Delay Anticipated in Effective Date of Remittance Transfer Rule
by Amy Kleinschmit, Director of Compliance
On Tuesday, November 27, 2012, the Consumer Financial Protection Bureau issued CFPB Bulletin 2012-08, which can be found here: http://files.consumerfinance.gov/f/201211_cfpb_remittance-rule-bulletin.pdf.
The bulletin announces that the CFPB plans to issue a proposed rule in December which will refine three elements of its rule regarding foreign remittance transfers. “This notice will propose to amend the final rule issued earlier this year, currently set to take effect on February 7, 2013. The notice will also propose a brief extension of the effective date of the rule until 90 days after the Bureau finalizes the proposal. The Bureau anticipates providing this extension in order to permit providers to adjust their systems in response to the proposed requirements. The Bureau expects that the proposed effective date will be sometime during the spring of 2013.” CFPB Bulletin 2012-08
The proposal that the CFPB expects to issue will address three topics which will be open for comment. Specifically, the CPFB plans to address:
• Situations in which a sender provides an incorrect account number to a remittance transfer provider. As the Bureau announced during its webinar on the remittance rule on October 16, 2012, the CFPB plans to propose revisions to the rule’s error resolution provisions. Specifically, the proposal will address the way the rule applies to situations in which a sender provides an incorrect account number to a remittance transfer provider resulting in a remittance transfer being deposited into the wrong account. The CFPB intends to propose that where the provider can demonstrate that the consumer provided the incorrect information, the provider would be required to attempt to recover the funds but would not be liable for the funds if those efforts are unsuccessful.
• Disclosure of third party fees and foreign taxes. The CFPB plans to propose revisions to the rule’s disclosure provisions concerning foreign taxes and fees assessed by the financial institution receiving the transfer. The proposal would provide additional flexibility around these requirements, including by permitting providers to base fee disclosures on published bank fee schedules and by providing further guidance on foreign tax disclosures where certain variables may affect tax rates.
• Disclosure of regional and local taxes assessed in foreign countries. The CFPB also plans to propose that the obligation for providers to disclose foreign taxes imposed on remittance transfers is limited to taxes imposed at the national level, and does not encompass taxes that may be imposed by foreign, sub-national jurisdictions.
Should you have any questions or concerns on this or any other compliance topic, please do not hesitate to contact Amy Kleinschmit at email@example.com or 701.214.9721.