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Financial Services Law Insights and Observations

CFPB Finalizes Amendments to Remittance Transfer Rules (Regulation E)

CFPB Dodd-Frank


On January 20, the CFPB issued a final rule to amend regulations applicable to consumer remittance transfers of over fifteen dollars originating in the United States and sent internationally. Generally, the final rule requires remittance transfer providers to (i) provide written pre-payment disclosures of the exchange rates and fees associated with a transfer of funds, as well as the amount of funds the recipient will receive, and (ii) investigate consumer disputes and remedy errors. The rulemaking stems from a Dodd-Frank Act provision that expanded the scope of the Electronic Fund Transfer Act to cover international money transfers, and concludes an effort started by the Federal Reserve Board (FRB) that was transferred to the CFPB last year. The final rule closely tracks the proposed FRB rule, but among other things, provides (i) a thirty-minute cancellation period for consumers, as opposed to the proposed one-day period, (ii) additional compliance guidance for specific circumstances, including for transactions conducted by mobile applications, and (iii) revised model disclosure forms. Concurrent with the final rule, the CFPB issued a request for comment on additional revisions to the regulations, including comments and information for use in (i) setting a specific safe harbor for remittance transfer providers that do not provide such services “in the normal course of business”, and (ii) applying the new disclosure and cancellation requirements in cases where the request is made several days in advance of the transfer date. Comments on the proposal will be accepted for sixty days following publication in the Federal Register.