May 10, 2021

Volume XI, Number 130


May 10, 2021

Subscribe to Latest Legal News and Analysis

International Fund Transfer Rules are Coming Soon!

Among the consumer law changes made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DFA”) were new protections for consumers who send funds to consumers or businesses located in other countries. They include disclosures (potentially in multiple languages) and error resolution and cancellation rights. These requirements have been implemented by the Bureau of Consumer Financial Protection (“CFPB”) in amendments to Regulation E.

This new regulation will take effect in just three months, on February 7, 2013. For those banks and businesses offering such services, it is not too early to plan for compliance with the new rule.

In general, the new rule applies to transfers of more than $15 by electronic means made by intermediaries on behalf of consumers to consumer or business recipients in foreign countries. In Regulation E, the consumers who make the transfers are called “senders,” the transfers covered by the rule are called “remittance transfers,” the recipients of transfers are called “designated recipients,” and the intermediaries to which the rule applies are called “remittance transfer providers.”

Remittance transfer providers include banks, thrift institutions, credit unions, money transmitters, securities broker-dealers, and other companies that offer remittance transfer services to consumers in the normal course of business. Such entities that consistently send 100 or fewer remittance transfers annually, however, are exempt under the rule.

The rule generally requires a remittance transfer provider to furnish two disclosures to the consumer. These disclosures must be given in writing, in English, and in some cases in another language as well. The first is given before the consumer pays for the remittance transfer. The second, containing additional information and a receipt, is furnished when the consumer makes payment. At the option of the remittance transfer provider, a single, combined disclosure may be given before the consumer makes payment, so long as an additional proof of payment is given when payment is made. Special rules apply to remittance transfers scheduled in advance, including recurring remittance transfers.

Getting ready for compliance with the new rule may involve multiple issues. Among other things, you will want to identify the products, departments and staff that are affected by the rule, as well as the business processes and operational or systems technology used to enter, implement, and record remittance transfers.

The new rule requires accurate disclosure of certain information, such as currency exchange rates, tax rates in foreign countries, and fees imposed by the third parties participating in international fund transfers, that may not be within your control. This may suggest the need for a review of the means by which you communicate with your business partners, and for greater coordination of real-time information exchange.

With the compliance deadline approaching in three months, it is not too early to act on your response. To learn more about the new rules, including disclosure requirements and cancellation and error resolution rights, click here.

© Copyright 2021 Dickinson Wright PLLCNational Law Review, Volume II, Number 327



About this Author

John Lawrence, international and domestic financial services attorney, dickinson wright law firm

John Lawrence works with Financial Institutions including:

  • International and domestic financial services
  • Government regulation of financial institutions
  • Mergers and acquisitions of financial institutions
  • Corporate finance
  • Consumer credit
  • International operations and joint ventures
  • Asset securitization