It's all about the dates.
That's the gist of two comment letters banking industry groups recently sent to the Consumer Financial Protection Bureau, or CFPB, supporting a temporary delay in the effective date of new remittance transfer rules and requesting a further delay that would allow financial institutions more time to prepare for the changes.
Remittances are financial transactions in which money is sent electronically to family members, friends or others who are outside of the U.S. A wire transfer to someone in a foreign country would be an example.
The new rules will require financial institutions to disclose the currency exchange rate, fees and amount of money that will be delivered to the recipient to the consumer before he or she pays for the money transfer. A receipt or proof of payment that repeats the information and tells the consumer when the money will arrive also must be provided, and consumers must be allowed 30 minutes, or sometimes longer, to cancel a transfer and get their money back, according to the CFPB.
The so-called Final Rule is scheduled to take effect Feb. 7, even though the CFPB has proposed some revisions, one of which would postpone the effective date until 90 days after the proposed rule is finalized. The deadline for comments is Jan. 30.
The first letter was from seven organizations: the Clearing House Association, American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, NACHA -- The Electronic Payments Association, and National Association of Federal Credit Unions.
In the letter, the groups said they appreciated the bureau's efforts to address industry concerns and supported the temporary delay, but urged the bureau to allow the financial institutions more time to develop, implement and test changes in accordance with their internal compliance and risk management programs.
In a separate letter, the Credit Union National Association, CUNA, requested a 12-month postponement of the effective date to allow credit unions more time to comply with the final rule after it's finalized. Parenthetically, CUNA also said it supports the temporary 90-day delay.
One concern is that some credit unions rely in part on third-party companies to provide international remittance transmittal services.
"While credit unions are urging vendors to make changes to their systems to ensure credit unions will be able to comply on a timely basis, credit unions have no control over such parties," CUNA stated.
The letter also noted that the bureau has "considerable latitude" in determining when compliance with the rule should begin since Congress didn't mandate a deadline.
Margot Saunders, an attorney for the National Consumer Law Center, an advocacy group, said in an earlier statement that the disclosures and other requirements will help to protect millions of consumers who send money overseas to family and friends.
A longer delay means those protections won't be afforded as soon as they otherwise would be.
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