Banking and Finance Law Daily Bureau issues policy statement on remittance transfers during COVID-19 pandemic
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Monday, April 13, 2020

Bureau issues policy statement on remittance transfers during COVID-19 pandemic

By Stephanie K. Mann, J.D.

The policy statement announces that through Jan. 1, 2021, the Bureau will neither cite nor initiate enforcement actions against remittance transfer providers in connection with the exception that is set to expire in July 2020.

The Consumer Financial Protection Bureau has taken steps to ensure that consumers will be able to continue to send remittance transfers without disruption during the COVID-19 pandemic. According to the Bureau’s press release, the regulator recognizes that many consumers rely on remittance transfers to send money from the United States to their families and friends abroad. The current national emergency is having a significant impact on consumers’ finances, and to combat these issues, the Bureau has issued a policy statement that will enable insured institutions to continue to focus on the immediate needs of their customers by taking a flexible approach to the Bureau’s supervision and enforcement of remittance transfers.

In order to minimize the impact of the pandemic on the remittances market, the policy statement announces that, through Jan. 1, 2021, the Bureau will neither cite supervisory violations nor initiate enforcement actions against certain remittance transfer providers in connection with an exception to that rule that is expiring in July of this year.

Section 919 of the Electronic Funds Transfer Act provides insured institutions with a temporary exception to the requirement to disclose exact costs under certain circumstances. Namely, the exception allows institutions to disclose estimates to consumers of the exchange rate and covered third-party fees instead of the exact amounts. Currently, the exception is set to expire on July 21, 2020.

Previously, the Bureau proposed amendments to the Remittance Rule to adopt two new permanent exceptions: one for insured institutions that meet certain conditions to prove estimated disclosure of third-party fees, and another for insured institutions that meet certain conditions to provide estimated disclosures of the exchange fee for transfers that meet certain conditions. The Bureau is continuing to collect comments on the proposed amendments and expects to issue a final rule in May 2020, so that a final rule can take effect by July 21, 2020, when the temporary exception expires.

MainStory: TopStory CFPB Covid19 ChecksElectronicTransfers

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