In January, the CFPB announced that it was delaying implementation of its controversial Remittance Rule governing foreign money transfers to revisit certain concerns raised by financial institutions. It appears that the CFPB was listening--sort of. The final Remittance Rule just released by the CFPB contains revisions lifting some of the compliance burdens on smaller community banks and credit unions, but leaving others in place that could jeopardize the ability of these small banks to offer remittance services.
The final rule changes the mandatory disclosure of foreign taxes and fees levied by foreign governments and financial institutions on money transfers optional to an optional requirement. The final rule also limits a bank's responsibility if funds are placed into an incorrect account. Director Cordray said that the revisions achieve the CFPB’s goals of “protecting consumers who send money abroad and to preserving their access to these services . . . by maintaining the rule’s crucial new consumer protections while facilitating compliance for providers of remittance transfers.” The Independent Community Bankers of America applauded the revisions explaining that they “reflect the operational realities of community banks and will help ensure that their customers continue to have access to remittance services.”
While some have been quick to recognize the CFPB’s willingness to make concessions to address industry concerns, the American Banker is reporting that the lobbying efforts of two consumer groups, the Center for Responsible Lending and the National Council of La Raza, were chiefly responsible for the revisions. Industry stakeholders are also critical of CFPB’s failure to address other requirements that could force credit unions and small banks out of the remittance business. National Association of Federal Credit Unions President and CEO Fred Becker explained that “the rule still imposes several costly requirements, and we remain concerned that many credit unions will either leave the market or sharply reduce their presence. Finally, we believe that the exemption for credit unions, which applies only to those institutions facilitating up to 100 remittances a year, remains far too low.” The Credit Union National Association also expressed concern that CFPB did not change the 100-remittance threshold, but vowed to continue urging “the CFPB to revisit these rules and to make additional changes to facilitate remittance transfers for credit unions.”