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[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Rules and Regulations]
[Pages 50243-50288]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19702]

[[Page 50243]]

Vol. 77

Monday,

No. 161

August 20, 2012

Part III

Bureau of Consumer Financial Protection

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12 CFR Part 1005

Electronic Fund Transfers (Regulation E); Final Rule

Federal Register / Vol. 77 , No. 161 / Monday, August 20, 2012 / 
Rules and Regulations

[[Page 50244]]

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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

[Docket No. CFPB-2011-0009]
RIN 3170-AA15

Electronic Fund Transfers (Regulation E)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretation.

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SUMMARY: The Bureau of Consumer Financial Protection is amending 
Regulation E, which implements the Electronic Fund Transfer Act, and 
the official interpretation to the regulation, which interprets the 
requirements of Regulation E. The final rule modifies a final rule 
published in February 2012 implementing section 1073 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act regarding remittance 
transfers. The final rule adopts a safe harbor with respect to the 
phrase ``normal course of business'' in the definition of ``remittance 
transfer provider,'' which determines whether a person is covered by 
the rule. The final rule also revises several aspects of the February 
2012 final rule regarding remittance transfers that are scheduled 
before the date of transfer, including preauthorized remittance 
transfers.

DATES: This rule is effective February 7, 2013.

FOR FURTHER INFORMATION CONTACT: Eric Goldberg, Counsel, or Andrea 
Edmonds or Dana Miller, Senior Counsels, Division of Research, Markets, 
and Regulations, Bureau of Consumer Financial Protection, 1700 G Street 
NW., Washington, DC 20552, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Overview

    Section 1073 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) \1\ amended the Electronic Fund 
Transfer Act (EFTA) to create a new comprehensive consumer protection 
regime for remittance transfers sent by consumers in the United States 
to individuals and businesses in foreign countries. For covered 
transactions conducted by remittance transfer providers, the statute 
generally requires: (i) The provision of disclosures prior to and at 
the time of payment by the sender for the transfer; (ii) cancellation 
and refund rights; (iii) the investigation and remedy of errors by 
remittance transfer providers; and (iv) liability standards for 
remittance transfer providers for the acts of their agents. The Bureau 
of Consumer Financial Protection (Bureau) published a final rule on 
February 7, 2012, to implement section 1073 of the Dodd-Frank Act. 77 
FR 6194, Feb. 7, 2012 (February Final Rule). The February Final Rule 
takes effect February 7, 2013. The Bureau concurrently published a 
proposed rule with request for public comment seeking comment on 
whether to provide additional safe harbors and flexibility in applying 
the February Final Rule to certain transactions and persons. 77 FR 
6310, Feb. 7, 2012 (February Proposal).\2\
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    \1\ Public Law 111-203, 124 Stat. 1376, section 1073 (2010).
    \2\ The Bureau issued the February Final Rule and the February 
Proposal on January 20, 2012. Consequently, when referencing the 
final rule, the February Proposal used the term ``January 2012 Final 
Rule.'' That term is being replaced in today's rule with ``February 
Final Rule'' to reflect the date the rule was published in the 
Federal Register (i.e., February 7, 2012). Similarly, the term 
``February Proposal'' is being used here in place of the term 
``January 2012 Proposed Rule,'' which was used in the February Final 
Rule. Additionally, a technical correction to the February Final 
Rule was published on July 10, 2012. 77 FR 40459. For simplicity, 
that technical correction is incorporated into the term ``February 
Final Rule.''
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    The February Proposal addressed two aspects of the February Final 
Rule. First, the Bureau proposed to adopt a safe harbor for determining 
whether a person is providing remittance transfers in the ``normal 
course of business,'' and thus is a ``remittance transfer provider.'' 
Second, it sought comment on possible refinements to disclosure and 
cancellation requirements for certain remittance transfers that are 
scheduled before the date of transfer, including ``preauthorized 
remittance transfers,'' which are authorized in advance to recur at 
substantially regular intervals. The Bureau noted that providing 
further clarification on these issues might reduce compliance burdens 
for remittance transfer providers and provide better disclosures and 
cancellation rights to consumers. The Bureau also stated that it 
expected to complete any further rulemaking on matters raised in the 
February Proposal on an expedited basis before the February 7, 2013 
effective date for the February Final Rule.
    The final rule adopts a safe harbor with respect to the phrase 
``normal course of business'' in the definition of ``remittance 
transfer provider,'' which determines whether a person is covered by 
subpart B of Regulation E. The final rule states that if a person 
provided 100 or fewer remittance transfers in the previous calendar 
year, and provides 100 or fewer remittance transfers in the current 
calendar year, then the person is deemed not to be providing remittance 
transfers for a consumer in the normal course of its business. For a 
person that crosses the 100-transfer threshold, and is then providing 
remittance transfers for a consumer in the normal course of its 
business, the final rule permits a reasonable time period, not to 
exceed six months, to begin complying with subpart B of Regulation E.
    The final rule also modifies several aspects of the February Final 
Rule regarding remittance transfers that are scheduled before the date 
of transfer, including preauthorized remittance transfers. First, when 
a sender schedules a one-time transfer or the first in a series of 
preauthorized remittance transfers five or more business days before 
the date of transfer, the final rule permits remittance transfer 
providers to estimate certain information in the pre-payment disclosure 
and the receipt provided when payment is made. If estimates are 
provided under this exception, the provider generally must give the 
sender an additional receipt with accurate figures after the transfer 
is made. With respect to subsequent preauthorized remittance transfers, 
the final rule generally eliminates the requirement that a remittance 
transfer provider mail or deliver a pre-payment disclosure for each 
subsequent transfer, unless certain specified information has changed. 
However, the final rule generally requires a remittance transfer 
provider to provide accurate receipts after subsequent transfers are 
made.
    The final rule also modifies the February Final Rule in several 
respects with regard to the disclosure requirements for remittance 
transfers scheduled at least three business days before the date of 
transfer and for preauthorized remittance transfers. The final rule 
generally requires disclosure of the date of transfer on the initial 
receipt and on any subsequent receipts provided with respect to a 
particular transfer. For subsequent preauthorized remittance transfers, 
the final rule also requires the remittance transfer provider to 
disclose the future date or dates the remittance transfer provider will 
execute subsequent transfers in the series; in most cases, the final 
rule offers some flexibility in how such disclosures can be made.
    As noted in the February Final Rule, the Bureau intends to continue 
working with consumers, industry, and other regulators in the coming 
months regarding implementation issues. In the near future, the Bureau 
expects to release a small business compliance guide and a list of 
countries that providers may rely on for purposes of

[[Page 50245]]

determining whether estimates may be provided under certain 
circumstances. The Bureau also expects to conduct a public awareness 
campaign to educate consumers about the new disclosures and their other 
rights under the Dodd-Frank Act with respect to remittance transfers.

II. Background

A. Summary of February Final Rule

    The February Final Rule imposes on remittance transfer providers 
new disclosure, error resolution, and other substantive requirements 
relating to remittance transfers. These requirements are set forth in 
subpart B of Regulation E. Consistent with the statute, the February 
Final Rule provides that the term remittance transfer provider means 
any person that provides remittance transfers for a consumer in the 
normal course of its business, regardless of whether the consumer holds 
an account with such person. 12 CFR 1005.30(f). The February Final Rule 
provides guidance in the commentary indicating that whether a person 
provides remittance transfers in the ``normal course of business'' will 
be evaluated based on the facts and circumstances, and does not set 
forth a numerical threshold.
    Among other requirements, the February Final Rule imposes several 
new disclosure requirements on remittance transfer providers. First, 
the rule generally requires a remittance transfer provider to provide a 
written pre-payment disclosure to a sender containing information about 
the specific transfer requested by the sender, such as the exchange 
rate, applicable fees and taxes, and the amount to be received by the 
designated recipient. Second, the provider also must provide a written 
receipt when payment is made for the transfer. The receipt must include 
the information provided on the pre-payment disclosure, as well as 
additional information such as the date of availability of the funds, 
the designated recipient's contact information, and information 
regarding the sender's error resolution and cancellation rights. 
Consistent with the statute, which permits remittance transfer 
providers to provide estimates only in two narrow circumstances, the 
February Final Rule generally requires that disclosures state the 
actual exchange rate that will apply to a remittance transfer and the 
actual amount that will be received by the designated recipient of a 
remittance transfer.
    The February Final Rule also sets forth special requirements for 
the timing and accuracy of disclosures with respect to ``preauthorized 
remittance transfers,'' which are defined as remittance transfers 
authorized in advance to recur at substantially regular intervals. As 
discussed in the February Final Rule, 77 FR 6194, 6267, the Bureau 
recognizes that the market for preauthorized remittance transfers is 
still developing.
    The February Final Rule differentiates between the first and 
subsequent transfers in a series of preauthorized remittance transfers. 
The first transfer in a series is treated the same as other standalone 
remittance transfers. Accordingly, the February Final Rule requires, 
for the first transaction in a series of preauthorized remittance 
transfers, that the provider provide a pre-payment disclosure at the 
time the sender requests the transfer and a receipt at the time payment 
for the transfer is made, which the commentary explains means when 
payment is authorized. In addition, the disclosures must be accurate as 
of when the payment for the transfer is made, unless a statutory 
exception applies.
    However, recognizing the potential risks to providers associated 
with setting exchange rates and determining the amount to be provided 
to a designated recipient weeks or months before any subsequent 
transfer, and the potentially limited utility to consumers of 
information provided far in advance, the February Final Rule does not 
require that disclosures for the entire series of preauthorized 
remittance transfers be provided at the time of the sender's initial 
request and payment authorization. Rather, the February Final Rule 
requires providers to issue pre-payment disclosures and receipts for 
each subsequent transfer near the date of the individual transfer. 
Specifically, the pre-payment disclosure for each subsequent transfer 
must be provided within a reasonable time prior to the scheduled date 
of the transfer. The receipt for each subsequent transfer generally 
must be provided no later than one business day after the date on which 
the transfer is made.
    Finally, the February Final Rule also provides senders specified 
cancellation and refund rights. Under the rule, a sender generally has 
30 minutes after payment is made to cancel a remittance transfer. The 
February Final Rule, however, contains special cancellation procedures 
for any remittance transfer scheduled by the sender at least three 
business days before the date of the transfer, including preauthorized 
remittance transfers. In such case, the provider would be required to 
cancel the remittance transfer if it received a request to cancel the 
transfer from the sender at least three business days before the date 
of the transfer.

B. Summary of the February Proposal

    Concurrent with the February Final Rule, the Bureau issued a 
proposed rule that sought comment on two aspects of the February Final 
Rule. First, the Bureau proposed to adopt in commentary a safe harbor 
clarifying when certain persons are excluded from the statutory scheme 
because they do not provide remittance transfers in the normal course 
of business. Second, the February Proposal sought comment on a possible 
safe harbor and other refinements to the disclosure and cancellation 
requirements for remittance transfers that are scheduled before the 
date of the transfer, including preauthorized remittance transfers. The 
Bureau indicated that these proposed amendments to the February Final 
Rule may reduce compliance burden for providers and allow for better 
disclosure and cancellation rights for senders. The Bureau stated its 
belief that these issues would benefit from further public comment.
    Regarding the first aspect of the February Proposal, the Bureau 
sought comment on a proposed safe harbor interpreting the phrase 
``normal course of business.'' The Bureau proposed commentary stating 
that if a person made no more than 25 remittance transfers in the 
previous calendar year, the person does not provide remittance 
transfers in the normal course of business during the current calendar 
year if it provides no more than 25 remittance transfers in that year. 
The Bureau also specifically solicited comment on whether, if such a 
safe harbor is appropriate, the threshold number should be higher or 
lower than 25 remittance transfers, such as 10 or 50 transfers, or some 
other number.
    Regarding the second aspect of the February Proposal, the Bureau 
sought comment on refinements to the disclosure and cancellation 
requirements for remittance transfers that are scheduled before the 
date of transfer, including preauthorized remittance transfers. 
Specifically, the February Proposal solicited comment on whether 
estimates should be permitted to be disclosed in the pre-payment 
disclosure and receipt given at the time the transfer is requested and 
authorized when: (i) A consumer schedules a one-time transfer or the 
first in a series of preauthorized remittance transfers more than ten 
days in advance; or (ii) a consumer enters into an agreement for 
preauthorized remittance transfers under which the amount of the 
transfers can vary and the provider does not

[[Page 50246]]

know the exact amount of the first transfer at the time the disclosures 
for that transfer are given. The February Proposal further requested 
comment on whether a remittance transfer provider that uses estimates 
in the two situations described above should be required to provide a 
second receipt with accurate information within a reasonable time 
closer to the scheduled date of the transfer. In addition, the February 
Proposal sought comment on whether the second receipt should be 
provided to senders ten days before the date of the transfer or whether 
the period should be longer or shorter.
    The February Proposal also solicited comment on possible 
refinements to the disclosure provisions applicable to subsequent 
preauthorized remittance transfers. For example, the Bureau sought 
comment on two alternative approaches to the disclosure provisions for 
subsequent preauthorized remittance transfers: (i) Whether the Bureau 
should retain the requirement that a remittance transfer provider 
provide a pre-payment disclosure for each subsequent transfer and 
provide a safe harbor for what constitutes ``a reasonable time'' for 
providing this disclosure; or (ii) whether the Bureau should eliminate 
the requirement to provide a pre-payment disclosure for each subsequent 
transfer.
    The February Proposal also sought comment on possible changes to 
the cancellation requirements for remittance transfers that are 
scheduled before the date of the transfer, including preauthorized 
remittance transfers. The February Proposal solicited comment on 
whether the three-business-day period for canceling such remittances 
transfers adopted in the February Final Rule is appropriate, or whether 
the rule should require a deadline to cancel these transfer that is 
more or less than three business days. Further, the February Proposal 
solicited comment on three issues related to the disclosure of the 
deadline to cancel as set forth in the February Final Rule: first, 
whether the three-business-day deadline to cancel transfers scheduled 
before the date of transfer should be disclosed to senders, such as by 
requiring a remittance transfer provider to disclose in the receipt the 
specific date on which the right to cancel will expire; second, whether 
a remittance transfer provider should be allowed to describe both the 
three-business-day and 30-minute deadline-to-cancel time frames on a 
single receipt and either describe the transfers to which each deadline 
is applicable, or alternatively, use a checkbox or other method to 
designate which deadline is applicable to the transfer to which the 
receipt relates; third, whether the disclosure of the deadline to 
cancel should be disclosed in the pre-payment disclosure, rather than 
in the receipt, for each subsequent preauthorized remittance transfer.

C. Overview of Comments and Outreach

    The Bureau received more than 50 comments on the proposed rule. The 
majority of comments were submitted by industry commenters, including 
depository institutions, credit unions, a money transmitter, and 
industry trade associations. In addition, letters were submitted by 
individual consumers, consumer groups, and an association of state 
banking regulators.
    Commenters generally supported, or did not oppose, clarifying the 
meaning of ``normal course of business'' with a safe harbor. Consumer 
group commenters supported the proposed threshold of 25 transfers per 
year. The majority of industry commenters argued that the proposed safe 
harbor threshold was insufficient and suggested higher numerical 
thresholds, ranging from 50 remittance transfers annually to 25 
transfers daily. Some industry commenters suggested alternative 
benchmarks for the safe harbor, including tests based on a percentage 
of an entity's revenues or transactions processed. A number of industry 
commenters stated that they or others would cease to offer remittance 
transfers if they did not qualify for the safe harbor. Some commenters 
also suggested changes in how any safe harbor was implemented, such as 
that the Bureau should provide time for an entity to come into 
compliance if the entity becomes a remittance transfer provider once 
the safe harbor threshold is exceeded.
    Commenters also generally supported revisions to the February Final 
Rule regarding remittance transfers that are scheduled before the date 
of the transfer. Commenters generally supported providing additional 
flexibility in disclosure requirements and expanding the use of 
estimates in order to reduce risks and costs that might be passed 
through to senders. Industry commenters cited various operational and 
financial challenges, as well as legal risks, associated with 
disclosing an accurate exchange rate for a future transfer. (Although 
the February Proposal asked about estimates for one-time transfers or 
the first in a series of preauthorized remittance transfers, most 
commenters addressed the use of estimates generally for any transfer 
scheduled before the date of such transfer.) Some industry commenters 
argued that small remittance transfer providers in particular would not 
have the scale or expertise to create the risk management practices 
necessary to comply. Other industry commenters expressed concern about 
the potential for behavior by consumers that would increase providers' 
exposure to foreign exchange risk in light of the February Final Rule's 
three-business-day cancellation period for transfers scheduled before 
the date of the transfer. Thus, these commenters supported permitting 
estimates in pre-payment disclosures and receipts provided for 
remittance transfers scheduled before the date of transfer. Separately, 
some commenters thought the Bureau should allow providers, in lieu of 
(or in addition to) providing an estimate of the exchange rate on a 
disclosure for a transfer scheduled before the date of the transfer, to 
disclose the formula the provider will use to calculate the exchange 
rate that will apply to a transfer.
    For similar reasons, industry commenters further stated that the 
proposed ten-day period after which estimates would not be permitted 
was too long, and should be shortened. Industry commenters suggested 
shorter time periods ranging from one to seven business days. Several 
industry commenters suggested that, even if estimates were permitted, 
remittance transfer providers might respond to the requirement to 
provide accurate disclosures for other one-time transfers scheduled 
before the date of the transfer or initial transfers in series of 
preauthorized remittance transfers scheduled in advance by only 
offering same-day remittance transfers, or remittance transfers 
scheduled ten or more days before the date of the transfer.
    Consumer group commenters agreed that the use of estimates in 
disclosures may be appropriate for the first remittance transfers in 
series of preauthorized remittance transfers, but stated that if 
remittance transfer providers were allowed to use estimates in 
disclosures for such transfers, senders should be informed they would 
not receive actual notice of the price of the transfer or of the amount 
to be received by the designated recipient during the periods when the 
senders can cancel the transfers. Alternatively, consumer group 
commenters suggested requiring providers to later give senders 
disclosures for such transfers that include accurate information about 
any amounts previously estimated.
    Industry commenters urged the Bureau to eliminate the requirement 
to provide pre-payment disclosures a reasonable time prior to each 
subsequent preauthorized remittance

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transfer. Commenters stated that such disclosures could cause consumer 
confusion in cases where senders receive pre-payment disclosures in 
close proximity to receipts for previous preauthorized remittance 
transfers. Further, industry commenters argued that many senders 
scheduling preauthorized remittance transfers are more concerned with 
the convenience allowed by the scheduling of transfers before the date 
of the transfer and having transfers made on time than with comparison 
shopping with pre-payment disclosures for each transfer. Thus, these 
commenters stated that the cost of providing pre-payment disclosures 
would outweigh any potential consumer benefit. Industry commenters also 
stated that if the requirement to provide updated pre-payment 
disclosures was not eliminated, the Bureau should permit estimates to 
be provided in those disclosures. Consumer group commenters stated that 
the Bureau should maintain the requirement to provide pre-payment 
disclosures before all subsequent preauthorized remittance transfers, 
but while allowing providers to provide estimates in those disclosures. 
These commenters also supported the Bureau's proposal that ten days 
before the date of transfer constitute a ``reasonable time.''
    Most industry commenters argued that three business days is an 
appropriate time period for a sender to cancel a remittance transfer 
that is scheduled at least three business days before the date of the 
transfer. Some industry commenters conditioned their support for the 
three-business-day cancellation period on whether a remittance transfer 
provider would be required to disclose to the sender the exchange rate 
that would apply to a transfer scheduled more than three business days 
before the date of such transfer. One commenter suggested that the 
Bureau adopt a five-business-day cancellation deadline in lieu of the 
three-business-day deadline adopted in the February Final Rule.
    With respect to the content and format of disclosures related to 
the cancellation period, most industry commenters argued against 
requiring that remittance transfer providers disclose the specific 
cancellation deadline in the receipt provided to a sender for a 
remittance transfer scheduled more than three business days before the 
date of the transfer. One commenter asserted that requiring disclosure 
of the specific cancellation deadline would create significant 
technical challenges for service providers. Commenters, however, 
generally supported the proposal to permit remittance transfer 
providers that provide both transfers scheduled at least three business 
days before and transfers less than three business days before the date 
of the transfer to include both the 30-minute and three-business-day 
cancellation periods in their receipts along with a checkbox or other 
method that allows the provider to designate which cancellation period 
is applicable to the transfer at issue.
    The Bureau received few comments in response to its inquiry 
regarding disclosure of cancellation requirements for subsequent 
preauthorized remittance transfers. Among those received, there was 
little consensus regarding how cancellation rights for subsequent 
transfers should be disclosed. Some commenters asserted that the 
cancellation provision should be included on the pre-payment disclosure 
and one industry commenter supported including it on the receipt.
    In addition to the comments received on the February Proposal, 
Bureau staff conducted outreach with various parties to gather more 
data regarding issues discussed in the proposal or raised in comments. 
Records of these outreach conversations are reflected in ex parte 
submissions included in the rulemaking record (accessible by searching 
by the docket number associated with this final rule at 
www.regulations.gov).

III. Summary of the Final Rule

A. Normal Course of Business

    The final rule provides a new safe harbor clarifying when a person 
provides remittance transfers in the normal course of business for 
purposes of determining whether a person falls under the definition of 
``remittance transfer provider.'' The proposed safe harbor was located 
in the commentary; the final safe harbor is included in regulatory 
text, with further guidance in the commentary. As adopted, the final 
rule states that if a person provided 100 or fewer remittance transfers 
in the previous calendar year, and provides 100 or fewer remittance 
transfers in the current calendar year, then the person is deemed not 
to be providing remittance transfers for a consumer in the normal 
course of its business. For a person that crosses the 100-transfer 
threshold, and is then providing remittance transfers for a consumer in 
the normal course of its business, the final rule permits a reasonable 
time period, not to exceed six months, to begin complying with subpart 
B of Regulation E.

B. Disclosure Rules for Remittance Transfers Scheduled Before the Date 
of Transfer

    The final rule modifies the February Final Rule with respect to 
remittance transfers that are scheduled before the date of transfer, 
including preauthorized remittance transfers. First, when a sender 
schedules a one-time transfer or the first in a series of preauthorized 
remittance transfers five or more business days before the date of 
transfer, the final rule permits remittance transfer providers to 
estimate certain information in the pre-payment disclosure and the 
receipt provided when payment is made. If a provider gives disclosures 
that include estimates under this exception, the final rule also 
requires that the provider give the sender an additional receipt with 
accurate figures (unless a statutory exception applies), which 
generally must be provided no later than one business day after the 
date on which the transfer is made.
    Second, with respect to subsequent preauthorized remittance 
transfers, the final rule eliminates the requirement that a remittance 
transfer provider mail or deliver a pre-payment disclosure for each 
subsequent transfer. A receipt must be sent, however, a reasonable time 
prior to the transfer if certain disclosed information is changed from 
what was disclosed regarding the first preauthorized remittance 
transfer. This receipt may also contain estimates. If estimates are 
provided or no update is necessary, the final rule also requires a 
remittance transfer provider to give an accurate receipt to a sender 
after a transfer is made.

C. Cancellation Period and Disclosures

    The final rule modifies the February Final Rule in several respects 
with regard to the disclosure requirements for remittance transfers 
scheduled at least three business days before the date of transfer and 
for preauthorized remittance transfers. First, the final rule requires 
a remittance transfer provider to disclose the date of transfer in the 
receipt provided when payment is made with respect to remittance 
transfers scheduled at least three business days before the date of the 
transfer and the initial transfer in a series of preauthorized 
transfers. The transfer date for a given transfer is also required to 
be disclosed on any subsequent receipts provided with respect to that 
transfer. The transfer date will enable a sender to identify the 
transfer to which the receipt pertains, and, when received prior to the 
date of the transfer,

[[Page 50248]]

generally calculate the date on which the right to cancel will expire.
    Second, for subsequent preauthorized remittance transfers, the 
final rule requires the remittance transfer provider to disclose the 
date or dates on which the provider will make those subsequent 
transfers in the series, with certain other information. The final rule 
provides providers some flexibility in how they may make these 
disclosures to senders. However, for subsequent preauthorized 
remittance transfers for which the date of transfer is four or fewer 
business days after payment is made for the transfer, the final rule 
requires disclosure of future dates of transfer in the receipt provided 
for the first transfer in the series.
    Finally, the final rule also permits providers to describe on a 
receipt both the three-business-day and 30-minute cancellation periods 
and either describe the transfers to which each deadline applies, or 
alternatively, use a checkbox or other method to designate which 
cancellation period is applicable to the transfer. The final rule does 
not change the three-business-day cancellation period for these 
transfers.

IV. Legal Authority

    Section 1073 of the Dodd-Frank Act creates a new section 919 of the 
EFTA and requires remittance transfer providers to provide disclosures 
to senders of remittance transfers, pursuant to rules prescribed by the 
Bureau. In particular, providers must give a sender a written pre-
payment disclosure containing specified information applicable to the 
sender's remittance transfer. The remittance transfer provider must 
also provide a written receipt that includes the information provided 
on the pre-payment disclosure, as well as additional specified 
information. EFTA section 919(a).
    In addition, EFTA section 919(d) directs the Bureau to promulgate 
rules regarding appropriate cancellation and refund policies. Except as 
described below, the final rule is adopted under the authority provided 
to the Bureau in EFTA section 919, and as more specifically described 
in this SUPPLEMENTARY INFORMATION.
    In addition to the statutory mandates set forth in the Dodd-Frank 
Act, EFTA section 904(a) authorizes the Bureau to prescribe regulations 
necessary to carry out the purposes of the title. The express purposes 
of the EFTA, as amended by the Dodd-Frank Act, are to establish ``the 
rights, liabilities, and responsibilities of participants in electronic 
fund and remittance transfer systems'' and to provide ``individual 
consumer rights.'' EFTA section 902(b). EFTA section 904(c) further 
provides that regulations prescribed by the Bureau may contain any 
classifications, differentiations, or other provisions, and may provide 
for such adjustments or exceptions for any class of electronic fund 
transfers or remittance transfers that the Bureau deems necessary or 
proper to effectuate the purposes of the title, to prevent 
circumvention or evasion, or to facilitate compliance.
    As described in more detail below, the provisions adopted in the 
final rule in part or in whole pursuant to the Bureau's authority in 
EFTA sections 904(a) and 904(c) \3\ include Sec. Sec.  
1005.30(f)(2)(ii), 1005.32(b)(2), 1005.36(a), 1005.36(b) and 
1005.36(d).\4\ The provisions adopted in whole or in part pursuant to 
the Bureau's authority in EFTA section 919(a)(5)(A) include Sec.  
1005.31(a)(3)(iv) and (a)(5)(iv).
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    \3\ Throughout this SUPPLEMENTARY INFORMATION, the Bureau is 
citing its authority under both EFTA section 904(a) and EFTA section 
904(c) for purposes of simplicity. The Bureau notes, however, that 
with respect to some of the provisions referenced in the text, use 
of only EFTA section 904(a) is needed.
    \4\ The consultation and economic impact analysis requirement 
previously contained in EFTA sections 904(a)(1)-(a)(4) were not 
amended to apply to the Bureau. Nevertheless, the Bureau consulted 
with the appropriate prudential regulators and other Federal 
agencies and considered the potential benefits, costs, and impacts 
of the rule to consumers and covered persons as required under 
section 1022 of the Dodd-Frank Act, and through these processes 
would have satisfied the requirements of these EFTA provisions if 
they had been applicable.
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V. Section-by-Section Analysis

Section 1005.30 Remittance Transfer Definitions

30(f) Definition of Remittance Transfer Provider
Overview
    Section 1005.30(f) of the February Final Rule and the accompanying 
commentary implement the definition of the term ``remittance transfer 
provider'' in EFTA section 919(g)(3). Section 1005.30(f) states that a 
``remittance transfer provider'' means any person that provides 
remittance transfers for a consumer in the normal course of its 
business, regardless of whether the consumer holds an account with such 
person. A remittance transfer provider is required to comply with 
subpart B of Regulation E relating to remittance transfers.
    As adopted in the February Final Rule, comment 30(f)-2 provides 
guidance interpreting the phrase ``normal course of business'' as used 
in the definition of remittance transfer provider. Specifically, 
comment 30(f)-2 to the February Final Rule states that whether a person 
provides remittance transfers in the normal course of business depends 
on the facts and circumstances, including the total number and 
frequency of remittance transfers sent by the provider. Comment 30(f)-2 
also sets forth illustrative examples.
    To provide clearer guidance on whether a person provides remittance 
transfers in the normal course of business, the Bureau proposed to add 
to comment 30(f)-2 an express safe harbor further interpreting the 
phrase ``normal course of business.'' The proposed safe harbor was 
based on the number of remittance transfers that a person provides. 
Proposed comment 30(f)-2 stated that if a person provided no more than 
25 remittance transfers in the previous calendar year, the person does 
not provide remittance transfers in the normal course of business for 
the current calendar year if it provides no more than 25 remittance 
transfers in that year. The proposed comment clarified, however, that 
if that person makes a 26th remittance transfer in the current calendar 
year, the person would be evaluated under the facts and circumstances 
test to determine whether the person is a remittance transfer provider 
for that transfer and any other transfers provided through the rest of 
the year.
    The Bureau solicited comment on the proposal to adopt a safe harbor 
interpreting the term ``normal course of business.'' The Bureau also 
specifically solicited comment on whether, if such a safe harbor is 
appropriate, the threshold number should be higher or lower than 25 
remittance transfers, such as 10 or 50 transfers, or some other number.
    Commenters generally supported or did not oppose clarifying the 
meaning of ``normal course of business'' with a safe harbor. Consumer 
group commenters supported the proposed threshold of 25 transfers per 
year. Some industry commenters proposed that any safe harbor be based 
on criteria other than or in addition to the number of transfers 
provided per year. Furthermore, most industry commenters argued that if 
the Bureau adopts a safe harbor based on the number of remittance 
transfers provided per year, that the Bureau should use a threshold 
number that is higher (and in some cases significantly higher) than 25 
transfers per year. Finally, some commenters suggested changes in how 
any safe harbor would be implemented, such as that the Bureau should 
provide time for an entity to come into compliance if the person 
becomes a remittance transfer provider once the safe harbor threshold

[[Page 50249]]

is exceeded. These comments are discussed in more detail below.
Regulatory Text
    Consumer group commenters suggested that if the Bureau adopted a 
safe harbor related to the term ``normal course of business,'' that the 
safe harbor be included in the text of subpart B to Regulation E rather 
than in the commentary to the rule in order to help consumers 
understand when the protections in subpart B of Regulation E will apply 
to their transactions. Upon further consideration, the Bureau believes 
that, for clarity, it is appropriate to include the safe harbor 
regarding the phrase ``normal course of business'' in the text of 
subpart B of Regulation E. Consequently, the Bureau redesignates former 
Sec.  1005.30(f) as Sec.  1005.30(f)(1), and adopts Sec.  
1005.30(f)(2)(i), which creates the new safe harbor described below. 
New Sec.  1005.30(f)(2)(ii) also creates a new transition period, 
described below. Revised comment 30(f)-2 provides interpretive guidance 
and illustrative examples.
Facts and Circumstances
    Comment 30(f)-2 to the February Final Rule states that whether a 
person provides remittance transfers in the normal course of business 
depends on the facts and circumstances, including the total number and 
frequency of remittance transfers sent by the provider. The Bureau did 
not propose any modification to this guidance. However, one consumer 
group commenter suggested a rewording of the proposed safe harbor that 
would mean that any person who does not qualify for the safe harbor 
should be subject to the requirements of subpart B of Regulation E, 
regardless of the facts and circumstances. Furthermore, some commenters 
appeared to misunderstand the relevance of the Bureau's guidance in 
proposed comment 30(f)-2 regarding persons that do not qualify for the 
safe harbor.
    Comment 30(f)-2 to the February Final Rule is renumbered and 
adopted with several non-substantive edits for clarity, and one minor 
modification, as comment 30(f)-2.i to the final rule. The modification 
is necessary because as discussed below, the final rule adopts a safe 
harbor similar to the safe harbor in proposed comment 30(f)-2, but, 
among other things, increases the threshold for that safe harbor from 
25 to 100 remittance transfers per calendar year. For conformity, the 
Bureau has changed its guidance regarding a person that provides 
remittance transfers in the normal course of business. Final comment 
30(f)-2.i interprets the phrase ``normal course of business'' to 
include a financial institution that makes remittance transfers 
generally available to customers and makes such transfers ``many'' 
times per month. Comment 30(f)-2 in the February Final Rule uses the 
term ``multiple'' rather than ``many.'' The Bureau believes that the 
term ``many'' is more consistent with the language and approach in the 
safe harbor as adopted.
A Safe Harbor Based on the Number of Remittance Transfers Provided
    Though most commenters did not oppose a safe harbor based on the 
number of remittance transfers provided, several industry commenters 
urged the Bureau to create a safe harbor based on other criteria. Some 
industry commenters suggested that a safe harbor be based on 
qualitative criteria, such as whether or not persons hold themselves 
out to be remittance transfer providers. Alternatively, some industry 
commenters suggested that the safe harbor apply to some or all 
financial institutions with less than $10 billion in assets, and other 
industry commenters suggested that the Bureau look to measures of the 
relative size of a person's remittance transfer business, such as the 
percent of a person's total transactions that are remittance transfers, 
or the percent of a person's revenue or net income that is earned from 
such transfers. Some industry commenters suggested the Bureau define a 
safe harbor based on these relative size measures alone, while others 
suggested that the relative size measures should apply only to certain 
entities or business models, or that entities should qualify for the 
safe harbor if they satisfy either of two alternative thresholds, such 
as the number of remittance transfers provided and a relative size 
measure. For example, one industry commenter suggested a safe harbor 
that would exclude from coverage of subpart B of Regulation E credit 
unions that (a) rely on unrelated third parties to send remittance 
transfers, and do not provide remittance transfers as their primary 
business, as long as (b) such transfers account for 30 percent or less 
of the credit unions' total revenues. In general, commenters suggesting 
relative size thresholds supported such measures because they would 
take into account the size of a person's overall business, or because 
the number of remittance transfers that a person provides may vary from 
year to year.
    The final rule adds a safe harbor, which is described in new Sec.  
1005.30(f)(2)(i). The safe harbor in the final rule reflects several 
modifications to the proposed commentary included in the February 
Proposal, as well as several non-substantive edits for clarity. Similar 
to the proposed comment, the safe harbor in Sec.  1005.30(f)(2)(i) is 
based on a single bright line threshold, the number of remittance 
transfers a person provides. It states that a person is deemed not to 
be providing remittance transfers for a consumer in the normal course 
of its business if the person provided 100 or fewer remittance 
transfers in the previous calendar year and provides 100 or fewer 
remittance transfers in the current calendar year. Comment 30(f)-2.ii 
provides additional clarification. It states that a person that 
qualifies for the safe harbor in Sec.  1005.30(f)(2)(i) is not a 
remittance transfer provider, and is thus not subject to the 
requirements of subpart B of Regulation E. The comment also clarifies 
that for the purposes of determining whether a person qualifies for the 
safe harbor, the number of remittance transfers provided includes any 
transfers that are excluded from the definition of ``remittance 
transfer'' due simply to this safe harbor. In contrast, the number of 
remittance transfers provided in a calendar year does not include any 
transfers that are excluded from the definition of ``remittance 
transfer'' for reasons other than the safe harbor, such as the small 
value transactions and securities and commodities transfers that are 
excluded from the definition of ``remittance transfer'' by Sec.  
1005.30(e)(2).
    As stated in the February Proposal, 77 FR 6310, 6314-15, the Bureau 
believes that a safe harbor can reduce compliance burden by increasing 
legal certainty in the market. Without a safe harbor, some persons who 
currently provide remittance transfers, or are contemplating doing so, 
may face uncertainty and litigation risk as to whether they meet the 
definition of ``remittance transfer provider'' when they provide a 
small number of transfers in a given year. Increased legal certainty 
may encourage some such persons to continue providing remittance 
transfers, when they might not otherwise be inclined to offer such 
products, due to concerns about legal uncertainty or the cost of 
compliance with subpart B of Regulation E.
    However, the Bureau also recognizes that a safe harbor interpreting 
the phrase ``normal course of business'' can limit the protections 
afforded to some consumers. The adoption of a numerical safe harbor may 
result in consumers not receiving the disclosures, error resolution, 
and other protections required by this rule in some instances

