The CFPB has issued a proposal to make revisions to the remittance transfer rule and delay the rule’s effective date. The CFPB had announced its plans to make the proposal in a bulletin it issued in November. The proposal would delay the rule’s effective date, currently set for February 7, 2013, until 90 days after the proposal is finalized.
The proposed changes address the following three areas:
- Error resolution procedures. The proposal would revise the error resolution procedures that apply when a remittance transfer is not delivered to the designated recipient because the sender gave the transfer provider an incorrect account number and the funds cannot be recovered. The transfer provider would not be liable for the funds if it (a) can demonstrate that (1) the sender gave an incorrect account number to the provider, (2) the sender had notice that he or she could lose the transfer amount if an incorrect account number was given, and (3) the incorrect account number resulted in the deposit of the transfer into the wrong account, and (b) promptly uses reasonable efforts to recover the transfer amount. The proposal would also make changes to the error resolution procedures for resending funds when an error occurred because the sender gave the provider incorrect or insufficient information other than an incorrect account number.
- Disclosure of foreign subnational taxes. The proposal would require transfer providers to disclose only those foreign taxes imposed by a country’s central government.
- Disclosure of recipient institution fees and foreign taxes. If there are variables that would affect the amount of foreign taxes imposed on a transfer or the amount of fees imposed by a recipient’s institution for receiving a transfer and the provider does not have specific knowledge regarding those variables, the proposal would allow the provider to disclose the highest possible tax or fee that could be imposed with respect to any unknown variable. The disclosure of the recipient institution’s fees with respect any unknown variable would have to be based on fee schedules made available by the recipient institution or information ascertained from prior transfers to the same recipient institution. If the provider could not obtain either of these sources of information, it could rely on other reasonable sources of information, such as fee schedules published by competitor institutions.
Comments on the delay in the effective date will be due 15 days after the proposal is published in the Federal Register. Comments on the remainder of the proposal will be due 30 days after publication.