Remittances

Our goal is to make financial markets work. A crucial part of reaching that goal is making sure that honest businesses – particularly small businesses – have what they need to understand and comply with our new regulations, which are designed both to help consumers and make a fair playing field for companies that play by the rules.

Today, we’re releasing our small business compliance guide for our international electronic money transfers rule (also known as the remittance rule), which will take effect on February 7, 2013. This guide will make it easier to understand the new requirements. Although the guide is not a substitute for the rule, it highlights issues that businesses, in particular small businesses and those that work with them, should consider while implementing the new requirements.

We need your help to find areas in the guide that could be better.

How can I provide feedback?

Email comments about the guide to CFPB_RemittanceGuide@cfpb.gov. Your feedback is crucial to making sure the guide is as helpful as possible. We would love to hear your thoughts on its usefulness and readability, and about improvements you think are needed.

We would especially like to know:

1) What kind of business do you operate?
2) Generally, what is the size of your business?
3) Where are you located?
4) How useful did you find the guide for understanding the rule?
5) How useful did you find the guide for implementing the rule at your business?
6) Do you have any suggestions for making the guide better, such as additional implementation tips?

What are some other compliance resources?

We are working on a number of projects to help industry understand and comply with the new requirements, including:

• Issuing a list of countries and other areas to which a particular exception to the rule’s disclosure requirements applies,
• Hosting a live webinar on October 16th,
• Answering specific questions at CFPB_RemittanceRule@cfpb.gov and at (202) 435-7700, and
• Releasing the small business guide.

Questions?

You can reach us at (202) 435-7700.

We held a live session on October 16th to talk about the new requirements for remittance transfer providers.

The rule to implement the consumer protections created by the Dodd-Frank Act for certain electronic transfers of funds to other countries – the remittance rule – will go into effect on February 7, 2013.

You can read CFPB Director Richard Cordray’s full remarks and see the remittance rule presentation slides from the event.

If you missed the event, you can watch below:

The rule to implement the consumer protections created by the Dodd-Frank Act for certain electronic transfers of funds to other countries – the remittance rule – will go into effect on February 7, 2013. We’re undertaking a number of efforts to help industry understand and comply with the new requirements. These include: releasing a list of countries and other areas to which a particular exception to the rule’s disclosure requirements applies, hosting a webinar, answering specific questions, and releasing a small business guide.

What is the countries list?

The remittance rule generally requires disclosure of, among other things, exact amounts to be received in a foreign currency, fees, and taxes, but estimates of these amounts are permitted in several situations. One situation where estimates are allowed is when the provider cannot determine exact amounts because of the laws of the recipient country. We are interpreting the exception regarding the laws of a recipient country to apply to these countries and other areas.

Webinar October 16th

Join us for a free, 90 minute webinar about the new requirements for remittance transfer providers on October 16th at 2:30 p.m. EST. We’ll give an overview of the rule and answer questions about compliance.

The webinar should be useful for money transmitters, banks, credit unions, and other companies that send money abroad for consumers, as well as other organizations that work with or represent consumers who send money abroad. Agents, software providers, foreign banks and others involved in international fund transfers from the United States may also be interested.

• RSVP by October 9 to CFPB_RemittanceRule@cfpb.gov to reserve your spot.
• Send your question about the rule by October 5 to CFPB_RemittanceRule@cfpb.gov. We will answer as many questions as we can during the webinar.

Small business guide

In the coming weeks, we will release a small business compliance guide to give more help to smaller entities that have to comply with the rule.

Questions?

While we expect to answer many questions at the webinar, our team can also answer additional questions about the rule. You can reach us at (202) 435-7700.

As a child of South Asian immigrants, I recall my parents frequently sending money back to our family and friends in India. Because so much depended on its receipt, my parents were uneasy about the transaction until they knew the money was in the right hands. Their unease was not unwarranted. My parents had no control over how the money got there. When my parents used a service to send money, they never fully understood the process, were charged numerous, unexplained fees, and felt powerless if any errors were made. At times they resorted to sending cash by mail, an option that was not especially secure.

Unfortunately, other immigrant families and other consumers who must send remittance transfers have had similar experiences, which is why advocates have been calling for greater protections around these transfers of money, or remittance transfers. Now, with direction from Congress through the Dodd-Frank Act, the CFPB has changed that. We adopted new rules that will go into effect in February 2013. These rules will generally make the costs of remittances clear and hold remittance transfer providers accountable for certain errors.

Here’s how:

Better Disclosures: Under this rule, remittance transfer providers must generally disclose the exchange rate, any fees related to the remittance, the amount of money that will be delivered abroad, and the date the money will be available. Certain disclosures must be provided both before and after the consumer pays for a remittance transfer. Consumers will generally receive these disclosures in English and sometimes in other languages. The CFPB thinks the clarity provided by these disclosures will help inform consumer decisions and instill confidence.

Option to Cancel: Typically, consumers will have at least 30 minutes after payment to cancel a remittance. If they cancel within the 30 minute window, they will get their money back, whether they make a mistake, change their minds, or feel something isn’t right.

Correction of Errors: With this rule, remittance transfer providers will generally be held accountable for errors. If a remittance sender reports a problem with a transfer within 180 days, the provider must generally investigate and correct errors. Companies that provide remittance transfers may also be responsible for mistakes made by their agents. The CFPB believes this will encourage remittance transfer providers to use reliable agents and partners in the U.S. and abroad, helping to weed out the bad actors.

As a lifelong advocate for immigrant communities, I am very proud that the first final rulemaking adopted by the CFPB addresses this issue and brings new protections to many consumers who, like my family, continue to send money to family members, loved ones, and others abroad.