[[Page 50250]]

in which they might otherwise, because these consumers may be customers 
of persons who qualify for the safe harbor and, therefore, will have 
certainty that they are not ``remittance transfer providers'' for 
purposes of subpart B of Regulation E.
    Based on these considerations, the Bureau believes that the safe 
harbor should be derived from the phrase ``normal course of business,'' 
should provide substantial certainty to potential providers, and should 
be limited in scope so as to preserve the benefits of the statutory 
protections as intended by Congress. The Bureau believes that a safe 
harbor will provide the most certainty if it is based on a bright-line 
measure that permits persons to identify easily whether or not they 
qualify.
    In addition, the Bureau continues to believe that the provision of 
only a small number of remittance transfers per year is a reasonable 
basis for identifying persons that do not provide remittance transfers 
in the normal course of business. As explained in the February 
Proposal, 77 FR 6310, 6315, the Bureau believes that the inclusion of 
the phrase ``normal course of business'' in the statutory definition of 
``remittance transfer provider'' was meant to exclude persons that 
provide remittance transfers on a limited basis. As a result, the fact 
that a person provides only a small number of remittance transfers can 
strongly indicate that the person is not providing such transfers in 
the normal course of its business. Furthermore, the number of transfers 
provided is an objective standard that is easy to apply and should 
provide substantial certainty to persons regarding whether or not they 
qualify for the safe harbor.\5\
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    \5\ As one industry commenter suggested, given the potential for 
seasonal variation in the demand for remittance transfers, the 
Bureau believes that an annual figure is the most appropriate for 
the safe harbor threshold.
---------------------------------------------------------------------------

    The Bureau does not believe that it is appropriate, based on the 
current administrative record, to define a safe harbor based on asset 
size or a relative size measure such as percentage of revenue. 
Commenters did not provide, and the Bureau does not have, data 
suggesting, across the remittance transfer industry, why any of the 
specific asset size or relative size thresholds suggested by the 
comments would be an appropriate basis for defining normal course of 
business. Moreover, the Bureau is concerned that there may not be a 
measure of entity size that is currently used by all segments of the 
remittance transfer industry. While some providers, such as banks and 
credit unions, tend to measure their size in assets, in other segments 
of the remittance transfer market, revenues or some other aspect of a 
business may be a more widely used measure.
    Additionally, the Bureau believes that due to the wide variety of 
business models for offering remittance transfers and lack of currently 
available data, it would be difficult to craft a single standalone 
measure of relative size for identifying persons who provide remittance 
transfers on only a limited basis. For example, a standalone revenue 
threshold might exclude from the rule's coverage both a person who 
makes few transfers, but at a high price, and a person who offers many 
more transfers for free or at a very low price, as a value-added 
service to its customers. The Bureau is concerned that many persons who 
fall into the latter category may, in fact, make remittance transfers 
generally available to customers and make many transfers each month.
    The Bureau also believes that a safe harbor based on qualitative 
criteria could require fact-intensive determinations, and thus, unlike 
a bright-line threshold, would provide little additional clarity to the 
market. For instance, a safe harbor based on whether a person ``holds 
itself out'' as a remittance transfer provider would require context-
specific evaluation similar to the evaluation of whether a person 
provides remittance transfers in the normal course of business based on 
the facts and circumstances, in accordance with the guidance in final 
comment 30(f)-2.i. Thus, such a safe harbor would not accomplish the 
goals of the February Proposal.
Size of Numerical Threshold
    In proposing comment 30(f)-2, the Bureau suggested 25 transfers as 
a potential threshold, noting that the number would be consistent with 
the general threshold for coverage under the Bureau's Regulation Z, 12 
CFR part 1026, which relates to credit transactions. Under Regulation 
Z, a creditor is defined as an entity that regularly extends consumer 
credit under specified circumstances. Generally, under Regulation Z, a 
person regularly extends consumer credit in the current calendar year 
when it either extended consumer credit more than 25 times in the 
preceding calendar year or more than 25 times in the current calendar 
year.\6\ See Sec.  1026.2(a)(17) and comment 2(a)(17)(i)-4.\7\
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    \6\ Regulation Z in some cases provides additional protections 
for credit secured by a dwelling and certain high cost mortgages. 
For example, with respect to whether a person is a creditor, a 
person regularly extends consumer credit in the current calendar 
year if it either extended consumer credit for transactions secured 
by a dwelling more than five times in the previous calendar year or 
more than five times in the current calendar year. In addition, a 
person regularly extends consumer credit if it extends consumer 
credit for just one high-cost mortgage in a 12-month period. See 12 
CFR 1026.2(a)(17).
    \7\ The Bureau notes that it has issued a separate notice of 
request for information on whether it should revise these threshold 
numbers in Regulation Z. See 76 FR 75825, Dec. 5, 2011.
---------------------------------------------------------------------------

    The Bureau received a number of comments regarding the appropriate 
threshold on which to base any safe harbor regarding the definition of 
``normal course of business.'' Consumer group commenters supported the 
proposed threshold of 25 remittance transfers provided per year. In 
contrast, most industry commenters suggested a range of higher 
thresholds. For example, some commenters suggested thresholds based on 
annual transfer volumes ranging from 50 to 5,000 remittance transfers, 
or 1,000 remittance transfers per method of transfer. Other commenters 
suggested thresholds of 75 remittance transfers per month, 25 
remittance transfers per day, or other figures. State banking 
regulators did not suggest a specific threshold, but maintained that 
the Bureau should base the threshold on data received regarding the 
number of remittance transfers sent by depository institutions with 
under $10 billion in assets. These regulators also suggested that the 
Bureau adopt a threshold for depository institutions that is higher 
than the threshold for other entities.
    Many of the commenters that explained why they believed a higher 
threshold was appropriate focused on the cost of compliance with 
subpart B of Regulation E. Both in commenting on the proposed ``normal 
course of business'' safe harbor, and more generally, depository 
institutions, credit unions, and trade associations of depository 
institutions and credit unions described challenges associated with 
complying with the February Final Rule. These industry commenters 
stated that for open network transfers in particular,\8\ the 
requirements to estimate

[[Page 50251]]

or disclose third-party fees and exchange rates, to disclose a 
transfer's date of availability, and to refund transfers in certain 
circumstances would be impossible, challenging, risky, or costly to 
implement. Based on these and related concerns, industry commenters who 
were focused on the concerns of depository institutions and credit 
unions generally argued that a threshold higher than 25 was necessary 
in order to relieve more persons from compliance, to encourage greater 
continued market participation after subpart B of Regulation E takes 
effect, or to promote the ability of smaller depository institutions to 
compete with other providers. A number of industry commenters stated 
that they expected that some (or many) individual depository 
institutions and credit unions would limit the number of remittance 
transfers provided in order to qualify for any safe harbor, or would 
exit the market for remittance transfers, in order to avoid compliance 
with subpart B of Regulation E.
---------------------------------------------------------------------------

    \8\ Depository institutions and credit unions have traditionally 
offered consumers remittance transfers by way of wire transfers, 
which are generally open network transactions. In an open network, 
no single provider has control over, or relationships with, all of 
the participants that may collect funds in the United States or 
disburse funds abroad. A number of principal providers may access 
the system. National laws, individual contracts, and the rules of 
various messaging, settlement, or payment systems may constrain 
certain parts of transfers sent through an open network system. 
However, any participant may use the network to send transfers to 
unaffiliated institutions abroad with which it has no contractual 
relationship, and over which it has limited authority or ability to 
monitor or control. See 77 FR 6194, 6195-97.
---------------------------------------------------------------------------

    Alternatively, some industry commenters urged the Bureau to 
increase the size of the threshold based on what they described as 
typical practice among banks. For example, one commenter stated that a 
typical bank could reach 25 remittance transfers within the first few 
weeks of a year. It suggested a threshold of 300 remittance transfers 
per year because, it contended, that figure better represents the 
number of such transfers that a small institution provides, is still 
small enough that the excepted transactions would not generate a 
material source of income for a financial institution, and amounts to, 
on average, less than one transfer for every 25 accountholders for 
small banks. That commenter and other industry commenters stated that 
many or most depository institutions or credit unions are not ``in the 
business'' of providing remittance transfers, do not advertise the 
service, or generally offer remittance transfers only upon request.
    Several industry commenters offered other rationales to support 
thresholds higher than 25 remittance transfers per year. Some industry 
commenters stated that a threshold of 25 would not be useful because of 
the complexity of preparing for compliance if the threshold is crossed. 
One industry commenter advocated for a threshold of 50 remittance 
transfers, because that figure would constitute approximately one 
remittance transfer per week. Suggesting a threshold of 75 remittance 
transfers per year, another industry commenter argued that Regulation Z 
was an inappropriate reference point for subpart B of Regulation E 
because financial institutions tend to provide far more fund transfers 
per year than they do loans. Another industry commenter contended that 
a threshold of 600 remittance transfers per year was better to exclude 
institutions that provide remittance transfers infrequently and in 
response to specific consumer requests.
    Industry commenters also suggested that the Bureau commit to 
reevaluating the threshold on which the safe harbor is based. One 
industry commenter suggested that the Bureau revisit the safe harbor 
threshold nine months after the effective date of subpart B of 
Regulation E to determine whether further adjustment is appropriate. 
Similarly, another industry commenter suggested that the Bureau 
annually adjust the safe harbor threshold.
    The safe harbor described in Sec.  1005.30(f)(2)(i) of the final 
rule establishes a threshold of 100 remittance transfers per calendar 
year. The Bureau believes that it is reasonable to set a higher 
transaction threshold for determining when remittance transfers are 
provided ``in the normal course of business'' than for determining when 
a person ``regularly extends'' consumer credit under Regulation Z. 
There are several reasons why remittance transfers are different from 
extensions of credit. A single extension of credit typically involves 
an ongoing relationship between a consumer and creditor that may extend 
over weeks, months, or years. Credit is often provided as a standalone 
financial product in its own right, and can generate significant per-
transaction revenues over time. A remittance transfer, on the other 
hand, is a one-time transaction, for which the provider generally 
collects a one-time set of fees. Revenues per transaction are often 
relatively low; additionally, remittance transfers are sometimes 
provided as an adjunct to other financial products (such as a long-term 
account relationship). As a result, a single extension of credit may be 
more significant to a business than a single remittance transfer would 
be to the business of a person that provides such transfers. 
Furthermore, a single extension of credit may meet the demand of a 
consumer with ongoing credit needs; on the other hand, multiple 
remittance transfers may be needed to satisfy the annual demand of a 
consumer with ongoing transaction needs. Similarly, the Bureau believes 
that because it is not uncommon for consumers who send money abroad to 
do so 12 or more times per year,\9\ a change in the demand of just one 
or two customers might result in significant variance in the number of 
remittance transfers provided by a person who sends only a small number 
of transfers. The Bureau believes the same is less likely to be true of 
extensions of credit.
---------------------------------------------------------------------------

    \9\ See, e.g., Bendixen & Amandi, Survey of Latin American 
Immigrants in the United States 22 (Apr. 30, 2008), available at: 
http://bendixenandamandi.com/wp-content/uploads/2010/08/IDB_2008_National_Survey_Presentation.pdf.
---------------------------------------------------------------------------

    The Bureau believes that a figure of 100 or fewer transfers per 
year appropriately accounts for the differences between remittance 
transfers and extensions of credit. It is high enough that persons will 
not risk exceeding the safe harbor based on the needs of just two or 
three customers seeking monthly transfers. At the same time, the Bureau 
believes that a threshold of 100 is low enough to serve as a reasonable 
basis for identifying persons who occasionally provide remittance 
transfers, but not in the normal course of their business. One hundred 
transfers per year is equivalent to an average of approximately two 
remittance transfers per week, or the number of remittance transfers 
needed to satisfy the needs of a handful of customers sending money 
abroad monthly.
    Though industry commenters suggested a number of thresholds higher 
than 100 remittance transfers per year, the Bureau is concerned that a 
person who provides more than 100 transfers in a calendar year is more 
likely than other persons to be providing remittance transfers in the 
normal course of its business, such as by making transfers generally 
available to its customers, and by providing them more frequently. 
Furthermore, the Bureau does not have industry-wide information linking 
commenters' suggested higher thresholds either to the definition of 
``normal course of business,'' or to other factors that commenters 
suggested were relevant, such as the cost of compliance with subpart B 
of Regulation E.
    Industry commenters provided little data to support their 
contentions that any particular threshold was the most appropriate. Two 
trade associations provided high-level summaries of limited surveys of 
member banks regarding the number of international funds transfers 
sent. Otherwise, the comments received in response to the February 
Proposal generally did not provide data on the overall distribution and 
frequency of remittance transfers

[[Page 50252]]

across providers to support treating any particular number of 
transactions as outside the normal course of business.
    Through additional outreach, the Bureau obtained limited data from 
several sources regarding the number of remittances transfers and 
similar transactions provided by individual depository institutions and 
credit unions, money transmitters, and other small businesses that may 
also send money abroad. The Bureau hoped that such information might 
enable the Bureau to better evaluate the comments received, and reveal 
patterns in the numbers of transfers sent by different types of 
providers.
    The data received include results from several limited surveys of 
depository institutions and/or credit unions regarding the number of 
remittance transfers that they send; estimates of the number of 
consumer-initiated outbound international wire transfers conducted by 
individual banks and/or credit unions provided through one 
correspondent bank or a corporate credit union; the number of 
remittances and other transactions conducted by state-licensed money 
transmitters in California, New York, and Ohio; and estimates of the 
number of outbound international transfers provided by individual 
credit unions using a specialized service. The Bureau also discussed 
with an industry expert the characteristics of several types of small 
businesses other than depository institutions and credit unions that 
may send money abroad, including start-up enterprises and small 
businesses that send money abroad that are not registered or licensed 
as money transmitters.
    The Bureau does not believe that it can extrapolate from any of the 
data sets received to the remittance transfer market as a whole or any 
segment of it, due to factors including the small sample sizes and the 
Bureau's inability to determine whether the institutions covered in any 
data set are representative of the market as a whole or any segment of 
it. Also, regarding some segments of the market, the Bureau did not 
receive any data. Furthermore, in some cases, the data received may 
overestimate or underestimate the number of remittance transfers 
provided. For example, the data sets from a correspondent bank and a 
corporate credit union may underestimate the number of transactions 
provided by individual institutions, as these data sets reflect only 
wire transfers sent through either that correspondent bank or corporate 
credit union, and the institutions covered by the data sets may use 
other such intermediary institutions, or send remittance transfers by 
means other than wire. By contrast, the three states' transaction data 
both underestimate and overestimate the number of remittance transfers 
sent. On the one hand, one state provided data regarding transactions 
only from that state to foreign countries, rather than all 
international transfers that the state-licensed entities may have sent 
from the United States. On the other hand, all three states' data mix 
consumer-initiated outbound international transactions with 
transactions that are not remittance transfers, as defined in subpart B 
of Regulation E, including transfers initiated by businesses, domestic 
transfers, and/or sales of certain payment devices or other state-
regulated transactions, depending on the state.
    As a result of these limitations, the Bureau does not believe it 
can rely on the data received to describe the number of remittance 
transfers provided by ``typical'' entities or to identify a clear 
pattern in the distribution of providers by the number of transfers 
provided. Nor does the data received allow the Bureau to distinguish 
meaningfully among a number of the more modest thresholds suggested by 
commenters, in terms of the challenge of compliance for such 
institutions, or other factors suggested by commenters.
    Nevertheless, the Bureau believes the data collected provide some 
additional support for a safe harbor based on a threshold of 100 
remittance transfers per year. Though the data sets regarding state-
licensed money transmitters did not show that any of the licensees that 
recorded some transaction volume also recorded 100 or fewer 
transactions per year nationally,\10\ each of the data sets regarding 
depository institutions and credit unions suggested that a meaningful 
portion of the institutions covered by the data set were sending 100 or 
fewer remittance transfers annually. In other words, the threshold is 
not so low as to be meaningless. In the data sets for which the Bureau 
received detailed information, between roughly 40 percent and roughly 
90 percent of those responding to or covered by the data who reported 
any transactions in the most recent year also stated that they provided 
100 or fewer such transactions in that year.
---------------------------------------------------------------------------

    \10\ For transmitters licensed in California, the Bureau does 
not know whether the number of transactions reported for a company 
in California is the same as or less than the number of transactions 
that a company sent nationwide. Because each of the states' data 
sets combines remittance transfers with domestic transfers, 
business-initiated transfers, and/or sales of certain payment 
instruments (depending on the state), the Bureau cannot be certain 
as to the number of remittance transfers provided by each listed 
entity. However, the Bureau's review of entity Web sites suggests 
that many of the licensees that provide international money 
transfers to consumers focus on that line of business, and thus, 
that for many of the licensees that provide any remittance 
transfers, most of the reported transactions are, in fact, 
remittance transfers.
---------------------------------------------------------------------------

    As commenters suggested, the Bureau intends to monitor the 100-
transfer threshold over time. The Bureau is working to develop better 
sources of information on the frequency of remittance transfers 
provided not only by depository institutions, credit unions, and state-
licensed money transmitters, but also by other types of entities, 
particularly broker-dealers and others that may send money abroad but 
that are not state- or federally-licensed or chartered. The Bureau 
believes based on available information that many nonbank companies 
that send money abroad fewer than 100 times per year may be agents for 
remittance transfer providers that are required to comply with subpart 
B of Regulation E. However, data about the market for international 
money transfers remains limited, especially with regard to providers 
that are not State- or Federally-licensed or chartered. Thus, the 
Bureau intends to continue seeking better data about the business 
structures and consumer protection concerns in all segments of the 
market.
Application of the Safe Harbor
    Commenters raised several questions and suggestions regarding the 
application of the safe harbor described in proposed comment 30(f)-2. 
For example, some industry commenters sought clarification that a newly 
formed entity or a new entrant to the market would be considered to 
have provided zero remittance transfers in the previous calendar year.
    New Sec.  1005.30(f)(2)(i) does not generally distinguish between 
entities that provided zero remittance transfers in the previous 
calendar year and those that provided from one to 100. For entities 
formed during a particular calendar year, the Bureau recognizes that 
the number of transfers provided during the previous calendar year 
(i.e., none), sheds little light on those entities' current or future 
business practices. However, the Bureau is concerned that an exception 
to the safe harbor for newly formed entities or new entrants would mean 
that none of those entities would be able to take advantage of the 
increased legal certainty that the safe harbor provides to other 
persons. Furthermore, the Bureau expects that any newly formed entity 
(or new entrant) that plans to offer remittance

[[Page 50253]]

transfers in the normal course of its business will develop systems to 
comply with subpart B of Regulation E from the start, rather than wait 
until its 101st transfer. The Bureau notes that newly formed entities 
or new entrants conducting 100 or fewer remittance transfers in their 
first year in operation likely account for a very small portion of the 
total volume of remittance transfers sent each year.
    Some industry commenters suggested that persons who exceed the safe 
harbor threshold not be required to come into compliance immediately 
with subpart B of Regulation E. One industry commenter suggested that 
providers be given six months to come into compliance with subpart B of 
Regulation E after exceeding any safe harbor threshold. Another 
industry commenter suggested that compliance be required only after a 
person exceeds the threshold for two consecutive years.
    In response to the comments received, the Bureau adopts new Sec.  
1005.30(f)(2)(ii), which provides a transition period for any person 
that provided 100 or fewer remittance transfers in the previous 
calendar year but provides more than 100 remittance transfers in the 
current calendar year. Upon exceeding the 100-transaction threshold, 
that person would be subject to greater uncertainty as to whether it is 
providing remittance transfers in the normal course of business. 
Section 1005.30(f)(2)(ii) states that if such person is then providing 
remittance transfers for a consumer in the normal course of its 
business, then the person may have a reasonable period of time, not to 
exceed six months, to begin complying with subpart B of Regulation E. 
Compliance with subpart B will not be required for any remittance 
transfers for which payment is made during that reasonable period of 
time.
    Comment 30(f)-2.iii offers further explanation and clarification. 
It states that if a person that provided 100 or fewer remittance 
transfers in the previous calendar year provides more than 100 such 
transfers in the current calendar year, the safe harbor described in 
Sec.  1005.30(f)(2)(i) applies to the first 100 remittance transfers 
that the person provides in the current calendar year. But similar to 
proposed comment 30(f)-2, final comment 30(f)-2.iii clarifies that for 
any additional remittance transfers provided in the current calendar 
year and for any remittance transfers provided in the subsequent 
calendar year, whether the person provides remittance transfers for a 
consumer in the normal course of business, and is thus a remittance 
transfer provider for those additional transfers, depends on the facts 
and circumstances. The comment further explains that for such a person, 
compliance with subpart B of Regulation E will be required at the end 
of the ``reasonable period of time'' permitted by Sec.  
1005.30(f)(2)(ii) unless, based on the facts and circumstances, such a 
person is not a remittance transfer provider. Comment 30(f)-2.iv 
provides an example with specific dates to illustrate application of 
the safe harbor and transition period.
    The Bureau believes it necessary and proper to use its EFTA section 
904(a) and (c) authority to adopt the transition period described in 
new Sec.  1005.30(f)(2)(ii) because the transition period will 
effectuate the purposes of the EFTA and facilitate compliance. The 
Bureau expects that a person initiating compliance with subpart B of 
Regulation E may need some time to adjust business processes and 
computer systems and train its staff. The Bureau is concerned that 
absent a transition period, persons who intend to become remittance 
transfer providers may temporarily suspend service in order to change 
their systems, and that such temporary suspension could be disruptive 
to consumers, as well as to the providers. However, the Bureau believes 
that any transition period should be limited because it will permit 
some persons to provide remittance transfers in the normal course of 
business without providing the disclosure, error resolution, and other 
protections generally required by subpart B of Regulation E. The Bureau 
believes that six months is an adequate period of time for entities to 
come into compliance, particularly because the Bureau expects that 
service providers will emerge or evolve to permit new remittance 
transfer providers to accelerate compliance. The Bureau expects that 
persons who are remittance transfer providers will use the transition 
period permitted by Sec.  1005.30(f)(2)(ii) to take all reasonable 
steps toward compliance with subpart B of Regulation E.
    One industry commenter stated that it does not have a system in 
place to count remittance transfers during the year. The Bureau 
recognizes that prior to the implementation of this rule, many persons 
likely had no reason to identify remittance transfers. In the future, 
the Bureau expects that many small providers will accurately track 
their remittance transfers to know whether they qualify for the safe 
harbor described in Sec.  1005.30(f)(2). With regard to transfers 
provided prior to this rule's effective date, the Bureau expects that 
providers who did not distinguish remittance transfers from other 
electronic transfers of funds sent to recipients in other countries can 
use reasonable means to identify what subset of these transfers were 
remittance transfers, based on available information. For example, a 
bank might conclude that every outbound international wire transfer 
initiated by a consumer is a remittance transfer for purposes of 
determining whether the safe harbor applies in the first year after the 
effective date.
Other Comments
    Consumer group commenters requested that the Bureau clarify that 
transfers provided by persons that qualify for the ``normal course of 
business'' safe harbor are governed by Article 4A of the Uniform 
Commercial Code (UCC). Article 4A applies to international funds 
transfers, but generally provides that it does not apply to a funds 
transfer any part of which is governed by the EFTA. In the February 
Final Rule, 77 FR 6194, 6212, the Bureau recognized that one 
consequence of covering remittance transfers under the EFTA could be 
legal uncertainty under the UCC for certain remittance transfer 
providers. The Bureau stated its belief that the best mechanisms for 
resolving that uncertainty rests with the states that have adopted the 
UCC, with the purveyors of rules applicable to specific wire systems, 
which can bind direct participants in the system, and with participants 
in wire transfers who can incorporate UCC Article 4A into their 
contracts. Similarly, the Bureau does not believe that the requested 
clarification is proper, as the Bureau does not implement or administer 
Article 4A. Furthermore, the Bureau believes that subpart B of 
Regulation E already makes clear what transactions it governs.
    Consumer group commenters also suggested that the Bureau require 
that either just insured institutions or all persons that qualify for 
the safe harbor described in Sec.  1005.30(f)(2)(i) disclose to 
consumers that consumer protections applicable to remittance transfers 
provided by remittance transfer providers will not apply to 
transactions provided by those persons. The Bureau does not believe it 
is appropriate to impose such a requirement without seeking notice and 
comment on it. Furthermore, such a requirement would be in tension with 
EFTA Section 919, which subpart B implements, and which does not impose 
any express obligation on persons that are not remittance transfer 
providers.

[[Page 50254]]

Section 1005.31 Disclosures

Overview
    In the February Proposal, the Bureau solicited comment on issues 
relating to disclosure of the cancellation requirements in Sec.  
1005.36(c) for remittance transfers scheduled by the sender at least 
three business days before the date of the transfer. To address these 
issues, the Bureau is amending the disclosure requirements in 
Sec. Sec.  1005.31(a)(3), (a)(5), and (b)(2) to improve consumers' 
ability to determine the cancellation deadlines for particular 
transfers. In addition, the Bureau is amending Sec.  1005.31(b)(3), 
regarding combined disclosures, to allow providers to give a 
confirmation that the transfer has been scheduled in lieu of the proof 
of payment required for transfers scheduled before payment is processed 
for the transfer. These amendments are discussed in detail in their 
respective sections below.
Disclosure of Deadline To Cancel Transfers Scheduled Before the Date of 
Transfer
    As discussed in more detail below regarding Sec.  1005.36(c), the 
February Final Rule adopts a cancellation policy for remittance 
transfers. Under Sec.  1005.34(a) of the February Final Rule, a sender 
generally has 30 minutes after payment is made to cancel a remittance 
transfer. The February Final Rule, however, contains special 
cancellation procedures for any remittance transfer that is scheduled 
at least three business days before the date of the transfer, including 
a series of preauthorized remittance transfers. For these transfers, 
the provider is required to cancel the remittance transfer if it 
receives a request to cancel from the sender at least three business 
days before the date of the transfer.
    The February Proposal solicited comment on possible changes to the 
cancellation requirements for remittance transfers that are scheduled 
at least three business days before the date of the transfer, including 
preauthorized remittance transfers. Specifically, the February Proposal 
solicited comment on whether the three-business-day period for 
cancelling such remittance transfers adopted in the February Final Rule 
is appropriate, or whether the rule should require a deadline to cancel 
these transfer that is more or less than three business days. The 
February Proposal also solicited comment on three issues related to the 
disclosure of the deadline to cancel as set forth in the February Final 
Rule. The first issue was whether the three-business-day deadline to 
cancel transfers scheduled before the date of the transfer should be 
disclosed differently to senders, such as by requiring a remittance 
transfer provider to disclose in the receipt the specific date on which 
the right to cancel will expire. The second issue was whether a 
provider should be allowed to describe both the three-business-day and 
30-minute cancellation provisions on a single receipt and either 
describe the transfers to which each cancellation period is applicable, 
or alternatively, use a checkbox or other method to designate which 
cancellation period is applicable to the transfer to which the receipt 
relates. The third issue was whether the cancellation requirements 
should be disclosed in the pre-payment disclosure, rather than in the 
receipt, for each subsequent preauthorized remittance transfer.
    The approaches taken in the final rule for the three-business-day 
cancellation period and the disclosures required to be provided in 
connection with subsequent remittance transfers within a series of 
preauthorized remittance transfers are described in greater detail 
below in the discussion regarding Sec.  1005.36(c) and (d). Consistent 
with these provisions, the Bureau is also revising Sec.  1005.31 to add 
new paragraphs (a)(3)(iv), (a)(5)(iv), and (b)(2)(vii), and associated 
commentary, regarding the content and format of the disclosures that 
must be provided to senders of transfers scheduled at least three 
business days before the date of the transfer and of certain 
preauthorized remittance transfers.
    Taken together, the final rule requires remittance transfer 
providers to disclose the date of transfer, and in certain instances, 
the future date or dates of transfer and related information in 
receipts that may be provided at the time payment is made or after the 
date of transfer. For any remittance transfer scheduled at least three 
business days before the date of the transfer, the receipt provided 
when payment is made must disclose the date of transfer for that 
transfer. Where a consumer schedules a series of preauthorized 
remittance transfers, the receipt provided for the first transfer must 
also provide the date of transfer for that first transfer. In each 
case, if a second receipt is required after the date of transfer, that 
receipt must also disclose the date the transfer was made. The final 
rule also addresses, among other things, a requirement to disclose 
future dates of transfer for subsequent preauthorized transfers. In 
addition to the information described above, the receipt provided for 
the initial transfer in a series of preauthorized remittance transfers 
must also disclose the future date or dates of transfer for any 
subsequent preauthorized remittance transfer in that series for which 
the date of transfer is scheduled four or fewer business days after the 
date on which payment for the initial transfer is made. For other 
subsequent preauthorized transfers, the rule provides flexibility as to 
whether the information regarding transfer dates and cancellation 
requirements for subsequent transfers is included in one or more 
receipts or standalone disclosures, so long as it is provided 
sufficiently in advance to allow the consumer to exercise his or her 
cancellation rights.
    Finally, as is the case with one-time transfers scheduled at least 
three business days before the date of the transfer, the final rule 
also requires that receipts for subsequent preauthorized remittance 
transfers include the date of transfer for the transfer that is the 
subject of the receipt and, if the provider chooses, the future dates 
of transfer for the next scheduled subsequent transfer or transfers.
31(a) General Form of Disclosures
31(a)(3)(iv)
    As discussed below, the Bureau adds new Sec.  1005.31(b)(2)(vii) to 
require that in certain circumstances, a receipt for a remittance 
transfer include the date of the transfer for that specific transfer in 
order to provide consumers with a clearer explanation of their 
cancellation rights. Further, the Bureau adds new Sec.  1005.36(d) to 
require that in certain instances, such receipts disclose the dates of 
upcoming transfers and related information. The Bureau is making 
corresponding changes to the disclosure requirements for transfers 
conducted entirely by telephone to require oral disclosure of transfer 
date information in certain circumstances. As stated in the February 
Final Rule, the Bureau believes that for oral telephone transactions, 
senders should be informed of their cancellation rights before the 
cancellation period has passed. 77 FR 6194, 6217. Because a receipt 
would generally be mailed to a sender for telephone transactions as 
permitted by Sec.  1005.31(e)(2), the sender may not receive the 
cancellation disclosure included in that receipt until after the 
standard 30-minute cancellation period had passed unless the Bureau 
required the disclosure to be made orally before the 30-minute 
cancellation period expires. Consequently, Sec.  1005.31(a)(3)(iii), as 
adopted in the February Final Rule, requires oral disclosure of 
cancellation rights when the sender requests the remittance transfer 
and prior to payment

[[Page 50255]]

for the transfer, if the provider takes advantage of the option to 
provide pre-payment disclosures orally for transactions conducted 
entirely by telephone.
    For similar reasons, among others, the Bureau believes that for a 
remittance transfer scheduled at least three business days before the 
date of the transfer, and for any preauthorized remittance transfer 
scheduled to occur four or fewer business days after the date payment 
is made for the transfer, an oral pre-payment disclosure regarding 
cancellation rights should be accompanied by an oral disclosure 
regarding the date of that transfer. Although the time period for 
cancellation of transfers scheduled in advance may be calculated in 
days rather than minutes, the period may still expire before the 
consumer receives any written material, particularly if the consumer is 
scheduling the transfer three or four days in advance. For 
preauthorized remittance transfers, several transfers in the series may 
be sent before a written receipt is received.
    Accordingly, pursuant to its authority under EFTA section 
919(a)(5)(A), the Bureau is amending Sec.  1005.31(a)(3) to add Sec.  
1005.31(a)(3)(iv) as a further condition for the provision of oral 
disclosures for remittance transfers conducted entirely by telephone. 
This provision permits oral disclosures if (among other requirements) 
the provider discloses orally, to the extent applicable, (A) the 
information required by Sec.  1005.31(b)(2)(vii) and (B) the 
information required by Sec.  1005.36(d)(1)(i)(A) with respect to 
transfers subject to Sec.  1005.36(d)(2)(ii), pursuant to the timing 
requirements in Sec.  1005.31(e)(1).
31(a)(5)(iv)
    As discussed in the section-by-section analysis to the February 
Final Rule, since remittance transfers sent via mobile application or 
text message on a telephone are conducted entirely by telephone, EFTA 
section 919(a)(5)(A) permits the Bureau to allow oral pre-payment 
disclosures in connection with transfers sent via mobile application or 
text message if the transfer is conducted entirely by telephone. 77 FR 
6194, 6217. Because oral disclosures are not retainable, the Bureau 
further observed that for such transactions, senders would not be less 
protected, and might be better informed, by receiving pre-payment 
disclosures via mobile application or a text message even though these 
disclosures may also not be retainable. Id. Accordingly, to effectuate 
the purposes of the EFTA and facilitate compliance, the Bureau used its 
authority under EFTA sections 904(a) and (c) to include in the February 
Final Rule Sec.  1005.31(a)(5), which states that the pre-payment 
disclosure may be provided orally or via mobile application or text 
message if: (i) The transaction is conducted entirely by telephone via 
mobile application or text message; (ii) the remittance transfer 
provider complies with the foreign language requirements of Sec.  
1005.31(g)(2); and (iii) the provider discloses orally or via mobile 
application or text message a statement about the rights of the sender 
regarding cancellation required by Sec.  1005.31(b)(2)(iv) pursuant to 
the timing requirements in Sec.  1005.31(e)(1).
    Pursuant to the same authority, and for the same reasons as those 
discussed above regarding with Sec.  1005.31(a)(3)(iv), the Bureau 
adopts new Sec.  1005.31(a)(5)(iv), which adds as an additional 
condition for the provision of the pre-payment disclosures orally or 
via mobile application or text message a requirement that the provider 
disclose, to the extent applicable, (A) the information required by 
Sec.  1005.31(b)(2)(vii) and (B) the information required by Sec.  
1005.36(d)(1)(i)(A) with respect to transfers subject to Sec.  
1005.36(d)(2)(ii), pursuant to the timing requirements in Sec.  
1005.31(e)(1).
31(b)(2) Receipt
31(b)(2)(vii) Date of Transfer
    The February Final Rule requires the receipt provided to a sender 
to include an abbreviated statement about the sender's cancellation 
rights. Sec.  1005.31(b)(2)(iv). In the February Proposal, the Bureau 
noted that senders may have difficulty determining the specific date on 
which the right to cancel expires for a particular transfer. 77 FR 
6310, 6321. Accordingly, the Bureau sought comment on whether, as 
applicable, the three-business-day deadline to cancel transfers should 
be disclosed differently to consumers, such as by requiring a 
remittance transfer provider to disclose in the receipt the specific 
date on which the right to cancel will expire or to state its business 
days in receipts provided to senders. The Bureau also solicited comment 
on alternative means of disclosing the deadline for cancelling 
transfers scheduled at least three business days before the date of the 
transfer.
    The Bureau received a number of comments on the cancellation 
disclosure from various industry members and one consumer group. Most 
comments focused on whether providers should be required to include the 
specific cancellation deadline in the receipts provided to senders. 
Commenters did not address any of the other questions raised on this 
issue in the February Proposal nor did they suggest alternatives.\11\
---------------------------------------------------------------------------

