On February 7, 2012, the Bureau of Consumer Financial Protection (the “Bureau”) issued a final rule adding a new Subpart B to its Regulation E (12 CFR Part 1005) governing international “remittance transfers,” as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”). At the same time, the Bureau issued a proposed rule, with a request for comment, on whether certain remittance transfers should be subject to the regulation, as well as other technical provisions of the final rule.
Section 1073 of the Act amends the Electronic Fund Transfer Act by adding a new system of consumer protections for “remittance transfers,” which are electronic fund transfers sent by consumers in the United States to individuals and businesses in foreign countries. The final rules generally require the following:
- Remittance transfer providers must give a consumer sending a remittance transfer a written pre-payment disclosure containing information about the transfer, such as the exchange rate, applicable fees and taxes, and the amount to be received by the recipient.
- Remittance transfer providers must give a consumer a receipt, when payment has been made by the consumer, containing the information contained in the pre-payment disclosure, plus additional information, such as the availability of the funds, the recipient’s contact information, and the sender’s error resolution and cancelation rights.
- In addition to disclosure requirements, there are substantive requirements with respect to remittance transfers, such as timing and accuracy requirements for preauthorized recurring transfers (along with disclosure requirements for these types of transfers).
- Senders of remittance transfers are given certain error resolution and cancelation rights.
The final rule is effective February 7, 2013.
In a separate proposed rule and request for public comment, also published in the Federal Register on February 7, 2012, the Bureau is requesting comment on whether a safe harbor should be adopted with respect to remittance transfer providers that do not provide remittance transfer services in the “normal course of business,” as well as a definition of that term. The proposed rule also requests comment on certain of the final rule’s provisions governing preauthorized recurring transfers. Comments on the proposed rule must be submitted by April 9, 2012. Comments must be identified by Docket No. CFPB-2011-0009 or RIN 3170-AA15, and may be sent by any of the methods set forth in the notice, which is published in the Federal Register of February 7, 2012 (Volume 77, No. 25) at page 6310.