The Consumer Financial Protection Bureau (CFPB) issued a proposed remittance rule Tuesday increasing the “normal course of business” threshold to 500 transfers per year, up from 100. CUNA has asked the CFPB to raise the threshold to at least 1,000 but considers the proposal a positive step forward.
“We thank the CFPB and Director Kraninger for listening to our concerns, as we’ve raised this issue in numerous meetings with the bureau,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer. “This has been a longtime priority for CUNA, Leagues and credit unions, as raising this threshold will allow more credit unions to offer the remittance services their members want and need.”
The CFPB’s remittance rule generally requires that entities providing remittance transfers (electronic money transfers from the U.S. to individuals in other countries) in the “normal course of business” disclose to consumers certain fees and the exchange rates that apply to transfers.
The proposal would increase the safe harbor threshold that determines whether a company makes remittance transfers in the normal course of its business and is subject to the rule
According to the CFPB, this would reduce burden on almost 250 credit unions that send a relatively small number of remittances -- less than .06% of all remittances.
The rule also includes an exception that allows certain banks and credit unions to estimate certain fee and exchange rate information instead of disclosing exact amounts in certain circumstances. This exception expires by statute in July 2020.
The proposal would allow certain credit unions and banks to continue to provide estimates under certain conditions where it could be economically infeasible for these institutions to provide exact disclosures. This could preserve consumers’ ability to send remittances from their bank accounts to certain destinations and reduce compliance burden for banks and credit unions.
Comments on the proposal will be due 45 days after it is published in the Federal Register, which is expected in the coming days.