As previously reported on the CFPB-Lawblog, the Bureau’s decision to provide an exemption to its final international money transfer rule (Rule) for institutions that conduct 100 or fewer remittance transfers per year did little to assuage concerns of the high compliance costs and legal liabilities that the rule imposes on smaller institutions. Now, a bipartisan group from the United States House of Representatives has joined the chorus expressing concerns over the Rule. The group is requesting that the CFPB “delay the effective date of these rules and to undertake a comprehensive study of their impact before moving forward to avoid irreparable harm to consumers.”
In a letter to Director Cordray, 32 House members urge the CFPB to delay the effective date of the Rule from February 2013 to February 2015 to engage in a thorough study of how international transfers are used by “all segments of the consumer population, and the impact of the current rule on consumers, pricing for international transfers . . . , and product accessibility.” The letter warns that the Rule’s high compliance costs and legal liabilities could force thousands of financial institutions to cease providing remittance transfers, which in turn will limit availability and drive up costs for consumers. The House members express particular concern for the impact the Rule will have on the “unbanked and underbanked populations who disproportionately use remittance services [and] will be forced to rely increasingly on services by less-regulated entities.”
Consumers and industry insiders standby as the CFPB has yet to respond to the letter. The CFPB-Lawblog will be closely following the CFPB’s movement on this issue, so check back with us regularly for updates on this developing story.