Consumer Financial Protection Bureau "CFPB" Proposes Revisions to Remittance Rule
The Consumer Financial Protection Bureau (CFPB or Bureau) on December 21 issued proposed revisions to a rule that creates certain protections for consumers who transfer money internationally. The proposed revisions, according to the Bureau, “are narrow in focus and intended to preserve the new consumer protections while facilitating compliance with the rule.” The Bureau also announced that it is delaying the implementation of the rule until 90 days after it issues a revised final rule.
Under the final rule, remittance transfer providers will be required to disclose certain fees and taxes, as well as the exchange rate that will apply to the transfer. The rule also provides consumers with error resolution and cancellation rights.
The proposed changes:
would provide increased flexibility and guidance with respect to the disclosure of taxes imposed by a foreign country’s central government as well as fees imposed by a recipient’s institution for receiving a remittance transfer in an account.
would require disclosure of foreign taxes imposed by a country’s central government, but would eliminate the requirement to disclose taxes imposed by foreign regional, provincial, state or other local governments.
- when the provider can demonstrate that the consumer provided an incorrect account number and certain other conditions are satisfied, would require the provider to attempt to recover the funds but would not require the provider to bear the cost of funds that cannot be recovered.
Though the rule was scheduled to take effect on February 7, 2013, the Bureau “is proposing a temporary delay of that date to accommodate the changes in today’s proposal.” Comments on the temporary delay will close 15 days after the proposed rule is published in the Federal Register. Comments on the remainder of the proposal will close 30 days after publication in the Federal Register.