Remittance Transfer Rule Provider
Relief Considered
In December 2019, the Consumer Financial Protection Bureau (CFPB) published a notice of proposed rulemaking to revise the
Remittance Transfer Rule (RTR).
Originally, the Dodd-Frank Act amended the Electronic Fund Transfer Act (EFTA) to create comprehensive consumer protections
for qualified remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries. The
CFPB implemented these consumer protections through the RTR to require disclosure of exact exchange rates, certain fees and
other key information.
Concerns over institutions potentially ceasing remittance transfer services or passing additional costs on to consumers due to
the expiration of the temporary exceptions related to the rule have prompted this new proposal. The following outlines the key
proposed amendments to the RTR.
Raising the safe harbor exception threshold from
100 remittance transfers annually to 500 transfers
annually. Currently, institutions providing 100 or fewer
qualified remittance transfers in each of the previous and
current calendar years are not covered by the disclosure
requirements stipulated.
Making permanent the temporary statutory exception
permitting insured, covered institutions to disclose
estimates of the exchange rate and covered third-
party fees instead of exact amounts. Specifically, under
the proposed rules, the exception, which was set to
sunset on July 21, 2020, would become permanent, and
provide for the following:
Exchange Rate: Institutions would qualify for the
estimated exchange rate permanent exception if the
designated recipient will receive funds in the country’s
local currency and the insured institution made 1,000
or fewer remittance transfers to the country in the
prior calendar year.
Third-Party Fees: Covered institutions would be
permitted to estimate covered third-party fees for a
remittance transfer to a recipient’s institution if the
insured institution made 500 or fewer remittance
transfers to that designated recipient’s institution in
the prior calendar year.
Making permanent a current rule exception permitting
providers to use estimates for transfers to certain
countries indicated on the safe harbor list and
providing a process for adding countries to this list.
The CFPB maintains a safe harbor list which currently
includes five countries: Aruba, Brazil, China, Ethiopia
and Libya. These countries’ laws prevent providers from
determining, at the time the required disclosures must be
provided, the exact exchange rate. This provision would
allow additional countries to be added to this list.
Industry comments, due in mid-January of this year,
regarding the proposal to gain additional and permanent
relief related to the RTR are presently under review. lll
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