WASHINGTON–The Consumer Financial Protection Bureau has issued a request for information (RFI) on its Remittance Rule.
CUNA said it has been advocating for the CFPB to substantially amend its remittances rule to make it more tailored to allow consumer access to desired products and services, noting it most recently raised the issues in a letter to Director Kathy Kraninger.
“CUNA has asked the CFPB for years to finalize substantive amendments to the remittance rule in order to balance necessary consumer protections with a more tailored regulation that allows consumers access to these services,” said CUNA President/CEO Jim Nussle in a statement. “We’re thankful to the CFPB for starting this process, and we thank our league and credit union partners who have brought this issue up in meetings with Director Kraninger, CFPB staff and other policymakers.”
Safe Harbor
CUNA noted the remittance rule places enhanced regulatory requirements on remittance transfer providers conducting remittances as part of their normal course of business. To make the rule’s coverage clearer, the CFPB created a safe harbor that excludes a provider that conducts fewer than 100 transfers.
CUNA’s position is the current threshold is too low and has resulted in many credit unions ceasing to offer this service and has recommended the threshold be raised to at least 1,000.
The RFI also requests information regarding the rule’s “fee estimates” safe harbor. This temporary safe harbor permits – in certain circumstances – a provider to disclose estimates of those fee amounts, as opposed to the exact amount. This exception is set to expire on July 21, 2020, unless there is action from Congress, CUNA stated.
CUNA said it has recommended the CFPB urge Congress to extend the safe harbor or make it permanent.
NAFCU's Position
NAFCU said it has long argued that credit unions should be exempt from all CFPB rulemakings, including its remittance rule.
"The remittance rule imposes overbearing compliance costs, which have effectively prevented many credit unions from providing assistance to consumers in need,” said NAFCU President and CEO Dan Berger. “The rule, as it stands, pushes countless consumers away from credit unions and into the waiting arms of shady, fly-by-night entities that may do consumers harm. We appreciate the CFPB’s commitment to reviewing the rule, and we look forward to continuing to work with them throughout the process.”