Compliance Matters: Remittance Transfer Disclosures

Proposed rule would require remittance transfer providers to make certain disclosures to senders of remittance transfers.

July 1, 2011

Remittance Transfer Disclosures

The Federal Reserve Board has issued a proposal to require disclosures on remittance transfers to recipients in foreign countries. The proposal implements the remittance transfer disclosures under Regulation E (Electronic Fund Transfers) as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The proposed rule would require remittance transfer providers to make certain disclosures to senders of remittance transfers—including information about fees and the exchange rate, as applicable, and the amount of currency the recipient receives. In addition, the proposed rule would provide error resolution and cancellation rights for senders of remittance transfers.

The proposal would apply to virtually all cross-border, consumer-initiated electronic fund transfers, including international wire transfers, international automated clearinghouse transfers, and products such as WOCCU’s IRnet, although federally-insured credit unions are exempted from some of the proposed requirements. The proposal doesn’t cover debit and credit cards, transactions from a consumer’s U.S. credit union account to a credit union or bank account in that consumer’s name in another country, or online bill payments made through a website.

More information is available in CUNA’s Regulatory Comment Call, available at (“regulations & compliance” and then “regulatory advocacy”). Comments are due by July 22, 2011.


‘Know Before You Owe’

The Consumer Financial Protection Bureau (CFPB) launched the ‘Know Before You Owe’ project in May. It’s an effort to combine the Truth in Lending mortgage disclosure and the Real Estate Settlement Procedures Act Good Faith Estimate into a “single, simpler form that makes the costs and risks of loans clear and allows consumers to comparison shop for the best offer.”

Congress and federal regulators have considered merging the two disclosures for many years. But the Dodd-Frank Act now directs the CFPB to develop new integrated disclosures.

The CFPB is testing two alternate prototype forms lenders can give to consumers who’ve just applied for a mortgage.

The CFPB also has posted the prototypes at It includes an interactive tool to gather public input about the designs.

The testing will take place during the summer, to be followed by CFPB’s formal rule-making
process. The Dodd-Frank Act requires CFPB to issue proposed forms and implementing regulations for comment by July 2012.

NCUA Issues Final Rule on Advertising

The NCUA Board issued a final rule in May requiring radio and television advertisements for federally insured credit unions to include the phrase “this credit union is federally insured by the National Credit Union Administration.” Federally insured credit unions also may use the phrase “federally insured by NCUA” or reproduce NCUA’s official sign.

The final rule requires this official advertising statement in all advertisements, including on the cover page of its annual reports and statements of condition, and on its main Web page. Radio and television ads that are less than 15 seconds would be exempt from this requirement (down from less than 30 seconds under the previous requirement).

The rule also revises the definition of “advertisement” to mean “a commercial message, in any medium that is designed to attract public attention or patronage
to a product or business.”

In addition, the final rule requires the NCUA official advertising statement to “be in a size and print that’s clearly legible and may be no smaller than the smallest font used in other portions of the advertisement intended to convey information to the consumer.”

The mandatory compliance date is Jan. 1, 2012.


Compliance Q&A

Q Whose unique identifier should be provided to a mortgage applicant when more than one mortgage loan originator (MLO) works on a loan application?

A According to CUNA’s discussions with NCUA, all MLOs involved in a particular residential mortgage should provide their unique identifier to the consumer. The “unique identifier” is the identification number associated with the MLO within the Nationwide Mortgage Licensing System & Registry (NMLS). The unique identifier tracks the MLO and facilitates public access to the employment history and any disciplinary or enforcement actions that have been initiated against the individual. The SAFE Act regulations require registered MLOs to provide their unique identifiers to consumers upon request, before acting as an MLO, and through the MLO’s initial written communication with the consumer.

Q Does the Servicemembers Civil Relief Act (SCRA) prohibit a credit union from reporting a delinquency to a credit bureau while a servicemember is on active duty?

A No. The SCRA prohibits credit unions from reporting negative information to a credit bureau based solely on the fact a servicemember has exercised his or her rights under the SCRA—such as, requesting the 6% interest rate on pre-service loans (SCRA, Section 108). But credit unions aren’t prohibited from reporting the delinquencies of active duty servicemembers. Nevertheless, many credit unions hold off on reporting until the servicemember’s active duty has ended and the individual has had an opportunity to make good on his or her debts.

For more information, visit CUNA’s e-Guide to Federal Laws and Regulations