6310 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

1Public Law 111–203, 124 Stat. 1376, section 

1073 (2010). 

2 15 U.S.C. 1693 et seq. EFTA section 919 is 

codified in 15 U.S.C. 1693o–1. 

3Because the Dodd-Frank Act requires that 

regulations to implement certain provisions be 

issued by January 21, 2012, the Board issued a 

Notice of Proposed Rulemaking in May 2011 (May 

2011 Proposed Rule) with the expectation that the 

Bureau would complete the rulemaking process. 76 

FR 29902 (May 23, 2011). 

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: Proposed rule; request for 

public comment. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

proposing to amend Regulation E, 

which implements the Electronic Fund 

Transfer Act, and the official 

interpretation to the regulation, which 

interprets the requirements of 

Regulation E. The proposal is related to 

a final rule, published elsewhere in 

today’s Federal Register, that 

implements section 1073 of the DoddFrank Wall Street Reform and Consumer 

Protection Act regarding remittance 

transfers. The proposal requests 

comment on whether a safe harbor 

should be adopted with respect to the 

phrase ‘‘normal course of business’’ in 

the definition of ‘‘remittance transfer 

provider.’’ This definition determines 

whether a person is covered by the rule. 

The proposal also requests comment on 

several aspects of the final rule 

regarding remittance transfers that are 

scheduled in advance, including 

preauthorized remittance transfers. In 

developing the final rule, the Bureau 

believes that these issues would benefit 

from further public comment. 

DATES: Comments must be received on 

or before April 9, 2012. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2011– 

0009 or RIN 3170–AA15, by any of the 

following methods: 

• Electronic: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Monica Jackson, Office of the 

Executive Secretary, Bureau of 

Consumer Financial Protection, 1700 G 

Street, NW., Washington, DC 20006. 

• Hand Delivery/Courier in Lieu of 

Mail: Monica Jackson, Office of the 

Executive Secretary, Bureau of 

Consumer Financial Protection, 1700 G 

Street, NW., Washington, DC 20006. 

All submissions must include the 

agency name and docket number or 

Regulatory Information Number (RIN) 

for this rulemaking. In general, all 

comments received will be posted 

without change to http:// 

www.regulations.gov. In addition, 

comments will be available for public 

inspection and copying at 1700 G Street, 

NW., Washington, DC 20006, on official 

business days between the hours of 10 

a.m. and 5 p.m. Eastern Time. You can 

make an appointment to inspect the 

documents by telephoning (202) 435– 

7275. 

All comments, including attachments 

and other supporting materials, will 

become part of the public record and 

subject to public disclosure. Sensitive 

personal information, such as account 

numbers or social security numbers, 

should not be included. Comments will 

not be edited to remove any identifying 

or contact information. 

FOR FURTHER INFORMATION CONTACT: 

Mandie Aubrey, Dana Miller, or 

Stephen Shin, Counsels, or Krista 

Ayoub and Vivian Wong, Senior 

Counsels, Division of Research, Markets, 

and Regulations, Bureau of Consumer 

Financial Protection, 1700 G Street, 

NW., Washington, DC 20006, at (202) 

435–7000. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

Section 1073 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act) 1 mandates a new 

comprehensive consumer protection 

regime for remittance transfers sent by 

consumers in the United States to 

individuals and businesses in foreign 

countries. The Bureau of Consumer 

Financial Protection (Bureau) is 

publishing a final rule (January 2012 

Final Rule) elsewhere in today’s Federal 

Register to implement the new regime. 

The Bureau is publishing this notice of 

proposed rulemaking to seek comment 

on whether to provide additional safe 

harbors and flexibility in applying the 

final rule to certain transactions and 

remittance transfer providers. 

The Dodd-Frank Act, which was 

enacted July 21, 2010, amends the 

Electronic Fund Transfer Act (EFTA) 2

to create a multi-faceted regime 

governing most electronic transfers of 

funds sent by consumers in the United 

States to recipients in other countries. 

