The Consumer Financial Protection Bureau’s rule on remittance transfers has resulted in initial compliance costs for remittance transfer providers of $86-92 million and ongoing compliance costs of $19-102 million per year, according to the bureau’s five-year assessment of the rule. The Dodd-Frank Act requires that the CFPB conduct an assessment of each “significant rule” within five years of the rule’s effective date. The assessment of the remittance rule is the first the bureau has completed.
The assessment found evidence that the rule’s requirement that a remittance transfer provide a 30-minute cancellation period led banks to “delay initiating at least some transfers” to make it easier to provide a refund within that window. In addition, the assessment found that consumers assert errors for only 0.5 to 1.9 percent of remittance transfers and that most of these asserted errors are “attributable to consumer mistakes or other issues.”
The CFPB’s assessment also found that the percentage of banks that transfer more than 100 remittances (and are thus subject to the rule’s requirements) has been “steady or increasing since 2014.” The assessment also reported that the evidence does not indicate the rule caused either substantial declines or increases in the price of remittance transfers.