Under the revised rule, institutions that transfer money need to disclose some fees, including their own, but do not need to tell customers about possible foreign taxes or fees charged by the institution receiving the money, except to say that additional charges may apply. The rule also does not hold a provider accountable for unrecovered funds if a sender accidentally enters the wrong account or routing number.
“We are dedicated to protecting consumers who send money abroad and to preserving their access to these services,” CFPB Director Richard Cordray said in a statement. “Today’s final rule achieves these goals by maintaining the rule’s crucial new consumer protections while facilitating compliance for providers of remittance transfers.”
{mosads}The agency first proposed the changes in December and received over 100 comments on the plan.
A joint comment from the National Council of La Raza and the Center for Responsible Lending at the time said that, for the most part, “we support the Bureau’s proposal regarding liability and taxes … and appreciate the significant advance of the proposal regarding account fees.”
“The good thing about making this change is banks are not required to disclose information they don’t have and can’t get,” said Robert Rowe, a vice president and senior counsel at the American Bankers Association, referring to foreign institutions’ fees. “The only [other] solution for the banks here would be to say ‘We can’t send your money overseas, just forget it.'”
Rowe added that if institutions were liable for accidental account number mistakes “it could be an invitation to fraud” from clients who try to collect the same money twice.
Credit unions support the new rules but don’t think they go far enough.
“We are still very concerned that the rule’s impact on credit unions – which have not engaged in predatory practices – is too severe,” said Patrick Keefe, a spokesman with the Credit Union National Association. The trade group wants the regulations to only apply to financial institutions that provide a large number of remittance transfers or to exempt credit unions entirely.
The rule has suffered delays, and was previously scheduled to go into effect in February. The new rule will take effect on Oct. 28.