A final rule announced by the CFPB on Monday allows credit unions and certain banks to continue to provide estimates of the exchange rate and certain fees under certain conditions. This could preserve consumers’ ability to send remittances from their bank accounts to certain countries or recipient institutions, according to a CFPB press release.
The remittance rule imposes requirements on entities that send international money transfers, or remittance transfers, on behalf of consumers, according to the CFPB. The rule mandates that remittance transfer providers “generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient.”
The rule also allows for depository institutions to estimate certain fees and exchange rate information under certain circumstances, but by statute, this provision expires in July 2020. In addition, the rule allows certain banks and credit unions to continue to provide estimates of the exchange rate and certain fees under certain conditions, which could preserve consumers’ ability to send remittances from their bank accounts to certain countries or recipient institutions, according to the CFPB.
Finally, the final rule increases the threshold that determines whether an entity makes remittance transfers in the normal course of its business and is subject to the rule.
Entities that conduct 500 or fewer transfers annually in the current and prior calendar years would not be subject to the rule, which will reduce the burden on almost 250 credit unions and over 400 banks that send a relatively small number of remittances — less than .06 percent of all remittances, according to the CFPB.
The rule is available on CFPB’s website.