WASHINGTON (4/16/14)--The Consumer Financial Protection Bureau is proposing a five-year extension to an exception that minimizes for some credit unions and other financial institutions certain information reporting requirements of its international remittance transfer rule.
The proposal will be available for comments for thirty days from the date it is published in the Federal Register. The agency is also proposing several clarifications and technical corrections to the final rule and commentary.
Under the CFPB rule, international remittance transfer providers are generally required to give prepayment and receipt disclosures to the consumer-sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer.
Remittance transfer providers will also be required to investigate disputes and correct errors. The rule has been in effect since Oct. 28.
The bureau in a release noted that the Dodd-Frank Wall Street Reform Act explicitly allows federally insured financial institutions, like banks and credit unions, to estimate third-party fees and exchange rates when providing remittance transfers to their accountholders for which they cannot determine exact amounts until July 21, 2015. Insured institutions can only use this exception when they cannot determine the exact amounts for reasons beyond their control.
This exception would continue until July 21, 2020, if the proposal is adopted. The CFPB said it moved to extend the exception when institutions reported that current market conditions would make it impossible to know the exact fees and exchange rates associated with a minority of their remittance transfers.
"Without the exemption, these insured institutions report that they would be unable to send some transfers to certain parts of the world that they currently serve," the CFPB noted.
The Credit Union National Association has repeatedly called on the CFPB to use the full authority granted to it in the Dodd-Frank Act to exempt credit unions from the international remittance transfer rule and other regulations.
"When the remittance rule was finalized, several credit unions stopped offering the service to their members," CUNA President/CEO Bill Cheney wrote in a February letter to Congress.