The Consumer Financial Protection Bureau issued a notice of proposed rulemaking relating to the remittance rule.
The rule generally requires companies that provide remittance transfers in the normal course of business disclose to consumers certain fees and the exchange rates that apply to transfers. It also includes an exception however, that allows certain banks and credit unions to estimate certain fee and exchange rate information instead of disclosing exact amounts in certain circumstances. This exception expires by statute in July 2020.
The NPRM proposes to allow certain banks and credit unions to continue to provide estimates under certain conditions where it could be economically infeasible for these institutions to provide exact disclosures. This could preserve consumers’ ability to send remittances from their bank accounts to certain destinations and reduce the compliance burden for banks and credit unions.
In addition, the CFPB is proposing to increase the safe harbor threshold that determines whether a company makes remittance transfers in the normal course of its business and is subject to the Rule. Under the NPRM, companies making 500 or fewer transfers annually in the current and prior calendar years would not be subject to the rule. This would reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances—less than .06 percent of all remittances.
The public will have until January 21, 2020 to comment on the proposed rule.