WASHINGTON (1/16/13)--The Consumer Financial Protection Bureau (CFPB) should give credit unions and other financial institutions a minimum of one year to implement international remittance regulations, the Credit Union National Association has recommended.
"The agency has considerable latitude in determining a final compliance date," CUNA Deputy General Counsel Mary Dunn noted in a comment letter Tuesday. A delayed date "will help facilitate compliance for credit unions, particularly those who work with vendors, while minimizing regulatory burdens on credit unions," the letter added.
The CFPB recently proposed extending the remittance rule implementation period until 90 days after the revised final rule is released. The rule, required by the Dodd-Frank Wall Street Reform Act, was scheduled to take effect on Feb. 7.
The CUNA letter said this delay is welcome and thanked the agency for addressing some of the concerns that CUNA, CUNA's International Remittances Working Group, leagues and credit unions have raised regarding the remittance regulations.
Preliminary results from a CUNA survey of remittance providing credit unions has found that more than 40% of respondents will need about 12 months to implement the required changes.
Dunn said credit unions will need the extra deadline leeway to:
- Develop new disclosures;
- Test current and upcoming changes from vendors and third-party providers;
- Make changes related to messaging, settlement, and payment systems; and
- Evaluate and possibly amend operating rules, message formats, contracts, and participant agreements.
Under the CFPB's rule, remittance transfer providers would be required to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers, which are subject to additional liability for errors, will also be required to comply with dispute and error resolution provisions.
The CFPB has provided a safe harbor exemption from the rule for remittance providers that transact 100 or fewer remittances per year.
CFPB regulatory counsel Eric Goldberg summarized the remittance proposal and answered credit union questions during a Monday teleconference hosted by CUNA. CUNA Director of Compliance Information Valerie Moss has highlighted noteworthy items from the teleconference in a CUNA CompBlog
CUNA continues to seek comments from credit unions and will be filing a second comment letter on additional substantive changes; comments on those revisions are due to the CFPB by Jan. 30.
For the comment letter, audio of the teleconference and a blog post on the teleconference, use the resource links.