WASHINGTON – The Consumer Financial Protection Bureau on Tuesday said credit unions and banks with fewer than 100 remittances per year are exempt from a requirement that providers of international money transfers provide upfront fee disclosures.
The bureau’s final rule, which updated an earlier regulation on remittances, appeared aimed at soothing concerns by credit unions and community banks that the fee requirements unduly harmed low-volume providers.
The CFPB previously had proposed a threshold of 25 transfers per year for exempting providers.
“We recognize that in regulations, one size does not necessarily fit all,” said CFPB Director Richard Cordray. “The final remittance rule will protect the overwhelming majority of consumers while making the process easier for community banks, credit unions and other small providers that do not send many remittance transfers.”
Under the Dodd-Frank Act, the CFPB was required to write a rule affording protections for remittance users, including that institutions disclose fees, exchange rates and how much a recipient in an international money transfer would receive. The bureau implemented the provision with a regulation issued in January, but at the time also sought comment on options for providing safe harbors. Both rules are set to become effective in February 2013.
Commenters expressed concern that the rule will penalize smaller institutions.
The latest final rule provides a six-month transition period to comply with the new restrictions for institutions that had less than 100 remittances in the previous year but subsequently crossed the threshold. The rule also allows some flexibility for remittance transfers that are scheduled in advance of the actual transfer.