The CFPB has adopted a final rule amending the remittance transfer provisions of Regulation E (electronic funds transfers) to extend a temporary exception for consumer disclosures that allows banks to estimate third-party fees and exchange rates for which they cannot determine exact amounts when providing remittance transfers to account holders. The final rule issued on August 22 extends the expiration of that temporary exception from July 21, 2015 to July 21, 2020. The Dodd-Frank Act provides that a bank can only rely on this exception when it cannot determine the exact amounts of third-party fees and exchange rates for remittance transfers sent by consumers to recipients in other countries for reasons beyond the bank’s control. The CFPB said that if the temporary exception expired in July 2015, current market conditions would not allow banks to know the exact fees and exchange rates associated with certain remittance transfers. These banks reported to the CFPB that they would have been unable to send some transfers to certain parts of the world that they currently serve without the exception. Section 1073 of the Dodd-Frank Act generally requires the disclosure of the actual exchange rate and remitted amount to be received prior to and at the time of payment by the consumer, along with the disclosure of cancellation and refund rights.
Nutter Notes: The final rule also includes several clarifications and technical corrections to the CFPB’s remittance transfer regulation. The final rule clarifies that U.S. military installations abroad are considered to be located in a state (i.e., within the U.S.) for purposes of the remittance transfer regulation. The final rule also clarifies that whether a remittance transfer from an account is for personal, family or household purposes may be determined by ascertaining the primary purpose of the account used for the transfer. The final rule clarifies that faxes are considered writings for purposes of satisfying certain provisions of the regulation that require remittance transfer providers to provide disclosures in writing, and that, in certain circumstances, a provider may provide oral disclosures after receiving a remittance inquiry from a consumer in writing. The final rule permits remittance transfer providers to include the CFPB’s new remittance-specific consumer web pages as the CFPB web site that providers must disclose on remittance transfer receipts. The final rule also clarifies two of the regulation’s error resolution provisions, namely what constitutes an error caused by delays related to fraud and related screenings, and the remedies for certain errors.