CFPB Remittance Rule Improved, but Still a Disappointment to Some NW Credit Unions

The highly controversial final remittance transfer rule takes effect October 28—eight months after the original February 7 date initially proposed by the Consumer Financial Protection Bureau (CFPB). Trade associations representing credit unions were successful in seeking an extended comment period, which culminated with Tuesday’s final rule.

The remittance rule was initially issued by the Federal Reserve Board (FRB) in early 2011, with rulemaking authority transferred to the CFPB in July of 2011. As initially published, the rule required remittance transfer originators to provide hard-to-obtain information, and held the provider liable for information outside their control.

“Credit unions expressed a number of concerns about the unintended consequences of the final rule,” said John Trull, director of regulatory advocacy for the Northwest Credit Union Association (NWCUA). “After expressing concerns that the final rule created indeterminate liabilities based on factors outside the control of the financial institution the CFPB made significant changes.”

During the extended rule making process, the NWCUA and some of its member credit unions leveraged opportunities to advocate for changes with CFPB Director Richard Cordray and Regional Director Edwin Chow, as well as with the bureau’s regional staff. The NWCUA worked with a key member of the Northwest congressional delegation as well as with the Credit Union National Association (CUNA).

Trull noted that many credit unions that stopped offering the service initially may now want to reconsider their decision after the CFPB addressed many of the underlying issues, such as simplifying disclosures and limiting liability. The 2013 Final Rule amends the 2012 Final Rule by addressing three specific concerns:

Disclosure of Institution Fees: Remittance transfer providers must still disclose certain fees, such as a provider’s own fees and those charged by an agent of the provider or intermediary institution. However the requirement to disclose fees imposed by a designated recipient’s institution for transfers to the recipient’s account becomes optional in certain circumstances. Providers must include, where applicable, a disclaimer that these fees may apply.

Disclosure of Foreign Taxes: The requirement that providers disclose foreign taxes or, if that institution is not the provider’s agent, fees imposed by a recipient institution for receiving transfers into an account have also been made optional. Providers must include, where applicable, a disclaimer that taxes may apply.

Errors from Incorrect Account Information: Under the final rule, when funds are deposited into the wrong account because the sender provided an incorrect account or routing number and certain other conditions are satisfied, the provider would be required to attempt to recover the funds but would not bear the cost of funds that cannot be recovered.

Trull added that “The Association, and many of our members, would like to have seen the CFPB more accurately define “normal course of business, which is what the exemption from the rule is based on.”

The final rule is available here:


Questions? Contact Lynn Heider: 503.350.2225,

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