    \11\ Regarding the Bureau's inquiry about disclosure of the 
provider's business days, the Bureau did not receive comment on this 
issue specifically, although one industry commenter stated that 
providers should not be required to disclose the specific deadline 
to cancel or other additional items that are not required to be 
disclosed by the February Final Rule.
---------------------------------------------------------------------------

    With respect to disclosure of the specific cancellation date, the 
majority of industry commenters opposed such a requirement. Some 
industry commenters asserted that requiring disclosure of the specific 
cancellation deadline for a particular transaction would make it more 
difficult and expensive to produce receipts by adding a new element 
specific to each transfer. One industry commenter stated that requiring 
a remittance transfer provider to specify the exact date for 
cancellation would create significant technical challenges because at 
that point, the disclosure becomes dynamic, rather than static. This 
commenter stated that producing such a dynamic disclosure may require 
updating based on the time of day of the transfer request and the 
provider's processing deadline, whereas a static disclosure without 
such a requirement can be reliably produced at any time of day. 
Further, the commenter stated that a sender uncertain of the 
cancellation deadline will contact a remittance transfer provider 
directly for clarification and then cancel the transaction in the 
course of the same contact.
    In contrast, the consumer group commenter argued that the period 
for cancellation rights should be disclosed as a specific date. One 
industry commenter did not oppose requiring remittance transfer 
providers to disclose the specific cancellation date for each 
transaction, but argued that providers should be allowed to disclose a 
cut-off time for exercising the cancellation right because the lack of 
clarity regarding the time of day the cancellation period expires could 
result in a transfer being delayed until the next business day.
    Pursuant to the Bureau's authority under EFTA section 919(d)(3), 
the February Final Rule is revised to add a new Sec.  
1005.31(b)(2)(vii), which requires that a receipt for any remittance 
transfer scheduled by the sender at least three business days before 
the date of the transfer, or the first transfer in a series of 
preauthorized remittance transfers, disclose the date the remittance 
transfer provider will make or made the

[[Page 50256]]

remittance transfer, using the term ``Transfer Date,'' or a 
substantially similar term.
    The Bureau is also adopting commentary to provide further guidance 
on the application of Sec.  1005.31(b)(2)(vii). As explained in more 
detail below in the discussion of Sec.  1005.36, for certain 
transactions, a receipt meeting the requirements of Sec.  
1005.31(b)(2), including the transfer date required under Sec.  
1005.31(b)(2)(vii), may need to be provided at different times. For 
example, for the first in a series of preauthorized remittance 
transfers, an initial receipt will need to be provided at the time 
payment is made for the transfer; and then in some cases, a receipt 
will need to be provided shortly after that particular transfer has 
been made. Thus, comment 31(b)(2)-4 clarifies that, where applicable, 
Sec.  1005.31(b)(2)(vii) requires disclosure of the date of transfer 
for the remittance transfer that is the subject of a receipt required 
by Sec.  1005.31(b)(2), including a receipt that is provided in 
accordance with the timing requirements in Sec.  1005.36(a).
    Comment 31(b)(2)-4 further clarifies that, for any subsequent 
preauthorized remittance transfer subject to Sec.  1005.36(d)(2)(ii), 
the future date of transfer and related information must be provided on 
any receipt provided for the initial transfer in that series of 
preauthorized remittance transfers, or where permitted, or disclosed as 
permitted by Sec.  1005.31(a)(3) and (a)(5), in accordance with Sec.  
1005.36(a)(1)(i).
    Comment 31(b)(2)-5 provides an example of how disclosure of the 
dates of transfer required by Sec.  1005.31(b)(2)(vii) and Sec.  
1005.36(d)(1) should be provided in receipts required by Sec.  
1005.31(b)(2) pursuant to the timing requirements in Sec.  
1005.36(a)(1)(i) or (a)(1)(ii). Comment 31(b)(2)-5 also explains that 
if the provider discloses on either receipt the cancellation period 
applicable to and dates of subsequent preauthorized remittance 
transfers in accordance with 1005.36(d)(2)(i), the disclosure must be 
phrased and formatted in such a way that it is clear to the sender 
which cancellation period is applicable each date of transfer on the 
receipt.
    Upon further review and analysis, the Bureau concludes that because 
the cancellation requirements in Sec.  1005.36(c) are based on and 
calculated from the date of transfer, the actual transfer date is the 
most logical piece of information to require since the remittance 
transfer provider is already required to obtain this information in 
order to comply with Sec.  1005.36(c), although it is not required to 
be disclosed to the sender under the February Final Rule.
    Further, the Bureau also believes that requiring a remittance 
transfer provider to disclose the date of a remittance transfer, along 
with a disclosure that the sender's cancellation rights will expire 
three business days before the date of the transfer, provides a 
reasonable balance between consumer and industry interests. This 
approach significantly improves the information provided to senders 
because, under the February Final Rule, a provider is generally only 
required to disclose the cancellation policy, with a statement such as 
``you can cancel for a full refund no later than three business days 
prior to the scheduled date of the transfer.'' 77 FR 6310, 6321. This 
required disclosure, however, does not elaborate on what constitutes 
the date of transfer or how the sender may determine the cancellation 
deadline from the date of transfer. Without a clear starting point from 
which to count the three-business-day deadline, the Bureau believes 
senders may be confused about the dates by which they are required to 
cancel transfers, which may make cancellation disclosures less 
effective. In situations such as when transferred funds will be drawn 
from an account at a later date rather than paid up front, the transfer 
date may also help the sender understand when the funds for the 
transfer must be available for the provider to conduct the transfer. 
The transfer date may also help senders differentiate and keep track of 
completed transfers, especially where the sender receives a number of 
receipts in the mail or on an account statement in close proximity to 
one another.
    The Bureau also believes that requiring disclosure of the date of 
transfer is the most technically feasible solution relative to the 
alternatives raised in the February Proposal. The dates of transfer 
should be readily available to remittance transfer providers since they 
are likely primarily responsible for executing remittance transfer 
requests, and as part of their business processes should already know 
when they must execute transfers to satisfy the terms of their 
contracts with senders (if the contracts are based on the date of the 
transfer) or to meet any delivery deadlines (if those deadlines are the 
bases of the contracts). The Bureau also believes that disclosure of 
the date of transfer is an added benefit for senders who may choose to 
schedule a transaction based on when the funds must be available. 
Finally, the Bureau notes that the requirement to disclose the date of 
transfer is consistent with the existing requirement for certain 
preauthorized electronic fund transfers. In particular, Sec.  
1005.10(d)(1) (in subpart A of Regulation E) requires an electronic 
fund transfer provider to send the consumer the date of transfer (and 
other information) at least ten days before the scheduled date of the 
transfer when a preauthorized electronic fund transfer from the 
consumer's account will vary in amount from the previous transfer under 
the same authorization. Consequently, certain remittance transfer 
providers that also provide preauthorized electronic fund transfers may 
already have the capability to produce disclosures with the date of 
transfer.
    Moreover, the Bureau believes that keeping disclosure forms short, 
simple, and succinct is helpful to senders. As noted in the February 
Final Rule, participants in consumer testing understood and responded 
positively to concise, abbreviated disclosures. 77 FR 6194, 6228. Of 
the options considered, the Bureau believes that disclosure of only the 
date of transfer best accomplishes this goal because that date may be 
provided independently of other information. While disclosure of the 
specific dates of cancellation deadlines would inform senders of the 
actual dates on which their rights to cancel expire, the Bureau 
believes that consumers would still benefit from disclosure of the date 
of transfer. The Bureau is concerned that requiring providers to 
include multiple dates on receipts may be more confusing to senders and 
possibly dilute the usefulness of the disclosures regarding 
cancellation rights.
    Likewise, the Bureau is concerned that requiring providers to state 
their business days on receipts may result in a longer, more unwieldy 
form. The Bureau believes that providers will generally make available 
to the public upon request the days that constitute ``business days'' 
under subpart B of Regulation E, and that, therefore, senders can 
obtain this information as necessary. Absent further data regarding the 
usefulness of this information, the Bureau does not believe that it is 
appropriate at this time to make the forms significantly longer and 
more complicated to include information that is likely to be used by 
only a small subset of consumers who may contact their remittance 
transfer providers in any event to effectuate the cancellation.
    Accordingly, the Bureau believes that requiring the date of 
transfer and cancellation rights in receipts strikes the appropriate 
balance between providing senders with information about their 
transfers and minimizing the burden to providers. However, the Bureau 
will

[[Page 50257]]

continue to gather data on consumers' exercise of cancellation rights, 
the effectiveness of related disclosures, and programming burdens on 
providers over time and, if warranted, will reexamine this issue at a 
later date to determine if a better solution exists.
    The Bureau has further determined that it is appropriate to require 
disclosure of the date of transfer at the time payment is made, but 
also in subsequent receipts required to be provided with respect to a 
given transfer in accordance with Sec.  1005.36(a)(1)(ii) or Sec.  
1005.36(a)(2)(ii). The Bureau believes that a single consistent rule 
will be simpler as a matter of programming for providers and will 
frequently provide additional benefits to consumers in light of the 
fact that the final rule eliminates the requirement to provide the pre-
payment disclosure and receipt in advance of the transfer for 
subsequent preauthorized transfers in a series. (See discussion below 
regarding Sec.  1005.36(a).)
    In particular, although stating the date of transfer in a post-
transfer receipt will not facilitate senders' understanding of 
cancellation deadlines that have already passed, the Bureau believes 
the information will frequently be useful to senders in other ways. For 
example, as noted above, if a sender schedules a number of standalone 
transfers before the date of transfer, or a series of closely-spaced 
preauthorized remittance transfers, senders may receive a number of 
receipts in close proximity to each other and may use the date of 
transfer to identify and track which transfer has occurred. Having the 
date of transfer on receipts with respect to each transfer would 
likewise be helpful in situations where the receipt is provided with a 
periodic statement on which there are several transactions.
    In addition, because senders may not receive additional disclosures 
prior to the subsequent preauthorized transfer in a series, the receipt 
provided after the transfer is completed in accordance with Sec.  
1005.36(a)(2)(ii) will contain information regarding cancellation 
rights (as well as the exchange rate, fees and taxes) that could help 
inform the sender about the upcoming subsequent remittance transfer. 
Furthermore, as most preauthorized remittance transfers are likely to 
be scheduled some time in advance, senders will generally receive 
receipts after the transfer is completed. This receipt would provide 
confirmation that the transfer occurred as scheduled. Finally, where 
remittance transfer providers choose to satisfy their obligations under 
Sec.  1005.36(d)(1) by disclosing the future transfer dates for 
preauthorized transfers on a receipt relating to a prior transaction, 
providing the date of transfer for the prior transaction will help 
differentiate to which transfer the disclosures in the receipt apply.
Disclosure of Both the Three-Business-Day Deadline and the 30-Minute 
Deadline in Same Receipt
    Under Sec.  1005.31(b)(2)(iv) of the February Final Rule, notice of 
the period to cancel a remittance transfer must be disclosed in the 
receipt provided pursuant to Sec.  1005.31(b)(2). For any transfer 
scheduled at least three business days before the date of the transfer, 
the receipt provided by the remittance transfer provider to the sender 
may describe only the cancellation rights and three-business-day 
deadline set forth in Sec.  1005.36(c). For all other remittance 
transfers, the provider is required to describe the cancellation rights 
and 30-minute cancellation period set forth in Sec.  1005.34(a). In the 
February Proposal, the Bureau solicited comment on whether remittance 
transfer providers that offer both types of transfers should be given 
flexibility to include the two different cancellation periods permitted 
by this rule on the same receipt with some statement or method such as 
a checkbox to designate which cancellation period applies to a given 
transaction.
    The Bureau received only a few comments on this issue. Of those 
received, two industry commenters urged the Bureau to permit providers 
flexibility in disclosing the cancellation requirement. One industry 
commenter argued that allowing providers to include both cancellation 
period options on the same receipt would enable providers to rely on 
one standard receipt form, which, compared to the alternative, may 
result in lower costs for providers (and, presumably, lower prices for 
senders). The other industry commenter stated that it supported any 
disclosure modification that would allow smaller providers to generate 
and deliver one disclosure and that the proposed option would eliminate 
the need to produce multiple disclosures to reflect the different 
cancellation periods. A consumer group commenter, however, stated that, 
to ensure that senders receive accurate and precise information to 
avoid potential confusion, only the cancellation provision that 
corresponds to the type of remittance transfer requested should be 
disclosed.
    After consideration of these comments, the Bureau is adding new 
comment 31(b)(2)-6 to clarify that providers that offer remittance 
transfers scheduled at least three business days before the date of the 
transfer, as well as remittance transfers scheduled fewer than three 
business days before the date of the transfer, may meet the 
cancellation disclosure requirements in Sec.  1005.31(b)(2)(iv) by 
describing the three-business-day and 30-minute cancellation periods on 
the same disclosure and using a checkbox or other method to clearly 
designate the applicable cancellation period. In other words, 
remittance transfer providers that provide both transfers scheduled at 
least three business days before the date of the transfer and transfers 
scheduled closer to the date of the transfer may disclose the 
cancellation period applicable to a particular transfer in one of two 
ways: (i) describe in the receipt either the 30-minute cancellation 
period or the three-business-day cancellation period, as applicable to 
the particular transaction; or (ii) provide a description of both the 
30-minute and three-business-day cancellation periods along with a 
clear indication of which cancellation period applies to the sender's 
transaction. With respect to the latter option, the comment does not 
mandate a particular method for identifying the applicable time period 
for cancellation. The comment, however, clarifies that the provider may 
use a number of ways to indicate which cancellation period applies to 
the transaction including, but not limited to, a statement to that 
effect, use of a checkbox, highlighting, circling, and the like. 
Finally, comment 31(b)(2)-6 states that for transfers scheduled three 
or more business days before the date of transfer, the cancellation 
disclosures provided pursuant to Sec.  1005.31(b)(2)(iv) should be 
phrased and formatted in such a way that it is clear to the sender 
which cancellation period is applicable to the date of transfer 
disclosed on the receipt.
    The Bureau believes senders are unlikely to be confused by having a 
description of both cancellation deadlines in the same disclosure. To 
the contrary, including a description of both the 30-minute and three-
business-day cancellation period with a checkbox or other method that 
clearly designates the cancellation time period applicable to the 
sender's transaction may improve senders' understanding of the 
cancellation provisions generally. Moreover, the ability for remittance 
transfer providers to use pre-printed receipt forms that describe both 
cancellation options with some method to identify the applicable 
cancellation time period may reduce the need to create multiple 
standard receipts,

[[Page 50258]]

potentially reducing costs for some providers. The Bureau also notes 
that nothing in the final rule prohibits a provider from including only 
the applicable cancellation policy on a receipt.
31(b)(3) Combined Disclosure
    The Bureau is revising the requirements in the February Final Rule 
for combined disclosures that remittance transfer providers may choose 
to give to senders. Under Sec.  1005.31(b)(3) in the February Final 
Rule, a remittance transfer provider may combine the pre-payment 
disclosure required by Sec.  1005.31(b)(1) and the receipt required by 
Sec.  1005.31(b)(2) into a single, combined disclosure, if such a 
disclosure is provided pursuant to the timing requirements applicable 
to pre-payment disclosures. See Sec.  1005.31(e)(1). Section 
1005.31(b)(3) provides that if the provider chooses to provide a 
combined disclosure, the provider must also provide the sender a proof 
of payment for the transfer when payment is made for the remittance 
transfer. As described in the February Final Rule, the Bureau issued 
Sec.  1005.31(b)(3) pursuant to its authority under EFTA sections 
919(a)(5)(C), and 904(a) and (c).
    Pursuant to the same authority, the Bureau is revising Sec.  
1005.31(b)(3) to allow a remittance transfer provider to provide a 
confirmation of scheduling in lieu of the proof of payment with 
combined disclosures for transfers scheduled before the date of 
transfer in order to facilitate compliance and enhance consumer 
protection. The Bureau is redesignating Sec.  1005.31(b)(3) from the 
February Final Rule as Sec.  1005.31(b)(3)(i) and is adopting a new 
Sec.  1005.31(b)(3)(ii). Section 1005.31(b)(3)(ii) states that if the 
disclosure described in Sec.  1005.31(b)(3)(i) is provided in 
accordance with Sec.  1005.36(a)(1)(i) (which concerns one-time 
transfers scheduled five or more business days before the date of 
transfer or the first in a series of preauthorized remittance 
transfers) and payment is not processed by the remittance transfer 
provider at the time the remittance transfer is scheduled, a remittance 
transfer provider may provide confirmation that the transaction has 
been scheduled in lieu of the proof of payment otherwise required by 
Sec.  1005.31(b)(3)(i). The confirmation of scheduling must be clear 
and conspicuous, provided in writing or electronically, and provided in 
a retainable form.
    Although the February Proposal did not propose changes to Sec.  
1005.31(b)(3), it sought comment generally on the form of disclosures 
for transfers scheduled before the date of transfer. 77 FR 6310, 6317. 
The Bureau believes that adjustments are necessary to Sec.  
1005.31(b)(3) because while comment 31(e)-2 in the final rule states 
that payment is made for purposes of subpart B of Regulation E when 
payment is authorized, this does not necessarily mean that providing 
``proof of payment'' at the time of authorization will make sense for 
either the provider or the sender for a one-time remittance transfer 
that is scheduled before the date of transfer or the first in a series 
of preauthorized remittance transfers when payment may not be processed 
until closer to the date of such transfer.
    For many remittance transfers, senders tender payment for immediate 
processing once they authorize the remittance transfer provider to 
complete the transfer (e.g., by paying cash or by providing a payment 
device). In those situations, the Bureau does not believe there would 
be any downside for the sender or the remittance transfer provider if 
the provider provided proof of payment at the time that payment is 
made, i.e., authorized. These situations are distinct from the case in 
which a sender arranges with the provider to have funds deducted from 
the sender's account with the provider or to process a payment with a 
payment device at some later time, closer to the date of a transfer. In 
such an instance, the Bureau is concerned that providing a sender with 
``proof of payment'' could confuse the sender. Furthermore, the Bureau 
is concerned that providers may not wish to provide ``proof of 
payment'' in such instances.
    New comment 31(b)(3)-2 provides additional guidance regarding the 
confirmation of scheduling. This comment explains that, as discussed in 
comment 31(e)-2, payment is considered to be made when payment is 
authorized for purposes of various timing requirements in subpart B, 
including with regard to the timing requirement for provision of the 
proof of payment described in Sec.  1005.31(b)(3)(i). However, where a 
transfer (whether a one-time remittance transfer or the first in a 
series of preauthorized remittance transfers) is scheduled before the 
date of transfer and the provider does not intend to process payment 
until at or near the date of transfer, the provider may provide a 
confirmation of scheduling in lieu of the proof of payment required by 
Sec.  1005.31(b)(3)(i). No further proof of payment is required when 
payment is later processed.

Section 1005.32 Estimates

32(b)(1) Permanent Exception for Transfers to Certain Countries
    In the February Proposal, the Bureau proposed renumbering Sec.  
1005.32(b) to Sec.  1005.32(b)(1) to allow for the proposed exception 
for the disclosure of estimates for transfers scheduled before the date 
of transfer (i.e., proposed Sec.  1005.32(b)(2)). The February Proposal 
also proposed conforming changes to provisions that reference this 
exception. No comments were received on this renumbering. As discussed 
below, the Bureau is adopting a new exception for estimates and thus is 
adopting as proposed conforming revisions to Sec.  1005.32(b)(1) and is 
renumbering the official interpretations thereto. See comments 
32(b)(1)-1 through -7.
32(b)(2) Permanent Exception for Transfers Scheduled Before the Date of 
Transfer
    In the February Proposal, the Bureau proposed to use its EFTA 
section 904(a) and (c) authority to add a new exception, in proposed 
Sec.  1005.32(b)(2), that would provide additional flexibility for 
remittance transfer providers to disclose estimates in pre-payment 
disclosures and receipts for one-time transfers or the first in a 
series of preauthorized remittance transfers scheduled to occur more 
than ten days after the transfer is authorized.
    In the February Proposal, the Bureau noted that the market for 
remittance transfers scheduled in advance of the date of transfer, 
including preauthorized remittance transfers, is still in its nascent 
stages. The Bureau also noted its concern that requiring a remittance 
transfer provider to set exchange rates before the date of transfer 
might cause a provider that is already permitting consumers to schedule 
remittance transfers in advance of the date of transfer to stop 
offering a potentially useful product to consumers rather than bear or 
manage the increased exchange rate risk that might be associated with 
such a product. While remittance transfer providers (or their business 
partners) may be able to develop tools to manage such risk, the Bureau 
stated that it was concerned that providers might not do so, or that 
they would pass on any new risk management costs to consumers. Based on 
these concerns, the Bureau sought comment on whether providers should 
be permitted to disclose estimates of exchange rates, and related 
figures, in two circumstances: (i) A sender schedules a one-time 
transfer or the first in a series of preauthorized remittance transfers 
to occur more than ten days after the

[[Page 50259]]

transfer is authorized; or (ii) a sender enters into an agreement for 
preauthorized remittance transfers where the amount of the transfers 
can vary and the provider does not know the exact amount of the first 
transfer at the time the disclosures for that transfer are given. The 
Bureau received comments about the use of estimates generally and 
conducted additional outreach to better understand some of the issues 
raised by commenters.
    The Bureau is adopting new Sec.  1005.32(b)(2), which permits 
disclosures to contain estimates in certain cases for remittance 
transfers scheduled before the date of transfer. The new provision 
allows for certain estimates for all remittance transfers scheduled 
five or more business days before the date of transfer, rather than 
only for one-time transfers or the first in a series of preauthorized 
remittance transfers scheduled more than ten business days before the 
date of the transfer (as was proposed). The allowance for estimates in 
disclosures for subsequent preauthorized remittance transfers will have 
limited application, insofar as the Bureau is eliminating the 
requirement that pre-payment disclosures be sent prior to subsequent 
preauthorized remittance transfers and is only requiring pre-transfer 
receipts for such transfers when certain previously disclosed figures 
change. However, to the extent that a remittance transfer provider must 
send a pre-transfer receipt, the final rule permits the provider to 
disclose estimates in accordance with Sec.  1005.32(b)(2). See Sec.  
1005.36(a)(2)(i) (discussing pre-transfer disclosure requirements for 
subsequent preauthorized remittance transfers). In addition, the new 
exception permitting estimates is expanded from the February Proposal 
to allow estimates in certain cases when the provider agrees to a 
sender's request to fix the amount to be transferred in the currency in 
which the remittance transfer will be received and not the currency in 
which it is funded. The new provisions and comments received are 
discussed in more detail below.
Provision of Estimates for Transfers Scheduled Before the Date of 
Transfer
    Industry commenters generally supported the first option for 
estimates suggested by the February Proposal: an exception from the 
general rule requiring accurate disclosures (Sec.  1005.31(f)) that 
would permit remittance transfer providers to disclose estimates of the 
amount of currency to be received, as well as other information such as 
exchange rates, for certain remittance transfers scheduled before the 
date of transfer. Although the February Proposal only sought comment 
regarding disclosure of estimates in one-time transfers and the first 
in a series of preauthorized remittance transfers scheduled more than 
ten business days before the date of transfer, most commenters 
addressed the use of estimates for all transfers scheduled before the 
date of transfer (i.e., one-time transfers scheduled before the date of 
transfer, the first in a series of preauthorized remittance transfers, 
and subsequent preauthorized remittance transfers).
    Industry commenters stated that absent an exception allowing for 
the disclosure of estimates, remittance transfer providers would face 
difficulties adjusting their risk management systems to provide 
accurate exchange rates before the date of transfer, particularly when 
providers are required to allow senders to cancel remittance transfers 
up to three business days before the scheduled date of transfer. See 
Sec.  1005.36(c). Commenters also favored the disclosure of estimates 
due to the potential legal consequences associated with creating risk 
management strategies required in order to provide accurate (rather 
than estimated) disclosures far before a scheduled remittance transfer.
    First, multiple industry commenters argued that if remittance 
transfer providers were required to give accurate disclosures of the 
exchange rates that would apply to remittance transfers scheduled 
before the date of transfer, any providers offering such transfers 
would likely need to change their current methods of managing foreign 
exchange risk. One commenter stated that remittance transfer providers 
often assume the risk from fluctuations in the wholesale rates at which 
they buy foreign currency during the course of a day, by setting one 
retail exchange rate to apply to remittance transfers (or other 
transactions) conducted throughout that day. However, industry 
commenters stated that setting retail exchange rates farther before the 
date of transfer would cause a remittance transfer provider to incur 
more exchange rate risk due to the extended time period during which 
wholesale foreign currency markets might fluctuate. Commenters 
contended that in order to disclose the exchange rate that would apply 
to a remittance transfer far before the date of such transfer, a 
provider would either have to (1) bear the risk of the wholesale 
exchange rate changing before the date of transfer or (2) use some 
method to purchase currency before the date of transfer and bear the 
risk of the sender cancelling the transfer, leaving the provider (or 
its business partner) with unneeded currency.
    During outreach conversations, the Bureau spoke to industry 
participants to learn more about how remittance transfer providers can 
or do manage foreign exchange risk. In these conversations, foreign 
currency providers and other market participants stated that if they 
were required to disclose accurate exchange rates several days in 
advance of the date of transfer, remittance transfer providers (or 
their business partners) might have to develop new procedures to manage 
fluctuations in the wholesale foreign exchange rates, i.e., the rates 
at which remittance transfer providers (or their business partners) 
generally buy foreign currency.
    Second, several industry commenters stated that remittance transfer 
providers would face difficulties implementing any of the methods that 
would allow them to manage the risk associated with disclosing exchange 
rates before the date of a transfer, and that these methods could 
result in increased prices for senders. Industry commenters indicated, 
and participants in outreach conducted by the Bureau further explained, 
that the primary method for remittance transfer providers (or their 
business partners) to manage any additional risk created due to the 
disclosure of actual exchange rates for remittance transfers scheduled 
before the date of transfer would likely be through employing foreign 
exchange futures or forward contracts, through which a buyer commits to 
buying a specified amount of foreign currency, at a specified foreign 
exchange rate, at a later date.\12\ Industry commenters stated that a 
remittance transfer provider could itself, or through a third party, 
purchase a futures or a forward contract for the amount of the 
remittance transfer, and/or sell such a contract to the sender. One 
industry commenter explained, however, that such methods can be risky 
if foreign currency markets fluctuate and if a sender cancels a 
remittance transfer after the provider secures the currency needed for 
the transfer. In such a case, a remittance transfer provider (or its 
business partner) may experience a loss due to changes in the foreign 
exchange markets.
---------------------------------------------------------------------------

    \12\ A futures contract for foreign currency is a contract 
between two parties to purchase a specified amount of foreign 
currency at a date in the future for a price agreed upon at the time 
of contracting. Such contracts would allow a provider to ``lock-in'' 
a rate in order for it to give customers an accurate rate when 
scheduling the transfer.
---------------------------------------------------------------------------

    Third, industry commenters stated that setting exchange rates 
before the

[[Page 50260]]

date of transfer could implicate other laws and regulations. For 
example, one trade association commenter expressed concern that for 
some types of entities, simply setting an exchange rate before the date 
of transfer might be considered a forward contract, and that therefore 
these entities might become subject to U.S. Commodity Futures Trading 
Commission regulations that contain registration, capital, reporting, 
and recordkeeping requirements. Separately, in an outreach 
conversation, one bank expressed concern that restrictions on 
depository institutions' investments created by the Dodd-Frank Act may 
similarly limit depository institutions' ability to purchase the 
necessary contracts needed to manage the risk associated with setting 
far in advance the exchange rates that will apply to remittance 
transfers. Finally, one credit union commenter expressed concern that 
Federal credit union regulations might restrict credit unions' ability 
to manage foreign currency risk.
    Fourth, apart from regulatory concerns, some industry commenters 
and participants in outreach suggested that requiring accurate 
disclosures of exchange rates far before the date of transfer would 
significantly increase costs. Several commenters stated that any 
additional efforts to provide exact exchange rates in advance would 
result in increased prices charged to senders (though none estimated by 
how much). These commenters indicated that costs could be so high that 
senders would not choose these products.
    Fifth, an industry commenter expressed concern that any requirement 
to disclose an accurate exchange rate before the date of a remittance 
transfer would pose a significant risk to remittance transfer providers 
if senders decide to take advantage of the three-business-day 
cancellation period to seek better exchange rates. The requirements in 
the February Final Rule in Sec. Sec.  1005.31(b)(1)(iv), 
1005.33(a)(1)(iii), and 1005.36(b) that remittance transfer providers 
disclose the exchange rate that applies to a remittance transfer in 
pre-payment disclosures and receipts and that the provider must make 
available to the designated recipient the amount of currency stated in 
the disclosure means, in effect, that a remittance transfer provider 
must commit to a specific exchange rate at the time the sender 
authorizes the transfer, even if disclosed days or weeks before the 
date of the transfer. As a result, the commenter stated some senders 
might use the three-day cancellation period applicable to transfers 
scheduled before the date of transfer strategically in order to seek 
better exchange rates. Thus, if prior to expiration of the cancellation 
period, the remittance transfer provider offered an exchange rate that 
was more favorable to the sender than the exchange rate set for the 
transfer, the commenter felt that a sender might decide to cancel the 
remittance transfer and immediately rebook it at the more favorable 
exchange rate available that day. Conversely, if the provider offered 
an exchange rate that was less favorable than the earlier rate, the 
sender would benefit from having locked in a better rate that the 
remittance transfer provider was contractually bound to apply to the 
transfer. The commenter stated that this phenomenon would increase 
providers' exchange rate risk and the cost of managing such risk. Some 
industry commenters indicated that, at least in some instances, 
providers would refuse to offer consumers the ability to schedule 
remittance transfers before the date of transfer if the Bureau required 
providers to disclose, before the cancellation deadline passes, the 
exchange rate that will apply to any such remittance transfer.
    Consumer group commenters agreed that the use of estimates in 
disclosures may be appropriate for initial transfers in series of 
preauthorized remittance transfers, but stated that, if remittance 
transfer providers were allowed to use estimates in disclosures for 
such transfers, senders should be informed they would not receive 
actual notice of the price of the transfer or of the amount to be 
received by the designated recipient during the periods when the 
senders can cancel the transfers. Some of these commenters also stated 
that if remittance transfer providers were permitted to use estimates 
for transfers scheduled before the date of transfer, then providers 
should also be required to ensure that senders eventually receive 
disclosures that state the actual exchange rates that will apply to the 
remittance transfers prior to the expiration of the cancellation 
periods for those transfers, or the providers should be required to 
commit to the method they will use to set the exchange rate on the date 
of transfer.
    Finally, an individual commenter and several industry commenters 
stated that disallowing estimates would disproportionately harm smaller 
remittance transfer providers. The individual commenter suggested that 
small providers would not have the scale or expertise to manage 
exchange rate risk in a manner necessary to comply with any requirement 
that providers disclose accurate exchange rates before the date of 
transfer. Relatedly, industry commenters stated that not allowing 
estimates for disclosures provided prior to the date of a remittance 
transfer would disproportionately affect small providers relative to 
large providers. Similarly, several industry commenters urged the 
Bureau to allow estimates because without estimates they would not be 
able to manage risk and thus would have no reliable way of providing 
accurate disclosures before the date of transfer of the exchange rate 
and related figures. If the February Final Rule remained unchanged, 
these providers stated they would not permit consumers to schedule 
transfers before the date of transfer.
    Based on comments received and the Bureau's outreach and further 
analysis, and in order to effectuate the purposes of the EFTA and 
facilitate compliance, the Bureau believes it necessary and proper to 
use its EFTA section 904(a) and (c) authority to adopt proposed Sec.  
1005.32(b)(2) with the changes discussed in more detail below 
concerning (i) when estimates will be allowed under this provision and 
(ii) situations where the amount to be transferred may vary.
    The Bureau continues to believe that the market for remittance 
transfers scheduled significantly before of the date of transfer, 
including preauthorized remittance transfers, is currently limited. 
Nevertheless, the Bureau believes that if it did not adopt this 
provision to allow estimates, the subset of remittance transfers 
providers that currently offer senders the ability to schedule 
remittance transfers before the date of transfer--or are considering 
doing so--may limit such offerings because the providers (or their 
business partners) would not want to absorb or manage the risk 
associated with fixing the exchange rates that would apply to transfers 
far in advance of the date of transfer. As described above, many retail 
exchange rates are set through reference to wholesale currency markets 
in which rates can fluctuate frequently. As a result, whenever there 
are time lags between when the retail rate applied to a transfer is 
set, when the relevant foreign currency is purchased, and when funds 
are delivered, a remittance transfer provider (and/or its business 
partner) may face losses due to unexpected changes in the value of the 
relevant foreign currency. Generally, this risk may increase the more 
time that elapses between these events.
    The Bureau is concerned that in many cases, remittance transfer 
providers (or their business partners) will find it more difficult or 
costly to manage the risks related to disclosing accurate exchange 
rates before the date of transfer and that such risks may be 
exacerbated because

[[Page 50261]]

the final rule allows senders to cancel transfers up to three business 
days before the date of transfer. The Bureau is also concerned that, 
because remittance transfers scheduled before the date of transfer are 
a relatively small portion of the remittance transfer market, providers 
may decide not to develop necessary risk management tools and may not 
offer transfers scheduled before the date of transfer. The Bureau 
further believes that for such transactions, allowing estimates may be 
beneficial to senders in many instances even though senders may receive 
less information before the date of transfer than they would under the 
February Final Rule. If senders received exchange rates set long before 
the dates of remittance transfers, in some cases, senders would receive 
a more favorable exchange rate than they would otherwise, while other 
senders would receive less favorable rates, depending on the 
fluctuation of the exchange rate between the date of disclosure and the 
date of transfer. However, allowing estimates may result in lower costs 
for remittance transfer providers (and thus lower prices for all 
senders of transfers scheduled before the date of transfer), as well as 
wider access for senders to the convenience of one-time transfers 
scheduled before the date of transfer and preauthorized remittance 
transfers.
    Furthermore, while under Sec.  1005.32(b)(2) senders will not 
always receive disclosures of a fixed exchange rate and amount of 
currency to be received, the Bureau believes that even estimates of 
these amounts will still permit consumers to learn some information 
that could assist in comparing remittance transfer providers' price 
models. As is discussed below (see Sec.  1005.32(d)) estimates provided 
pursuant to Sec.  1005.32(b)(2) must be based on the exchange rate or, 
where applicable, the estimated exchange rate based on an estimation 
methodology permitted under Sec.  1005.32(c) that the provider would 
have used or did use that day in providing disclosures to a sender 
requesting such a remittance transfer to be made on the same day.
Time Period for Estimates for Transfers Scheduled Before the Date of 
Transfer
    Proposed Sec.  1005.32(b)(2)(i) stated that estimates could be 
provided for certain items required in the pre-payment disclosure, 
receipt, or combined disclosure if a remittance transfer was requested 
or authorized by the sender more than ten days before the date of 
transfer. The Bureau sought comment on whether ten days is an 
appropriate period after which estimates should no longer be permitted 
or whether the period should be longer or shorter.
    The Bureau received a number of comments on the appropriate period 
for use of estimates in disclosures provided for all remittance 
transfers scheduled before the date of transfer (rather than just one-
time transfers scheduled before the date of transfer and first in a 
series of preauthorized remittance transfers as covered by the February 
Proposal). Industry commenters supported estimates in disclosures for 
all remittance transfers scheduled more than ten days before the date 
of transfer, but many also urged the Bureau to allow estimates for 
remittance transfers scheduled ten or less days before for many of the 
reasons discussed above--namely the risk management and other 
challenges that they believed that remittance transfer providers would 
face if they were required to disclose exchange rates far in advance of 
remittance transfers. These commenters urged a shorter period within 
which they would not be permitted to provide estimated disclosures. 
Commenters also expressed concern that providers would refuse to offer 
consumers the ability to schedule transfers ten or fewer days before 
the date of transfer because providers would not want to disclose exact 
exchange rates between one and ten days before the date of transfer.
    Industry commenters suggested a range of alternatives less than ten 
days. One industry commenter proposed allowing estimates for all 
transfers scheduled more than one day before the date of transfer 
because it was unable to manage the risks associated with providing 
accurate exchange rates more than one day in advance. Other industry 
commenters provided similar rationales for proposed periods of less 
than two days, two or three days, five days, and seven days. One trade 
group commenter urged the Bureau to allow estimates for all remittance 
transfers scheduled two or more days before the date of transfer and to 
require only a two-day cancellation period because a shorter 
cancellation period would still allow senders to cancel transfers and 
would exacerbate providers' foreign currency risks.
    Consumer group commenters favored the ten-day rule expressed in the 
February Proposal. One of these commenters explained that although it 
understood the difficulty of disclosing the actual exchange rate before 
the date of transfer, its research showed that consumers are better 
informed when they receive accurate and precise disclosures, and thus 
this commenter preferred to expand the period during which estimates 
would not permitted.
    The Bureau is adopting a revised Sec.  1005.32(b)(2)(i), which 
permits remittance transfer providers to estimate exchange rates and, 
in some instances fees and taxes, for all remittance transfers 
scheduled five or more business days before the date of transfer, 
rather than for one-time transfers or the first in a series of 
preauthorized remittance transfers scheduled more than ten days before 
the date of transfer as proposed. As is explained above regarding the 
use of estimates generally, compared to the proposal permitting 
estimates in some cases more than ten days before the date of transfer, 
the Bureau believes this provision will allow providers increased 
flexibility to continue to offer transfers scheduled five or more 
business days before the date of transfer while still requiring 
accurate disclosures for transfers scheduled less than five days before 
the date of transfer (except when estimates are permitted by Sec.  
1005.32(a) or (b)(1)).
    The Bureau recognizes that for transfers scheduled three or four 
business days before the date of transfer, providers will have to 
disclose an accurate exchange rate (rather than an estimate) while 
maintaining the sender's right to cancel the transfer. See Sec.  
1005.36(c). The Bureau believes, however, that as compared to transfers 
scheduled five or more business days before the date of transfer, risk 
management needs are reduced for transfers scheduled less than five 
business days before the date of transfer. The Bureau believes that 
providers should not be permitted to use provide estimates, other than 
as permitted under Sec.  1005.32(a) and (b)(1), for transfers scheduled 
less than five business days before the date of transfer. Because risk 
is generally more manageable closer to the date of transfer, the Bureau 
believes consumers should receive accurate disclosures during that 
period. To the extent that any remittance transfer providers that 
currently offer, or plan to offer, remittance transfers scheduled in 
advance may be inclined to limit senders' ability to schedule transfers 
three or four business days before the date of transfer (because they 
are unwilling or unable to provide an accurate exchange rate while 
cancellation remains possible), the Bureau believes there is a limited 
loss of convenience to consumers as compared to a scenario where 
estimates are disallowed for a longer period. The Bureau presumes that 
any consumer has the option of a same-day transfer with a remittance 
transfer provider who does not offer two, three, or four days advance 
scheduling.

