit union partners who stressed the importance of this issue in meetings with Director Kraninger, CFPB staff and other policymakers.”
The remittance rule places enhanced regulatory requirements on “remittance transfer providers” conducting remittances as part of the “normal course of business.” To make the rule’s coverage clearer, the CFPB created a safe harbor that excludes a provider that conducts fewer than 100 transfers. Entities under the 100-transfer threshold are not considered to be a provider conducting remittances in the “normal course of business.”
CUNA maintains that the current threshold is too low and has resulted in many credit unions ceasing to offer this service and has recommended the threshold be raised to at least 1,000.
The RFI also requests information regarding the rule’s “fee estimates” safe harbor. This temporary safe harbor permits – in certain circumstances – a provider to disclose estimates of those fee amounts (as opposed to the exact amount). This safe harbor is statutory. This exception is set to expire on July 21, 2020, unless there is action from Congress.
CUNA believes the fee estimates safe harbor is still appropriate and necessary and has recommended the CFPB urge Congress to extend the safe harbor or make it permanent.
The public will have 60 days to comment after the RFI (available here) is published in the Federal Register.