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Financial Services Law Insights and Observations

CFPB issues Covid-19 remittance rule FAQs

Federal Issues CFPB Agency Rule-Making & Guidance Remittance Transfer Rule Covid-19

Federal Issues

On June 2, the CFPB released Regulation E Remittance Rule FAQs related to the Covid-19 pandemic. The FAQs state that a provider’s failure to deliver remittance transfer funds to a designated recipient by the disclosed date of availability due to a government-mandated closure of commercial activity in response to Covid-19 would not be considered an error under the rule if the provider could not have reasonably anticipated the closure. The FAQs note that a provider would not be able to reasonably anticipate a closure, for example, if the closure of remittance transfer services was announced in the foreign country after the provider initiated the transfer, but before the guaranteed availability date.

The Bureau previously issued a policy statement (covered by InfoBytes here), which established a temporary exception allowing institutions providing remittance transfers to estimate fees to consumers in light of the Covid-19 pandemic. From July 1 until January 21, 2021, the Bureau will not cite supervisory violations or initiate enforcement actions against certain institutions for disclosing estimated fees and exchange rates.

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