The Consumer Financial Protection Bureau today finalized several American Bankers Association-advocated changes to the remittance rule, including one that will permanently allow depository institutions to estimate certain fees and exchange rates when making disclosures to their customer about the cost of remittance transfers. The final rule takes effect July 21, 2020, just as a temporary provision of the rule which allowed institutions to estimate these rates and fees is set to expire. As ABA noted in previous comments, without this important change, many banks would have been prevented from sending remittances to certain countries.
The final rule will also increase the threshold for identifying which banks are subject to the remittance rule’s requirements. Under the final rule, institutions submitting 500 or fewer remittance transfers annually will not be considered remittance providers for the purposes of the rule, up from a previous threshold of 100 remittances or fewer.
This change—which was also advocated by ABA—is expected to affect nearly 400 banks and will ensure that institutions that process a smaller volume of remittances can remain in the market. The CFPB estimated that while the change will affect a very small percentage of the market—less than 0.06% of all remittances—it will significantly reduce the regulatory burden for community banks.