[[Page 50262]]

    Thus, in the final rule, Sec.  1005.32(b)(2)(i) provides that 
estimates may be provided in certain cases for the amounts to be 
disclosed under Sec.  1005.31(b)(1)(iv) through (vii) if a remittance 
transfer is scheduled by a sender five or more business days before the 
date of transfer.
    The Bureau proposed revisions to comment 32-1 to explained when the 
proposed Sec.  1005.32(b)(2) exception would apply. The Bureau is 
revising proposed comment 32-1 to clarify that Sec.  1005.32(b)(2) 
permits estimates to be used for certain information if the remittance 
transfer is scheduled by a sender five or more business days before the 
date of the transfer, for disclosures described in Sec.  
1005.36(a)(1)(i) and (a)(2)(i). Section 1005.36(a)(1)(i) and (a)(2)(i) 
concern pre-payment disclosures and receipts for one-time transfers 
scheduled five or more business days before the date of transfer and 
preauthorized remittance transfers and are discussed in detail below.
Estimates of the Amount To Be Transferred
    The Bureau also sought comment on whether remittance transfer 
providers should be allowed flexibility to estimate certain information 
in disclosures for the first scheduled transfer in a series of 
preauthorized remittance transfers where the exact amount of the 
transfer can vary. The few commenters on this issue suggested that the 
need to estimate the amount to be transferred could occur in two 
scenarios. For example, an industry commenter suggested that senders 
may want to transfer a variable amount (such as a paycheck or 
government benefits payment in an amount that varies), or may want to 
prearrange the delivery of a fixed amount of one currency from an 
account denominated in another currency, e.g., U.S. dollars (which 
would result in the transfer amount depending on the exchange rate). 
The Bureau believes it unnecessary to adjust the rule expressly to 
address the first potential scenario. No industry commenter stated that 
it currently allows customers to schedule transfers of a variable 
amount, and the Bureau is not aware of business models permitting such 
remittance transfers. Under the final rule, Sec.  1005.36(a)(2)(i) 
requires a receipt to be provided a reasonable time prior to a 
subsequent preauthorized transfer if the amount to be transferred 
changes from the first transfer in series a of preauthorized remittance 
transfers.
    As to the latter scenario, outreach confirmed that the marketplace 
currently permits some consumers to schedule series of recurring 
remittance transfers in which the transfer amount is fixed in a 
currency other than that in which the transfer is funded. To address 
this latter scenario, the Bureau believes it necessary and proper to 
effectuate the purposes of the EFTA and to facilitate compliance to 
exercise its EFTA section 904(a) and (c) authority to adopt an 
additional revision to Sec.  1005.32(b)(2). Specifically, the final 
rule states in Sec.  1005.32(b)(2)(i) that if, at the time the sender 
schedules a transfer, the remittance transfer provider agrees to a 
sender's request to fix the amount to be transferred in the currency in 
which the remittance transfer will be received and not the currency in 
which it is funded, estimates may also be provided for the amounts to 
be disclosed under Sec.  1005.31(b)(1)(i) through (iii), except as 
provided in Sec.  1005.32(b)(2)(iii) (i.e., in certain cases the 
provider can disclose estimates of the fees and taxes imposed on the 
transaction and the total amount of the transaction, as well as the 
amount that will be transferred in the currency in which the remittance 
transfer is funded).
    New comment 32(b)(2)-1 provides an example regarding the exception 
for remittance transfers scheduled before the date of transfer in which 
the amount to be transferred is fixed in a currency other than that in 
which the transfer is funded.
    New comment 32(b)(2)-2 clarifies the interaction between the final 
rule and Sec.  1005.10(d) of subpart A of Regulation E.\13\ It states 
that to the extent Sec.  1005.10(d) requires, for an electronic fund 
transfer that is also a remittance transfer, notice when a 
preauthorized electronic fund transfer from the consumer's account will 
vary in amount from the previous transfer under the same authorization 
or from the preauthorized amount, that provision applies even if 
subpart B would not otherwise require notice before the date of 
transfer. However, insofar as Sec.  1005.10(d) does not specify the 
form of such notice, a notice sent pursuant to Sec.  1005.36(a)(2)(i) 
will satisfy Sec.  1005.10(d) as long as the timing requirements of 
Sec.  1005.10(d) are satisfied.
---------------------------------------------------------------------------

    \13\ Section 1005.10(d)(1) states: ``Notice. When a 
preauthorized electronic fund transfer from the consumer's account 
will vary in amount from the previous transfer under the same 
authorization or from the preauthorized amount, the designated payee 
or the financial institution shall send the consumer written notice 
of the amount and date of the transfer at least 10 days before the 
scheduled date of the transfer.''
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    Relatedly, the Bureau solicited comment as to whether a remittance 
transfer provider should be permitted to estimate the date in the 
foreign country on which the funds will be available, if the amount of 
the transfers under the preauthorized remittance transfer arrangement 
varies from one transfer to the next, and the remittance transfer 
provider does not know the exact date on which the remittance transfer 
must be sent at the time that disclosures are given for the first 
transfer. 77 FR 6310, 6318 (suggesting that this situation could arise, 
for example, if remittance transfers are being used to pay bills with 
due dates that are not known in advance). No comments were received on 
this issue. The Bureau is not adopting any changes to the February 
Final Rule regarding estimates of the date on which funds will be 
available.
32(b)(2)(ii) and (b)(2)(iii)
    To accommodate the allowance for estimates of exchange rates in 
certain disclosures for remittance transfers scheduled five or more 
business days before the date of transfer, several additional 
provisions are included in Sec.  1005.32(b)(2) regarding other 
information disclosed in pre-payment disclosures and receipts.
    Proposed Sec.  1005.32(b)(2)(ii) permitted a remittance transfer 
provider to estimate taxes imposed on the remittance transfer by a 
person other than the provider for transfers scheduled more than ten 
days before the date of transfer only if those taxes were a percentage 
of the amount transferred to the designated recipient and are to be 
disclosed in the currency in which the funds will be received. Proposed 
Sec.  1005.32(b)(2)(iii)(A) similarly permitted a remittance transfer 
provider to estimate fees imposed on the remittance transfer by a 
person other than the provider for transfers scheduled more than ten 
days before the date of transfer only if those fees were a percentage 
of the amount transferred to the designated recipient and are to be 
disclosed in the currency in which the funds will be received. Unlike 
proposed Sec.  1005.32(b)(2)(ii), proposed Sec.  1005.32(b)(2)(iii) 
contained an additional provision--Sec.  1005.32(b)(2)(iii)(B)--that, 
in effect, reasserted the temporary exception (in Sec.  1005.32(a)) for 
``insured institutions'' to estimate fees. Because Sec.  1005.32(a) 
remains unchanged in the final rule and continues to apply regardless 
of the application of Sec.  1005.32(b)(2), the Bureau believes it 
unnecessary to include a provision incorporating that exception.\14\
---------------------------------------------------------------------------

    \14\ For the same reasons, the Bureau is not adopting the 
proposed change to comment 32(c)(1)-1, concerning potential 
transmittal routes or proposed comment 32(b)(2)-1 concerned fees 
imposed on the remittance transfer provider by a person other than 
the remittance transfer provider. The Bureau received no comments 
regarding comment 32(b)(2)-1. Nevertheless, the Bureau is not 
adopting the proposed comment because it is duplicative. See Sec.  
1005.32(a) and (b)(2)(ii). The final rule continues, in effect, to 
allow estimates for the fees described in Sec.  1005.31(b)(1)(vi) in 
two circumstances: (i) Where the fees are calculated as a percentage 
of the amount transferred to the designated recipient pursuant to 
Sec.  1005.32(b)(2)(ii); or (ii) where an ``insured institution'' as 
defined in Sec.  1005.32(a)(3) is permitted to estimate fees under 
the temporary exception in Sec.  1005.32(a).

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[[Page 50263]]

    As a result, there is no longer a need for separate provisions for 
estimation of the fees and taxes in the disclosure required under Sec.  
1005.31(b)(1)(vi). In place of proposed Sec.  1005.32(b)(2)(ii) and 
(b)(2)(iii)(A), as well as proposed comment 32(b)(2)-7, the Bureau 
adopts Sec.  1005.32(b)(2)(ii), which provides that fees and taxes 
described in Sec.  1005.31(b)(1)(vi) may be estimated under Sec.  
1005.32(b)(2)(i) only if the exchange rate is also estimated under 
Sec.  1005.32(b)(2)(i) and the estimated exchange rate affects the 
amount of fees and taxes under Sec.  1005.31(b)(1)(vi). The revised 
provision expands the ability to estimate fees and taxes to cover not 
just situations in which the tax or fee is a percentage of the amount 
of the funds transferred, but also to cover situations in which a tax 
or fee may otherwise vary depending on the exchange rate (i.e. a tax is 
only charged on transfers that exceed a certain threshold denominated 
in the currency in which the funds will be received, and that amount 
depends on the exchange rate).
    The final rule also includes Sec.  1005.32(b)(2)(iii). This 
provision allows remittance transfer providers to estimate fees and 
taxes in certain disclosures provided for remittance transfers 
scheduled five or more business days before the date of transfer, when 
a remittance transfer provider agrees to a sender's request to fix the 
amount to be transferred in the currency in which the remittance 
transfer will be received and not the currency in which it is funded. 
But Sec.  1005.32(b)(2)(iii) explains that fees and taxes described in 
Sec.  1005.31(b)(1)(ii) may be estimated under Sec.  1005.32(b)(2)(i) 
only if the amount that will be transferred in the currency in which it 
is funded is also estimated under Sec.  1005.32(b)(2)(i), and the 
estimated amount affects the amount of such fees and taxes.
Disclosure of Formulas Used To Calculate the Exchange Rate
    In the February Proposal, the Bureau sought comment on whether, in 
lieu of providing an estimate of the exchange rate for a remittance 
transfer scheduled before the date of transfer, the Bureau should allow 
providers to disclose a formula that will be used to calculate the 
exchange rate that will apply to such a transfer, and that is based on 
information that is publicly available prior to the time of transfer. 
The sender could then use that formula to calculate the exchange rate 
that will apply to the transfer.
    Several industry and consumer group commenters supported the use of 
such a formula although they disagreed on whether its use should be 
optional. One industry commenter stated that the disclosure of a 
formula could eliminate the need for remittance transfer providers to 
manage exchange rate risk and would reduce the burden on providers as 
compared to a rule that required providers to disclose actual exchange 
rates for transfers scheduled before the date of transfer. Another 
industry commenter favored disclosure of formulas rather than estimates 
for remittance transfers scheduled before the date of transfer because 
the volatility of currency markets makes disclosure of estimates of 
limited utility to senders trying to gauge the pricing of a particular 
provider's services. Other industry commenters stated that either a 
formula or use of estimates could reduce compliance burden on 
providers. One consumer group favored the use of formulas whenever the 
Bureau would also permit estimates on disclosures provided more than 
ten days before the date of transfer because formulas may make 
comparison shopping easier for consumers.
    In contrast, one industry commenter preferred disclosure of 
estimates to formulas because, the commenter stated, for remittance 
transfers scheduled before the date of transfer, it would be easier to 
provide an estimate of an exchange rate to senders and such an estimate 
would be easier for a sender to understand.
    The Bureau believes that, in some cases, compared to either an 
estimated or an actual exchange rate, a well-designed formula could 
better serve consumers and potentially reduce burden on remittance 
transfer providers. The Bureau believes that, given the nature of 
foreign currency markets, in many cases, any estimate of the exchange 
rate for a remittance transfer scheduled days or weeks in the future 
may not provide a highly precise indication to the sender of the 
exchange rate that would actually be applied to the sender's transfer. 
By contrast, a formula that will be used to calculate the exchange rate 
applicable to a transfer could provide more certainty to a sender as to 
relative prices or the pricing mechanism used and allow the sender to 
calculate the actual exchange rate that will apply to a transfer, 
before the date of the transfer. In addition, disclosing a formula 
would reduce the need for a remittance transfer provider to manage the 
currency risk associated with providing an accurate exchange rate for a 
transfer scheduled before the date of transfer.
    Nevertheless, the Bureau does not believe it is appropriate to 
allow for the use of formulas in disclosures at this time. First, the 
Bureau is concerned that the disclosure of formulas themselves could be 
confusing to senders if not designed in a way that consumers can 
understand. Second, if a formula was not required to be disclosed by 
all remittance transfer providers, the Bureau is concerned that 
consumer confusion could be a problem if some providers disclose 
formulas while others disclose estimates. However, the Bureau expects 
to continue evaluating how disclosures can most effectively inform 
senders without imposing undue burden on remittance transfer providers.
32(c) and (d) Bases for Estimates
    The February Proposal sought comment on the appropriate method to 
calculate estimates of exchange rates, and related figures, under the 
proposed exception for remittance transfers scheduled before the date 
of transfer. However, the Bureau did not propose specific changes to 
Sec.  1005.32(c), which concerns the allowable bases for estimates of 
required disclosures.\15\ The Bureau received a few comments on this 
issue but none that suggested revisions to Sec.  1005.32(c). However, 
in order to allow remittance transfer providers to give estimates for 
transfers scheduled five or more business days before the date of 
transfer and to make those estimates more useful for consumers, the 
Bureau believes revisions to the allowable bases for such estimates are 
necessary for disclosures that contain estimates pursuant to Sec.  
1005.32(b)(2). These changes are adopted in a new Sec.  1005.32(d).
---------------------------------------------------------------------------

    \15\ In the February Proposal, the Bureau did propose conforming 
changes to comment 32(c)(3)-1 that referenced the renumbered 
provisions relating to the permanent exception for transfers to 
certain countries (what is Sec.  1005.32(b)(1) in the final rule). 
The Bureau received no comments on the proposed changes to this 
comment, and the Bureau is adopting it as proposed.
---------------------------------------------------------------------------

    The February Final Rule contains, in Sec.  1005.32(c)(1), three 
specific approaches by which a remittance transfer provider may 
estimate an exchange rate when using the exceptions for estimates in 
Sec.  1005.32(a) and (b) (now renumbered as (b)(1)). Section 1005.32(c) 
further allows a

[[Page 50264]]

provider to use an estimation approach not listed in Sec.  
1005.32(c)(1) so long as the designated recipient receives the same, or 
greater, amount of funds than the remittance transfer provider 
disclosed, as required by Sec.  1005.31(b)(1)(vii). Under, the February 
Proposal, the bases for determining estimates under proposed Sec.  
1005.32(b)(2) would have been the same as the bases for determining 
estimates under the existing provisions permitting estimates in the 
February Final Rule (i.e., Sec.  1005.32(c)).
    In commenting on proposed Sec.  1005.32(b)(2), industry commenters 
noted that if allowed, the most likely way that they would ``estimate'' 
the future exchange rate would be by providing the actual rate 
available on the day of scheduling to customers sending same-day 
transfers. One commenter explained that while they could always 
disclose the actual rate available on the date the transfer is 
scheduled, the commenter cautioned that many variables could alter 
exchange rates over time. Furthermore, industry commenters stated that 
they believed that senders typically do little comparison shopping when 
scheduling transfers before the date of transfer and instead are more 
interested in reliable and timely transfers from a remittance transfer 
provider that the senders trust.
    To clarify the proper bases for disclosing estimates, the Bureau 
adds Sec.  1005.32(d), which states that estimates provided pursuant to 
Sec.  1005.32(b)(2) must be based on the exchange rate or, where 
applicable, the estimated exchange rate based on an estimation 
methodology permitted under Sec.  1005.32(c) that the provider would 
have used or did use that day in providing disclosures to a sender 
requesting such a remittance transfer to be made on the same day. If, 
in accordance with Sec.  1005.32(d), a remittance transfer provider 
uses a basis described in Sec.  1005.32(c) but not listed in Sec.  
1005.32(c)(1), the provider is deemed to be in compliance with Sec.  
1005.32(d) regardless of the amount received by the designated 
recipient, so long as the estimation methodology is the same as that 
the provider would have used or did use in providing disclosures to a 
sender requesting such a remittance transfer to be made on the same 
day.\16\
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    \16\ Section 1005.32(c)(1) contains three methodologies for 
providing estimates. If a provider chooses to use a non-listed 
method, Sec.  1005.32(c) explains that the amount received by the 
designated recipient must be the same, or greater then, the 
estimated amount disclosed to the sender.
---------------------------------------------------------------------------

    The Bureau is making two changes to the bases for estimates 
applicable to the exception for estimates for remittance transfers 
scheduled five or more business days before the date of transfer. The 
first requires providers to base estimates on the exchange rate (or 
estimated exchange rate) that the provider would have used or did use 
that day in providing disclosures to a sender requesting such a 
remittance transfer to be made on the same day. In order to allow for 
easier comparison shopping and for estimates to be of use to senders, 
the Bureau believes that remittance transfer providers should base 
their estimates on similar methodologies. The Bureau believes that if 
providers uniformly disclose the actual rate available that day as the 
estimated rate for transfers scheduled before the date of transfer, 
senders will more easily be able to compare the offerings of various 
remittance transfer providers by comparing rates and fees. Moreover, 
commenters did not suggest any other reliable method to estimate future 
exchange rates.
    The second change concerns estimates pursuant to Sec.  
1005.32(b)(2) by remittance transfer providers that can otherwise use 
the two statutory exceptions in Sec.  1005.32(a) or (b)(1). As 
explained above, providers of transfers scheduled before the date of 
transfer who cannot use one of the enumerated methods for estimating in 
Sec.  1005.32(c)(1) will have difficulties guaranteeing that the 
designated recipient receives the same, or greater, amount of funds 
than the remittance transfer provider disclosed. The Bureau is 
concerned about remittance transfer providers that use estimates 
pursuant to Sec.  1005.32(a) or (b)(1), and that, as permitted by Sec.  
1005.32(c), have chosen to use an estimation methodology other than 
those specified in Sec.  1005.32(c)(1). With regard to such 
methodologies, Sec.  1005.32(c) requires that if a provider bases an 
estimate on an approach that is not listed in that paragraph, the 
provider is deemed to be in compliance with the paragraph so long as 
the designated recipient receive the same, or greater, amount of funds 
than the provider disclosed under Sec.  1005.31(b)(1)(vii). The Bureau 
is concerned that due to the fluctuations in wholesale foreign exchange 
markets discussed above, in many cases, remittance transfer providers 
that have developed estimation methodologies that reliably satisfy the 
requirements of Sec.  1005.32(c) for same-day transfers, may not be 
able to do the same for estimates of exchange rates provided for 
transfers scheduled five or more business days before the date of a 
remittance transfer. The Bureau also recognizes that the elimination of 
this guarantee will reduce burden on providers.
    The Bureau expects that most remittance transfer providers, if 
allowed, will set the retail exchange rate that applies to a remittance 
transfer scheduled before the date of transfer on the date of that 
transfer, in rough reference to one of several measures of the 
wholesale or market exchange rates. Insofar as there are a large number 
of factors that may alter exchange rates, the Bureau believes that in 
most scenarios, there is no method to predict with precision what those 
market or wholesale rates will be far before the date on which a 
remittance transfer provider sets a retail exchange rate. Thus, the 
requirement in Sec.  1005.32(c) that providers who cannot use a listed 
methodology guarantee that the amount received by the designated 
recipient must be the same, or greater than, the estimated amounts 
disclosed to the sender, is not feasible for disclosures provided five 
or more business days before the date of transfer. Nevertheless, 
because providers must use the same method for transfers scheduled 
before the date of transfers as they use for same-day transfers, the 
Bureau believes there will still be consistency in the estimation 
methodology.
    New comment 32(d)-1 explains that when providing an estimate 
pursuant to Sec.  1005.32(b)(2), Sec.  1005.32(d) requires that a 
remittance transfer provider's estimated exchange rate must be the 
exchange rate (or estimated exchange rate) that the remittance transfer 
provider would have used or did use that day in providing disclosures 
to a sender requesting such a remittance transfer to be made on the 
same day. If, for the same-day remittance transfer, the provider could 
utilize either of the other two exceptions permitting the provision of 
estimates in Sec.  1005.32(a) or (b)(1), the provider may provide 
estimates based on a methodology permitted under Sec.  1005.32(c). For 
example, if, on February 1, the sender schedules a remittance transfer 
to occur on February 10, the provider should disclose the exchange rate 
as if the sender was requesting the transfer be sent on February 1. 
However, if at the time payment is made for the requested transfer, the 
remittance transfer provider could not send any remittance transfer 
until the next day (for reasons such as the provider's deadline for the 
batching of transfers), the remittance transfer provider can use the 
rate (or estimated exchange rate) that the remittance transfer provider 
would have used or did use in providing disclosures that day with 
respect to a remittance transfer

[[Page 50265]]

requested that day that could not be sent until the following day.

Section 1005.33 Procedures for Resolving Errors

    As noted above, consumers may be permitted to schedule a series of 
preauthorized remittance transfers in which the transfer amount is 
fixed in a currency other than that in which the transfer is funded. 
Thus, Sec.  1005.32(b)(2)(i) permits estimates to be provided for, 
among other things, the total amount of the transfer. In light of this 
new provision, a revision to Sec.  1005.33(a)(1)(i) is necessary to 
clarify that disclosing an estimate of the total amount of the transfer 
in this case would not result in an error.
    Under the February Final Rule, Sec.  1005.33(a)(1)(i) states than 
``error'' means an incorrect amount paid by a sender in connection with 
a remittance transfer. Comment 33(a)-1 explains that Sec.  
1005.33(a)(1)(i) covers circumstances in which a sender pays an amount 
that differs from the total amount of the transaction, including fees 
imposed in connection with the transfer, stated in the receipt or 
combined disclosure provided under Sec.  1005.31(b)(2) or (3).
    The Bureau is revising this provision to exempt from the definition 
of error estimates of the total amount of the transfer provided in 
accordance with the new exception in Sec.  1005.32(b)(2). This 
exception allows for, among other things, an estimate of the amount to 
be transferred if, at the time the sender schedules the transfer, the 
remittance transfer provider agrees to a sender's request to fix the 
amount to be transferred in the currency in which the remittance 
transfer will be received and not the currency in which it is funded. 
When the amount to be transferred is estimated under this section, the 
provider is also permitted to estimate the total amount of the 
transaction (i.e., the amount to be paid by the sender).
    Thus, as revised, Sec.  1005.33(a)(1)(i) states that the term error 
means an incorrect amount paid by a sender in connection with a 
remittance transfer, unless the disclosure stated an estimate of the 
amount paid by a sender in accordance with Sec.  1005.32(b)(2) and the 
difference results from application of the actual exchange rate, fees, 
and taxes, rather than any estimated amount. As discussed in detail 
below, when a remittance transfer provider estimates of the total 
amount of the transfer in a receipt provided at least five or more 
business days before the date of transfer (see Sec.  1005.36(a)(1)(i) 
and (a)(2)(i)), the provider must also send a receipt without the 
estimate after the transfer (see Sec.  1005.36(a)(1)(ii) and 
(a)(2)(ii)). Thus, the sender will still receive a receipt with the 
actual amount the sender paid for the transfer and can still assert an 
error based on the disclosure of the amount paid in that receipt.

Section 1005.36 Transfers Scheduled Before the Date of Transfer

Overview
    The February Final Rule sets forth several procedures for the 
timing, content, and accuracy of pre-payment disclosures and receipts 
for preauthorized remittance transfers. At the same time, the February 
Proposal sought comment on whether further adjustments were necessary 
to address one-time transfers scheduled before the date of transfer and 
preauthorized remittance transfers.
    Specifically, the February Final Rule treats the first in a series 
of preauthorized remittance transfers the same as most other remittance 
transfers by requiring that accurate (not estimated) figures be 
disclosed in the pre-payment disclosure and receipt. But in recognition 
of the potential risks associated with setting exchange rates and the 
potential difficulty of determining the amount to be provided to a 
designated recipient weeks or months before subsequent transfers, the 
February Final Rule does not require that disclosures for an entire 
series of preauthorized remittance transfers be provided when the 
sender initially requests the transfer and authorizes payment. Instead, 
the February Final Rule requires remittance transfer providers to issue 
pre-payment disclosures and receipts for each subsequent transfer 
closer to the dates of the individual transfers. In particular, under 
the February Final Rule, the pre-payment disclosure for each subsequent 
transfer must be provided within a reasonable time prior to the 
scheduled date of the transfer, and the receipt for each subsequent 
transfer generally must be provided no later than one business day 
after the date on which the transfer is made. The pre-payment 
disclosure and receipt for each subsequent transfer must be accurate 
when the respective transfer is made, unless a statutory exception 
applies. See Sec.  1005.36(b). Senders must also be permitted to cancel 
these transfers up to three business days before the date of transfer. 
See Sec.  1005.36(c).
    Because the Bureau was concerned that even with the modifications 
permitted by the February Final Rule, the disclosure requirements could 
pose difficulty for certain remittance transfers scheduled 
significantly before the date of transfer, the February Proposal asked 
a number of questions regarding whether to make further adjustments to 
the disclosure and cancellation regime for these transfers. The Bureau 
sought input on how to manage the importance to senders of accurate and 
timely disclosures, permit growth of this portion of the remittance 
transfer market, and limit industry compliance burdens in light of the 
potential risks associated with providing accurate exchange rates and 
the difficulty of determining the amount to be received by designated 
recipients for a particular transfer.
    Specifically, the February Proposal sought comments on a number of 
potential changes to the February Final Rule concerning the type, 
timing, and accuracy of pre-payment disclosures and receipts a sender 
should receive in connection with one-time transfers and the first in a 
series of preauthorized remittance transfers scheduled to occur more 
than ten days before the date of transfer. The February Proposal also 
sought comment on whether senders should receive disclosures for 
subsequent preauthorized remittance transfers and, if so, what form 
those disclosures should take. Finally, the February Proposal sought 
comment on what cancellation rules should apply to these transactions 
and how and when those rules should be disclosed to senders.
    Based on comments received, the Bureau is amending the February 
Final Rule to allow providers increased flexibility, while maintaining 
requirements that senders receive sufficient and timely information to 
help inform their selection of remittance transfer providers and help 
them understand the terms of their remittance transfers. With respect 
to timing, the final rule requires pre-payment disclosures and receipts 
for one-time transfers scheduled five or more business days before the 
date of transfer and the first in a series of preauthorized remittance 
transfers to be provided in the same manner as they are provided for 
all other transfers (i.e., at request and at payment authorization). 
The final rule also requires providers to give senders additional, 
accurate receipts after the transfer is sent if prior disclosures 
contained estimates pursuant to Sec.  1005.32(b)(2). The Bureau is also 
maintaining the three-business-day cancellation period in Sec.  
1005.36(c). Finally, although the Bureau is generally eliminating the 
requirement to provide pre-payment disclosures for subsequent 
remittance transfers in a preauthorized series, the Bureau is adopting 
a new Sec.  1005.36(d) to require disclosure of upcoming dates of 
transfer

[[Page 50266]]

and cancellation provisions a reasonable time before the dates of such 
transfers.
36(a) Timing
    Section 1005.36(a) of the February Final Rule addresses the timing 
of disclosures for the first in a series of preauthorized remittance 
transfers. In the February Proposal, the Bureau sought comment on a 
number of questions relating to the timing of disclosures for all 
remittance transfers that are scheduled more than ten days before the 
date of transfer, including preauthorized remittance transfers, as 
described below.
    As is discussed further below, to further the purposes of the EFTA 
and facilitate compliance, the Bureau finds it necessary and proper to 
use its EFTA section 904(a) and (c) authority to adopt Sec.  
1005.36(a)(1)(i), (a)(1)(ii), and (a)(2)(i) through (iii) and to 
eliminate the requirement to provide pre-payment disclosures for 
subsequent preauthorized remittance transfers. Sections 
1005.36(a)(1)(i), (a)(1)(ii), (a)(2)(i), and (a)(2)(ii) are revised 
from the February Final Rule. Section 1005.36(a)(2)(iii) is a new 
provision in the final rule.
36(a)(1) Timing of Disclosures for One-Time Transfers Scheduled Before 
the Date of Transfer and the First in a Series of Preauthorized 
Remittance Transfers
    Section 1005.36(a) of the February Final Rule addresses the timing 
of required disclosures for preauthorized remittance transfers. Section 
1005.36(a)(1) of the February Final Rule requires that, for the first 
in a series of preauthorized remittance transfers, the pre-payment 
disclosure and receipt be provided in the same manner as required for 
all other transfers. In the February Proposal, the Bureau sought 
comment on whether to make further adjustments in the disclosure rules 
for preauthorized remittance transfers and certain other transfers 
scheduled before the date of transfer.
    With respect to the timing of pre-payment disclosures and receipts 
given to senders upon request of and payment for a transfer, the Bureau 
received few comments, apart from those raising the concerns discussed 
earlier regarding the disclosure of exact exchange rates far before the 
date of a remittance transfer. Largely, industry commenters did not 
raise other concerns about the requirement that remittance transfer 
providers give pre-payment disclosures (or combined disclosures) when 
transfers are requested and prior to payment and receipts (if no 
combined disclosures were provided) when payment is authorized for 
either one-time transfers scheduled before the date of transfer or the 
first in a series of preauthorized remittance transfers. In the final 
rule, the Bureau maintains the requirement from the February Final Rule 
that for any one-time remittance transfer scheduled five or more 
business days before the date of transfer, and for the first transfer 
in a series of preauthorized remittance transfers, a remittance 
transfer provider must provide a pre-payment disclosure and a receipt 
to the sender subject to the same timing rules that apply to any one-
time transfer.
    For clarity and consistency, the Bureau is revising Sec.  
1005.36(a)(1) from the February Final Rule as a new Sec.  
1005.36(a)(1)(i) by adjusting the provision to apply both to a one-time 
advance transfer scheduled five or more business days before the date 
of transfer and the first in a series of preauthorized remittance 
transfers, rather than just the latter. The Bureau is also clarifying 
that remittance transfer providers may use combined disclosures, 
pursuant to Sec.  1005.31(b)(3), for transfers covered by this 
provision.
    The Bureau also requested comment on what follow-up disclosures, if 
any, should be provided to senders after authorization of a remittance 
transfer scheduled before the date of transfer. Specifically the Bureau 
asked whether a second receipt with accurate information should be 
provided to a sender within a reasonable time period prior to such a 
transfer, if the remittance transfer provider previously disclosed 
estimates pursuant to proposed Sec.  1005.32(b)(2).
    Most industry commenters argued against requiring a second receipt 
with accurate figures to be given prior to a remittance transfer when 
the original pre-payment disclosure and receipt contained estimates. 
These commenters argued that to the extent such a provision required 
disclosure of accurate figures ten days before the date of transfer, it 
would render the exception allowing providers to disclose estimates 
meaningless.
    To the extent the Bureau would instead allow a second receipt to 
contain estimates, industry commenters argued that giving senders three 
documents (a pre-payment disclosure when requesting the remittance 
transfer, a receipt when payment is authorized for the transfer, and a 
second receipt a reasonable time before the transfer) would be 
confusing and unhelpful to senders. One industry commenter suggested 
there would be limited value added by a second receipt that could 
contain information that, other than updated estimated exchange rates 
and associated figures, would be identical to the information included 
in the initial receipt. Another commenter expressed concern that a 
sender could be confused into thinking that a remittance transfer 
provider has made a single transfer multiple times or that an error had 
occurred, necessitating the additional disclosure. Industry commenters 
also stated that they thought senders would benefit little from 
additional disclosures before a transfer, particularly when any such 
benefit is balanced against the increased upfront and ongoing costs to 
the remittance transfer providers of giving senders the additional 
receipt. These commenters argued that providers would pass these costs 
on to senders. Finally, as an alternative to a second pre-transfer 
receipt, one industry commenter suggested that providers give senders 
receipts reflecting actual figures (and not estimates) after the 
providers send the transfers to the designated recipient. Consumer 
group commenters argued that receipts with actual figures (and not 
estimates) be provided to senders a reasonable time prior to the date 
of each transfer.
    In light of the Bureau's decision to allow the use of estimates in 
certain disclosures for remittance transfers scheduled five or more 
business days before the date of a remittance transfer rather than ten 
days as originally proposed, the Bureau believes that a follow-up 
receipt provided closer to the date of the transfer is not likely to 
provide significant benefit to senders in many cases. For example, if a 
remittance transfer provider schedules a remittance transfer one month 
before the date of transfer, and discloses an estimated exchange rate 
at that time, and then provides a sender a receipt with an accurate 
exchange rate only four business days before the date of transfer 
(because unless a statutory exception applies, Sec.  1005.32(b)(2) of 
the final rule permits estimates only for disclosures five or more 
business days before the date of transfer) the receipt might not reach 
the sender before the expiration of the three-business-day cancellation 
period in Sec.  1005.36(c). Conversely, if this follow-up receipt were 
sent five or more business days before the date of transfer, estimates 
of certain amounts would be permitted under Sec.  1005.32(b)(2). The 
Bureau believes that such a disclosure generally would be of little 
additional value as compared to the initial estimate provided in the 
pre-payment disclosure and receipt required by Sec.  1005.36(a)(1)(i) 
if the wholesale rate, and thus the retail rate, had not moved 
significantly since the initial estimate was provided.

