Credit unions prepare for remittance transfer rules
10/17/2013 04:00 pm
As the Oct. 28 effective date for new remittance transfer regulations approaches, credit unions are reminded of how the coming regulatory changes could impact their daily business, and how they can prepare for the changes.
Under the final Consumer Financial Protection Bureau (CFPB) rule, remittance transfer providers are required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers will also be required to investigate disputes and correct errors.
In a recent
CUNA CompBlog post, Valerie Moss, senior director of compliance analysis, noted that two types of credit unions have reached out to CUNA with questions regarding the rule: credit unions that provide remittance transfers "in the normal course of business" and are working on implementation issues, and credit unions that only provide international money transfers occasionally as an accommodation to members.
Both groups, Moss wrote, have one thing in common: they need to determine what is and is not a remittance transfer under subpart B of Regulation E - the electronic funds transfer rule.
Credit unions that provide remittance transfers in the "normal course of business" will be considered "remittance transfer providers," and will need to comply with the remittance rule requirements. Credit unions will not be considered remittance transfer providers under the rule if:
They provided 100 or fewer remittance transfers in the previous calendar year
If they provide 100 or fewer remittance transfers in the current calendar year
Credit unions that qualify for this safe harbor are exempt from the rule, Moss wrote. When tallying the 100, credit unions must count all the various types of remittance transfers covered by the rule together. However, transactions that do not count toward this 100 transfer total include:
Domestic wire/ACH transactions;
Transfers where the credit union is the recipient institution of the wire/ACH;
Debit card purchases from a merchant located in another country;
International transfers sent by businesses;
Prepaid cards purchased in the U.S. that are not delivered to a recipient abroad; and
Online bill payments to recipients located in another country where the agreement states that payments will be made solely by check, draft or similar instrument.
For more information about the CFPB remittance rule,