CFPB proposes expanding safe harbor in remittance rule

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The Consumer Financial Protection Bureau is proposing to expand a safe harbor in its remittance rule to more institutions.

The agency announced changes Tuesday meant to reduce compliance costs and allow some institutions to provide estimates rather than disclose exact prices, fees and exchange rates for international money transfers.

The notice of proposed rulemaking would amend Regulation E, which implements the Electronic Fund Transfer Act's protections for consumers sending remittances.

The bureau is proposing that institutions receive a permanent safe harbor if they provide 500 or fewer remittance transfers a year. Currently, institutions receive a safe harbor if they issue just 100 transfers annually.

The bureau’s 2013 rule gave a temporary exception to banks and credit unions but the exception expires in July 2020 and cannot be extended. In April, the CFPB issued a request for information asking for public comment on how to proceed.

Banks and credit unions collectively send roughly 45% of the dollar volume of all remittance transfers a year.

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Remittances Payment fees Money transfers Regulatory reform Regulatory relief CFPB