An Advocacy Win for Credit Unions: New CFPB Remittance Transfer Rule Proposal Raises Disclosures Threshold from 100 to 500 - December 3, 2019
The Consumer Financial Protection Bureau has released a notice of proposed rulemaking for the Remittance Transfer Rule, and it potentially removes a regulatory burden for some credit unions.
This rule requires financial institutions that provide remittance transfers in the normal course of business, to notify consumers about certain fees and exchange rates. When the rule was initially introduced in January 2012, disclosures were required for financial institutions doing 25 or more remittances per year. By August of that year, advocacy outreach to the CFPB resulted in an increase of that threshold to 100. While that was an improvement in the rule, it continued to be a regulatory barrier for credit unions.
The Northwest Credit Union Association reached out to member credit unions for input on the rule and filed a comment letter with the CFPB asking for an increase in the threshold. The new proposal increases the threshold to require disclosures for financial institutions doing more than 500 transfers annually in the current and prior calendar year. That’s a win for credit unions. Another promising aspect of the proposed rule allows financial institutions to continue using estimates of certain fees and exchange rates. Prior to the new proposal that exception was set to expire next July.