[[Page 50267]]

    Although the Bureau is not requiring a second receipt closer to the 
time of transfer, the Bureau believes that for every remittance 
transfer, where a sender receives a disclosure that contains estimates 
pursuant to Sec.  1005.32, the sender should also receive an accurate 
post-transfer disclosure that informs the sender of the actual exchange 
rate (as well as fees, taxes, and other figures) applied to the 
transfer. Thus, to further consumer protections, the Bureau is adopting 
a revised Sec.  1005.36(a)(1)(ii), which requires that if the 
disclosures provided pursuant to Sec.  1005.36(a)(1)(i) contain 
estimates as permitted by Sec.  1005.32(b)(2) (for transfers scheduled 
five or more business days before the date of transfer), the provider 
must mail or deliver to the sender an additional receipt meeting the 
requirements described in Sec.  1005.31(b)(2) no later than one 
business day after the date of transfer.\17\ If the transfer involves 
the transfer of funds from the sender's account held by the provider, 
the receipt required by Sec.  1005.36(a)(1)(ii) may be provided on or 
with the next periodic statement for that account, or within 30 days 
after the date of the transfer if a periodic statement is not provided. 
As required by Sec.  1005.36(b)(3), which is discussed below, this 
receipt must contain accurate figures unless estimates are allowed by 
Sec.  1005.32(a) or (b)(1).
---------------------------------------------------------------------------

    \17\ The timing requirement in Sec.  1005.36(a)(1)(ii) does not 
prevent a remittance transfer provider from providing this receipt 
before the date of the transfer. The same is true for disclosures 
required by Sec.  1005.36(a)(2)(ii), which are discussed below.
---------------------------------------------------------------------------

    As many remittance transfers scheduled before the date of transfer 
are conducted by senders who have accounts with remittance transfer 
providers, the Bureau believes the final rule may relieve many 
providers of having to provide receipts immediately after each 
preauthorized remittance transfer or after one-time transfer scheduled 
five or more business days before the date of the transfer. In 
addition, the Bureau believes that an accurate receipt will ensure that 
senders receive accurate accountings of their transfers. Furthermore, 
to the extent that senders of preauthorized remittance transfers want 
to comparison shop based on price for future transfers, these receipts 
may be a mechanism that allows senders to better understand providers' 
pricing mechanisms (by allowing a sender to know the exchange rate 
applied to each transfer) and the amount received by the designated 
recipient.
36(a)(2) Timing of Disclosures for Subsequent Preauthorized Remittance 
Transfers
    The February Final Rule contains disclosure provisions specific to 
subsequent preauthorized remittance transfers (i.e., all preauthorized 
remittance transfers after the first in the series of transfers). 
Section 1005.36(a)(2)(i) of the February Final Rule requires that a 
remittance transfer provider also mail or deliver a pre-payment 
disclosure to the sender for each subsequent transfer and requires the 
disclosure to be mailed or delivered within a reasonable time prior to 
the scheduled date of each subsequent transfer. This provision is in 
lieu of the general timing rule, which would have required that a pre-
payment disclosure for each transfer in a series of preauthorized 
remittance transfers be given at the time of the initial request (and 
thus a sender would receive a disclosure for every preauthorized 
transfer when requesting the entire series). See Sec.  1005.31(e)(1). 
Section 1005.36(a)(2)(ii) in the February Final Rule requires a receipt 
to be mailed or delivered no later than one business day after the 
transfer or, for account-based transactions, on or with the next 
regularly scheduled periodic statement or within 30 days after payment 
is made for the remittance transfer if a periodic statement is not 
provided.
    In the February Proposal, the Bureau sought comment on an 
alternative to the requirement in the February Final Rule that a pre-
payment disclosure for each subsequent transfer in a series of 
preauthorized remittance transfer be provided within a reasonable time 
prior to the scheduled date of transfer: Whether the pre-payment 
disclosure requirement for subsequent preauthorized remittance 
transfers should be eliminated.
    Industry commenters generally favored eliminating the requirement 
for providing pre-payment disclosures for subsequent preauthorized 
remittance transfers for many of the same reasons these commenters 
disfavored a rule requiring accurate pre-payment disclosures for other 
transfers scheduled before the date of transfer. These commenters 
argued that a pre-payment disclosure for each subsequent transfer would 
be unnecessary, potentially confusing to senders, and burdensome to 
providers. For example, one commenter argued that senders schedule 
preauthorized remittance transfers for purposes of convenience and that 
senders typically do not comparison shop to complete each recurring 
transfer. The same commenter expressed concern that the requirement of 
an additional pre-payment disclosure might cause some providers to no 
longer allow consumers to schedule transfers before the date of 
transfer.
    In contrast, one consumer group commenter supported requiring pre-
payment disclosures to be provided to senders ten days before each 
subsequent transfer in a series of preauthorized remittance transfers 
(and stated that if estimates were permitted for disclosures related to 
such transfers, that those disclosures contain current estimates). This 
commenter urged that the Bureau maintain the requirement in the 
February Final Rule for pre-payment disclosures so that senders have 
additional information regarding the details of each preauthorized 
remittance transfer prior to such transfer.
    Upon consideration of these comments and to facilitate compliance, 
the Bureau is eliminating the requirement to provide a pre-payment 
disclosure within a reasonable time prior to the scheduled date of each 
subsequent preauthorized remittance transfer. Thus, the Bureau is 
eliminating what was Sec.  1005.36(a)(2)(i) in the February Final Rule. 
The Bureau is doing so for several reasons. The Bureau is concerned 
that the requirement in the February Final Rule--a pre-payment 
disclosure sent a reasonable time prior to each subsequent remittance 
transfer--might provide senders only a limited amount of information 
because pre-payment disclosures for subsequent preauthorized remittance 
transfers sent five or more business days before the date of transfer 
could contain estimates, pursuant to Sec.  1005.32(b)(2). In addition, 
in some scenarios, this could create a potential for confusing and 
overlapping disclosures and receipts.
    Conversely, the Bureau believes that if it mandated that pre-
payment disclosures be sent less than five business days before a 
subsequent transfer such that the disclosures could not contain 
estimates under Sec.  1005.32(b)(2), the disclosure would be of little 
use to the sender for the upcoming transfer as it could be received too 
close to (or after) the cancellation deadline. Separately, confusion 
for senders could exist in some circumstances where preauthorized 
remittance transfers are scheduled relatively close together or 
receipts are provided with periodic statements. In these cases, a 
sender might receive a post-transfer receipt from a prior preauthorized 
remittance transfer close in time to a pre-payment disclosure for the 
next transfer. These documents, with potentially differing

[[Page 50268]]

exchange rates and other figures, might confuse senders unnecessarily.
    The Bureau also believes that eliminating the requirement for pre-
payment disclosures for subsequent preauthorized remittance transfers 
is appropriate in part because senders will receive some relevant 
information in receipts for prior preauthorized remittance transfers. 
The final rule requires that for any preauthorized remittance transfer, 
the remittance transfer provider must provide a sender a receipt with 
accurate information (except to the extent estimates are permitted by 
Sec.  1005.32(a) or (b)(1)). A receipt from the prior transfer with 
accurate amounts may provide the sender with information that could 
educate the sender not only about the prior transfer but also about the 
provider's practices generally, which may help the sender judge whether 
to continue with the provider for future preauthorized remittance 
transfers. The Bureau believes a sender can learn about a remittance 
transfer provider's exchange rate practices from what the designated 
recipient actually received from the prior transfers in the series. In 
addition, the receipt provided for the initial transfer in a series 
provides information about the fees and taxes that will apply to all 
subsequent preauthorized remittance transfers, unless a change 
necessitates a new disclosure, as discussed below.
    Although the Bureau is eliminating the requirement that a 
remittance transfer provider provide a pre-payment disclosure for each 
subsequent transfer in a series of preauthorized remittance transfers, 
the Bureau remains concerned that previously disclosed figures (other 
than the estimates themselves) could change, rendering the figures 
disclosed in the pre-payment disclosure provided for the initial 
transfer inaccurate as applied to the subsequent transfers.\18\ Comment 
31(f)-1 to the February Final Rule explains that under the general 
timing and accuracy rules in subpart B of Regulation E, providers must 
give senders new pre-payment disclosures before accepting payment if 
previously provided pre-payment disclosures are inaccurate. However, 
since a receipt provided pursuant to Sec.  1005.36(a)(1)(i) or, as 
discussed below, .36(a)(2)(i), may serve as a disclosure with respect 
to multiple subsequent preauthorized transfers, the temporal elements 
disclosed on those receipts would only be accurate with respect to the 
transfer to occur after the receipt is provided.
---------------------------------------------------------------------------

    \18\ Although changes in terms trigger notice requirements in 
some instances under Regulation E (see 12 CFR 1005.10), that 
provision does not apply to remittance transfers that are not 
electronic fund transfers.
---------------------------------------------------------------------------

    Thus, the Bureau is adopting a new Sec.  1005.36(a)(2)(i) to 
specifically address certain changes in terms related to subsequent 
preauthorized remittance transfers. Section 1005.36(a)(2)(i) states 
that if any of the information on the most recent receipt provided 
pursuant to Sec.  1005.36(a)(1)(i) or Sec.  1005.36(a)(2)(i), other 
than the temporal disclosures required by Sec.  1005.31(b)(2)(ii) (Date 
Available) and (b)(2)(vii) (Transfer Date), is no longer accurate with 
respect to a subsequent preauthorized remittance transfer for reasons 
other than as permitted by Sec.  1005.32, then the remittance transfer 
provider must provide an updated receipt meeting the requirements 
described in Sec.  1005.31(b)(2) to the sender. The provider must mail 
or deliver this receipt to the sender within a reasonable time prior to 
the scheduled date of the next subsequent preauthorized remittance 
transfer. Such receipt must clearly and conspicuously indicate that it 
contains updated disclosures.
    New comment 36(a)(2)-1 clarifies when the disclosure required by 
Sec.  1005.36(a)(2)(i) must be provided. Specifically, it states that 
when a sender schedules a series of preauthorized remittance transfers, 
the provider is generally not required to provide a pre-payment 
disclosure prior to the date of each subsequent transfer. However, 
Sec.  1005.36(a)(1)(i) requires the provider to provide a pre-payment 
disclosure and receipt for the first in the series of preauthorized 
remittance transfers in accordance with the timing requirements set 
forth in Sec.  1005.31(e). See Sec.  1005.36(a)(1)(i). While certain 
information in those disclosures is expressly permitted to be estimated 
(see Sec.  1005.32(b)(2)(i) through (iii)), other information is not 
permitted to be estimated, or is limited in how it may be estimated. 
When any of the information on the most recent receipt provided 
pursuant to Sec.  1005.36(a)(1)(i) or (a)(2)(i), other than the 
temporal disclosures required by Sec.  1005.31(b)(2)(ii) (the Date 
Available) and (b)(2)(vii) (the Transfer Date), is no longer accurate 
with respect to a subsequent preauthorized remittance transfer for 
reasons other than as permitted by Sec.  1005.32, the provider must 
provide, within a reasonable time prior to the scheduled date of the 
next preauthorized remittance transfer, a receipt that complies with 
Sec.  1005.31(b)(2) and which discloses, among the other disclosures 
required by Sec.  1005.31(b)(2), the changed terms.
    For example, if the provider discloses in the pre-payment 
disclosure for the first in the series of preauthorized remittance 
transfers that its fee for each remittance transfer is $20 and, after 
six preauthorized remittance transfers, the provider increases its fee 
to $30 (to the extent permitted by contract law), the provider must 
provide the sender a receipt that complies with Sec. Sec.  
1005.31(b)(2) and 1005.36(b)(2) within a reasonable time prior to the 
seventh transfer. Barring a further change, this receipt will apply to 
transfers after the seventh transfer. Or, if, after the sixth transfer, 
a tax increases from 1.5% of the amount that will be transferred to the 
designated recipient to 2.0% of the amount that will be transferred to 
the designated recipient, the provider must provide the sender a 
receipt that complies with Sec. Sec.  1005.31(b)(2) and 1005.36(b)(2) 
within a reasonable time prior to the seventh transfer. In contrast, 
Sec.  1005.36(a)(2)(i) does not require an updated receipt where an 
exchange rate, estimated as permitted in Sec.  1005.32, changes.
    New comment 36(a)(2)-2 explains that in order to clearly and 
conspicuously indicate that the provider's fee has changed as required 
by Sec.  1005.36(a)(2)(i), the provider could, for example, state on 
the receipt: ``Transfer Fees (UPDATED) * * * $30.'' To the extent that 
other figures on the receipt must be revised because of the new fee, 
the receipt should similarly indicate that those figures are updated.
    In the February Proposal, the Bureau also solicited comment on 
whether it should provide a safe harbor interpreting the ``within a 
reasonable time'' standard for providing a pre-payment disclosure for 
subsequent preauthorized remittance transfers. Although such a 
disclosure is no longer required, the same ``within a reasonable time'' 
requirement now applies to receipts required by Sec.  1005.36(a)(2)(i). 
The bulk of the comments received on how to interpret ``within a 
reasonable time'' concerned industry commenters' concerns regarding the 
requirement in the February Final Rule that any required pre-payment 
disclosures reflect the actual exchange rates that will apply to 
preauthorized remittance transfers. Industry commenters stated that it 
would be difficult to disclose accurate exchange rates ten days before 
the date of a remittance transfer. Insofar as Sec.  1005.32(b)(2) 
allows estimates in disclosures provided for remittance transfers 
scheduled five or more business days before the date of transfer, this 
concern should be alleviated. Industry commenters generally stated that 
if estimates were permitted, ten days was a reasonable period of time.

[[Page 50269]]

    New comment 36(a)(2)-3 explains if a receipt required by Sec.  
1005.36(a)(2)(i) (or, as discussed below, required by Sec.  
1005.36(d)(1)) is mailed, the receipt would be considered to be 
received by the sender five business days after it is posted in the 
mail. If hand delivered or provided electronically, the receipt would 
be considered to be received by the sender at the time of delivery. 
Thus, if the provider mails the receipt not later than ten business 
days before the scheduled date of the transfer, or hand or 
electronically delivers the receipt not later than five business days 
before the scheduled date of the transfer, the provider would be deemed 
to have mailed or delivered the receipt within a reasonable time prior 
to the scheduled date of the subsequent preauthorized remittance 
transfer.
    In addition, the Bureau is modifying Sec.  1005.36(a)(2)(ii) from 
the February Final Rule, which requires receipts for all subsequent 
preauthorized remittance transfers. As adopted, Sec.  1005.36(a)(2)(ii) 
explains when receipts must be sent. It states that unless a receipt 
was provided in accordance with Sec.  1005.36(a)(2)(i) that contained 
no estimates pursuant to Sec.  1005.32, the remittance transfer 
provider must mail or deliver to the sender a receipt described in 
Sec.  1005.31(b)(2) no later than one business day after the date of 
the transfer. If the remittance transfer involves the transfer of funds 
from the sender's account held by the provider, the receipt required by 
this paragraph may be provided on or with the next periodic statement 
for that account, or within 30 days after the date of the transfer if a 
periodic statement is not provided.
    Finally, the Bureau is adopting an additional disclosure 
requirement for subsequent preauthorized remittance transfers as Sec.  
1005.36(a)(2)(iii), which requires providers to provide the disclosures 
required by Sec.  1005.36(d) in accordance with the timing requirements 
of that section. Section 1005.36(d) is discussed in more detail below.
36(b) Accuracy
    The February Final Rule contains, in Sec.  1005.36(b), requirements 
for the accuracy of disclosures for preauthorized remittance transfers. 
Under that provision in the February Final Rule, the pre-payment 
disclosures and receipt for the first scheduled transfers in a series 
of preauthorized remittance transfers are required to be accurate at 
the time of payment (i.e., they must comply with Sec.  1005.31(f), 
which states that disclosures must be accurate when a sender makes 
payment for the remittance transfer, except to the extent estimates are 
permitted by Sec.  1005.32). For subsequent preauthorized remittance 
transfers, as discussed above, the February Final Rule requires 
providers to give accurate pre-payment disclosures as of when the 
transfer is made within a reasonable time prior to each transfer and 
then to provide an accurate receipt after each transfer.
    To further compliance and to enhance consumer protections, the 
Bureau finds it necessary and proper to use its EFTA section 904(a) and 
(c) authority to adopt a revised Sec.  1005.36(b). The Bureau is 
revising Sec.  1005.36(b) to address the accuracy of receipts provided 
for remittance transfers that are scheduled five or more business days 
before the date of transfer, as well as preauthorized remittance 
transfers. The Bureau is adopting Sec.  1005.36(b)(1), which states 
that for a one-time transfer scheduled five or more business days 
before the date of transfer or the first in a series of preauthorized 
remittance transfers, disclosures provided in accordance with Sec.  
1005.36(a)(1)(i) must comply with Sec.  1005.31(f) by being accurate 
when the sender makes payment, except to the extent estimates are 
permitted by Sec.  1005.32.
    For subsequent preauthorized remittance transfers, the Bureau is 
adopting Sec.  1005.36(b)(2), which states that for each subsequent 
preauthorized remittance transfer, the most recent receipt provided 
pursuant to Sec.  1005.36(a)(1)(i) or (a)(2)(i) must be accurate as of 
when such transfer is made, except: (i) The temporal elements required 
by Sec.  1005.31(b)(2)(ii) (Date Available) and (b)(2)(vii) (Transfer 
Date) must be accurate only if the transfer is the first transfer to 
occur after the disclosure was provided, and (ii) to the extent 
estimates are permitted by Sec.  1005.32. As noted above, since a 
receipt provided pursuant to Sec.  1005.36(a)(1)(i) or (a)(2)(i) may 
serve as a disclosure with respect to multiple subsequent preauthorized 
transfers, the temporal elements disclosed on those receipts need only 
be accurate with respect to the transfer to occur after the receipt is 
provided.
    To address situations in which receipts may be provided after the 
date of a remittance transfer, the Bureau is adopting a new Sec.  
1005.36(b)(3). That provision states that such receipts (provided 
pursuant to either Sec.  1005.36(a)(1)(ii) or (a)(2)(ii)) must be 
accurate as of when the remittance transfer to which it pertains is 
made, except to the extent estimates are permitted by Sec.  1005.32(a) 
or (b)(1).
    Proposed comment 36(b)-1 addressed estimates and, in particular, 
stated that providers may use any of the exceptions set forth in Sec.  
1005.32, to the extent applicable. This comment is adopted largely as 
proposed, with changes to reflect the newly adopted Sec.  
1005.32(b)(2), which allows for estimates in certain disclosures for 
transfers scheduled five or more business days before the date of 
transfer, and the revised Sec.  1005.36(a)(1)(i) and (a)(2)(i), which 
permit use of estimates under Sec.  1005.32(b)(2). The comment also 
notes that when estimates are permitted, they must be disclosed in 
accordance with Sec.  1005.31(d).
    New comment 36(b)-2 explains that, for a subsequent transfer in a 
series of preauthorized remittance transfers, the receipt provided 
pursuant to Sec.  1005.36(a)(1)(i), except for the temporal disclosures 
in that receipt required by Sec.  1005.31(b)(2)(ii) (Date Available) 
and (b)(2)(vii) (Transfer Date), applies to each subsequent 
preauthorized remittance transfer unless and until it is superseded by 
a receipt provided pursuant to Sec.  1005.36(a)(2)(i). For each 
subsequent preauthorized remittance transfer, only the most recent 
receipt provided pursuant to Sec.  1005.36(a)(1)(i) or (a)(2)(i) must 
be accurate as of the date each subsequent transfer is made. As a 
receipt may apply to multiple transfers in a series of preauthorized 
remittance transfers, the disclosure required by Sec.  
1005.31(b)(2)(ii) (i.e. disclosure of the date in the foreign country 
on which funds will be available to the designated recipient) need not 
be accurate for subsequent preauthorized remittance transfers that 
occur after the first transfer to which the receipt pertains.
    Finally, new comment 36(b)-3 clarifies that a receipt required by 
Sec.  1005.36(a)(1)(ii) must accurately reflect the details of the 
transfer to which it pertains and may not contain estimates pursuant to 
Sec.  1005.32(b)(2). However, the remittance transfer provider may 
continue to disclose estimates to the extent permitted by Sec.  
1005.32(a) or (b)(1). In providing receipts pursuant to Sec.  
1005.36(a)(1)(ii) or (a)(2)(ii), Sec.  1005.36(b)(2) and (b)(3) do not 
allow a remittance transfer provider to change figures previously 
disclosed on a receipt provided pursuant to Sec.  1005.36(a)(1)(i) or 
(a)(2)(i), unless a figure was an estimate or based on an estimate 
disclosed pursuant to Sec.  1005.32. Thus, for example, if a provider 
disclosed its fee as $10 in a receipt provided pursuant to Sec.  
1005.36(a)(1)(i) and that receipt contained an estimate of the exchange 
rate pursuant to Sec.  1005.32(b)(2), the

[[Page 50270]]

second receipt provided pursuant to Sec.  1005.36(a)(1)(ii) must also 
disclose the fee as $10. The Bureau is adopting this comment to clarify 
that the purpose of receipts required by Sec.  1005.36(a)(1)(ii) and 
(a)(2)(ii) is to provide a sender with the actual exchange rate applied 
to the transfer (unless the statutory exceptions for estimates apply) 
rather than the estimate previously disclosed for the transfer pursuant 
to Sec.  1005.32(b)(2). Thus, the final rule does not permit a provider 
to change other items, such as non-estimated fees and taxes, from a 
prior disclosure applicable to that transfer on the post-transfer 
receipt.
36(c) Cancellation
    The February Final Rule contains cancellation requirements for 
remittance transfers. For most remittance transfers, Sec.  1005.34(a) 
requires the remittance transfer provider to comply with a cancellation 
request received no later than 30 minutes after the sender makes 
payment for the remittance transfer if: (i) The sender's request allows 
the provider to identify the sender's name and address or telephone 
number and the specific transaction to be cancelled; and (ii) the 
transferred funds have not been picked up by the designated recipient 
or deposited into the recipient's account. For remittance transfers 
scheduled at least three business days before the date of the transfer, 
including preauthorized remittance transfers, Sec.  1005.36(c) of the 
February Final Rule requires the remittance transfer provider to comply 
with a sender's request for cancellation if the request: (i) Enables 
the provider to identify the sender's name and address or telephone 
number and the particular transfer to be cancelled; and (ii) is 
received at least three business days before the scheduled date of the 
remittance transfer. Section 1005.31(b)(2)(iv) requires the provider to 
include a statement about the sender's cancellation rights, using the 
language set forth in Model Form A-37 of Appendix A to subpart B or 
substantially similar language.
    The Bureau is amending Regulation E in this final rule to, among 
other things, clarify the obligations of the remittance transfer 
provider for remittance transfers scheduled before the date of transfer 
and to provide senders with information to calculate the cancellation 
deadline for remittance transfers scheduled at least three business 
days before the date of the transfer. As discussed above, the Bureau is 
making certain adjustments to the disclosure and timing requirements in 
other sections of the final rule in order to enhance senders' ability 
to properly determine the cancellation deadline for remittance 
transfers, to enable senders to more easily identify and track 
preauthorized remittance transfers that occur in close proximity to one 
another, and to facilitate industry compliance with the cancellation 
disclosure requirements.
    As discussed above, the final rule adds Sec.  1005.31(b)(2)(vii), 
which requires remittance transfer providers to disclose the date of 
transfer in certain receipts provided to senders pursuant to Sec.  
1005.31(b)(2). These requirements apply only to remittance transfers 
scheduled by the sender at least three business days before the date of 
the transfer, as well as the initial transfer in a series of 
preauthorized remittance transfers. As discussed below, Sec.  
1005.36(d)(2)(ii) also requires future transfer dates to be disclosed 
for subsequent transfers in a series of preauthorized remittance 
transfers, for which payment is made by the sender four or fewer 
business days before the date of the transfer.
    However, as discussed below, the Bureau is retaining in Sec.  
1005.36(c) the requirement that a remittance transfer provider must 
comply with any oral or written request to cancel a remittance transfer 
if the request to cancel is received at least three business days 
before the scheduled date of the remittance transfer. The Bureau is 
also adopting a new Sec.  1005.36(d) to require providers to disclose 
the future dates of transfer, cancellation requirements, and provider's 
contact information for subsequent preauthorized remittance transfers 
no more than 12 months and no less than five business days before the 
date of the transfer. This timing requirement for these disclosures 
does not apply to subsequent transfers in a series of preauthorized 
remittance transfers for which payment is made by the sender four or 
fewer business days before the date of the transfer. For this subset of 
transfers, the information required by Sec.  1005.36(d)(1), including 
future dates of transfer, must instead be included in the receipt for 
the first transfer in the series of preauthorized remittance transfers 
provided in accordance with Sec.  1005.36(a)(1)(i). For subsequent 
preauthorized remittance transfers and transfers scheduled at least 
three business days before the date of transfer, any receipt provided 
after the transfer is made in accordance with Sec.  1005.36(a)(1)(ii) 
or (a)(2)(ii) must include the date of transfer (and cancellation 
requirements) for the transfer that is the subject of the receipt.
The Three-Business-Day Deadline To Cancel
    As noted above, section 919(d)(3) of the EFTA provides the Bureau 
broad discretion to fashion cancellation requirements for remittance 
transfers. In the February Final Rule, the Bureau adopted in Sec.  
1005.36(c) specific cancellation requirements for remittance transfers 
scheduled at least three business days before the date of the transfer. 
In adopting the three-business-day cancellation rule for such 
transfers, the Bureau explained that the general 30-minute cancellation 
period would not be appropriate for remittance transfers scheduled far 
in advance because it would permit only a short time for cancellation 
even though the remittance transfer might not occur for many days or 
even months. 77 FR 6194, 6268. Thus, the Bureau concluded that a three-
business-day time period is more beneficial because it provides senders 
with more time to decide whether to go through with the transaction 
while giving remittance transfer providers sufficient time to process a 
cancellation request before the transaction is executed. Id.
    In the February Proposal, the Bureau explained that further 
consideration of the three-business-day cancellation rule and its 
application to remittance transfers scheduled before the date of 
transfer was necessary to ensure that the rule provided appropriate 
protection to senders without imposing an undue burden on providers. 77 
FR 6310, 6321. Accordingly, the Bureau solicited comment on whether the 
three-business-day deadline to cancel advance transfers accomplishes 
these goals, or whether the deadline to cancel should be more or less 
than the three days adopted in the February Final Rule. The Bureau also 
solicited comment on whether it is important to maintain consistency 
between the cancellation deadline adopted for preauthorized remittances 
transfers in Sec.  1005.36(c) and the cancellation deadline for 
preauthorized electronic fund transfers in Sec.  1005.10(c)(1). 77 FR 
6310, 6321. Finally, the Bureau solicited comment on whether the 
deadline to cancel would be easier to calculate if the cancellation 
period was based on calendar days instead of business days.
    Several commenters addressed the cancellation deadline for 
remittance transfers scheduled three or more business days in advance. 
Both industry and consumer group commenters generally agreed that the 
three-business-day time period for cancellation in the February Final 
Rule appropriately balances the interests of both parties to

[[Page 50271]]

the transfer. One industry commenter opposed the three-business-day 
time period for cancellation; this commenter proposed as an alternative 
a five-day cancellation period, arguing that the Bureau should take 
into consideration providers' existing compliance obligations under 
other laws as well. Another industry commenter posited that, if the 
Bureau does not amend the definition of ``remittance transfer 
provider'' to exclude depository institutions executing certain types 
of international wire transfers, cancellation should be allowed only 
until a transfer has been executed by a depository institution. One 
industry commenter agreed that the Bureau should continue to require 
the deadline to cancel to be expressed in business days as opposed to 
calendar days.
    Although most commenters expressed support for the three-business-
day cancellation period, a few industry commenters conditioned their 
support on whether and to what extent remittance transfer providers may 
be required to disclose to senders the exchange rates that apply to 
transfers scheduled before the date of transfer. One industry commenter 
stated that the three-business-day cancellation period would be 
appropriate only if a remittance transfer provider were not required to 
disclose the actual exchange rates that would apply to preauthorized 
remittance transfers ten days before the dates of such transfers. The 
industry commenter, however, also agreed that senders should be able to 
cancel preauthorized remittance transfers or other remittance transfers 
scheduled to take place in the future, but that the cancellation 
requirements should be balanced with a shorter time period for exchange 
rate disclosure. Another industry commenter argued that the three-
business-day cancellation requirement would present a substantial risk 
of loss to a remittance transfer provider if the provider were required 
to disclose the exchange rate that would apply to a remittance transfer 
more than one day before the scheduled date of transfer. This commenter 
suggested that the Bureau establish a bifurcated cancellation structure 
for transfers scheduled before the date of transfer under which: (i) 
the 30-minute cancellation period in Sec.  1005.34(a) would apply for 
any transfer for which the provider discloses the actual exchange rate; 
and (ii) the three-business-day cancellation period established in 
Sec.  1005.36(c) would apply for any transfer in which the provider 
discloses an estimated exchange rate.
    The Bureau recognizes the concern expressed by a few industry 
commenters that remittance transfer providers may incur additional risk 
if the time period to cancel a transfer extends beyond the date upon 
which a remittance transfer provider must disclose the actual exchange 
rate that will apply to a remittance transfer. As the Bureau noted in 
the discussion regarding Sec.  1005.32(b)(2)(i), whenever there are 
time lags between when the retail exchange rate that applies to a 
remittance transfer is set, when the relevant foreign currency is 
purchased, and when funds are delivered, a remittance transfer provider 
(and/or its business partner) may face losses due to unexpected changes 
in the value of the relevant foreign currency. The Bureau's decision in 
Sec.  1005.32(b)(2) of the final rule to allow remittance transfer 
providers to provide an estimated exchange rate in certain disclosures 
for remittance transfers scheduled five or more business days before 
the date of transfer should help alleviate these concerns. (See 
discussion above regarding Sec.  1005.32(b)(2) for additional analysis 
of foreign exchange risks.) As a result, under the final rule, a 
remittance transfer provider will not be required to disclose, prior to 
the date of the transfer, an actual, as opposed to an estimated, 
exchange rate if the transfer is scheduled five or more business days 
before the date of transfer. This five-business-day period is shorter 
than the more than ten day period proposed in the February Proposal and 
reduces the period during which a remittance transfer provider that 
permits transfers to be scheduled before the date of transfer may face 
additional foreign exchange risks due to the gap between the time the 
provider sets an exchange rate and the date of the transfer. And, while 
there is a short period outside the cancellation window in which the 
remittance transfer provider is required to disclose actual rather than 
estimated exchange rates, the Bureau believes that providers may be 
able to manage the foreign currency risks or may choose not to offer 
consumers the ability to schedule remittance transfers in this period. 
The Bureau does not believe the latter option presents a substantial 
risk of harm to senders, because it believes that any provider that 
generally permits consumers to schedule remittance transfers in advance 
will at least retain the option for consumers to schedule their 
transfers the day of or five or more business days before the date of 
the transfer.
    Accordingly, the Bureau concludes that the three-day-business 
cancellation period for remittance transfers scheduled at least three 
business days before the date of the transfer as adopted in the 
February Final Rule is appropriate. The Bureau believes that 
cancellation rights are important because they allow senders time to 
review the disclosure for accuracy and cancel the transaction when 
warranted by a change in circumstances. In addition, the Bureau 
believes the three-business-day cancellation period strikes an 
appropriate balance between sender and remittance transfer provider 
interests. This time period is close enough to the transfer date so 
that senders will know if there are circumstances warranting a 
cancellation, while it gives providers an adequate amount of time to 
process a cancellation request. Finally, as the Bureau noted in the 
February Final Rule, the three-business-day cancellation period is 
consistent with the cancellation requirement for electronic fund 
transfers. 77 FR 6194, 6268. Since many remittance transfer providers 
also provide electronic fund transfers, maintaining similar regulatory 
regimes should minimize burden and facilitate compliance.
Disclosure of Cancellation Period in Pre-Payment Disclosures for 
Subsequent Preauthorized Remittance Transfers
    In the February Proposal, the Bureau solicited comment on whether a 
remittance transfer provider should be required to disclose the 
cancellation period in the pre-payment disclosure for each subsequent 
remittance transfer in a series of preauthorized remittance transfers, 
rather than in the receipt for each subsequent transfer. As the Bureau 
recognized in the February Proposal, this issue would be relevant only 
if the pre-payment disclosure requirement in Sec.  1005.36(a)(2)(i) of 
the February Final Rule is retained in this rulemaking. 77 FR 6310, 
6323.
    As discussed above, the Bureau is revising the disclosure 
requirements for preauthorized remittance transfers to eliminate the 
requirement that remittance transfer providers provide a pre-payment 
disclosure for each subsequent transfer in series of preauthorized 
remittance transfers. Instead, the final rule requires that, in most 
circumstances, a receipt for each subsequent transfer be provided to 
the sender. Consequently, the Bureau's inquiry of whether the 
cancellation disclosure should be provided in the pre-payment 
disclosure or the receipt for each subsequent transfer is now generally 
moot. Since there generally is no longer a requirement to provide a 
pre-payment disclosure for subsequent transfers, the sender's 
cancellation rights must be disclosed on any receipt

