The Consumer Financial Protection Bureau is seeking public input on “potential next steps” as a temporary exception to the agency’s remittance rule is set to expire.
The rule, which became effective in 2013, requires that money transfer providers disclose specific information to consumers including the price of a remittance transfer, the exact exchange rate, the amount to be delivered to a recipient and the date of availability.
But as noted in the agency’s request for information released Thursday, the rule provides an exception allowing banks and credit unions, under certain conditions, simply to estimate the exchange rate and certain fees when sending money transfers.
Because the exception expires in July 2020 and cannot be extended, the CFPB said it is trying to determine how to proceed.
“The statutory provision authorizing the temporary exception expressly limits its length and does not provide the Bureau the authority to extend the exception beyond July 21, 2020,” the CFPB said in a press release.
Less than 1% of all remittance transfers sent in 2017 relied on the temporary exception. A CFPB analysis found that all remittance transfers sent by credit unions and roughly 6% of total bank transfers relied on the temporary exception in 2017.
“While a substantial majority of remittance transfers may not involve the use of the temporary exception, the Bureau also recognizes that a large number of remittance transfers, specifically, 886,000 of them in 2017, could be affected by the expiration of the exception, and these effects could be particularly significant in some countries or corridors,” the RFI stated.
The bureau also is considering whether to add a small financial institution exception to the remittance rule and is looking into whether to change a safe harbor threshold that excludes providers of 100 or fewer remittance transfers from the rule.
The public will have 60 days to comment after the RFI is published in the Federal Register.
