Michelle L. Rogers and Edward W. Somers Authored a Law360 Article, "CFPB Shines Spotlight On Consumer Remittance Transfers"
Law360Michelle L. Rogers, Edward W. Somers, Lauren E. Quigley
The Consumer Financial Protection Bureau recently closed a 60-day public comment period on a plan to conduct an assessment of the effectiveness of its May 2013, final rule governing consumer remittance transfers under Subpart B of Regulation E (remittance transfer rule). The remittance transfer rule governs the transfer of money by consumers to recipients located overseas and has been routinely blamed by industry participants and trade associations for increased costs, declining market participation and higher prices for consumers. The planned assessment will focus on (1) “whether the market for remittances has evolved ... in ways that promote access, efficiency, and limited market disruption;” and (2) whether the remittance transfer rule (and other CFPB regulatory activity) has “brought more information, transparency, and greater predictability of prices to the market.”
Based on the responses received during the comment period, the answer to both questions may be “no,” and commenters pulled few punches in blaming the core elements of the rule for adverse market impacts.
Multiple commenters requested that the CFPB consider doing away with or substantially revise the core disclosure, cancelation and error resolution provisions that make up the heart of the rule but are now blamed for hurting consumers through higher prices. Others sought an increase to the safe harbor exemption for low-volume remittance providers in order to remove them entirely from the ambit of the rule.
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Originally published in Law360; reprinted with permission.