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Last update: 04/20/14

Consumer International Payments/Remittance Transfers

A “remittance transfer” is defined broadly to include all electronic transfers of funds to designated recipients located in foreign countries that are initiated by a consumer in the United States utilizing a remittance transfer provider’s services. A “remittance transfer provider” is defined as any entity providing remittance transfers in the “normal course of business,” and does not depend upon whether the consumer holds an account with the remittance transfer provider. Remittance transfer providers include banks, thrifts, credit unions and money transmitters.

Starting October 28, 2013, federal law will provide new protections, including new rights to see more information about the transfer, resolve complaints or mistakes, and cancel transfers after they've been requested.

Download ICBA Summary of the CFPB Final Rules Regarding Remittance Transfers

ICBA Position

While the April 2013 Final Rule provides much needed relief for community banks, there are still a number of steps that policymakers can take to encourage remittance transfer growth among community banks:

  • Increase the safe harbor threshold to encourage community banks to cultivate greater remittance transfer volumes.
  • Exclude from the definition of “remittance transfer” funds transfers not destined to a natural person outside the United States or that are of large dollar amounts.
  • Incorporate the temporary exchange rate estimates (which expire in 2015) into a permanent provision.
  • Promote open network transactions such as wire and ACH transfers as a fast and cost-effective alternative for remittance transfers and develop requirements that reflect the functionality and capabilities of open network systems.

Background

On January 20, 2012, the Consumer Financial Protection Bureau (“CFPB”) issued a final rule that amended Regulation E, which implements the Electronic Fund Transfer Act. On December 31, 2012, the CFPB delayed the effective date of the final rule and re-proposed certain provisions. This action was prompted by concerns raised by ICBA and other financial institutions that the January 2012 rule, would have led community banks to either discontinue or drastically limit the availability of this service and thereby limit consumer access.

On April 30, 2013, the CFPB issued a final rule that revises several provisions of the remittance transfers rule that were problematic and unworkable for community banks. In the final rule, disclosures of foreign taxes and recipient bank fees, which were required under the prior rules, are optional. Additionally, banks are no longer liable for an uncollectable loss if the consumer provides an incorrect account number, routing number or international identifier.

Staff contacts: Cary Whaley



Date Title Source/Publication
04/16/2014 CFPB Proposes Revision to Remittance Rule NewsWatch Today
01/24/2014 CFPB Proposes Oversight of Large, Nonbank Remittance Providers NewsWatch Today
05/30/2013 ICBA Summary of the Consumer Financial Protection Bureau’s Final Rules Regarding Remittance Transfers Summary
05/01/2013 ICBA Supports Revisions to Remittance Rule News Release
04/22/2013 Proposed Remittance Transfer Reporting Industry Letter to Regulators
03/13/2013 Remittance Transfers Policy Resolution
02/01/2013 Proposed Revisions to Regulation E, Remittance Transfer Rules Letter to Regulators
10/17/2012 Request for Interim Final Rule to Correct Regulation E Requirements Related to Remittance Transfers Letter to Regulators
10/17/2012 Joint Letter on the Implementation of Remittance Transfer Rules under Section 1073 of the Dodd- Frank Act Joint Letter to Regulators
08/08/2012 ICBA Statement on New Requirements on Remittance Transfers Press Release
08/07/2012 Consumer Financial Protection Bureau Final Regulation E (Electronic Fund Transfers) Remittance Transfers Safe Harbor and Preauthorized Transfers Rule CFPB Rulemaking
07/22/2012 Regulation E, Electronic Fund Transfers Letter to Regulators
04/09/2012 Industry Comments on Consumer Financial Protection Bureau Proposed Regulation E (Electronic Fund Transfers) Remittance Transfers Rule Industry Letter to Regulators
04/09/2012 ICBA Comments on Consumer Financial Protection Bureau Proposed Regulation E (Electronic Fund Transfers) Remittance Transfers Rule Comment Letter
01/20/2012 Consumer Financial Protection Bureau Final Regulation E (Electronic Fund Transfers) Remittance Transfers Rule and Proposed Safe Harbor and Preauthorized Transfers Rule CFPB Rulemaking
07/22/2011 Industry Comments on Federal Reserve Proposed Regulation E (Electronic Fund Transfers) Remittance Transfers Rule Industry Letter to Regulators
07/22/2011 ICBA Comments on Federal Reserve Proposed Regulation E (Electronic Fund Transfers) Remittance Transfers Rule Letter to Regulators
05/12/2011 Federal Reserve Proposed Regulation E (Electronic Fund Transfers) Remittance Transfers Rule Federal Reserve Rulemaking
ICBA Issues Statement on CFPB Update of Remittance Transfer Rule

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