The CFPB has issued a policy statement regarding its approach to supervision and enforcement of remittance transfers during the COVID-19 pandemic.
The EFTA, as implemented by the CFPB’s remittance rule, provides insured depository institutions with a temporary exception that allows them, under certain conditions, to disclose estimates of the exchange rate and covered third-party fees instead of exact amounts. The exception expires on July 21, 2020.
In December 2019, the CFPB proposed several amendments to its remittance rule, including changes that would mitigate the effects of the expiration of the temporary exception. In the policy statement, the CFPB states that it expects to issue a final rule in May 2020 so that the final rule can take effect by July 21, 2020 when the temporary exception expires.
Because the EFTA does not allow the CFPB to extend the temporary exception beyond July 21, subject to any new exceptions contained in the final rule, the final rule will require insured depository institutions to disclose actual exchange rates and third-party fees as of July 21. To mitigate the challenges that the COVID-19 pandemic creates for institutions in taking the steps necessary to be able to disclose such actual amounts by July 21, the CFPB advises in the policy statement that for remittance transfers that occur on or after July 21, 2020 and before January 1, 2021, it does not intend to cite in an examination or initiate an enforcement action against any insured institution “in connection with the disclosure of actual third-party fees and exchange rates that will be newly required to disclose actual costs by the expiration of the temporary exception, and instead continues to provide estimated disclosures that would have been allowed under the temporary exception.” Institutions are encouraged to implement procedures that will enable them to disclose actual amounts “as their capacity permits.” (Despite the supervisory or enforcement relief offered by the CFPB, insured institutions could still face consumer litigation alleging EFTA violations based on the use of estimates in reliance on the exception after July 21.)