As the Consumer Financial Protection Bureau prepares to assess the effectiveness of its final rule governing remittance transfers, ABA called on the bureau to conduct an evidence-based assessment on whether the rule has preserved consumers’ access to remittance services.
The rule is intended to provide additional information to help consumers shop for remittances and establish error resolution procedures and protections. However, according to an ABA survey and other banker feedback, the rule has “restricted consumers’ access to remittances, increased fees for use of the service, and unnecessarily delayed remittance requests.” In a comment letter filed by ABA today, the association said that there is “little evidence that the final rule has improved consumer decision-making or facilitated comparison shopping.”
ABA urged the bureau to examine whether consumers, including those in rural areas, have access to remittance transfer services; whether consumers are given information about remittance services that inform rather than confuse; and whether regulation of remittances is not unnecessarily burdensome to the financial institutions that provide this service.
In a separate joint letter with the Clearing House and the Consumer Bankers Association, ABA and BAFT — ABA’s global transaction banking subsidiary — also urged the CFPB to examine the effects of the rule from the perspective of both consumers sending remittances and the providers offering those services. The groups called on the CFPB to continue to permit banks to provide estimates of third-party fees and exchange rates rather than actual fees and rates in cases where obtaining exact data is not feasible; to exclude from the rule transfers in excess of a certain dollar amount and those providing funds onto prepaid cards; to modify disclosure requirements and cancellation and resend rights; and to make changes to the rule’s error resolution provisions to hold the sender responsible for transaction costs resulting from sender error.
