The Consumer Financial Protection Bureau (CFPB) announced Thursday (April 25) that it has issued a request for information on its remittance rule, which had faced calls by the Credit Union National Association for revision.
The CFPB said in a press release that the government watchdog is looking for information about changing the definition of the remittance transfer providers the rule covers and is looking at the extension of a temporary exception to the rule. The Remittance Rule mandates that providers generally must disclose the exact exchange rate, the number of certain fees, and the amount expected to be delivered to the recipient.
In a press release, CUNA said it had raised the issue about the rule on several occasions with new CFPB Director Kathy Kraninger, including a letter and face-to-face meetings. According to CUNA, the remittance rules place more regulatory requirements on companies that engage in remittance transfers as part of a normal cause of business. The rules excluded a provider that does less than 100 transfers. They are not considered to be a provider of remittances as part of the normal course of business. But CUNA said the threshold is low and has resulted in many credit unions getting out of the remittance business. CUNA wants the threshold raised to at least 1,000.
“CUNA has asked the CFPB for years to finalize substantive amendments to the remittance rule in order to balance necessary consumer protections with a more tailored regulation that allows consumers access to these services,” said CUNA President/CEO Jim Nussle in a press release. “We’re thankful to the CFPB for starting this process, and we thank our league and credit union partners who stressed the importance of this issue in meetings with Director Kraninger, CFPB staff, and other policymakers.”
In addition to requesting information on the remittance rule, CUNA said the CFPB’s request for information is also seeking information about the rule’s fee estimates safe harbor. With that CUNA said in some circumstances this permits a provider to disclose estimates of the fees rather than the exact amount. The exception expires on July 21, 2020, unless Congress acts to extend it. CUNA supports the fee estimate safer harbor and said in the press release that it thinks the CFPB should urge Congress to extend it or make it permanent.