[[Page 50272]]

provided in accordance with Sec.  1005.36(a)(2) and (d)(2) (see 
discussion below), as applicable.
36(d) Additional Requirements for Subsequent Preauthorized Remittance 
Transfers
    Under the February Final Rule, remittance transfer providers are 
required to provide senders with both a pre-payment disclosure and a 
receipt for each subsequent preauthorized remittance transfer in a 
series. Specifically, the pre-payment disclosure for each subsequent 
transfer must be provided within a reasonable time prior to the 
scheduled date of the transfer, and the receipt for each subsequent 
transfer generally must be provided no later than one business day 
after the date on which the transfer is made. As discussed above, 
however, the Bureau is concerned with balancing the interest of 
consumers in receiving timely disclosures for subsequent transfers with 
the interests of industry in reducing risks and developing this market 
segment. Thus, in the February Proposal, the Bureau sought comment on a 
number of issues related to subsequent preauthorized remittance 
transfers, including whether senders should receive disclosures for 
subsequent preauthorized remittance transfers and, if so, what form 
those disclosures should take. 77 FR 6310, 6223. The February Proposal 
also sought comment on what cancellation rules should apply to these 
transfers and when those rules should be disclosed to senders.
    The Bureau received few comments in response to its inquiry 
regarding disclosure of cancellation requirements for subsequent 
preauthorized remittance transfers. Among those received, there was 
little consensus regarding how cancellation rights for subsequent 
preauthorized transfers should be disclosed. One industry commenter 
advocated for flexibility on the disclosure requirements to minimize 
costs. Another industry commenter asserted that the cancellation rights 
should be included only in the first pre-payment disclosure for each 
subsequent transfer, while a consumer group commenter posited that a 
subsequent pre-payment disclosure disclosing cancellation rights should 
be sent before each subsequent transfer. Only one industry commenter 
supported including the statement regarding cancellation rights for the 
next scheduled transfer on the current receipt, arguing that it would 
give senders more time to cancel the transfer than if the cancellation 
rights were included in a pre-payment disclosure provided before the 
subsequent transfer.
    Having eliminated the pre-payment disclosure requirement for 
subsequent transfers and altered the requirements for when a receipt 
would have to be provided for a subsequent transfer in the final rule, 
the Bureau is concerned that senders may not receive adequate and 
timely information regarding the dates of upcoming transfers and, thus, 
may not know when their right to cancel those transfers expires. 
Further, as discussed above regarding Sec.  1005.31(b)(2)(vii), even 
when senders receive disclosures regarding their cancellation rights, 
they may not have the type of information needed to determine the date 
on which the right to cancel a subsequent transfer expires. The Bureau 
is also concerned that, where senders receive a number of receipts in 
close proximity to one another as part of a series of preauthorized 
remittance transfers, senders may not have information that would be 
helpful in distinguishing to which transfer a particular receipt 
applies.
    Accordingly, to further the purposes of the EFTA, the Bureau 
believes it is necessary and proper to use its authority under EFTA 
sections 904(a) and (c) to adopt a new Sec.  1005.36(d), which amends 
the disclosure requirements for subsequent preauthorized remittance 
transfers. Section 1005.36(d)(1)(i) states that, for any subsequent 
transfer in a series of preauthorized remittance transfers, the 
remittance transfer provider must disclose to the sender: (A) the date 
the provider will make the subsequent transfer, using the term ``Future 
Transfer Date,'' or a substantially similar term; (B) a statement about 
the rights of the sender regarding cancellation as described in Sec.  
1005.31(b)(2)(iv); and (C) the name, telephone number(s), and Web site 
of the remittance transfer provider. Section 1005.36(d)(1)(ii) states 
that if the future date or dates of transfer required to be disclosed 
by this paragraph are described as occurring in regular periodic 
intervals, e.g., the 15th of every month, rather than as a specific 
calendar date or dates, the remittance transfer provider must disclose 
any future date or dates of transfer that do not conform to the 
described interval.
    Section 1005.36(d)(2)(i) establishes the general timing 
requirements for disclosures required by Sec.  1005.36(d)(1), stating 
that, except as described in Sec.  1005.36(d)(2)(ii), the disclosures 
required by Sec.  1005.36(d)(1) must be received by the sender no more 
than 12 months, and no less than five business days prior to the date 
of any subsequent preauthorized remittance transfer to which it 
pertains. Section 1005.36(d)(2)(i) also states that the disclosures 
required by Sec.  1005.36(d)(1) may be provided in a separate 
disclosure or on one or more disclosures required by subpart B related 
to the same series of preauthorized remittance transfers, so long as 
the consumer receives the required information for each subsequent 
preauthorized remittance transfer in accordance with the timing 
requirements of Sec.  1005.36(d)(2)(i).
    The Bureau believes that information regarding cancellation rights 
is as important to subsequent preauthorized remittance transfers as it 
is to other transfers. Accordingly, as noted in the discussion 
regarding Sec.  1005.31(b)(2)(vii), senders need the date of transfer 
to determine, among other things, when the cancellation period for a 
certain preauthorized transfer expires. At the same time, the Bureau 
recognizes that when authorizing a preauthorized remittance transfer, 
the sender establishes a recurring schedule. The Bureau believes the 
repetitive and cyclical nature of preauthorized remittance transfers 
reduces the need for senders to receive notice of the cancellation 
period in individual notices sent immediately before each subsequent 
transfer, and warrants additional flexibility to remittance transfer 
providers to determine the timing and type of disclosure to be used to 
advise senders of their cancellation rights for subsequent 
preauthorized remittance transfers. The Bureau notes, however, that 
such notices must be provided within a timeframe that would be useful 
to senders and is concerned that a notice provided more than 12 months 
before the date of such transfers would likely be unhelpful to senders. 
Likewise, a notice received fewer than five business days before the 
date of transfer may not provide the sender with enough time to 
determine whether cancellation is warranted and, thus, would also not 
be helpful to senders.
    The Bureau also recognizes that for subsequent preauthorized 
remittance transfers scheduled four or fewer business days before the 
date of the transfer, remittance transfer providers will be unable to 
provide the disclosures regarding the future date of transfer and 
cancellation rights five or more business days before the date of 
transfer. Accordingly, Sec.  1005.36(d)(2)(ii) states that for any 
preauthorized remittance transfer for which the date of transfer is 
four or fewer business days after the date payment is made for that 
transfer, the information required by

[[Page 50273]]

Sec.  1005.36(d)(1) must be provided on or with the receipt described 
in Sec.  1005.31(b)(2), or disclosed as permitted by Sec.  
1005.31(a)(3) and (a)(5), for the initial transfer in that series in 
accordance with Sec.  1005.36(a)(1)(i). For example, if, on Monday, a 
sender authorizes a series of preauthorized remittance transfers in 
which the initial transfer occurs that day and the first subsequent 
transfer is scheduled to occur on Wednesday, the 30-minute cancellation 
period under Sec.  1005.34(a) would apply to both transfers. If, 
however, in the same series of preauthorized remittance transfers the 
second subsequent remittance transfer is scheduled to occur on Friday, 
the three-business-day cancellation period would apply to that 
transfer. For either subsequent transfer, the provider would be unable 
to provide the required information at least five business days before 
the date of the transfer. In that instance, the provider would be 
required to disclose the cancellation period and future date of 
transfer for the subsequent remittance transfer on or with the receipt 
provided for the initial preauthorized remittance transfer.
    As a result, preauthorized remittance transfers scheduled fewer 
than three business days from the date of the transfer are now subject 
to different disclosure requirements than standalone remittance 
transfers scheduled fewer than three business days from the date of the 
transfer. With respect to the latter, there is no requirement to 
disclose the date of transfer or future date of transfer on receipts. 
The Bureau, however, believes these two sets of transfers present 
different concerns warranting different treatment. Preauthorized 
remittance transfers by definition are authorized to recur at 
substantially regular intervals. As a result, as discussed above, 
preauthorized remittance transfer present a higher risk of confusion 
since, depending on the frequency of the subsequent transfers in the 
series, senders may receive multiple receipts at or around the same 
time and, absent identifying information such as the date of transfer, 
may be unable to identify the transfer to which a particular receipt 
applies. One-time transfers scheduled in advance do not generally 
present the same risks because in most instances the sender would 
schedule a single transfer at any given time as opposed to a series of 
transfers and should not have difficulty identifying the transfer to 
which the receipt applies. Further, if disclosures were only required 
for subsequent preauthorized transfers occurring at least three 
business days in the future, consumers may mistakenly believe that no 
transfers were scheduled on any days prior to that time.
    Thus, while the Bureau believes the date of transfer would be 
helpful to senders of preauthorized remittance transfers, it does not 
believe such information is necessary for standalone transfers 
scheduled fewer than three business days from the date of the transfer. 
As stated above, the Bureau believes that it will be simpler for 
remittance transfer providers to program their receipts to include the 
transfer date information consistently for preauthorized transfers than 
to create separate receipt forms for one-time and preauthorized 
remittance transfers.
    New Sec.  1005.36(d)(3) and (d)(4) address formatting and accuracy 
requirements for disclosures required under Sec.  1005.36(d)(3). 
Section 1005.36(d)(3) states that the information required by Sec.  
1005.36(d)(1)(i)(A) generally must be disclosed in close proximity to 
the other information required by Sec.  1005.36(d)(1)(i)(B). Section 
1005.36(d)(4) states that any disclosure required by Sec.  
1005.36(d)(1) must be accurate as of the date the subsequent 
preauthorized remittance transfer to which it pertains is made.
    The Bureau is also adopting commentary to provide further guidance 
on the application of Sec.  1005.36(d). Comment 36(d)-1 clarifies that 
Sec.  1005.36(d)(2) permits remittance transfer providers some 
flexibility in determining how and when the disclosures required by 
Sec.  1005.36(d)(1) may be provided to senders. Comment 36(d)-1 states 
that the disclosure may be provided as a separate disclosure, or on or 
with any other disclosures required by subpart B of Regulation E 
related to the same series of preauthorized remittance transfers, 
provided that the disclosure and timing requirements in Sec.  
1005.36(d)(2) and other applicable provisions in subpart B are 
satisfied. For example, the required disclosures may be made on or with 
a receipt provided pursuant to Sec.  1005.36(a)(1)(i); a receipt 
provided pursuant to Sec.  1005.36(a)(2)(ii); or in a separate 
disclosure created by the provider. The comment also provides a fact 
pattern describing how a remittance transfer provider would comply with 
Sec.  1005.36(d)(1).
    Comment 36(d)-2 clarifies that Sec.  1005.36(d)(2)(i) requires that 
the sender receive disclosure of the date of transfer, applicable 
cancellation requirements, and the provider's contact information no 
more than 12 months and no less than 5 business days prior to the date 
of the subsequent preauthorized remittance transfer. Comment 36(d)-2 
also cross-references comment 36(a)(2)-3 for purposes of determining 
when a disclosure required by Sec.  1005.36(d)(1) is received by the 
sender.
    Comment 36(d)-3 provides guidance on how the remittance transfer 
provider should disclose the date of transfer. Specifically, comment 
36(d)-3 clarifies that the date of transfer of a subsequent 
preauthorized remittance transfer may be disclosed either as a specific 
date (e.g., July 19, 2013), or by using a method that clearly permits 
identification of the date of transfer, such as periodic intervals 
(e.g., the third Monday of every month, or the 15th of every month). 
Comment 36(d)-3 further clarifies that if the future dates of transfer 
are disclosed as occurring periodically and there is a break in the 
sequence, or the date of transfer does not conform to the described 
period, e.g., if a weekend or holiday causes the provider to deviate 
from the normal schedule, the provider should disclose the specific 
date of transfer for the affected transfer. Finally, comment 36(d)-4 
clarifies the accuracy requirements for disclosures required by Sec.  
1005.36(d)(1). Comment 36(d)-4 explains that if any of the information 
required by Sec.  1005.36(d)(1) changes, the provider must provide an 
updated disclosure with the revised information that is accurate as of 
when the transfer is made, pursuant to Sec.  1005.36(d)(2).

VI. Section 1022(b)(2) Analysis

    In developing the proposed rule, the Bureau has considered 
potential benefits, costs, and impacts, and has consulted or offered to 
consult with the prudential regulators and the Federal Trade 
Commission, including regarding consistency with any prudential, 
market, or systemic objectives administered by such agencies.\19\
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    \19\ Specifically, section 1022(b)(2)(A) of the Dodd-Frank Act 
calls for the Bureau to consider the potential benefits and costs of 
a regulation to consumers and covered persons, including the 
potential reduction of access by consumers to consumer financial 
products or services; the impact on depository institutions and 
credit unions with $10 billion or less in total assets as described 
in section 1026 of the Dodd-Frank Act; and the impact on consumers 
in rural areas.
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    In this rulemaking, the Bureau is amending subpart B of Regulation 
E, which implements EFTA section 919, and the accompanying commentary. 
This rule modifies the February Final Rule and the accompanying 
commentary. The final rule provides a new safe harbor clarifying when a 
person does not provide remittance transfers in the normal course of 
business for purposes of determining whether a person is a ``remittance 
transfer provider.'' In the final rule, the

[[Page 50274]]

Bureau is also refining the disclosure requirements for certain 
remittance transfers scheduled before the date of the transfer, 
including preauthorized remittance transfers, and the accompanying 
interpretations of those requirements. The analysis below considers the 
benefits, costs, and impacts of this rule relative to the baseline 
provided by the February Final Rule.
    In the February Proposal, the Bureau sought information regarding 
various aspects of the market for remittance transfers. Among other 
things, the Bureau sought information describing the number of 
consumers who send remittance transfers through persons who would 
qualify for the proposed safe harbor or who schedule remittance 
transfers before the date of the transfer. Similarly, the Bureau sought 
data describing the number and characteristics of persons who would 
qualify for the proposed safe harbor. Additionally, the Bureau 
requested that interested parties provide data describing the number of 
firms that schedule remittance transfers before the date of the 
transfer, the number of remittance transfers provided, and the revenues 
earned from those transfers.
    The Bureau received limited information in response to these 
requests. In their comments in response to the February Proposal, two 
trade associations provided high-level summaries of limited surveys of 
member depository institutions. Through additional outreach, the Bureau 
obtained more detailed data from these associations, as well as data 
from several other sources regarding the number of remittance transfers 
or similar transactions provided by individual depository institutions, 
credit unions, and state-licensed money transmitters. However, as 
discussed above, the data received through this process were neither 
comprehensive nor necessarily representative of the entire population 
of remittance transfer providers or of the populations covered by the 
data. Furthermore, the Bureau did not receive any data pertaining to 
certain types of persons who may be remittance transfer providers, such 
as non-depository institutions that are not state-licensed money 
transmitters.
    The Bureau also did not receive any industry-wide data regarding 
the number of remittance transfer providers that send preauthorized 
remittance transfers or standalone remittance transfers scheduled 
before the date of the transfer, or the number of consumers using these 
services. Nor did the Bureau receive specific figures regarding the 
costs of the options discussed in the February Proposal.
    Due to the limited quantitative information received, this analysis 
generally provides a qualitative discussion of the benefits, costs, and 
impacts of the final rule. Considered with the limited data that are 
available, general economic principles provide insight into these 
benefits, costs, and impacts but do not support a quantitative 
analysis.

A. Benefits and Costs to Consumers and Covered Persons

Normal Course of Business
    Section 1005.30(f) of the February Final Rule defines the term 
``remittance transfer provider'' to mean any person that provides 
remittance transfers for a consumer in the normal course of its 
business. Such persons are required to comply with subpart B of 
Regulation E relating to remittance transfers. Comment 30(f)-2 to the 
February Final Rule states that whether a person provides remittance 
transfers in the normal course of business depends on the facts and 
circumstances, including the total number and frequency of remittance 
transfers sent by the provider. Though it includes two examples, 
comment 30(f)-2 to the February Final Rule does not state a specific 
numerical threshold for determining when a person is not providing 
remittance transfers in the normal course of its business.
    The final rule provides, in Sec.  1005.30(f)(2)(i), a safe harbor 
clarifying when a person does not provide remittance transfers in the 
normal course of business for purposes of determining whether a person 
is a ``remittance transfer provider.'' The final rule states that if a 
person provided 100 or fewer remittance transfers in the previous 
calendar year, and provides 100 or fewer remittance transfers in the 
current calendar year, then the person is deemed not to be providing 
remittance transfers for a consumer in the normal course of its 
business.
    For a person that crosses the 100-transfer threshold, and is then 
providing remittance transfers in the normal course of its business, 
the final rule also permits a reasonable period of time, not to exceed 
six months, to begin complying with subpart B of Regulation E. For such 
a person, compliance with subpart B of Regulation E will be required at 
the end of the ``reasonable period of time'' unless, based on the facts 
and circumstances, such a person is not a remittance transfer provider.
    The safe harbor will benefit persons who qualify by reducing the 
legal uncertainty they likely would have had under the February Final 
Rule regarding whether they provided remittance transfers in the normal 
course of business and their compliance costs to the extent they decide 
not to comply voluntarily with subpart B of Regulation E. Furthermore, 
the safe harbor does not impose any burden on the persons who qualify. 
The safe harbor is based on a bright-line numerical threshold that 
persons may use to determine easily whether they do not meet the 
definition of remittance transfer provider. The bright-line threshold 
should reduce uncertainty and legal risk for persons who provide a 
small number of remittance transfers each year as to whether they do 
not provide remittance transfers in the normal course of business and 
thus are not required to comply with subpart B of Regulation E. For 
those persons who do not qualify for the safe harbor, whether or not 
they are providing remittance transfers in the normal course of 
business will continue to depend on the facts and circumstances.
    As a result, the Bureau expects that the safe harbor could enable 
persons who qualify to continue providing remittance transfers to 
consumers, as opposed to exiting the market or increasing prices in 
response to the February Final Rule. The Bureau expects that some 
persons who qualify for the safe harbor would have exited the market 
for remittance transfers, absent the safe harbor, rather than incurred 
the cost associated with implementing the requirements of subpart B of 
Regulation E under the February Final Rule or risking non-compliance 
(due to legal risk surrounding the interpretation of the term ``normal 
course of business''). Alternatively, some persons may have chosen to 
implement subpart B of Regulation E if it resulted in higher expected 
net benefits than either risking non-compliance or ceasing to offer 
remittance transfers (and foregoing any revenues earned from them). 
Such persons may have increased their prices to recover some, or all, 
of the cost of complying with subpart B of Regulation E.
    Under the final rule, by contrast, the Bureau expects that most 
persons who qualify for the safe harbor will not voluntarily choose to 
implement the requirements of subpart B of Regulation E given the 
expense associated with implementing the requirements. The Bureau 
expects that, for these persons, the cost associated with counting 
remittance transfers (to ensure the conditions of the safe harbor are 
met) is lower than the cost of unnecessarily

[[Page 50275]]

implementing the requirements of subpart B of Regulation E. 
Furthermore, the Bureau expects that the clarity provided by the safe 
harbor will encourage more persons to continue to offer remittance 
transfers rather than exiting the market--thus retaining a revenue 
stream they may otherwise have foregone.
    For certain persons who are newly entering the market or who plan 
to expand their business such that they may no longer qualify for the 
safe harbor, the Bureau expects that the transition period in the final 
rule may also reduce the cost of compliance, by permitting such 
providers a reasonable period of time during which to come into 
compliance with subpart B of Regulation E. Under the February Final 
Rule, those persons considered to be remittance transfer providers 
would have been required to implement the requirements of subpart B of 
Regulation E for each remittance transfer.
    Consumers may experience both benefits and costs from the 
additional clarity offered by both the safe harbor and the transition 
period permitted by the final rule. Some consumers may benefit from 
additional access to remittance transfers and increased competition 
among providers, including potentially lower prices, if, absent the 
safe harbor, some persons who qualify for the safe harbor would have 
exited the market. However, some consumers may incur costs associated 
with not receiving disclosures, error resolution rights, and other 
protections generally required by subpart B of Regulation E. Some 
consumers might incur such costs due to the transition period. Other 
consumers may incur such costs because some of the persons who qualify 
for the safe harbor might have complied with subpart B of Regulation E 
absent the safe harbor. If persons who would have provided more than 
100 remittance transfers absent the safe harbor choose to limit the 
number of remittance transfers provided so that they may qualify for 
the safe harbor, some consumers could also experience decreased access. 
However, the Bureau expects any cost arising from not receiving 
disclosures, error resolution rights, and other protections will be 
incurred by a small number of consumers, as the Bureau estimates that 
depository institutions, credit unions, and others that will qualify 
for the safe harbor are responsible for only a very small fraction of 
all remittance transfers provided each year.
    The Bureau cannot quantify the number of persons who will qualify 
for the safe harbor or the transition period implemented in the final 
rule. As discussed above, the Bureau received limited survey results 
and data from several sources regarding the number of remittance 
transfers or similar transactions provided by individual depository 
institutions, credit unions, and state-licensed money transmitters. The 
Bureau does not believe that it can extrapolate from any of these data 
sources to determine precisely the number of persons who will qualify 
for the safe harbor, or the fraction of those persons who might cross 
the 100-transfer threshold in any year, and thus be eligible for the 
transition period. However, as discussed above, the data suggest that a 
meaningful number of insured institutions and credit unions will likely 
qualify for the safe harbor while few state-licensed money transmitters 
will qualify. Data sources of varying quality and comprehensiveness 
show that between roughly 40 and roughly 90 percent of depository 
institutions or credit unions that responded to a survey or were 
otherwise covered by the data, and that reported any transactions, sent 
100 or fewer covered transactions in the prior year.\20\ As noted 
above, the Bureau estimates that the depository institutions, credit 
unions, and others that qualify for the safe harbor are responsible for 
only a very small fraction of the remittance transfers provided each 
year.
---------------------------------------------------------------------------

    \20\ Caveats associated with these data sources are described 
above.
---------------------------------------------------------------------------

    In addition, the Bureau cannot determine the number of persons who 
will no longer implement subpart B of Regulation E as a result of the 
final rule. It is likely that some persons who qualify for the safe 
harbor would not have implemented subpart B of Regulation E, in any 
event, either because they would have relied on the facts and 
circumstances to conclude that they were not providing remittance 
transfers in the normal course of business under the February Final 
Rule, or because they would have exited the market absent the safe 
harbor. It is also possible that some of the persons who qualify for 
the safe harbor or are eligible for the transition period will choose 
to implement some portions of the requirements in subpart B of 
Regulation E due to market demands. Therefore, whether there is a 
change, and the extent of such a change, in the number of institutions 
that will implement subpart B of Regulation E relative to the February 
Final Rule is not known. However, all persons who qualify for the safe 
harbor now have an additional option available to them for determining 
whether they are required to comply with subpart B of Regulation E and 
therefore may potentially benefit from this provision of the final 
rule. Furthermore, all persons who qualify for the safe harbor but then 
cross the 100-transfer threshold will be eligible for the transition 
period.
Estimates and Disclosure Requirements
    The February Final Rule requires, for the first transfer in a 
series of preauthorized remittance transfers, that the provider provide 
a pre-payment disclosure at the time the sender requests the transfer 
and a receipt at the time payment for the transfer is made, which the 
commentary explains means when payment is authorized. The February 
Final Rule also generally requires that both the pre-payment disclosure 
and the receipt be accurate when payment is made. In the case of 
subsequent preauthorized remittance transfers, the February Final Rule 
requires that a pre-payment disclosure be provided a reasonable time 
prior to each subsequent preauthorized remittance transfer and that a 
receipt be provided following the transfer. These pre-payment 
disclosures and receipts are required to include accurate figures, 
unless a statutory exception permitting the use of estimates applies.
    In the final rule, a new exception, Sec.  1005.32(b)(2), permits 
disclosures required to be provided prior to or when payment is made to 
contain estimates of exchange rates and certain related figures in 
certain cases for remittance transfers scheduled five or more business 
days before the date of the transfer, including preauthorized 
remittance transfers. If a remittance transfer provider discloses 
estimates under this provision, the final rule requires that the 
provider later give senders receipts with accurate figures unless a 
statutory exception permitting the use of estimates applies.
    As discussed above, industry commenters stated that disclosing an 
exchange rate that would apply to a remittance transfer long before the 
date of that transfer poses particular difficulties. Commenters stated 
that such a disclosure would potentially subject the remittance 
transfer provider (or its business partners) to additional exchange 
rate risk since a wholesale exchange rate may vary between the date 
that a remittance transfer is scheduled (and disclosures are provided) 
and the date of the transfer. Although some of this risk may be reduced 
through the use of financial instruments, risk mitigation strategies 
may increase costs to providers, and some providers may not want to 
absorb or manage the associated risks. In addition, an industry 
commenter

[[Page 50276]]

indicated that, at least in some instances, providers would refuse to 
offer remittance transfers scheduled three or more business days before 
the date of the transfer if the Bureau required providers to disclose 
an accurate exchange rate prior to the expiration of the consumer's 
cancellation right.
    Under the final rule, remittance transfer providers choosing to 
provide estimates in certain circumstances will avoid the cost 
associated with providing accurate figures before the date of transfer 
but will incur the cost associated with providing accurate receipts 
after the date of transfer. Since remittance transfer providers retain 
the option of giving accurate pre-payment disclosures and receipts as 
required under the February Final Rule, net costs incurred by 
remittance transfer providers choosing to use the new exception for 
estimates should not increase relative to the February Final Rule. 
Permitting estimates of certain amounts on the pre-payment disclosure 
and receipt given in connection with remittance transfers scheduled 
five or more business days before the date of the transfer reduces the 
cost of compliance. Specifically, the exception eliminates the need for 
remittance transfer providers (or their business partners) to manage 
any exchange rate or other risk associated with committing to an 
exchange rate on disclosures provided five or more business days before 
the date of the transfer.
    If a remittance transfer provider chooses to estimate certain 
information under this new exception, it is also required to provide an 
additional receipt with figures that are accurate as of the date the 
transfer is made (unless estimates are permitted under either of the 
two statutory exceptions). For one-time remittance transfers or the 
first in a series of preauthorized remittance transfers scheduled five 
or more business days before the date of the transfer, this requirement 
could require three disclosure forms, rather than the two disclosures 
required by the February Final Rule. To provide this additional 
disclosure in these cases, remittance transfer providers may incur 
additional costs, e.g. for programming, printing or distribution, if it 
is not already the providers' standard business practice to provide 
this disclosure.
    Consumers scheduling remittance transfers five or more business 
days before the date of the transfer may receive benefits or incur 
costs as a result of the changes made by the final rule to provisions 
concerning these transfers. Industry commenters indicated that, at 
least in some instances, remittance transfer providers would cease 
offering transfers scheduled before the date of the transfer if they 
were required to disclose accurate exchange rates at the time of 
scheduling. In addition, to address any risk associated with setting 
exchange rates before the date of the transfer, providers might have 
disclosed less favorable exchange rates to consumers, thus effectively 
increasing the prices of their services. Permitting the use of 
estimates may result in more providers offering remittance transfers 
scheduled before the date of the transfer, and doing so at a lower 
cost. Therefore, consumers may benefit from expanded access to 
remittance transfers scheduled five or more business days before the 
date of the transfer, increased competition, and potentially lower 
prices. If providers who otherwise would have provided accurate figures 
choose to disclose estimates under the final rule, some consumers may 
incur costs if they receive less reliable information regarding the 
exchange rate, the amount transferred, and the amount received before 
the date of the transfer. The magnitude of these costs would depend on 
the size of any discrepancy between estimated and accurate disclosures 
and the extent to which the consumer relies on the disclosure to choose 
among providers or to make spending, budgeting, or other financial 
decisions. However, consumers valuing accurate information retain the 
option of not pre-scheduling remittance transfers. Furthermore, this 
change will have no impact on consumers who send remittance transfers 
that require no foreign exchange because they are funded and received 
in the same currency and thus no exchange rate needs to be disclosed.
Disclosure Rules for Subsequent Preauthorized Remittance Transfers
    The final rule eliminates the requirement that remittance transfer 
providers mail or deliver a pre-payment disclosure a reasonable time 
prior to each subsequent preauthorized remittance transfer. Instead, 
the final rule requires that a provider send a receipt a reasonable 
time prior to the scheduled date of the next preauthorized remittance 
transfer if certain disclosed information is changed from what was 
disclosed regarding the first preauthorized remittance transfer (or 
what was disclosed in a prior updated receipt, if such a receipt was 
provided previously). This receipt must disclose the changed terms, in 
addition to the other disclosures required by Sec.  1005.31(b)(2).\21\ 
If no updated receipt is necessary (or if the updated receipt contains 
estimates), providers generally must give an accurate receipt to 
consumers for each subsequent preauthorized remittance transfer shortly 
after the date of transfer.
---------------------------------------------------------------------------

    \21\ It may contain estimates as permitted by Sec.  
1005.32(b)(2).
---------------------------------------------------------------------------

    The Bureau does not know the number of remittance transfer 
providers offering preauthorized remittance transfers, but comments and 
information received through outreach suggest that they comprise a 
small percentage of all remittance transfers.\22\ Furthermore, based on 
the Bureau's understanding of the remittance transfer market, the 
Bureau believes that, although some depository institutions and credit 
unions that are remittance transfer providers offer preauthorized 
remittance transfers, a very small number of state-licensed money 
transmitters do so.
---------------------------------------------------------------------------

    \22\ One trade association reported that it believes that less 
than three percent of remittance transfers at credit unions are 
preauthorized remittance transfers. Another trade association noted 
that ``preauthorized international transfers'' make up only a small 
percentage of the ``total international transfers initiated by 
consumers.'' One money transmitter stated that, although the product 
is relatively new and growing, scheduled payments currently 
represent only a small percentage of its overall business.
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    For the remittance transfer providers that offer preauthorized 
remittance transfers, the elimination of the pre-payment disclosure for 
subsequent preauthorized remittance transfers reduces the costs 
associated with providing preauthorized remittance transfers. These 
costs may include distribution cost as well as compliance risk arising 
from uncertainty surrounding the interpretation of ``reasonable time.''
    For consumers, the changes in the requirements regarding subsequent 
preauthorized remittance transfers could result in some benefits and 
some costs. Since the risk and burden associated with providing 
accurate pre-payment disclosures for subsequent preauthorized 
remittance transfers might have discouraged some providers from 
offering preauthorized remittance transfers or caused them to increase 
prices, consumers potentially will have increased access to this 
product and the convenience associated with it. Furthermore, in some 
cases, the elimination of the pre-payment disclosure requirement may 
provide some benefit to consumers who might otherwise have been 
confused when receiving, in close proximity, both receipts from 
completed preauthorized remittance transfers as well as pre-

[[Page 50277]]

payment disclosures for future preauthorized remittance transfers.
    With the elimination of the requirement for pre-payment disclosures 
for subsequent preauthorized remittance transfers, consumers could also 
be harmed by generally not receiving additional reminders of upcoming 
remittance transfers and their cost close to the date of the transfer. 
However, the Bureau expects that any such effect will be small. As 
discussed below, the final rule generally requires that providers 
disclose the date of the transfer, cancellation requirements, and the 
provider's contact information to senders of subsequent preauthorized 
remittance transfers no fewer than five business days and no more than 
12 months before the date of the transfer. This should serve as a 
reminder to consumers of future preauthorized remittance transfers and 
the method of cancellation. With respect to cost, the accurate figures 
provided in receipts may serve as a basis for the consumer to project 
the likely cost associated with future preauthorized remittance 
transfers.
Cancellation Period and Other Disclosures
    The final rule modifies the February Final Rule in several respects 
with regard to the cancellation disclosure requirements for transfers 
scheduled at least three business days before the date of the transfer, 
as well as preauthorized remittance transfers. First, the final rule 
requires a remittance transfer provider to disclose the specific date 
of the transfer in receipts given in association with certain 
transfers, so that a sender may calculate the date on which the 
sender's right to cancel will expire. This requirement applies to one-
time remittance transfers scheduled at least three business days before 
the date of the transfer, as well as the first transfer in a series of 
preauthorized remittance transfers. Also, the final rule requires, in 
conjunction with certain disclosures related to initial transfers in 
series of preauthorized transfers, disclosures of the date of transfer 
regarding any subsequent preauthorized transfer in that series for 
which the date of the transfer is four or fewer business days after the 
date payment is made for that transfer. Second, for other preauthorized 
remittance transfers (i.e., those scheduled five or more business days 
before the date of the transfer), the final rule requires the 
remittance transfer provider to disclose the date or dates on which the 
remittance transfer provider will execute such subsequent transfers in 
the series of preauthorized remittance transfers, the applicable 
cancellation requirements, and contact information for the provider. 
The final rule permits providers some flexibility in determining how 
these disclosures may be provided, although there are specific timing 
requirements. In addition, disclosures regarding the dates of transfer 
for all preauthorized remittance transfers must be accurate as of the 
date the preauthorized remittance transfer to which the disclosure 
pertains is made. Finally, the final rule also permits providers to 
describe on the same receipt both the three-business-day and 30-minute 
cancellation periods (the latter applying to remittance transfers 
scheduled fewer than three business days before the date of the 
transfer) and either describe the transfers to which each period 
applies or, alternatively, use a checkbox or other method to designate 
which cancellation period is applicable to the transfer.
    Remittance transfer providers could incur costs from the 
requirement in the final rule that they disclose certain dates of 
transfer on receipts given in connection with one-time remittance 
transfers scheduled at least three business days before the date of the 
transfer and certain preauthorized remittance transfers. To comply with 
this new requirement, remittance transfer providers will need to revise 
receipts for these transfers to include the date or dates of the 
transfers.\23\ The additional disclosures on certain receipts may 
constitute an additional cost to remittance transfer providers if they 
do not already include this information on their receipts. The Bureau 
lacks specific information regarding the additional burden imposed on 
remittance transfer providers by this change but believes that it 
involves a slight modification of a disclosure required by the February 
Final Rule to include information maintained by providers. For those 
providers producing receipts electronically, this customization will 
likely involve a one-time change to information technology systems.
---------------------------------------------------------------------------

    \23\ In some limited circumstances described in Sec.  
1005.36(d)(2)(ii), disclosure regarding future dates of transfer may 
also be accompanied by additional information regarding cancellation 
periods.
---------------------------------------------------------------------------

    For transfers scheduled at least three business days before the 
date of the transfer, the date of the transfer gives consumers a basis 
from which to determine when their cancellation rights expire, thus 
providing consumers with additional clarity regarding their 
cancellation rights that could benefit those consumers who may want to 
cancel. This requirement also provides consumers with additional 
information about when the transfer will take place and, thus, the date 
by which a consumer's funds must be available in order for the 
remittance transfer provider to make the transfer.
    As discussed above, the final rule also requires that the provider 
disclose to the sender the upcoming date of the transfer, cancellation 
requirements, and the provider's contact information for any subsequent 
preauthorized remittance transfer scheduled five or more business days 
before the date of the transfer.\24\ This additional requirement in the 
final rule represents an additional cost to providers who are not 
already required to, or do not otherwise voluntarily, provide this 
information to consumers. The Bureau does not have information 
regarding the cost associated with disclosing the dates of transfer, 
cancellation requirements, and the provider's contact information for 
subsequent preauthorized remittance transfers. For remittance transfer 
providers who choose to include this information on an electronically-
generated periodic statement or receipt, this likely represents a 
modest, one-time programming cost. The final rule does not require that 
this information be provided on an additional, separate disclosure, but 
rather permits providers to modify existing statements, receipts, or 
disclosures to include this information, which is already maintained by 
the remittance transfer provider. If the provider elects to do so, 
however, it may disclose this information in a separate disclosure that 
may be provided annually.
---------------------------------------------------------------------------

    \24\ Timing requirements for this additional requirement are 
addressed in Sec.  1005.36(d)(2)(i).
---------------------------------------------------------------------------

    As described above, the date of the transfer gives consumers a 
basis from which to determine when their cancellation rights expire. 
This requirement provides consumers with additional clarity regarding 
their cancellation rights that could benefit those consumers that may 
want to cancel. It also provides consumers with additional information 
about when the transfer will take place and, thus, the date by which 
the consumer's funds must be available in order for the remittance 
transfer provider to make the transfer.
    The final rule also states that remittance transfer providers that 
offer both remittance transfers scheduled at least three business days 
before the date of the transfer and remittance transfers scheduled 
fewer than three business days before the date of the transfer may 
describe both the three-business-day and 30-minute cancellation periods

[[Page 50278]]

applicable to such transfers on one receipt, provided they either 
describe the applicable deadline, or alternatively, use a checkbox or 
some other method to designate which cancellation period is applicable. 
This allows providers to use one standardized form, though each receipt 
needs to be modified for that particular remittance transfer. Providers 
who offer remittance transfers scheduled three or more business days 
before the date of the transfer, in addition to remittance transfers 
scheduled closer to or on the date of the transfer, may be relieved of 
costs since they are otherwise required by the February Final Rule to 
produce two distinct types of receipts. This additional flexibility 
benefits providers without imposing any additional costs because 
providers retain the option of complying with the requirements of the 
February Final Rule.
    Disclosing both cancellation provisions on the same receipt could 
result in a receipt that is potentially more confusing to 
consumers.\25\ However, the Bureau believes that consumers are unlikely 
to be confused by having a description of both cancellation deadlines 
in the same disclosure. To the contrary, including a description of 
both the 30-minute and three-business-day cancellation periods with a 
checkbox or other method that clearly designates the cancellation time 
period applicable to a consumer's transaction may improve consumers' 
understanding of the cancellation provisions generally.
---------------------------------------------------------------------------

    \25\ These potential confusion costs, which the Bureau is unable 
to monetize, are likely only incurred by consumers using remittance 
transfer providers that offer remittance transfers scheduled more 
than three business days before, as well as remittance transfers 
scheduled closer to, the date of the transfer. It is possible, 
however, that a consumer using a provider that does not offer 
remittance transfers scheduled three or more business days before 
the date of the transfer could be exposed to both cancellation 
periods if, for example, the provider utilizes a third-party 
software solution that prints both periods on the same receipt.
---------------------------------------------------------------------------

B. Potential Specific Impacts of the Final Rule

Depository Institutions and Credit Unions With $10 Billion or Less in 
Total Assets, as Described in Section 1026
    The Bureau does not believe that the costs and benefits arising 
from the final rule for depository institutions and credit unions with 
$10 billion or less in total assets are substantively different from 
those discussed in the general analysis. However, the Bureau does 
believe that those depository institutions and credit unions with $10 
billion or less in total assets are more likely to benefit from the 
additional clarity and burden reduction provided by the safe harbor 
than larger institutions or non-depository institutions. Although the 
Bureau lacks comprehensive data describing the number of remittance 
transfers provided by each entity, information that the Bureau obtained 
through comments and outreach suggests that, among depository 
institutions and credit unions that provide any remittance transfers, 
an institution's asset size and the number of remittance transfers sent 
by the institution is positively, though imperfectly, related. As a 
result, the Bureau expects that a greater share of depository 
institutions and credit unions with $10 billion or less in total assets 
that provide any remittance transfers will qualify for the safe harbor 
compared with those with more than $10 billion in total assets. The 
Bureau does not have any data with which to predict the percentage of 
those institutions that may, at some point, stop qualifying for the 
safe harbor, and thus be eligible for the transition period included in 
the final rule.
    With respect to the elements of the final rule addressing 
remittance transfers scheduled before the date of the transfer, the 
Bureau does not believe that the costs and benefits arising from the 
final rule for depository institutions and credit unions with $10 
billion or less in total assets are substantively different from those 
discussed in the general analysis.
Consumers in Rural Areas
    Consumers in rural areas may experience different impacts from the 
final rule than consumers in general. In the February Proposal, the 
Bureau solicited additional information regarding the characteristics 
of rural consumers who send remittance transfers, the types of 
businesses through which they send remittance transfers, and the 
quantitative and qualitative characteristics of the services provided 
to them. The Bureau did not receive information regarding the types of 
institutions that rural consumers use to send remittance transfers and 
whether those institutions are more or less likely to benefit from the 
additional clarity provided by the safe harbor provision.\26\ 
Furthermore, the Bureau did not receive information regarding whether 
rural consumers are more or less likely than other consumers either to 
schedule remittance transfers three or more business days before the 
date of the transfer or to send preauthorized remittance transfers.
---------------------------------------------------------------------------

    \26\ A few commenters suggested that rural banks would benefit 
from the safe harbor. The Bureau did not receive comment regarding 
whether rural consumers were more or less likely to use non-
depository institutions than other consumers.
---------------------------------------------------------------------------

    As discussed above, the final rule generally lowers costs for 
persons providing remittance transfers relative to the February Final 
Rule.\27\ If consumers in rural areas are more likely to send 
remittance transfers through persons who qualify for the safe harbor 
and, absent the safe harbor, would have exited the market, they likely 
will experience greater benefits from the final rule--in terms of 
increased access or more competitive pricing--than consumers generally. 
If persons providing remittance transfers to rural consumers are more 
likely to qualify for the safe harbor and, absent the safe harbor, 
would have chosen to implement subpart B of Regulation E, rural 
consumers may be more likely to lose potential benefits arising from 
the disclosure, cancellation, and error resolution rights.
---------------------------------------------------------------------------

    \27\ Exceptions include additional requirements in certain cases 
to disclose the date of the transfer and other cancellation 
information as described above.
---------------------------------------------------------------------------

    It is likely that depository institutions and credit unions serving 
rural consumers are smaller in terms of asset size, on average, 
suggesting that they might be more likely to benefit from the safe 
harbor. This benefit may be muted, however, if rural consumers are more 
likely than other consumers to use remittance transfer providers that 
are not depository institutions or credit unions.

VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct an initial regulatory flexibility analysis (IRFA) and a 
final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities.\28\ The Bureau also is subject to 
certain additional procedures under the RFA involving the convening of 
a panel to consult with small business representatives prior to

[[Page 50279]]

proposing a rule for which an IRFA is required.\29\
---------------------------------------------------------------------------

    \28\ For purposes of assessing the impacts of the proposed rule 
on small entities, ``small entities'' is defined in the RFA to 
include small businesses, small not-for-profit organizations, and 
small government jurisdictions. 5 U.S.C. 601(6). A ``small 
business'' is determined by application of Small Business 
Administration regulations and reference to the North American 
Industry Classification System (NAICS) classifications and size 
standards. 5 U.S.C. 601(3). A ``small organization'' is any ``not-
for-profit enterprise which is independently owned and operated and 
is not dominant in its field.'' 5 U.S.C. 601(4). A ``small 
governmental jurisdiction'' is the government of a city, county, 
town, township, village, school district, or special district with a 
population of less than 50,000. 5 U.S.C. 601(5).
    \29\ 5 U.S.C. 609.
---------------------------------------------------------------------------

    The Bureau is certifying the final rule. Therefore, a FRFA is not 
required for this rule because it will not have a significant economic 
impact on a substantial number of small entities.
    In this rulemaking, the Bureau is amending subpart B of Regulation 
E, which implements the EFTA, and the official interpretation to the 
Regulation. This rule modifies the February Final Rule as well as the 
accompanying commentary. The final rule provides a new safe harbor 
clarifying when a person does not provide remittance transfers in the 
normal course of business for purposes of determining whether a person 
is a ``remittance transfer provider.'' In the final rule, the Bureau is 
also refining the disclosure requirements for certain remittance 
transfers scheduled before the date of the transfer, including 
preauthorized remittance transfers, and the accompanying 
interpretations of those requirements.
    This rule facilitates compliance with the February Final Rule and 
eases possible compliance burden while generally preserving potential 
benefits to consumers arising from the disclosure, cancellation, and 
error resolution requirements of the February Final Rule. The Bureau 
concluded that the February Proposal would not have a significant 
economic impact on a substantial number of small entities, and to the 
extent that it has such impacts, they would largely be positive.
    The Bureau received a number of comments in response to the 
February Proposal addressing the burden imposed by the February 
Proposal and potential alternatives as well as the burden imposed by 
the February Final Rule. These comments are summarized above. The 
Bureau also invited comment from members of the public regarding 
whether the rule, as proposed, would have a significant impact on a 
substantial number of small entities. One commenter urged the Bureau to 
employ the Small Business Regulatory Enforcement Fairness Act (SBREFA) 
panel process. This commenter also suggested that the Bureau engage in 
outreach to credit unions and community banks prior to finalizing the 
rule.\30\
---------------------------------------------------------------------------

    \30\ This commenter appeared to be confusing the February 
Proposal with the February Final Rule. The letter states: ``As noted 
in the final rule, the agency concluded that the proposed rule could 
have a significant economic impact on small entities regarding 
international wire transfers.'' This is not true of the February 
Proposal in which the Bureau certified that the February Proposal, 
if promulgated, would not have a significant economic impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    As discussed below, the Bureau considered these comments, data, and 
other information obtained through further outreach in concluding that 
a factual basis exists for certifying the final rule. The analysis 
examines the regulatory impact of the final rule against the baseline 
of the February Final Rule.

A. Affected Small Entities

    Potentially affected small entities include depository institutions 
and credit unions that have $175 million or less in assets that offer 
remittance transfers as well as non-depository institutions that have 
average annual receipts that do not exceed $7 million.\31\ These 
affected small entities may include state-licensed money transmitters, 
among others.\32\ Of the 7,319 insured depository institutions, 3,845 
are small entities.\33\ As explained in the February Final Rule, these 
institutions generally offer remittance transfers through wire 
transfers, though they may also offer remittance transfers through 
other means.
---------------------------------------------------------------------------

    \31\ Small Business Administration, Table of Small Business Size 
Standards Matched to North American Industry Classification System 
Codes, http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. Effective March 26, 2012.
    \32\ For the purpose of this analysis, the Bureau assumes that 
providers, and not their agents, will assume any costs associated 
with implementing the final rule. A remittance transfer provider is 
liable for any violation of subpart B by an agent when the agent 
acts for the provider (See Sec.  1005.35). There may be other 
entities that serve as remittance transfer providers that are not 
depository institutions, credit unions, or money transmitters, as 
traditionally defined. These entities could include broker-dealers 
that send remittance transfers. The Bureau does not have information 
regarding the number of broker-dealers that send remittance 
transfers.
    \33\ Federal Deposit Insurance Corporation, http://www2.fdic.gov/idasp/main.asp, downloaded July 12, 2012. Count 
includes active institutions as of March 31, 2012.
---------------------------------------------------------------------------

    Regulatory filings by insured depository institutions do not 
contain information about the number of institutions that offer 
consumer international wire transfers (or other types of remittance 
transfers). Two trade association surveys of a small number of 
depository institutions found that seven percent of respondents (in one 
survey) and ten percent (in the other survey) stated that they do not 
offer international funds transfers on behalf of consumers.\34\ The 
Bureau does not believe it can extrapolate from either survey to the 
entire population of depository institutions. However, for the purposes 
of this analysis, the Bureau assumes that all but seven percent of 
small depository institutions, i.e., 3,576, send remittance transfers. 
The Bureau believes that this figure likely overestimates the number of 
small entity depository institutions offering remittance transfers. 
Data from the National Credit Union Administration suggest that, as of 
March 2012, 3,382 of the 7,019 federally insured credit unions offer 
international wire transfers. Of the insured credit unions that offer 
international wire transfers, 2,548 are small entities. Though the 
Bureau does not have exact data on the number of credit unions that 
offer remittance transfers, the Bureau assumes that the figure is 
similar.
---------------------------------------------------------------------------

    \34\ One survey of 146 banks reported that 10.3 percent of 
respondent banks did not ``initiate electronic funds transfers 
(wires or IAT) for consumers in the U.S. to persons or entities 
outside the U.S.'' Another survey of 277 banks found that 6.9 
percent of bank respondents did not send international fund 
transfers on behalf of consumers. In its comment letter, the same 
trade association stated that 68 percent of community banks offer 
international funds transfers to consumers and cited to a survey 
with 713 respondents (implying that 32 percent of banks do not offer 
international funds transfers).
---------------------------------------------------------------------------

    Apart from insured depository institutions and credit unions, the 
Bureau believes that most of the other small entities affected by this 
rule are state-licensed money transmitters. In comment to the February 
Final Rule, one trade association estimated that there are about 500 
state-licensed money transmitters. In an analysis performed in 
connection with the February Final Rule, the Bureau estimated that 350 
of these 500 state-licensed money transmitters had $7 million or less 
in total revenues and therefore would be considered small entities 
under the Small Business Administration's small business size 
standards.\35\
---------------------------------------------------------------------------

    \35\ Regulatory data received from New York shows that 55 
percent of money transmitters licensed in that state had $7 million 
or less in revenue in 2011. Applying that percentage to the figure 
of 500 state-licensed money transmitters would result in an estimate 
of 275 small entity money transmitters. However, absent further 
information, the Bureau does not believe that it can extrapolate 
from the New York data to the entire money transmitter market.
---------------------------------------------------------------------------

    As discussed below, the Bureau expects that many small entities 
will likely benefit from the additional clarity provided by the safe 
harbor. The small entities directly affected by other aspects of the 
final rule are those entities that are required to comply with subpart 
B of Regulation E and either (i) Provide remittance transfers scheduled 
at least five business days before the date of the transfer; (ii) 
provide preauthorized remittance transfers; or (iii) provide remittance 
transfers scheduled three or more business days

[[Page 50280]]

before the date of the transfer as well as remittance transfers 
scheduled fewer than three business days before the date of the 
transfer.

B. Normal Course of Business

    Comment 30(f)-2 to the February Final Rule states that whether a 
person provides remittance transfers in the normal course of business 
depends on the facts and circumstances, including the total number and 
frequency of remittance transfers sent by the provider. The final rule 
provides a new safe harbor clarifying when a person does not provide 
remittance transfers in the normal course of business for purposes of 
determining whether a person is a ``remittance transfer provider.'' The 
final rule states that if a person provided 100 or fewer remittance 
transfers in the previous calendar year, and provides 100 or fewer 
remittance transfers in the current calendar year, then the person is 
deemed not to be providing remittance transfers for a consumer in the 
normal course of its business. For a person that crosses the 100-
transaction threshold, and is providing remittance transfers for 
consumers in the normal course of its business, the final rule permits 
a reasonable period of time, not to exceed six months, to begin 
complying with subpart B of Regulation E. For such a person, compliance 
with subpart B of Regulation E will be required at the end of the 
``reasonable period of time'' unless, based on the facts and 
circumstances, such a person is not a remittance transfer provider.
    The Bureau expects that persons who believe they qualify for the 
safe harbor will endeavor to track the number of remittance transfers 
that they send each year. Though there may be a cost associated with 
tracking the number of remittance transfers provided, persons elect to 
incur it at their option. Persons qualifying for the safe harbor will 
be relieved of uncertainty and legal risk regarding whether they 
provide remittance transfers in the normal course of business. 
Furthermore, persons who formerly qualified for the safe harbor, but 
then provide more than 100 remittance transfers in a year, will benefit 
from the final rule's transition period. Therefore, the final rule may 
only decrease compliance costs relative to the baseline established by 
the February Final Rule.
    As discussed above, the Bureau is unable to state definitively the 
number of small entities that would benefit from the additional 
certainty provided by the safe harbor and the benefits of the 
transition period. The Bureau received limited survey results and data 
from several sources describing the number of remittance transfers or 
similar transactions (which may include remittance transfers) provided 
by individual depository institutions, credit unions, and state-
licensed money transmitters. This information suggests that a 
meaningful number of depository institutions and credit unions will 
likely qualify for the safe harbor. Furthermore, for depository 
institutions and credit unions that provide remittance transfers, these 
sources also suggest a generally positive relationship between asset 
size and remittance transfer counts, suggesting that small entity 
institutions are more likely to qualify for the safe harbor than larger 
institutions.
    In addition to data regarding depository institutions and credit 
unions, the Bureau obtained some information from state regulators in 
California, New York, and Ohio regarding entities licensed as money 
transmitters in those states. These data generally tracked transactions 
that are money transmissions under each state's law, which generally 
include remittance transfers, as defined in subpart B of Regulation E, 
but may not include all such remittance transfers, and may include a 
number of other types of transactions that are not remittance transfers 
under subpart B of Regulation E. Nevertheless, these data, combined 
with the Bureau's research regarding the business models of covered 
companies, suggest that few state-licensed money transmitters would 
qualify for the safe harbor. Therefore, the additional clarity provided 
by the safe harbor would likely represent little, if any, change 
relative to the February Final Rule for small entity state-licensed 
money transmitters.\36\
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    \36\ Although the Bureau does not have access to data regarding 
other types of entities that potentially provide remittance 
transfers, those entities could only benefit from the clarity 
provided by the safe harbor and the reduction in compliance costs 
associated with the transition period.
---------------------------------------------------------------------------

C. Estimates and Disclosure Requirements

    In the final rule, Sec.  1005.32(b)(2) permits providers to 
estimate certain information in pre-payment disclosures and certain 
receipts provided for remittance transfers scheduled by a sender five 
or more business days before the date of the transfer, including 
preauthorized remittance transfers. If a remittance transfer provider 
chooses to give estimated disclosures pursuant to Sec.  1005.32(b)(2), 
the final rule also requires that it provide a receipt with accurate 
figures (unless a statutory exception permitting the use of estimates 
applies).
    This provision for estimates only affects remittance transfer 
providers that offer consumers the option to schedule remittance 
transfers five or more business days before the date of the transfer. 
As discussed above in the Section 1022 Analysis, these providers are 
relieved of the potential burden associated with disclosing accurate 
exchange rates five or more business days before the date of the 
transfer.
    Remittance transfer providers choosing to employ this exception for 
estimates will potentially incur additional costs associated with 
providing an additional receipt with accurate figures to consumers in 
connection with one-time transfers and the first in a series of 
preauthorized remittance transfers. However, remittance transfer 
providers retain the option of complying with the February Final Rule 
and providing accurate pre-payment disclosures and receipts (and thus 
not providing a second receipt) for every transfer. Therefore, 
remittance transfer providers, including small entity providers, should 
only benefit and not incur any additional costs from this change.

D. Disclosure Rules for Subsequent Preauthorized Remittance Transfers

    The final rule eliminates the requirement that remittance transfer 
providers mail or deliver pre-payment disclosures within a reasonable 
time prior to the date of each subsequent preauthorized remittance 
transfer. Instead, the final rule requires a receipt be provided to the 
consumer within a reasonable time prior to the date of the next 
preauthorized remittance transfer only if certain figures (generally 
those that are not estimates or based on estimates) on the receipt 
provided with respect to the first in that series of preauthorized 
remittance transfers change (or the figures disclosed from a prior 
updated receipt change, if one was previously provided). This receipt 
must disclose the changed terms, among the other disclosures required 
by Sec.  1005.31(b)(2).\37\ This additional flexibility will benefit 
providers, including small entity providers. With respect to these pre-
payment disclosures, providers will no longer incur the costs 
associated with providing these disclosures or compliance risk arising 
from uncertainty surrounding the interpretation of ``reasonable time.'' 
When certain figures change, providers will still incur some cost 
associated with providing a receipt displaying

[[Page 50281]]

these figures a reasonable time prior to the subsequent transfer. 
However, it is expected that an obligation to provide updated receipts 
will occur less frequently than the requirement in the February Final 
Rule to provide pre-payment disclosures before every subsequent 
preauthorized transfer.
---------------------------------------------------------------------------

    \37\ It may contain estimates as permitted by Sec.  
1005.32(b)(2).
---------------------------------------------------------------------------

E. Cancellation Period and Disclosures

    The final rule requires that remittance transfer providers disclose 
the date of the transfer on receipts given in association with any 
transfer scheduled at least three business days before the date of the 
transfer, as well as the first transfer in a series of preauthorized 
remittance transfers. Also, the final rule requires, in conjunction 
with certain disclosures related to initial transfers in series of 
preauthorized transfers, disclosures of the date of transfer regarding 
any subsequent preauthorized transfer in that series for which the date 
of the transfer is four or fewer business days after the date payment 
is made for that transfer. To comply with this new requirement, 
remittance transfer providers must program systems to disclose the date 
of the transfer on receipts for certain transfers. This may constitute 
an additional cost to remittance transfer providers if they do not 
already include this information on their receipts. The Bureau lacks 
specific information regarding the additional burden imposed on 
remittance transfer providers by this provision, but believes it to be 
modest given that it involves a slight modification of a disclosure 
already required by the February Final Rule to include information 
already maintained by the provider. For those remittance transfer 
providers producing receipts electronically, this will likely involve a 
one-time programming change to information technology systems.
    The additional requirement in the final rule that providers 
disclose the date of the transfer, as well as cancellation requirements 
and the provider's contact information, within a certain period before 
each subsequent preauthorized remittance transfer scheduled five or 
more business days before the date of the transfer represents an 
additional cost to remittance transfer providers that do not already 
disclose this information. Among other options, providers may include 
this information in an existing statement or disclosure, or in a single 
notice covering multiple transfers that is provided up to a year before 
the date of the transfer.\38\ The Bureau believes that modifying 
existing statements or disclosures to include information already 
maintained by the remittance transfer provider likely represents a 
modest, one-time programming cost for those remittance transfer 
providers generating statements or disclosures electronically. 
Furthermore, the rule permits providers flexibility to disclose the 
required information in any number of ways. Thus, providers may be able 
to choose the least expensive among several disclosure options.
---------------------------------------------------------------------------

    \38\ This flexibility does not extend to subsequent 
preauthorized remittance transfers scheduled four or fewer business 
days after the date payment is made for that transfer.
---------------------------------------------------------------------------

    The final rule also states that remittance transfer providers may 
describe both the three-business-day and 30-minute cancellation periods 
on one receipt, provided they either describe the remittance transfers 
to which each period applies, or alternatively, use a checkbox or some 
other method to designate which cancellation period is applicable to 
the transfer.\39\ This permits the use of one standardized form, though 
each receipt would need to be modified for the particular remittance 
transfer. This may result in reduced costs for those providers that 
offer both remittance transfers scheduled either three or more business 
days before the date of the transfer and closer to or on the date of 
the transfer, since providers otherwise are required by the February 
Final Rule to produce two types of receipts. This additional 
flexibility may benefit providers while not imposing any additional 
costs on them since they retain the option of complying with the 
requirements of the February Final Rule.
---------------------------------------------------------------------------

    \39\ Consumers scheduling remittance transfers at least three 
business days before the date of the transfer may cancel the 
remittance transfer up to three business days prior to the date of 
the transfer. Otherwise, consumers have 30 minutes from when they 
make payment to cancel.
---------------------------------------------------------------------------

    The Bureau did not receive specific information regarding the 
number of small entities that would be affected by these changes. As 
discussed above, the Bureau believes that a meaningful number of small 
insured depository institutions and credit unions will qualify for the 
safe harbor in the final rule, and thus are not remittance transfer 
providers and are not required to comply with subpart B of Regulation 
E. The Bureau additionally believes that, though few state-licensed 
money transmitters are likely to qualify for the safe harbor in the 
final rule, very few small state-licensed money transmitters offer 
consumers preauthorized remittance transfers or the ability to schedule 
remittance transfers to be sent at some later date. Therefore, the 
Bureau believes that provisions relating to preauthorized or 
prescheduled transfers are not likely to have a significant economic 
impact on a substantial number of small entities.

F. Cost of Credit for Small Entities

    The final rule does not apply to credit transactions or to 
commercial remittances. Therefore, the Bureau does not expect the final 
rule to increase the cost of credit for small businesses. With a few 
exceptions, the final rule generally does not change or lowers the cost 
of compliance for depositories and credit unions, many of which offer 
small business credit. Any effect of this rule on small business 
credit, however, would be highly attenuated. The final rule also 
generally does not change or lowers the cost of compliance for money 
transmitters. Money transmitters typically do not extend credit to any 
entity, including small businesses.

G. Certification

    Accordingly, the undersigned certifies that this rule will not have 
a significant economic impact on a substantial number of small 
entities.

VIII. Paperwork Reduction Act

    The Bureau's information collection requirements contained in this 
final rule have been submitted to and approved by the Office of 
Management and Budget (OMB) in accordance with the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). This collection of 
information was submitted to OMB as an amendment to the previously 
approved collection for the Electronic Fund Transfer Act (Regulation E) 
12 CFR part 1005 under OMB control number 3170-0014. Under the 
Paperwork Reduction Act (PRA), an agency may not conduct or sponsor, 
and a person is not required to respond to, an information collection 
unless the information collection displays a valid OMB control number.
    The information collection requirements in this final rule are in 
12 CFR part 1005. This information collection is required to provide 
benefits for consumers and is mandatory. See 15 U.S.C. 1693, et seq. 
The likely respondents are remittance transfer providers, including 
small businesses. This information collection is required to provide 
disclosures and receipts to consumers in the United States who, 
primarily for personal, family, or household purposes, request 
remittance transfer providers to send remittance transfers to 
designated recipients, to be received in a foreign country. The 
disclosures provide pricing information and information regarding 
cancellation and error resolution rights. This information may be used 
by consumers

[[Page 50282]]

for budgeting and shopping purposes and by consumers and Federal 
agencies to determine when violations of the underlying rules and 
statute have occurred.
    The Bureau estimates that the frequency of response to the 
collection of information in the final rule will be on-occasion. The 
Bureau estimates that the total one-time burden for all 10,689 
respondents potentially affected by the final rule to comply with 
Regulation E decreases by 914,311 hours as a result of the final rule, 
and the total ongoing annual burden decreases by 532,784 hours.\40\ 
This decrease in total burden is largely, but not exclusively, 
attributable to respondents who will decide not to comply with subpart 
B of Regulation E due to the safe harbor provided for in the final 
rule.\41\ Although the Bureau does not have precise information 
regarding the number of entities qualifying for the safe harbor, the 
information obtained in this rulemaking suggests that a meaningful 
number of insured depositories and credit unions may qualify. For 
purposes of this PRA analysis, the Bureau has assumed that all 
respondents availing themselves of the safe harbor are non-Bureau 
respondents, since the Bureau estimates that larger depository 
institutions and credit unions (in terms of asset size) are less likely 
to qualify for the safe harbor. Other Federal agencies, including the 
Federal Trade Commission, are responsible for estimating and reporting 
to OMB the paperwork burden for the institutions for which they have 
administrative enforcement authority. They may, but are not required 
to, use the Bureau's burden estimation methodology.
---------------------------------------------------------------------------

    \40\ The decrease in respondents relative to the PRA analysis 
for the February Final Rule reflects a revision by the Bureau of the 
estimate of the number of non-Bureau depository institutions and 
credit unions offering remittance transfers relative to the number 
reported in the February Final Rule. The Bureau previously estimated 
that approximately 11,000 insured depositories and credit unions not 
supervised by the Bureau provide remittance transfers. The Bureau 
now believes that that number may be closer to 10,000. The decrease 
in burden relative to what was previously reported from this 
revision is not included in the change in burden reported here. 
However, the revised entity counts are used for the purpose of 
calculating other changes in burden arising from the final rule. 
This number also assumes that 500 money transmitters, and not their 
agents, are respondents.
    \41\ The Bureau previously made the conservative assumption in 
the PRA analysis for the February Final Rule that no respondent 
would choose not to comply with subpart B of Regulation E. By 
increasing certainty as to whether a remittance transfer provider 
does not provide remittance transfers in the normal course of 
business, the Bureau anticipates that the final rule's safe harbor 
will increase the number of respondents that take advantage of the 
normal course of business exclusion and therefore decide to not 
comply with subpart B.
---------------------------------------------------------------------------

    Despite this overall reduction, the Bureau estimates that one-time 
burden for Bureau respondents increases slightly.\42\ For the 154 large 
depository institutions and credit unions (including their depository 
affiliates) considered to be Bureau respondents for the purposes of 
this PRA analysis, the Bureau estimates that the final rule increases 
one-time burden by 809 hours and has no impact on ongoing burden. For 
the 500 non-depository money transmitters for which the Bureau has 
administrative enforcement authority for the purposes of the PRA, the 
rule increases one-time burden by 1,313 hours and has no impact on 
ongoing burden.\43\
---------------------------------------------------------------------------

    \42\ The Bureau's estimates of burden and respondents have 
changed from the February Proposal due to modifications to the 
Bureau's estimation methodology. Specifically, this PRA analysis 
reduces certain burdens in instances where disclosures are no longer 
required. The Bureau also assumes that no ongoing burden is 
associated with the modification of an existing disclosure. 
Additionally, burden attributed to reading the final rule is 
included. With respect to Bureau respondents, the Bureau further 
assumes that money transmitters, and not their agents, incur the 
burden associated with the provisions in this rulemaking, which 
generally involve the modification of existing disclosures.
    \43\ The Bureau and the Federal Trade Commission generally both 
have enforcement authority over non-depository institutions subject 
to Regulation E. Accordingly, the Bureau has allocated to itself 
half of the total estimated 2,626 burden hours incurred by non-
depository money transmitters subject to the final rule.
---------------------------------------------------------------------------

    In conjunction with the February Proposal, the Bureau received 
comments on the merits of various aspects of the final rule, including 
the burden of compliance generally, the relative burden of providing 
actual exchange rates and estimates, whether or how information 
regarding cancellation periods should be disclosed, estimates of the 
number of institutions affected by the safe harbor, and whether 
particular disclosure forms should be required. These comments relate 
to core issues in the February Proposal and the Bureau's consideration 
of these comments is discussed above. The Bureau received no comments 
specifically addressing the Bureau's proposed PRA burden estimates or 
numbers of Bureau respondents.

List of Subjects in 12 CFR Part 1005

    Banking, Banks, Consumer protection, Credit unions, Electronic fund 
transfers, National banks, Remittance transfers, Reporting and 
recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons stated in the preamble, the Bureau of Consumer 
Financial Protection amends 12 CFR part 1005 as set forth below:

PART 1005--ELECTRONIC FUND TRANSFERS (REGULATION E)

0
1. The authority citation for part 1005 is revised to read as follows:

    Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1693b.
    Subpart B is also issued under 12 U.S.C. 5601.

Subpart B--Requirements for Remittance Transfers

0
2. Amend Sec.  1005.30 to revise paragraph (f) to read as follows:

Sec.  1005.30  Remittance transfer definitions.

* * * * *
    (f) Remittance transfer provider--(1) General definition. 
``Remittance transfer provider'' or ``provider'' means any person that 
provides remittance transfers for a consumer in the normal course of 
its business, regardless of whether the consumer holds an account with 
such person.
    (2) Normal course of business--(i) Safe harbor. For purposes of 
paragraph (f)(1) of this section, a person is deemed not to be 
providing remittance transfers for a consumer in the normal course of 
its business if the person:
    (A) Provided 100 or fewer remittance transfers in the previous 
calendar year; and
    (B) Provides 100 or fewer remittance transfers in the current 
calendar year.
    (ii) Transition period. If a person that provided 100 or fewer 
remittance transfers in the previous calendar year provides more than 
100 remittance transfers in the current calendar year, and if that 
person is then providing remittance transfers for a consumer in the 
normal course of its business pursuant to paragraph (f)(1) of this 
section, the person has a reasonable period of time, not to exceed six 
months, to begin complying with this subpart. Compliance with this 
subpart will not be required for any remittance transfers for which 
payment is made during that reasonable period of time.
* * * * *

0
3. Amend Sec.  1005.31 to revise paragraphs (a)(3)(ii), (a)(3)(iii), 
(a)(5)(ii), (a)(5)(iii), (b)(2)(v), (b)(2)(vi), and (b)(3); and add 
paragraphs (a)(3)(iv), (a)(5)(iv), and (b)(2)(vii) to read as follows:

Sec.  1005.31  Disclosures.

    (a) * * *
    (3) * * *

[[Page 50283]]

    (ii) The remittance transfer provider complies with the 
requirements of paragraph (g)(2) of this section;
    (iii) The provider discloses orally a statement about the rights of 
the sender regarding cancellation required by paragraph (b)(2)(iv) of 
this section pursuant to the timing requirements in paragraph (e)(1) of 
this section; and
    (iv) The provider discloses orally, as each is applicable, the 
information required by paragraph (b)(2)(vii) of this section and the 
information required by Sec.  1005.36(d)(1)(i)(A), with respect to 
transfers subject to Sec.  1005.36(d)(2)(ii), pursuant to the timing 
requirements in paragraph (e)(1) of this section.
* * * * *
    (5) * * *
    (ii) The remittance transfer provider complies with the 
requirements of paragraph (g)(2) of this section;
    (iii) The provider discloses orally or via mobile application or 
text message a statement about the rights of the sender regarding 
cancellation required by paragraph (b)(2)(iv) of this section pursuant 
to the timing requirements in paragraph (e)(1) of this section; and
    (iv) The provider discloses orally or via mobile application or 
text message, as each is applicable, the information required by 
paragraph (b)(2)(vii) of this section and the information required by 
Sec.  1005.36(d)(1)(i)(A), with respect to transfers subject to Sec.  
1005.36(d)(2)(ii), pursuant to the timing requirements in paragraph 
(e)(1) of this section.
* * * * *
    (b) * * *
    (2) * * *
    (v) The name, telephone number(s), and Web site of the remittance 
transfer provider;
    (vi) A statement that the sender can contact the State agency that 
licenses or charters the remittance transfer provider with respect to 
the remittance transfer and the Consumer Financial Protection Bureau 
for questions or complaints about the remittance transfer provider, 
using language set forth in Model Form A-37 of Appendix A to this part 
or substantially similar language. The disclosure must provide the 
name, telephone number(s), and Web site of the State agency that 
licenses or charters the remittance transfer provider with respect to 
the remittance transfer and the name, toll-free telephone number(s), 
and Web site of the Consumer Financial Protection Bureau; and
    (vii) For any remittance transfer scheduled by the sender at least 
three business days before the date of the transfer, or the first 
transfer in a series of preauthorized remittance transfers, the date 
the remittance transfer provider will make or made the remittance 
transfer, using the term ``Transfer Date,'' or a substantially similar 
term.
    (3) Combined disclosure--(i) In general. As an alternative to 
providing the disclosures described in paragraph (b)(1) and (2) of this 
section, a remittance transfer provider may provide the disclosures 
described in paragraph (b)(2) of this section, as applicable, in a 
single disclosure pursuant to the timing requirements in paragraph 
(e)(1) of this section. Except as provided in paragraph (b)(3)(ii) of 
this section, if the remittance transfer provider provides the combined 
disclosure and the sender completes the transfer, the remittance 
transfer provider must provide the sender with proof of payment when 
payment is made for the remittance transfer. The proof of payment must 
be clear and conspicuous, provided in writing or electronically, and 
provided in a retainable form.
    (ii) Transfers scheduled before the date of transfer. If the 
disclosure described in paragraph (b)(3)(i) of this section is provided 
in accordance with Sec.  1005.36(a)(1)(i) and payment is not processed 
by the remittance transfer provider at the time the remittance transfer 
is scheduled, a remittance transfer provider may provide confirmation 
that the transaction has been scheduled in lieu of the proof of payment 
otherwise required by paragraph (b)(3)(i) of this section. The 
confirmation of scheduling must be clear and conspicuous, provided in 
writing or electronically, and provided in a retainable form.
* * * * *

0
4. Amend Sec.  1005.32 to revise paragraph (b) and the introductory 
text of paragraph (c), and to add paragraph (d) to read as follows:

Sec.  1005.32  Estimates.

