The CFPB finalized revisions to the remittance rule, extending the sunset date of a temporary provision that permits insured financial institutions to estimate certain pricing disclosures under the Dodd-Frank Act by five years to July 21, 2020. The rule requires financial institutions to disclose certain third-party fees and applicable exchange rate, while the exception allows federally insured financial institutions to estimate charges when exact amounts are indeterminable for reasons beyond the financial institution’s control. The CFPB noted in its press release that it cannot extend the temporary exception beyond 2020, and that financial instructions should use the extra five years to develop reasonable ways to provide consumers with exact fees and exchange rates for all remittance transfers.
While remittance functions are a popular feature on many payment cards, those international remittance providers that work with an open-transfer network face the biggest challenge with respect to compliance. Licensed money transmitters that offer international remittances via a closed-agent network are likely better equipped to comply with the rule once it becomes effective.
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