The Consumer Financial Protection Bureau (CFPB) recently released new guidance that it says provides an easy-to-use summary of its pending remittance transfer rule and highlights any issues that businesses might find helpful to consider when implementing the rule.
The agency noted that the guidance is particularly tailored to help small businesses, and those that work with them, cope with the remittance changes.
The CFPB's new remittance rule, which is scheduled to take effect on February 7, will require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers also will be required to investigate disputes and correct errors. The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.
Portions of the guidance are intended to help financial institutions determine if they are subject to the CFPB's remittance regulations. The guidance also provides model remittance disclosures and receipts.
Information on cancellation, refund, and error resolution rights, and liability issues, are also addressed in the guidance.
In the guidance, the agency recommends that financial institutions that offer remittance transfers consider practical implementation issues in addition to understanding their obligations under the rule. Remittance rule compliance plans may include identifying products, departments, and staff that will be impacted by the rule, and identifying training needs, the CFPB said.
The CFPB also noted that the remittance rule changes may impact marketing or advertising practices, the forms and processes used to communicate with customers, and systems and processes for sending transfers. Fully understanding the changes required may involve a review of existing business processes, as well as the hardware and software that a given financial institution, related agents, or other business partners employ, the CFPB added.
In October, the agency published a safe harbor list of countries that qualify for an exception to the remittance rule. An overview of the rule will also be provided in a webinar that took place at the time of the announcement.
Click guidance for that information and click on the webinar to access more information.