The Consumer Financial Protection Bureau has postponed the effective date of a new rule designed to protect consumers who electronically transfer money from the United States to other countries.
Slated to start on Feb. 7, the Bureau's international remittance transfer rule, now delayed until later this year, stems from a requirement of the Dodd-Frank Act that foreign-bound money transfers be covered by existing federal consumer protection regulations, doing so by expanding the scope of the Electronic Fund Transfer Act. Initially drafted by the Bureau in February 2012, it requires providers to disclose fees, taxes, and exchange rate information. Consumers also gain new error resolution and cancellation rights. In August, the CFPB updated the rule in order to make the transfer process easier for institutions handling 100 or fewer wire transfers a year, exempting them from new requirements unless they surpass that threshold.
In December, further responding to industry concerns and in an effort to “facilitate compliance,” the Bureau's formal proposal relaxed other disclosure requirements. Although the proposal still required disclosure of foreign taxes imposed by a country's central government, it eliminated the need to disclose taxes imposed by foreign regional, provincial, state, or other local governments. Also, when a provider can demonstrate that a consumer provided an incorrect account number they would not be responsible for funds that cannot be recovered.
At that time, the Bureau first proposed a temporary delay of effectiveness and began a comment period with a Jan. 30 deadline. Based on this feedback, and after finalizing amendments, a new effective date will be set.