On Tuesday, August 7th, the Consumer Financial Protection Bureau (CFPB) released its final rule regarding the safe harbor exemption from the remittance transfers final rule. While the final is a slight improvement over the 25 transfers per year in the proposal, CUNA and leagues had repeatedly urged the CFPB to increase its proposed safe harbor for credit unions and other providers to no less than 1,000 transfers per year. However, the final rule only permits an exemption for providers that transmit 100 or fewer remittances a year.
The remittances final rule applies to credit unions and financial institutions that provide consumers with international electronic funds transfer services, because it broadly defines the term "remittance transfers" to include virtually all cross-border electronic funds transfers initiated by consumers in the U.S., including international ACH, international wire transfers, products such as WOCCU’s IRnet, and money transfer organizations. The final rule will require new disclosure and other requirements for institutions covered by the rule, effective on February 7, 2013.
CUNA and leagues remain very concerned that the remittance transfers final rule will impose high compliance costs and legal liabilities on credit unions.
We have worked with the leagues, credit unions and other trade associations to advocate for meaningful relief during the enactment of the Dodd-Frank Act and throughout the rulemaking process over the past two years.
We are reviewing our options including appealing the rule with the Financial Stability Oversight Council (FSOC), which can overturn CFPB rules. We will continue to work with the leagues and keep you posted on all our efforts to address concerns with the rule.
– by CUNA President, Bill Cheney