* * * * *
    (b) Permanent exceptions--(1) Permanent exception for transfers to 
certain countries.
    (i) General. For disclosures described in Sec. Sec.  1005.31(b)(1) 
through (b)(3) and 1005.36(a)(1) and (a)(2), estimates may be provided 
for transfers to certain countries in accordance with paragraph (c) of 
this section for the amounts required to be disclosed under Sec.  
1005.31(b)(1)(iv) through (b)(1)(vii), if a remittance transfer 
provider cannot determine the exact amounts when the disclosure is 
required because:
    (A) The laws of the recipient country do not permit such a 
determination, or
    (B) The method by which transactions are made in the recipient 
country does not permit such determination.
    (ii) Safe harbor. A remittance transfer provider may rely on the 
list of countries published by the Bureau to determine whether 
estimates may be provided under paragraph (b)(1) of this section, 
unless the provider has information that a country's laws or the method 
by which transactions are conducted in that country permits a 
determination of the exact disclosure amount.
    (2) Permanent exception for transfers scheduled before the date of 
transfer. (i) Except as provided in paragraph (b)(2)(ii) of this 
section, for disclosures described in Sec. Sec.  1005.36(a)(1)(i) and 
(a)(2)(i), estimates may be provided in accordance with paragraph (d) 
of this section for the amounts to be disclosed under Sec. Sec.  
1005.31(b)(1)(iv) through (vii) if the remittance transfer is scheduled 
by a sender five or more business days before the date of the transfer. 
In addition, if, at the time the sender schedules such a transfer, the 
provider agrees to a sender's request to fix the amount to be 
transferred in the currency in which the remittance transfer will be 
received and not the currency in which it is funded, estimates may also 
be provided for the amounts to be disclosed under Sec. Sec.  
1005.31(b)(1)(i) through (iii), except as provided in paragraph 
(b)(2)(iii) of this section.
    (ii) Fees and taxes described in Sec.  1005.31(b)(1)(vi) may be 
estimated under paragraph (b)(2)(i) of this section only if the 
exchange rate is also estimated under paragraph (b)(2)(i) and the 
estimated exchange rate affects the amount of such fees and taxes.
    (iii) Fees and taxes described in Sec.  1005.31(b)(1)(ii) may be 
estimated under paragraph (b)(2)(i) of this section only if the amount 
that will be transferred in the currency in which it is funded is also 
estimated under paragraph (b)(2)(i) of this section, and the estimated 
amount affects the amount of such fees and taxes.
    (c) Bases for estimates generally. Estimates provided pursuant to 
the exceptions in paragraph (a) or (b)(1) of this section must be based 
on the below-listed approach or approaches, except as otherwise 
permitted by this paragraph. If a remittance transfer provider bases an 
estimate on an approach that is not listed in this paragraph, the 
provider is deemed to be in compliance with this paragraph so long as 
the designated recipient receives the same, or greater, amount of funds 
than the remittance transfer provider disclosed under Sec.  
1005.31(b)(1)(vii).
* * * * *
    (d) Bases for estimates for transfers scheduled before the date of 
transfer.

[[Page 50284]]

Estimates provided pursuant to paragraph (b)(2) of this section must be 
based on the exchange rate or, where applicable, the estimated exchange 
rate based on an estimation methodology permitted under paragraph (c) 
of this section that the provider would have used or did use that day 
in providing disclosures to a sender requesting such a remittance 
transfer to be made on the same day. If, in accordance with this 
paragraph, a remittance transfer provider uses a basis described in 
paragraph (c) of this section but not listed in paragraph (c)(1) of 
this section, the provider is deemed to be in compliance with this 
paragraph regardless of the amount received by the designated 
recipient, so long as the estimation methodology is the same that the 
provider would have used or did use in providing disclosures to a 
sender requesting such a remittance transfer to be made on the same 
day.

0
5. Amend Sec.  1005.33 to revise paragraph (a)(1)(i) to read as 
follows:

Sec.  1005.33  Procedures for resolving errors.

    (a) * * *
    (1) * * *
    (i) An incorrect amount paid by a sender in connection with a 
remittance transfer unless the disclosure stated an estimate of the 
amount paid by a sender in accordance with Sec.  1005.32(b)(2) and the 
difference results from application of the actual exchange rate, fees, 
and taxes, rather than any estimated amount;
* * * * *

0
6. Amend Sec.  1005.36 to revise the section heading and paragraphs (a) 
and (b), and to add paragraph (d) to read as follows:

Sec.  1005.36  Transfers scheduled before the date of transfer.

    (a) Timing. (1) For a one-time transfer scheduled five or more 
business days before the date of transfer or for the first in a series 
of preauthorized remittance transfers, the remittance transfer provider 
must:
    (i) Provide either the pre-payment disclosure described in Sec.  
1005.31(b)(1) and the receipt described in Sec.  1005.31(b)(2) or the 
combined disclosure described in Sec.  1005.31(b)(3), in accordance 
with the timing requirements set forth in Sec.  1005.31(e); and
    (ii) If any of the disclosures provided pursuant to paragraph 
(a)(1)(i) of this section contain estimates as permitted by Sec.  
1005.32(b)(2), mail or deliver to the sender an additional receipt 
meeting the requirements described in Sec.  1005.31(b)(2) no later than 
one business day after the date of the transfer. If the transfer 
involves the transfer of funds from the sender's account held by the 
provider, the receipt required by this paragraph may be provided on or 
with the next periodic statement for that account, or within 30 days 
after the date of the transfer if a periodic statement is not provided.
    (2) For each subsequent preauthorized remittance transfer:
    (i) If any of the information on the most recent receipt provided 
pursuant to paragraph (a)(1)(i) of this section, or by this paragraph 
(a)(2)(i), other than the temporal disclosures required by Sec.  
1005.31(b)(2)(ii) and (b)(2)(vii), is no longer accurate with respect 
to a subsequent preauthorized remittance transfer for reasons other 
than as permitted by Sec.  1005.32, then the remittance transfer 
provider must provide an updated receipt meeting the requirements 
described in Sec.  1005.31(b)(2) to the sender. The provider must mail 
or deliver this receipt to the sender within a reasonable time prior to 
the scheduled date of the next subsequent preauthorized remittance 
transfer. Such receipt must clearly and conspicuously indicate that it 
contains updated disclosures.
    (ii) Unless a receipt was provided in accordance with paragraph 
(a)(2)(i) of this section that contained no estimates pursuant to Sec.  
1005.32, the remittance transfer provider must mail or deliver to the 
sender a receipt meeting the requirements described in Sec.  
1005.31(b)(2) no later than one business day after the date of the 
transfer. If the remittance transfer involves the transfer of funds 
from the sender's account held by the provider, the receipt required by 
this paragraph may be provided on or with the next periodic statement 
for that account, or within 30 days after the date of the transfer if a 
periodic statement is not provided.
    (iii) A remittance transfer provider must provide the disclosures 
required by paragraph (d) of this section in accordance with the timing 
requirements of that section.
    (b) Accuracy. (1) For a one-time transfer scheduled five or more 
business days in advance or for the first in a series of preauthorized 
remittance transfers, disclosures provided pursuant to paragraph 
(a)(1)(i) of this section must comply with Sec.  1005.31(f) by being 
accurate when a sender makes payment except to the extent estimates are 
permitted by Sec.  1005.32.
    (2) For each subsequent preauthorized remittance transfer, the most 
recent receipt provided pursuant to paragraph (a)(1)(i) or (a)(2)(i) of 
this section must be accurate as of when such transfer is made, except:
    (i) The temporal elements required by Sec.  1005.31(b)(2)(ii) and 
(b)(2)(vii) must be accurate only if the transfer is the first transfer 
to occur after the disclosure was provided; and
    (ii) To the extent estimates are permitted by Sec.  1005.32.
    (3) Disclosures provided pursuant to paragraph (a)(1)(ii) or 
(a)(2)(ii) of this section must be accurate as of when the remittance 
transfer to which it pertains is made, except to the extent estimates 
are permitted by Sec.  1005.32(a) or (b)(1).
* * * * *
    (d) Additional requirements for subsequent preauthorized remittance 
transfers--(1) Disclosure requirement. (i) For any subsequent transfer 
in a series of preauthorized remittance transfers, the remittance 
transfer provider must disclose to the sender:
    (A) The date the provider will make the subsequent transfer, using 
the term ``Future Transfer Date,'' or a substantially similar term;
    (B) A statement about the rights of the sender regarding 
cancellation as described in Sec.  1005.31(b)(2)(iv); and
    (C) The name, telephone number(s), and Web site of the remittance 
transfer provider.
    (ii) If the future date or dates of transfer are described as 
occurring in regular periodic intervals, e.g., the 15th of every month, 
rather than as a specific calendar date or dates, the remittance 
transfer provider must disclose any future date or dates of transfer 
that do not conform to the described interval.
    (2) Notice requirements. (i) Except as described in paragraph 
(d)(2)(ii) of this section, the disclosures required by paragraph 
(d)(1) of this section must be received by the sender no more than 12 
months, and no less than five business days prior to the date of any 
subsequent transfer to which it pertains. The disclosures required by 
paragraph (d)(1) of this section may be provided in a separate 
disclosure or may be provided on one or more disclosures required by 
this subpart related to the same series of preauthorized transfers, so 
long as the consumer receives the required information for each 
subsequent preauthorized remittance transfer in accordance with the 
timing requirements of this paragraph (d)(2)(i).
    (ii) For any subsequent preauthorized remittance transfer for which 
the date of transfer is four or fewer business days after the date 
payment is made for that transfer, the information required by 
paragraph (d)(1) of this section must be provided on or with the 
receipt described in Sec.  1005.31(b)(2), or disclosed as permitted by 
Sec.  1005.31(a)(3) or (a)(5), for the initial

[[Page 50285]]

transfer in that series in accordance with paragraph (a)(1)(i) of this 
section.
    (3) Specific format requirement. The information required by 
paragraph (d)(1)(i)(A) of this section generally must be disclosed in 
close proximity to the other information required by paragraph 
(d)(1)(i)(B) of this section.
    (4) Accuracy. Any disclosure required by paragraph (d)(1) of this 
section must be accurate as of the date the preauthorized remittance 
transfer to which it pertains is made.

0
7. In Supplement I to part 1005:
0
a. Under Section 1005.30, amend comment 30(f) by revising paragraph 2;
0
b. Under Section 1005.31, comment 31(b), amend paragraph 31(b)(2) by 
adding paragraphs 4 through 6;
0
c. Under Section 1005.31, comment 31(b), amend paragraph 31(b)(3) by 
adding paragraph 2;
0
d. Under Section 1005.32, revise paragraph 1;
0
e. Under Section 1005.32, revise comment 32(b);
0
f. Under Section 1005.32, comment 32(c), amend paragraph (c)(1) by 
revising paragraph 1;
0
g. Under Section 1005.32, add new comment 32(d); and
0
h. Under Section 1005.36, add comments 36(a), 36(b) and 36(d).
    The additions and revisions read as follows:

Supplement I to Part 1005--Official Interpretations

* * * * *

Section 1005.30--Remittance Transfer Definitions

* * * * *

30(f) Remittance Transfer Provider

* * * * *
    2. Normal course of business. i. General. Whether a person 
provides remittance transfers in the normal course of business 
depends on the facts and circumstances, including the total number 
and frequency of remittance transfers sent by the provider. For 
example, if a financial institution generally does not make 
remittance transfers available to customers, but sends a couple of 
such transfers in a given year as an accommodation for a customer, 
the institution does not provide remittance transfers in the normal 
course of business. In contrast, if a financial institution makes 
remittance transfers generally available to customers (whether 
described in the institution's deposit account agreement, or in 
practice) and makes transfers many times per month, the institution 
provides remittance transfers in the normal course of business.
    ii. Safe harbor. Under Sec.  1005.30(f)(2)(i), a person that 
provided 100 or fewer remittance transfers in the previous calendar 
year and provides 100 or fewer remittance transfers in the current 
calendar year is deemed not to be providing remittance transfers in 
the normal course of its business. Accordingly, a person that 
qualifies for the safe harbor in Sec.  1005.30(f)(2)(i) is not a 
``remittance transfer provider'' and is not subject to the 
requirements of subpart B. For purposes of determining whether a 
person qualifies for the safe harbor under Sec.  1005.30(f)(2)(i), 
the number of remittance transfers provided includes any transfers 
excluded from the definition of ``remittance transfer'' due simply 
to the safe harbor. In contrast, the number of remittance transfers 
provided does not include any transfers that are excluded from the 
definition of ``remittance transfer'' for reasons other than the 
safe harbor, such as small value transactions or securities and 
commodities transfers that are excluded from the definition of 
``remittance transfer'' by Sec.  1005.30(e)(2).
    iii. Transition period. A person may cease to satisfy the 
requirements of the safe harbor described in Sec.  1005.30(f)(2)(i) 
if the person provides in excess of 100 remittance transfers in a 
calendar year. For example, if a person that provided 100 or fewer 
remittance transfers in the previous calendar year provides more 
than 100 remittance transfers in the current calendar year, the safe 
harbor applies to the first 100 remittance transfers that the person 
provides in the current calendar year. For any additional remittance 
transfers provided in the current calendar year and for any 
remittance transfers provided in the subsequent calendar year, 
whether the person provides remittance transfers for a consumer in 
the normal course of its business, as defined in Sec.  
1005.30(f)(1), and is thus a remittance transfer provider for those 
additional transfers, depends on the facts and circumstances. 
Section 1005.30(f)(2)(ii) provides a reasonable period of time, not 
to exceed six months, for such a person to begin complying with 
subpart B, if that person is then providing remittance transfers in 
the normal course of its business. At the end of that reasonable 
period of time, such person would be required to comply with subpart 
B unless, based on the facts and circumstances, the person is not a 
remittance transfer provider.
    iv. Example of safe harbor and transition period. Assume that a 
person provided 90 remittance transfers in 2012 and 90 such 
transfers in 2013. The safe harbor will apply to the person's 
transfers in 2013, as well as the person's first 100 remittance 
transfers in 2014. However, if the person provides a 101st transfer 
on September 5, the facts and circumstances determine whether the 
person provides remittance transfers in the normal course of 
business and is thus a remittance transfer provider for the 101st 
and any subsequent remittance transfers that it provides in 2014. 
Furthermore, the person would not qualify for the safe harbor 
described in Sec.  1005.30(f)(2)(i) in 2015 because the person did 
not provide 100 or fewer remittance transfers in 2014. However, for 
the 101st remittance transfer provided in 2014, as well as 
additional remittance transfers provided thereafter in 2014 and 
2015, if that person is then providing remittance transfers for a 
consumer in the normal course of business, the person will have a 
reasonable period of time, not to exceed six months, to come into 
compliance with subpart B. Assume that in this case, a reasonable 
period of time is six months. Thus, compliance with subpart B is not 
required for remittance transfers made on or before March 5, 2015 
(i.e., six months after September 5, 2014). After March 5, 2015, the 
person is required to comply with subpart B if, based on the facts 
and circumstances, the person provides remittance transfers in the 
normal course of business and is thus a remittance transfer 
provider.
* * * * *

Section 1005.31--Disclosures

* * * * *

31(b) Disclosure Requirements.

* * * * *

31(b)(2) Receipt

* * * * *
    4. Date of transfer on receipt. Where applicable, Sec.  
1005.31(b)(2)(vii) requires disclosure of the date of transfer for 
the remittance transfer that is the subject of a receipt required by 
Sec.  1005.31(b)(2), including a receipt that is provided in 
accordance with the timing requirements in Sec.  1005.36(a). For any 
subsequent preauthorized remittance transfer subject to Sec.  
1005.36(d)(2)(ii), the future date of transfer must be provided on 
any receipt provided for the initial transfer in that series of 
preauthorized remittance transfers, or where permitted, or disclosed 
as permitted by Sec.  1005.31(a)(3) and (a)(5), in accordance with 
Sec.  1005.36(a)(1)(i).
    5. Transfer date disclosures. The following example demonstrates 
how the information required by Sec.  1005.31(b)(2)(vii) and Sec.  
1005.36(d)(1) should be disclosed on receipts: On July 1, a sender 
instructs the provider to send a preauthorized remittance transfer 
of US$100 each week to a designated recipient. The sender requests 
that first transfer in the series be sent on July 15. On the 
receipt, the remittance transfer provider discloses an estimated 
exchange rate to the sender pursuant to Sec.  1005.32(b)(2). In 
accordance with Sec.  1005.31(b)(2)(vii), the provider should 
disclose the date of transfer for that particular transaction (i.e., 
July 15) on the receipt provided when payment is made for the 
transfer pursuant to the timing requirements in Sec.  
1005.36(a)(1)(i). The second receipt, which Sec.  1005.36(a)(1)(ii) 
requires to be provided within one business day after the date of 
the transfer or, for transfers from the sender's account held by the 
provider, on the next regularly scheduled periodic statement or 
within 30 days after payment is made if a periodic statement is not 
provided, is also required to include the date of transfer. If the 
provider discloses on either receipt the cancellation period 
applicable to and dates of subsequent preauthorized remittance 
transfers in accordance with Sec.  1005.36(d)(2), the disclosure 
must be phrased and formatted in such a way that it is clear to the 
sender which cancellation period is applicable to any date of 
transfer on the receipt.
    6. Cancellation disclosure. Remittance transfer providers that 
offer remittance transfers scheduled three or more business days 
before the date of the transfer, as well as remittance transfers 
scheduled fewer than

[[Page 50286]]

three business days before the date of the transfer, may meet the 
cancellation disclosure requirements in Sec.  1005.31(b)(2)(iv) by 
describing the three-business-day and 30-minute cancellation periods 
on the same disclosure and using a checkbox or other method to 
clearly designate the applicable cancellation period. The provider 
may use a number of methods to indicate which cancellation period 
applies to the transaction including, but not limited to, a 
statement to that effect, use of a checkbox, highlighting, circling, 
and the like. For transfers scheduled three business days before the 
date of the transfer, the cancellation disclosures provided pursuant 
to Sec.  1005.31(b)(2)(iv) should be phrased and formatted in such a 
way that it is clear to the sender which cancellation period is 
applicable to the date of transfer disclosed on the receipt.
* * * * *

31(b)(3) Combined Disclosures

* * * * *
    2. Confirmation of scheduling. As discussed in comment 31(e)-2, 
payment is considered to be made when payment is authorized for 
purposes of various timing requirements in subpart B, including with 
regard to the timing requirement for provision of the proof of 
payment described in Sec.  1005.31(b)(3)(i). However, where a 
transfer (whether a one-time remittance transfer or the first in a 
series of preauthorized remittance transfers) is scheduled before 
the date of transfer and the provider does not intend to process 
payment until at or near the date of transfer, the provider may 
provide a confirmation of scheduling in lieu of the proof of payment 
required by Sec.  1005.31(b)(3)(i). No further proof of payment is 
required when payment is later processed.
* * * * *

Section 1005.32--Estimates

    1. Disclosures where estimates can be used. Sections 1005.32(a) 
and (b)(1) permit estimates to be used in certain circumstances for 
disclosures described in Sec. Sec.  1005.31(b)(1) through (3) and 
1005.36(a)(1) and(2). To the extent permitted in Sec.  1005.32(a) 
and (b)(1), estimates may be used in the pre-payment disclosure 
described in Sec.  1005.31(b)(1), the receipt disclosure described 
in Sec.  1005.31(b)(2), the combined disclosure described in Sec.  
1005.31(b)(3), and the pre-payment disclosures and receipt 
disclosures for both first and subsequent preauthorized remittance 
transfers described in Sec.  1005.36(a)(1) and (a)(2). Section 
1005.32(b)(2) permits estimates to be used for certain information 
if the remittance transfer is scheduled by a sender five or more 
business days before the date of the transfer, for disclosures 
described in Sec.  1005.36(a)(1)(i) and (a)(2)(i).
* * * * *

32(b) Permanent Exceptions

32(b)(1) Permanent Exceptions for Transfers to Certain Countries

    1. Laws of the recipient country. The laws of the recipient 
country do not permit a remittance transfer provider to determine 
exact amounts required to be disclosed when a law or regulation of 
the recipient country requires the person making funds directly 
available to the designated recipient to apply an exchange rate that 
is:
    i. Set by the government of the recipient country after the 
remittance transfer provider sends the remittance transfer or
    ii. Set when the designated recipient receives the funds.
    2. Example illustrating when exact amounts can and cannot be 
determined because of the laws of the recipient country.
    i. The laws of the recipient country do not permit a remittance 
transfer provider to determine the exact exchange rate required to 
be disclosed under Sec.  1005.31(b)(1)(iv) when, for example, the 
government of the recipient country, on a daily basis, sets the 
exchange rate that must, by law, apply to funds received and the 
funds are made available to the designated recipient in the local 
currency the day after the remittance transfer provider sends the 
remittance transfer.
    ii. In contrast, the laws of the recipient country permit a 
remittance transfer provider to determine the exact exchange rate 
required to be disclosed under Sec.  1005.31(b)(1)(iv) when, for 
example, the government of the recipient country ties the value of 
its currency to the U.S. dollar.
    3. Method by which transactions are made in the recipient 
country. The method by which transactions are made in the recipient 
country does not permit a remittance transfer provider to determine 
exact amounts required to be disclosed when transactions are sent 
via international ACH on terms negotiated between the United States 
government and the recipient country's government, under which the 
exchange rate is a rate set by the recipient country's central bank 
or other governmental authority after the provider sends the 
remittance transfer.
    4. Example illustrating when exact amounts can and cannot be 
determined because of the method by which transactions are made in 
the recipient country.
    i. The method by which transactions are made in the recipient 
country does not permit a remittance transfer provider to determine 
the exact exchange rate required to be disclosed under Sec.  
1005.31(b)(1)(iv) when the provider sends a remittance transfer via 
international ACH on terms negotiated between the United States 
government and the recipient country's government, under which the 
exchange rate is a rate set by the recipient country's central bank 
on the business day after the provider has sent the remittance 
transfer.
    ii. In contrast, a remittance transfer provider would not 
qualify for the Sec.  1005.32(b)(1)(i)(B) methods exception if it 
sends a remittance transfer via international ACH on terms 
negotiated between the United States government and a private-sector 
entity or entities in the recipient country, under which the 
exchange rate is set by the institution acting as the entry point to 
the recipient country's payments system on the next business day. 
However, a remittance transfer provider sending a remittance 
transfer using such a method may qualify for the Sec.  1005.32(a) 
temporary exception.
    iii. A remittance transfer provider would not qualify for the 
Sec.  1005.32(b)(1)(i)(B) methods exception if, for example, it 
sends a remittance transfer via international ACH on terms 
negotiated between the United States government and the recipient 
country's government, under which the exchange rate is set by the 
recipient country's central bank or other governmental authority 
before the sender requests a transfer.
    5. Safe harbor list. If a country is included on a safe harbor 
list published by the Bureau under Sec.  1005.32(b)(1)(ii), a 
remittance transfer provider may provide estimates of the amounts to 
be disclosed under Sec.  1005.31(b)(1)(iv) through (b)(1)(vii). If a 
country does not appear on the Bureau's list, a remittance transfer 
provider may provide estimates under Sec.  1005.32(b)(1)(i) if the 
provider determines that the recipient country does not legally 
permit or method by which transactions are conducted in that country 
does not permit the provider to determine exact disclosure amounts.
    6. Reliance on Bureau list of countries. A remittance transfer 
provider may rely on the list of countries published by the Bureau 
to determine whether the laws of a recipient country do not permit 
the remittance transfer provider to determine exact amounts required 
to be disclosed under Sec.  1005.31(b)(1)(iv) through (vii). Thus, 
if a country is on the Bureau's list, the provider may give 
estimates under this section, unless a remittance transfer provider 
has information that a country on the Bureau's list legally permits 
the provider to determine exact disclosure amounts.
    7. Change in laws of recipient country. i. If the laws of a 
recipient country change such that a remittance transfer provider 
can determine exact amounts, the remittance transfer provider must 
begin providing exact amounts for the required disclosures as soon 
as reasonably practicable if the provider has information that the 
country legally permits the provider to determine exact disclosure 
amounts.
    ii. If the laws of a recipient country change such that a 
remittance transfer provider cannot determine exact disclosure 
amounts, the remittance transfer provider may provide estimates 
under Sec.  1005.32(b)(1)(i), even if that country does not appear 
on the list published by the Bureau.

32(b)(2) Permanent Exceptions for Transfers Scheduled Before the 
Date of Transfer

    1. Fixed amount of foreign currency. The following is an example 
of when and how a remittance transfer provider may disclose 
estimates for remittance transfers scheduled five or more business 
days before the date of transfer where the provider agrees to the 
sender's request to fix the amount to be transferred in a currency 
in which the transfer will be received and not the currency in which 
it was funded. If on February 1, a sender schedules a 1000 Euro wire 
transfer to be sent from the sender's bank account denominated in 
U.S. dollars to a designated recipient on February 15, Sec.  
1005.32(b)(2) allows the provider to estimate the amount that will 
be transferred to the designated recipient (i.e., the amount 
described in Sec.  1005.31(b)(1)(i)), any fees and taxes imposed on 
the remittance transfer by the provider (if based on the amount 
transferred)

[[Page 50287]]

(i.e., the amount described in Sec.  1005.31(b)(1)(ii)), and the 
total amount of the transaction (i.e., the amount described in Sec.  
1005.31(b)(1)(iii)). The provider may also estimate any fees and 
taxes imposed on the remittance transfer by a person other than the 
provider if the exchange rate is also estimated and the estimated 
exchange rate affects the amount of fees and taxes (as allowed by 
Sec.  1005.32(b)(2)(ii)).
    2. Relationship to Sec.  1005.10(d). To the extent Sec.  
1005.10(d) requires, for an electronic fund transfer that is also a 
remittance transfer, notice when a preauthorized electronic fund 
transfer from the consumer's account will vary in amount from the 
previous transfer under the same authorization or from the 
preauthorized amount, that provision applies even if subpart B would 
not otherwise require notice before the date of transfer. However, 
insofar as Sec.  1005.10(d) does not specify the form of such 
notice, a notice sent pursuant to Sec.  1005.36(a)(2)(i) will 
satisfy Sec.  1005.10(d) as long as the timing requirements of Sec.  
1005.10(d) are satisfied.

32(c) Bases for Estimates

32(c)(1) Exchange Rate

    1. Most recent exchange rate for qualifying international ACH 
transfers. If the exchange rate for a remittance transfer sent via 
international ACH that qualifies for the Sec.  1005.32(b)(1)(i)(B) 
exception is set the following business day, the most recent 
exchange rate available for a transfer is the exchange rate set for 
the day that the disclosure is provided, i.e., the current business 
day's exchange rate.
* * * * *

32(d) Bases for Estimates for Transfers Scheduled Before the Date 
of Transfer

    1. In general. When providing an estimate pursuant to Sec.  
1005.32(b)(2), Sec.  1005.32(d) requires that a remittance transfer 
provider's estimated exchange rate must be the exchange rate (or 
estimated exchange rate) that the remittance transfer provider would 
have used or did use that day in providing disclosures to a sender 
requesting such a remittance transfer to be made on the same day. 
If, for the same-day remittance transfer, the provider could utilize 
either of the other two exceptions permitting the provision of 
estimates in Sec.  1005.32(a) or (b)(1), the provider may provide 
estimates based on a methodology permitted under Sec.  1005.32(c). 
For example, if, on February 1, the sender schedules a remittance 
transfer to occur on February 10, the provider should disclose the 
exchange rate as if the sender was requesting the transfer be sent 
on February 1. However, if at the time payment is made for the 
requested transfer, the remittance transfer provider could not send 
any remittance transfer until the next day (for reasons such as the 
provider's deadline for the batching of transfers), the remittance 
transfer provider can use the rate (or estimated exchange rate) that 
the remittance transfer provider would have used or did use in 
providing disclosures that day with respect to a remittance transfer 
requested that day that could not be sent until the following day.

Section 1005.36--Transfers Scheduled Before the Date of Transfer

36(a) Timing

36(a)(2) Subsequent Preauthorized Remittance Transfers

    1. Changes in disclosures. When a sender schedules a series of 
preauthorized remittance transfers, the provider is generally not 
required to provide a pre-payment disclosure prior to the date of 
each subsequent transfer. However, Sec.  1005.36(a)(1)(i) requires 
the provider to provide a pre-payment disclosure and receipt for the 
first in the series of preauthorized remittance transfers in 
accordance with the timing requirements set forth in Sec.  
1005.31(e). While certain information in those disclosures is 
expressly permitted to be estimated (see Sec.  1005.32(b)(2)), other 
information is not permitted to be estimated, or is limited in how 
it may be estimated. When any of the information on the most recent 
receipt provided pursuant to Sec.  1005.36(a)(1)(i) or (a)(2)(i), 
other than the temporal disclosures required by Sec.  
1005.31(b)(2)(ii) and (b)(2)(vii), is no longer accurate with 
respect to a subsequent preauthorized remittance transfer for 
reasons other than as permitted by Sec.  1005.32, the provider must 
provide, within a reasonable time prior to the scheduled date of the 
next preauthorized remittance transfer, a receipt that complies with 
Sec.  1005.31(b)(2) and which discloses, among the other disclosures 
required by Sec.  1005.31(b)(2), the changed terms. For example, if 
the provider discloses in the pre-payment disclosure for the first 
in the series of preauthorized remittance transfers that its fee for 
each remittance transfer is $20 and, after six preauthorized 
remittance transfers, the provider increases its fee to $30 (to the 
extent permitted by contract law), the provider must provide the 
sender a receipt that complies with Sec. Sec.  1005.31(b)(2) and 
1005.36(b)(2) within a reasonable time prior to the seventh 
transfer. Barring a further change, this receipt will apply to 
transfers after the seventh transfer. Or, if, after the sixth 
transfer, a tax increases from 1.5% of the amount that will be 
transferred to the designated recipient to 2.0% of the amount that 
will be transferred to the designated recipient, the provider must 
provide the sender a receipt that complies with Sec. Sec.  
1005.31(b)(2) and 1005.36(b)(2) within a reasonable time prior to 
the seventh transfer. In contrast, Sec.  1005.36(a)(2)(i) does not 
require an updated receipt where an exchange rate, estimated as 
permitted by Sec.  1005.32(b)(2), changes.
    2. Clearly and conspicuously. In order to indicate clearly and 
conspicuously that the provider's fee has changed as required by 
Sec.  1005.36(a)(2)(i), the provider could, for example, state on 
the receipt: ``Transfer Fees (UPDATED) * * * $30.'' To the extent 
that other figures on the receipt must be revised because of the new 
fee, the receipt should also indicate that those figures are 
updated.
    3. Reasonable time. If a disclosure required by Sec.  
1005.36(a)(2)(i) or (d)(1) is mailed, the disclosure would be 
considered to be received by the sender five business days after it 
is posted in the mail. If hand delivered or provided electronically, 
the receipt would be considered to be received by the sender at the 
time of delivery. Thus, if the provider mails a disclosure required 
by Sec.  1005.36(a)(2)(i) or (d)(1) not later than ten business days 
before the scheduled date of the transfer, or hand or electronically 
delivers a disclosure not later than five business days before the 
scheduled date of the transfer, the provider would be deemed to have 
provided the disclosure within a reasonable time prior to the 
scheduled date of the subsequent preauthorized remittance transfer.

36(b) Accuracy

    1. Use of estimates. In providing the disclosures described in 
Sec.  1005.36(a)(1)(i) or (a)(2)(i), remittance transfer providers 
may use estimates to the extent permitted by any of the exceptions 
in Sec.  1005.32. When estimates are permitted, however, they must 
be disclosed in accordance with Sec.  1005.31(d).
    2. Subsequent preauthorized remittance transfers. For a 
subsequent transfer in a series of preauthorized remittance 
transfers, the receipt provided pursuant to Sec.  1005.36(a)(1)(i), 
except for the temporal disclosures in that receipt required by 
Sec.  1005.31(b)(2)(ii) (Date Available) and (b)(2)(vii) (Transfer 
Date), applies to each subsequent preauthorized remittance transfer 
unless and until it is superseded by a receipt provided pursuant to 
Sec.  1005.36(a)(2)(i). For each subsequent preauthorized remittance 
transfer, only the most recent receipt provided pursuant to Sec.  
1005.36(a)(1)(i) or (a)(2)(i) must be accurate as of the date each 
subsequent transfer is made.
    3. Receipts. A receipt required by Sec.  1005.36(a)(1)(ii) or 
(a)(2)(ii) must accurately reflect the details of the transfer to 
which it pertains and may not contain estimates pursuant to Sec.  
1005.32(b)(2). However, the remittance transfer provider may 
continue to disclose estimates to the extent permitted by Sec.  
1005.32(a) or (b)(1). In providing receipts pursuant to Sec.  
1005.36(a)(1)(ii) or (a)(2)(ii), Sec.  1005.36(b)(2) and (3) do not 
allow a remittance transfer provider to change figures previously 
disclosed on a receipt provided pursuant to Sec.  1005.36(a)(1)(i) 
or (a)(2)(i), unless a figure was an estimate or based on an 
estimate disclosed pursuant to Sec.  1005.32. Thus, for example, if 
a provider disclosed its fee as $10 in a receipt provided pursuant 
to Sec.  1005.36(a)(1)(i) and that receipt contained an estimate of 
the exchange rate pursuant to Sec.  1005.32(b)(2), the second 
receipt provided pursuant to Sec.  1005.36(a)(1)(ii) must also 
disclose the fee as $10.
* * * * *

36(d) Date of Transfer for Subsequent Preauthorized Remittance 
Transfers

    1. General. Section 1005.36(d)(2)(i) permits remittance transfer 
providers some flexibility in determining how and when the 
disclosures required by Sec.  1005.36(d)(1) may be provided to 
senders. The disclosure described in Sec.  1005.36(d)(1) may be 
provided as a separate disclosure, or on or with any other 
disclosure required by this subpart B related to the same series of 
preauthorized remittance transfers, provided that the disclosure and 
timing requirements in Sec.  1005.36(d)(2) and other applicable

[[Page 50288]]

provisions in subpart B are satisfied. For example, the required 
disclosures may be made on or with a receipt provided pursuant to 
Sec.  1005.36(a)(1)(i); a receipt provided pursuant to Sec.  
1005.36(a)(2); or in a separate disclosure created by the provider. 
Thus, for example, a remittance transfer provider complies with 
Sec.  1005.36(d)(1) for a period of one year if it provides in the 
receipt provided to the sender when payment is made for the initial 
preauthorized remittance transfer, a schedule or summary of the 
dates of transfer of all the subsequent preauthorized remittance 
transfers in the series scheduled to occur over the next 12 months 
(and the applicable cancellation requirements and contact 
information).
    2. Delivery of disclosure. Section 1005.36(d)(2)(i) requires 
that the sender receive disclosure of the date of transfer, 
applicable cancellation requirements, and the provider's contact 
information no more than 12 months, and no less than 5 business days 
prior to the date of transfer of the subsequent preauthorized 
remittance transfer. For purposes of determining when a disclosure 
required by Sec.  1005.36(d)(1) is received by the sender, refer to 
comment 36(a)(2)-3.
    3. Disclosure of the date of transfer. The date of transfer of a 
subsequent preauthorized remittance transfer may be disclosed as a 
specific date (e.g., July 19, 2013) or by using a method that 
clearly permits identification of the date of the transfer, such as 
periodic intervals (e.g., the third Monday of every month, or the 
15th of every month). If the future dates of transfer are disclosed 
as occurring periodically and there is a break in the sequence, or 
the date of transfer does not otherwise conform to the described 
period, e.g., if a holiday or weekend causes the provider to deviate 
from the normal schedule, the remittance transfer provider should 
disclose the specific date of transfer for the affected transfer.
    4. Accuracy requirements. Section 1005.36(d)(4) sets forth 
accuracy requirements for disclosures required for subsequent 
preauthorized remittance transfers under Sec.  1005.36(d)(1). If any 
of the information provided in these disclosures change, the 
provider must provide an updated disclosure with the revised 
information that is accurate as of when the transfer is made, 
pursuant to Sec.  1005.36(d)(2).

    Dated: August 7, 2012.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2012-19702 Filed 8-14-12; 4:15 pm]
BILLING CODE 4810-AM-P
```