For covered transactions conducted by 

‘‘remittance transfer providers’’ as 

defined by the statute, the regime 

requires: (i) The provision of disclosures 

concerning the exchange rate and 

amount to be received by the remittance 

recipient, prior to and at the time of 

payment by the consumer for the 

transfer; (ii) Federal rights regarding 

transaction cancellation periods; (iii) 

investigation and remedy of errors by 

remittance transfer providers; and (iv) 

standards for the liability of remittance 

transfer providers for the acts of their 

agents. Authority to implement the new 

Dodd-Frank Act provisions transferred 

from the Board of Governors of the 

Federal Reserve System (Board) to the 

Bureau effective July 21, 2011.3

This proposal has two parts. First, it 

seeks comment on addition of a possible 

safe harbor to the definition of the term 

‘‘remittance transfer provider’’ to make 

it easier to determine when certain 

companies are excluded from the 

statutory scheme because they do not 

provide remittance transfers in ‘‘the 

normal course of business.’’ Second, it 

seeks comment on a possible safe harbor 

and other refinements to disclosure and 

cancellation requirements for certain 

transfers scheduled in advance, 

including ‘‘preauthorized’’ remittance 

transfers that are scheduled in advance 

to recur at substantially regular 

intervals. The Bureau believes that 

providing additional guidance on these 

issues may help both to reduce 

compliance burden for providers and to 

increase the benefits of the disclosure 

and cancellation requirements for 

consumers. 

The final rule adopted by the Bureau 

provides a one-year implementation 

period. The Bureau expects to complete 

any further rulemaking on matters 

raised in this proposal on an expedited 

basis before the January 2013 effective 

date for the final rule. As detailed in the 

SUPPLEMENTARY INFORMATION to the 

January 2012 Final Rule, the Bureau 

will work actively with consumers, 

industry, and other regulators in the 

coming months to facilitate 

implementation of the new regime. 

II. Summary of Final Rule 

Elsewhere in today’s Federal Register, 

the Bureau is publishing the final rule 

(January 2012 Final Rule) to implement 

the remittance transfer provisions in 

section 1073 of the Dodd-Frank Act. The 

final rule largely adopts the proposal as 

published in the May 2011 Proposed 

Rule, with several amendments and 

clarifications based on commenters’ 

suggestions. The final rule incorporates 

the definitions of ‘‘remittance transfer,’’ 

‘‘sender,’’ ‘‘remittance transfer 

provider,’’ and ‘‘designated recipient’’ 

set forth in the statute. With regard to 

statutory language excluding any person 


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that does not provide remittance 

transfers in the ‘‘normal course of its 

business’’ from the definition of 

‘‘remittance transfer provider,’’ the rule 

adopts a facts and circumstances test. 

The final 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. Under the final rule, the 

remittance transfer provider also is 

required generally to provide a written 

receipt when payment is made for the 

transfer, which is when the payment is 

authorized. The receipt must include 

the information provided on the prepayment disclosure, as well as 

additional information such as the date 

of availability, the 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 

final rule generally requires that 

disclosures provide the actual exchange 

rate and amount to be received. 

The 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 

explained in the SUPPLEMENTARY

INFORMATION to the January 2012 Final 

Rule, the Bureau recognizes that the 

market for preauthorized remittance 

transfers is still developing. The Bureau 

is concerned that if providers were 

required to provide accurate disclosures 

for subsequent preauthorized remittance 

transfers at the time those transfers are 

authorized, in many cases providers 

would not be able to offer preauthorized 

remittance transfer products, which 

could limit consumer access to a 

potentially valuable product. 

The final rule treats the first 

transaction in a series of preauthorized 

remittance transfers the same as all 

other remittances transfers. 

Accordingly, the provider must issue a 

pre-payment disclosure at the time the 

sender requests the transfer and a 

receipt at the time when payment for 

the transfer is authorized, and the 

disclosures must be accurate when 

payment for the transfer is authorized, 

unless the statutory exceptions apply. 

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 in advance of subsequent 

transfers, the final rule does not require 

that disclosures for the entire series of 

preauthorized transfers be provided at 

the time of the consumer’s initial 

request and payment authorization. 

Instead, providers must issue prepayment disclosures and receipts for 

each subsequent transfer at later times. 

Specifically, under the 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. 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. However, if 

the transfer involves the transfer of 

funds from the sender’s ‘‘account’’ (as 

defined by Regulation E) held by the 

provider, the receipt may be provided 

on or with the next regularly scheduled 

periodic statement for that account or 

within 30 days after payment is made 

for the remittance transfer if a periodic 

statement is not required. The prepayment disclosure and receipt for each 

subsequent transfer must be accurate 

when the respective transfer is made, 

unless the statutory exceptions apply. 

The final rule also provides senders 

specified cancellation and refund rights. 

