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Bureau Also Releases Tool to Help Make Regulations Easier to Understand
WASHINGTON – The Consumer Financial Protection Bureau (CFPB) today published the procedures it will use in examining institutions that make remittance transfers for consumers. The Bureau is also releasing eRegulations, an online tool designed to make regulations easier to understand.
“Consumers need and deserve to have greater transparency and basic consumer protections when transferring money internationally,” said CFPB Director Richard Cordray. “Today’s examination procedures will help ensure that they are getting just that from their remittance providers.”
Consumers send tens of billions of dollars from the United States to foreign countries each year. Prior to the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, these international money transfers were generally not covered by federal consumer protection regulations. The Dodd-Frank Act expanded the scope of the Electronic Fund Transfer Act to provide protections for senders of remittance transfers. In February 2012, the CFPB issued a final rule outlining how covered providers of remittance transfers should treat consumers who send money abroad.
The rule, which goes into effect on October 28, 2013, has been subsequently revised to address concerns related to some specific implementation challenges. The rule applies to many companies that offer international transfers to consumers, including banks, credit unions, and money transmitters. It does not, however, apply to companies that consistently provide 100 or fewer remittance transfers each year, nor does it apply to transactions under $15.
The remittance transfer rule was designed to bring new levels of transparency to international money transfers. CFPB examiners will use today’s procedures as a guide to ensure that remittance transfer providers are complying with requirements of federal consumer financial law, including:
- Providing required disclosures: The CFPB remittance rule requires that providers disclose information about certain fees, the exchange rate, and the amount to be received by the recipient. Disclosures must generally be provided when the consumer first requests a transfer. After payment is made, consumers are entitled to additional information or, in some cases, a proof of payment.
- Following proper error resolution procedures: Remittance providers must to investigate and resolve errors. These procedures must include notifying the consumer of the outcome of the investigation.
- Offering refund and cancellation rights to consumers: Consumers may cancel most remittance transfers up to thirty minutes after payment. Examiners will be looking to make sure that the provider refunds the consumer’s money, at no additional cost to the consumer, within three business days if the consumer makes an appropriate request in time.
Examiners will also review the activities of international money transfer providers for other consumer risks, including potentially unfair, deceptive, or abusive acts or practices. When necessary, examiners will coordinate and work closely with the CFPB’s enforcement staff to take appropriate enforcement actions to address harm to consumers.
The CFPB is coordinating with other regulators to ensure they all have a shared understanding of the CFPB’s new rules. Today’s procedures are based on procedures that the CFPB and other examining agencies developed through the Federal Financial Institutions Examination Council. This interagency effort will promote consistent supervision of remittance providers.
In addition to the examination procedures, the CFPB has developed a small entity compliance guide to assist the industry in its implementation of the rule’s requirements. To raise awareness of the rule and its requirements, the CFPB has been holding webinars and information sessions at a number of industry conferences in addition to addressing questions from stakeholders.
Resources on the CFPB’s remittance transfer rule are available at: http://www.consumerfinance.gov/remittances-transfer-rule-amendment-to-regulation-e/
The Remittance Transfer Examination Procedures can be found at: http://files.consumerfinance.gov/f/201310_cfpb_remittance-transfer-examination-procedures.pdf
In conjunction with the examination procedures, the Bureau is releasing “eRegulations,” a web-based, open source tool that aims to make regulations easier to find, read, and understand. Regulation E is the first regulation to be included in this new tool and the contents of Regulation E, including the final remittance rule, can be accessed with eRegulations. The eRegulations tool lets users identify and display definitions for specific terms within regulation text, move easily among past, present and future versions of a regulation, and smoothly navigate between regulation text, official interpretations, appendices, and certain section-by-section analyses contained within Federal Register notices.
The CFPB created this tool with the goals of increased compliance, more efficient supervision, and improved accessibility. When all of those involved can better understand the regulations, the regulations are more likely to achieve their objectives and better protect consumers. The Bureau sought feedback from various stakeholders in the development of eRegulations. This tool is a work in progress and the CFPB welcomes feedback at CFPB_eRegs_Team@cfpb.gov.
The eRegulations tool can be found at: http://www.consumerfinance.gov/eregulations/1005
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.