On February 14, the Consumer Financial Protection Bureau (CFPB) updated its Supervision and Examinations Manual to reflect changes it made to the Remittance Transfer Rule (Rule) in a final rule published on June 5, 2020. The changes made to Subpart B of Regulation E, effective July 21, 2020, (1) increased the Rule’s safe harbor for compliance from 100 remittance transfers to 500 remittance transfers annually and (2) created two new permanent exceptions that permit insured institutions to disclose estimates of particular fees and exchange rates if certain conditions are met.

The Dodd-Frank Act amended the Electronic Fund Transfer Act (EFTA) and created a new system of consumer protections for remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries. On February 7, 2012, the CFPB published Subpart B (Requirements for Remittance Transfers) to Regulation E to implement the new remittance protections set forth in the Dodd-Frank Act (77 Fed. Reg. 6194). Under Regulation E, a financial institution subject to the remittance transfer requirements must provide the sender with both a pre-payment disclosure (when the consumer first requests a transfer and before the sender is required to pay for the remittance transfer) and a receipt (after the sender makes payment for the remittance transfer). These disclosures include the exchange rate, fees charged by a third party in connection with the transfer, etc.

The safe harbor states that only entities that have provided 500 or fewer remittance transfers in both the current calendar year and the prior calendar year will not be subject to remittance transfer requirements.

The first permanent exception allows insured institutions to estimate the exchange rate and other disclosures that depend on the exchange rate, provided several conditions are met: (1) The sender is requesting to send the remittance transfer from her account at the insured institution; (2) the exact exchange rate for the remittance transfer cannot be determined by the insured institution at the time the disclosures must be made; and (3) in the prior calendar year, the insured institution sent 1,000 or fewer remittance transfers to the particular country to which the remittance transfer in question is being sent.

The second permanent exception permits insured institutions to estimate covered third-party fees and other disclosures that depend on covered third-party fees in connection with a remittance transfer only if (1) the sender is requesting to send the remittance transfer from her account at the insured institution; (2) the insured institution cannot determine the exact third-party fees required to be disclosed at the time of the remittance transfer; and (3) in the prior calendar year, the insured institution sent 500 or fewer remittance transfers to the particular country to which the remittance transfer in question is being sent.

Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their business cycle.

Photo of Carlin McCrory Carlin McCrory

A seasoned regulatory and compliance attorney, Carlin brings extensive experience representing financial institutions, fintechs, lenders, payment processors, neobanks, virtual currency companies, and mortgage servicers.

Photo of Keith J. Barnett Keith J. Barnett

Keith’s experience representing clients in the financial services industry as a litigation, compliance, regulatory, investigations (internal and regulatory), and enforcement attorney spans 20 years. Keith represents clients against government regulators (CFPB, FTC, SEC, CFTC), industry regulators (FINRA), and private litigants in federal courts…

Keith’s experience representing clients in the financial services industry as a litigation, compliance, regulatory, investigations (internal and regulatory), and enforcement attorney spans 20 years. Keith represents clients against government regulators (CFPB, FTC, SEC, CFTC), industry regulators (FINRA), and private litigants in federal courts, state courts, and before arbitration and administrative law panels in the financial services industry.