Remittance Transfer Rule Regulation E
AML AND COMPLIANCE NEWS |
When is the final rule effective?
Feb. 7, 2013 – however, currently delayed and date is pending the finalization of the December 2012 proposal.
What and who does the rule apply to?
Rule applies to most remittance transfers if they are: 1) more than $15; 2) made by a consumer in the United States; and 3) sent to a person or company in a foreign country.
The rules apply to companies that offer remittance transfers including, banks, thrifts, credit unions, money transmitters and broker-dealers.
What and who is excluded from the rule?
Companies that consistently conduct 100 or fewer remittance transfers per year.
What procedures does a remittance transfer provider need to implement and consider when applying the new rule?
1. Needs to provide disclosure to sender, prior to payment for transfer, regarding the following items:
- Transfer amount
- Any transfer fees and taxes
- Total amount of transaction
- Exchange rate used by provider
- Amount that will be received by recipient
- Must be in English and if applicable each foreign language used by remittance transfer provider or foreign language used by sender with the provider to conduct the transaction
2. Needs to provide receipt to sender including the following items:
- All disclosure items listed above
- Date funds are available to recipient
- Name, telephone and address of recipient
- Error resolution and cancellation notice
- Name, telephone number(s) and web site of remittance transfer provider
- Statement for sender to contact State Agency and CFPB for questions and complaints
- Transfer date, for transfers scheduled 3 days prior to transfer or first in series of pre-authorized transfers
3. Provider is allowed to provide estimates if the following conditions are met:
- A remittance transfer provider cannot determine the exact amounts for reasons beyond its control
- A remittance transfer provider is an insured institution
- The remittance transfer is sent from the sender's account with the institution
4. Provider is allowed to have estimates on a permanent basis including:
- Certain countries, due to laws of recipient country not permitting a determination or the transaction method does not allow such determination. (safe harbor lists exists)
- Transfer is scheduled 5 or more business days before the date of transfer
5. Prompt Investigations to determine whether an error occurred within 90 days of receiving a notice of error. The remittance transfer provider needs to report the results to the sender, including a notice of any remedies available for correcting any error that the provider determines has occurred, within three business days after completing its investigation.
6. If an error occurred, procedures need to include remedies of refunding sender the amount provided in transfer or making available the appropriate amount to the recipient at no cost to the sender.
7. Allow sender the right of cancellation and refund if request is made within 30 minutes of sender making a payment or if received at least 3 business days before the scheduled date of transfer for transfers scheduled at least 3 days before transfer date.
8. If estimates were used, provider must send additional receipt meeting all required disclosure requirements no later than one business day after the date of the transfer. If the provider holds the sender’s account from which the funds were transferred, this receipt can be provided on or with the next periodic statement for that account, or within 30 days after the date of the transfer if a periodic statement is not provided.
9. The provider has 6 months for complying with the remittance transfer rules, after exceeding the 100 transaction threshold to comply with the rules.