CFPB Releases Final Remittance Rule, Expanding Temporary Protections and Making Them Permanent
Earlier today, the Consumer Financial Protection Bureau (CFPB) issued a final rule regarding remittance transfers, also known as international money transfers, which places requirements on entities that send such transfers on behalf of consumers.
“The term ‘remittance transfers’ is sometimes used to describe consumer-to-consumer transfers of small amounts of money, often made by immigrants supporting friends and relatives in other countries,” the rule reads. “The term may also include, however, consumer-to-business payments of larger amounts, for instance, to pay bills, tuition, or other expenses.”
According to American Banker, the rule “expanded and made permanent temporary protections established in an earlier 2013 regulation” and “establishes a safe harbor for banks providing 500 or fewer transfers a year from complying with a requirement that they disclose the price of a remittance transfer, the exact exchange rate, the amount to be delivered, and the date funds are available.” The previous exemption threshold was set at 100 transfers.
Institutions making more than 500 transfers per year remain subject to the rule, though a press release issued by the CFPB notes that the exemption “will 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.”
Since the coronavirus pandemic began, many foreign consumers have relied on remittance transfers from the United States. In April, the CFPB announced regulatory flexibility to enable institutions to concentrate on consumers’ immediate needs. The Bureau says that the final Remittance Rule will continue to provide regulation to ensure that consumers can send money to family and friends during the pandemic.