Under the final rule, a sender generally 

has 30 minutes after payment for the 

transfer is made to cancel the transfer. 

The 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 

that case, the sender must notify the 

provider at least three business days 

before the scheduled date of the transfer 

to cancel the transfer. 

III. Summary of the Proposed Rule 

The proposal relates to two provisions 

in the January 2012 Final Rule. First, the 

proposal solicits comment on a possible 

safe harbor to define when a person 

does not provide transfers in the 

‘‘normal course of business’’ for 

purposes of the definition of 

‘‘remittance transfer provider.’’ Second, 

the proposal solicits comment on 

possible changes to the rules applicable 

to remittance transfers that are 

scheduled in advance, including 

preauthorized remittance transfers. In 

developing the January 2012 Final Rule, 

the Bureau recognized that additional 

safe harbors and flexibility for providers 

in complying with certain requirements 

related to these provisions may be 

needed to facilitate compliance with the 

final rule, and to minimize compliance 

burden. In addition, the Bureau wants to 

ensure that the disclosures required 

under the final rule for preauthorized 

remittance transfers are beneficial to 

senders, and are provided at a time that 

is most useful to senders in 

understanding the terms of the transfers. 

Moreover, the Bureau wants to ensure 

that the special cancellation procedures 

for remittance transfers scheduled in 

advance as set forth in the final rule 

provide appropriate protections for 

senders and do not impose undue 

burden on providers. The Bureau also 

wants to ensure that senders are 

informed properly of the right to cancel 

a transfer and the deadline to cancel, 

without undue burden on providers in 

providing these disclosures. The Bureau 

believes that these issues would benefit 

from further public comment, as 

summarized below. 

Definition of ‘‘Remittance Transfer 

Provider’’ 

Consistent with the statute, the 

January 2012 Final Rule provides 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,’’ as defined in the 

final rule, is required to comply with 

the disclosure and substantive 

protections set forth in subpart B of 

Regulation E relating to remittance 

transfers. The final rule provides 

guidance in the commentary regarding 

the phrase ‘‘normal course of business’’ 

using a facts and circumstances test, but 

does not give a numerical threshold. 

The proposal solicits comment on 

whether the Bureau should adopt a safe 

harbor for determining whether a person 

is providing remittance transfers in the 

‘‘normal course of its business,’’ and 

thus is a ‘‘remittance transfer provider.’’ 

Under the proposed safe harbor, if a 

person makes 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 year if it provides no more than 

25 remittance transfers in the current 

year. If that person, however, makes a 

26th remittance transfer in the current 

calendar year, the person would be 

evaluated under the facts and 

circumstances test to determine whether 

that person is a remittance transfer 

provider for that transfer and any 

additional transfers provided through 

the rest of the year. The Bureau requests 

comment on the proposed safe harbor 

generally, and, if such a safe harbor is 

appropriate, whether the maximum 


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6312 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

number of transfers per calendar year to 

qualify for the safe harbor should be 

higher or lower than 25 transfers, such 

as 10 or 50 transfers, or some other 

number. 

Disclosure Rules For Advance 

Remittance Transfers 

The January 2012 Final Rule sets forth 

special requirements for the timing and 

accuracy of disclosures relating to 

preauthorized remittance transfers, 

which are remittance transfers 

authorized in advance to recur at 

substantially regular intervals. This 

proposal seeks comment both on a 

relatively narrow question regarding 

whether to provide a safe harbor 

regarding certain timing requirements 

under the final rule and more broadly 

on whether to make further adjustments 

in the disclosure rules for preauthorized 

remittance transfers and certain other 

remittance transfers requested in 

advance of the transfer date (advance 

transfers). The options presented 

explore whether there are ways to better 

balance consumer benefits and potential 

industry compliance burdens in light of 

the potential costs of setting exchange 

rates and the potential difficulty of 

determining the amount to be received 

by designated recipients far in advance 

of a particular transfer. 

The proposal first addresses whether 

the Bureau should modify the final rule 

for a transfer scheduled more than a 

certain number of days (e.g., 10 days) in 

advance of the consumer’s requested 

transfer date, whether that transfer is a 

standalone transaction or the first in a 

series of preauthorized remittance 

transfers. The proposal also solicits 

comments on modifications of the final 

rule as applied to the first transfer in a 

series of 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 proposal 

then seeks comment on whether the 

Bureau should modify the disclosure 

rules for subsequent transfers in a 

preauthorized series. 

