CFPB examination procedures for remittance transfers
by. Coppelia Padgett
The CFPB has released the examination procedures for the new Remittance Transfer Rule, which is an amendment of Regulation E or Electronic Funds Transfer Act (EFTA). The final rule went into effect on Monday October 28th. 2013. The CFPB examination procedures contain a breakdown of audit procedures, a summary of the regulation itself and a useful checklist of requirements at the end (page 54).
I recommend that my clients read the examination procedures from their Regulatory Authorities. These procedures are generally easier to understand than original legal text. Not a whole lot easier, but better. The Remittance Procedures are a total of 67 pages and very detailed. However, the examination procedures are what the examiners will follow. When you know what they are looking at or for, you can do the same and be prepared.
A “remittance transfer” is an electronic transfer of money from a consumer in the United States to a person or business in a foreign country. It can include transfers from retail “money transmitters” as well as banks and credit unions that transfer funds through wire transfers, automated clearing house (ACH) transactions, or other methods. Business transfers and domestic transfers are not remittances by definition. Entities that make fewer than 100 remittances in a calendar year will be exempt from this requirement.
The Remittance rule can be broken down into three parts (1) required disclosures about the providers fees and exchange rates, (2) error resolution procedures (similar to error resolution already present in EFTA rules) and (3) new refund and cancelation rights for the sender. The most difficult part of the regulation will be the first item because it will often involve making estimates of fees or taxes that the institution cannot know for certain.
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