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CFPB to adjust remittance transfer rules, delay rule’s effective date

The Consumer Financial Protection Bureau said in a recent bulletin that the watchdog plans to propose some adjustments to its rule on international money transfers and to delay the rule’s effective date.

“Some regulated entities identified issues that pose practical challenges in implementing the new law,” the CFPB said. “To address these issues, next month we will propose a narrow set of changes to the remittance rule. The proposed changes will address what should happen if a consumer provides an incorrect account number for a transfer and how remittance providers must disclose certain third-party fees and foreign taxes.”

The CFPB said that it would it extend the effective date of the measure until 90 days after a final rule on the matter is issued.

“[W]e recognize that remittance providers may need time to make sure they’re in compliance with the rule,” the agency said, indicating that a new implementation date would likely be during spring 2013.

The CFPB plans to address three areas in making the proposed adjustments to the remittance rules.

“The CFPB intends to propose that where the provider can demonstrate that the consumer provided the incorrect information, the provider would be required to attempt to recover the funds but would not be liable for the funds if those efforts are unsuccessful,” the CFPB said.

Additionally, the agency plans to propose revisions to the rule’s disclosure requirements regarding foreign taxes and fees calculated by the receiving institution.

“The proposal would provide additional flexibility around these requirements, including by permitting providers to base fee disclosures on published bank fee schedules and by providing further guidance on foreign tax disclosures where certain variables may affect tax rates,” the agency said.

The agency would also limit the obligation of providers to disclose foreign taxes limited to the national level, not including sub-national taxes.

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