Initial Advance Transfers 

The January 2012 Final Rule treats the 

first transaction in a series of 

preauthorized remittance transfers the 

same as all other remittances transfers 

by requiring disclosure of the actual 

exchange rate and amount to be 

provided to the designated recipient 

unless one of the statutory exceptions 

permitting use of estimates applies. As 

the final rule recognizes with regard to 

subsequent transfers in the same 

preauthorized series, however, setting 

exchange rates and determining the 

amount to be received far in advance 

may pose risks and remittance transfer 

providers may choose not to offer 

advance scheduling rather than 

developing new risk management 

strategies or finding partners that are 

willing to do so. The Bureau lacks data 

on how frequently consumers request 

transfers many days in advance, and 

seeks comment on whether further 

adjustment of the disclosure regime is 

warranted to address such situations. 

The proposal therefore solicits 

comment on two potential changes to 

the disclosure requirements: (i) Whether 

a provider should be permitted 

additional flexibility to provide 

estimates for certain information in the 

pre-payment disclosure and receipt; and 

(ii) if additional estimates are permitted, 

whether a provider that uses this 

additional flexibility to provide 

estimates in the disclosures given at the 

time the transfer is requested and 

authorized should be required to 

provide a second receipt with accurate 

information closer to the time the 

transfer is scheduled to occur. The 

Bureau also solicits comment on 

whether in lieu of providing an estimate 

of the exchange rate on the disclosures 

for an advance transfer, the Bureau 

should allow a provider to disclose a 

formula that will be used to calculate 

the exchange rate that will apply to a 

transfer, and that is based on 

information that is publicly available 

prior to the time of transfer. The Bureau 

is contemplating these changes to 

minimize compliance burden on 

providers and to ensure that senders 

receive accurate information about 

transfers at a time that is most useful to 

them. 

Specifically, the proposal solicits 

comment on whether use of estimates 

should be permitted in the following 

two circumstances: (i) A consumer 

schedules a one-time transfer or the first 

in a series of preauthorized transfers to 

occur more than 10 days after the 

transfer is authorized; or (ii) a consumer 

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. For the first proposed use of 

estimates, the Bureau has structured the 

proposed 10-day threshold to mesh with 

the safe harbor proposed below 

regarding provision of disclosures 

relating to subsequent preauthorized 

transfers within a ‘‘reasonable time’’ 

prior to the individual transfer. The 

Bureau requests comment on whether 

this linkage is appropriate and whether 

10 days is the appropriate cut off for 

both purposes. 

The Bureau also requests comment on 

whether a provider that uses estimates 

in the pre-payment disclosure and 

receipt given at the time the transfer is 

requested and authorized in the two 

situations described above should be 

required to provide a second receipt 

with accurate information within a 

reasonable time prior to the scheduled 

date of the transfer. The Bureau requests 

comment on any tradeoffs between 

compliance burdens to providers of 

allowing an estimate-and-redisclosure 

option and the benefit to senders of 

receiving a second, more accurate 

disclosure. The Bureau also solicits 

comment on whether providing 

multiple disclosures (one pre-payment 

disclosure and two receipts) for each 

transfer described above would create 

information overload for consumers. 

Subsequent Advance Transfers 

Under the January 2012 Final Rule, a 

provider must provide a pre-payment 

disclosure and receipt for each 

subsequent transfer in a series of 

preauthorized remittance transfers. 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. The 

proposal solicits comment on two 

alternative approaches to possible 

changes to the disclosures rules for 

subsequent transfers: (i) whether the 

Bureau should retain the requirement 

that a provider give a pre-payment 

disclosure for each subsequent transfer, 

and should provide a safe harbor 

interpreting the ‘‘within a reasonable 

time’’ standard for providing this 

disclosure; or (ii) whether the Bureau 

instead should eliminate the 

requirement to provide a pre-payment 

disclosure for each subsequent transfer. 

