The Consumer Financial Protection Bureau has issued a final rule covering remittances transfers which raises the reporting threshold for those institutions making relatively few annual remittances.
The remittance rule imposes requirements on entities that send international money transfers, or remittance transfers, on behalf of consumers. It goes into effect July 21, 2020.
Among its requirements, the rule mandates that remittance transfer providers generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient. It also allows for depository institutions to estimate certain fees and exchange rate information under certain circumstances, but by statute, this provision expires in July 2020.
The final rule allows certain banks and credit unions to continue to provide estimates of the exchange rate and certain fees under certain conditions. This could preserve consumers’ ability to send remittances from their bank accounts to certain countries or recipient institutions.
The final rule also increases the threshold that determines whether an entity makes remittance transfers in the normal course of its business and is subject to the rule. Entities making 500 or fewer transfers annually in the current and prior calendar years would not be subject to the rule.
This will reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances—less than 0.06 percent of all remittances, the bureau said.
The move is part of the CFPB’s overall efforts to increase regulatory flexibility in the midst of the COVID-19 pandemic.