With respect to the first alternative 

approach, the Bureau would retain the 

requirement that a provider mail or 

deliver a pre-payment disclosure within 

a reasonable time prior to the scheduled 

date of the transfer. The Bureau solicits 

comment on whether it should provide 

a safe harbor interpreting the ‘‘within a 

reasonable time’’ standard for providing 

this disclosure. The proposal 

specifically solicits comment on a safe 

harbor under which a provider would 

be deemed to have provided the prepayment disclosure within a reasonable 

time prior to the scheduled date of a 

subsequent transfer, if the provider 

mails or delivers the pre-payment 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 6313 

disclosure not later than 10 days before 

the scheduled date of the respective 

subsequent transfer. The Bureau 

believes that this proposed safe harbor 

would facilitate compliance with the 

final rule with respect to the timing of 

the disclosures required for subsequent 

preauthorized remittance transfers. The 

Bureau requests comment on whether 

the length of time for the safe harbor 

should be longer or shorter than 10 

days, and whether different safe harbors 

should be provided based on whether 

the disclosures are mailed or provided 

electronically. 

With respect to the second alternative 

approach, the Bureau solicits comment 

on whether the Bureau instead should 

eliminate the requirement that a 

provider mail or deliver a pre-payment 

disclosure for each subsequent transfer. 

Specifically, the Bureau solicits 

comment on whether the benefit to 

senders of receiving a pre-payment 

disclosure for each subsequent transfer 

justifies the cost to providers of 

providing this disclosure for each 

subsequent transfer. The Bureau solicits 

comment on whether senders will find 

the pre-payment disclosures useful, for 

example, (i) to ensure that their deposit 

or other accounts have sufficient funds 

to cover the upcoming transfers; or (ii) 

to evaluate whether to cancel the 

subsequent transfers and discontinue 

the preauthorized remittance transfer 

arrangement. The Bureau also requests 

comment on the relative trade off in 

compliance burdens to providers in 

providing pre-payment disclosures for 

each subsequent transfer. 

Cancellation Requirements Applicable 

to Certain Remittance Transfers 

Scheduled in Advance, Including 

Preauthorized Remittance Transfers 

The January 2012 Final Rule provides 

senders specified cancellation and 

refund rights. Under the final rule, a 

sender generally has 30 minutes after 

payment for the transfer is made to 

cancel the transfer. The 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 that case, the 

sender must notify the provider at least 

three business days before the 

scheduled date of the transfer to cancel 

the transfer. In the final rule, the Bureau 

adopted special cancellation provisions 

for these transfers scheduled in advance 

(in lieu of the general 30 minute 

cancellation rule) because the Bureau 

believes it is appropriate to provide 

senders with additional time to change 

their minds about sending a transfer if, 

for example, circumstances change 

between when the transfer is authorized 

and when the transfer is to be made. At 

the same time, the Bureau believes that 

it is necessary to give providers 

sufficient time to process any 

cancellation requests before a transfer is 

made. 

The Bureau wants to ensure that the 

special cancellation procedures for 

remittance transfers scheduled in 

advance as set forth in the final rule 

provide appropriate protections for 

senders and do not impose undue 

burden on providers. As a result, the 

Bureau solicits comment on whether the 

three-business-day deadline to cancel 

accomplishes these goals, or whether 

the deadline to cancel these transfers 

should be more or less than three 

business days before the scheduled date 

of the transfer. 

Notice of Deadline to Cancel 

The Bureau also wants to ensure that 

senders are informed properly of the 

right to cancel a transfer and the 

deadline to cancel, without undue 

burden on providers in providing these 

disclosures. The January 2012 Final 

Rule requires that a provider disclose 

the deadline to cancel in the receipt. 

Under the final rule, a provider must 

only disclose in the receipt for a transfer 

the deadline to cancel that is applicable 

to that transfer. Thus, for any remittance 

transfer scheduled by the sender at least 

three business days before the date of 

the transfer, a provider may solely 

disclose in the receipt information about 

the three-business-day deadline to 

cancel the transfer. For other transfers, 

the receipt may solely disclose the 30 

minute deadline to cancel. In addition, 

in disclosing the three-business-day 

deadline to cancel, under the final rule, 

the provider is not required to disclose 

a specific date on which the right to 

cancel will expire, such as disclosing: 

‘‘You can cancel for a full refund no 

later than [insert calendar date].’’ Thus, 

under the final rule, a provider could 

use a generic disclosure, such as 

disclosing: ‘‘You can cancel for a full 

refund no later than three business days 

prior to the scheduled date of the 

transfer.’’ The Bureau solicits comment 

on three issues related to the disclosure 

of the deadline to cancel as set forth in 

the final rule: (i) Whether the threebusiness-day deadline to cancel 

transfers scheduled in advance should 

be disclosed in a different manner to 

consumers, such as by requiring a 

provider to disclose in the receipt the 

specific date on which the right to 

cancel will expire; (ii) whether a 

provider should be allowed on a receipt 

to describe both the three-business-day 

and 30 minute deadline-to-cancel time 

frames and either describe to which 

transfers each deadline to cancel is 

applicable, or alternatively, use a check 

box or other method to indicate which 

deadline is applicable to the transfer; 

and (iii) whether a provider should be 

required to disclose the deadline to 

cancel in the pre-payment disclosure for 

each subsequent transfer, rather than in 

the receipt given for each subsequent 

transfer. 

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 senders 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 prepayment disclosure, as well as 

additional specified information. EFTA 

section 919(a). 

In addition, EFTA section 919 

provides for specific error resolution 

procedures. The Act directs the Bureau 

to promulgate error resolution standards 

and rules regarding appropriate 

cancellation and refund policies. EFTA 

section 919(d). Finally, EFTA section 

919 requires the Bureau to establish 

standards of liability for remittance 

transfer providers, including those that 

act through agents. EFTA section 919(f). 

Except as described below, the proposed 

changes are proposed 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 


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6314 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

4Throughout the 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 one of the authorities may be 

sufficient. 

5The consultation and economic impact analysis 

requirement previously contained in EFTA sections 

904(a)(1)–(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. 

6Regulation 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 more than five times for transactions secured by 

a dwelling 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). 

7The 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). 

title, to prevent circumvention or 

evasion, or to facilitate compliance. 

As described in more detail in the 

SUPPLEMENTARY INFORMATION, the 

provisions proposed in part or in whole 

pursuant to the Bureau’s authority in 

EFTA sections 904(a) and 904(c) 

include: 4 § 1005.32(b)(2).5 The Bureau 

also solicits comments on various 

regulatory provisions some of which 

would require use of EFTA sections 

904(a) and (c) authority but for which 

proposed regulatory text is not 

provided. 

VI. Section-by-Section Analysis 

Section 1005.30 Remittance Transfer 

Definitions 

30(f) Remittance Transfer Provider 

As adopted in the January 2012 Final 

Rule, § 1005.30(f) and the accompanying 

interpretations implement the definition 

of ‘‘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,’’ as defined in § 1005.30(f), is 

required to comply with disclosure and 

substantive protections set forth in 

subpart B of Regulation E relating to 

remittance transfers. 

Comment 30(f)–2 provides guidance 

interpreting the phrase ‘‘normal course 

of business’’ for purposes of the 

definition of ‘‘remittance transfer 

provider’’ in § 1005.30(f). Specifically, 

comment 30(f)–2 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. For example, if a financial 

institution generally does not make 

international consumer wire transfers 

available to customers, but sends a 

couple of international consumer wire 

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 international 

consumer wire transfers generally 

available to customers (whether 

described in the institution’s deposit 

account agreement, or in practice) and 

makes transfers multiple times each 

month, the institution provides 

remittance transfers in the normal 

course of business. 

Under the final rule, comment 30(f)– 

2 does not provide any de minimis 

numerical threshold under which a 

person would be deemed not to be 

providing remittance transfers in the 

normal course of business, and thus 

would not be a ‘‘remittance transfer 

provider’’ for purposes of § 1005.30(f). 

However, the Bureau recognizes that a 

bright-line safe harbor may minimize 

compliance burden. Thus, the Bureau 

proposes to revise comment 30(f)–2 to 

provide 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 the 

current calendar year. If that person, 

however, 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 transfer provided 

through the rest of the year. 

The proposed comment provides 

several examples to demonstrate how 

this proposed safe harbor would apply. 

For instance assume that in calendar 

year 2012, a person provided 20 

remittance transfers. This person is not 

providing remittance transfers in the 

normal course of business for calendar 

year 2013 if it provides no more than 25 

remittance transfers in calendar year 

2013. Assume further that the person 

makes 15 transfers in calendar year 

2013. Because this person limited its 

remittance transfers to no more than 25 

in 2013, it would not be required to 

comply with the rules in subpart B for 

any of its transfers in 2013. However, if 

the person provides a 26th transfer in 

calendar year 2013, then the person will 

be evaluated under the facts and 

circumstances test for determining 

whether the person is a remittance 

transfer provider for that and any other 

transfer provided through the rest of the 

calendar year. In addition, if the person 

provides a 26th transfer for calendar 

year 2013, this person would not qualify 

for the safe harbor in 2014 because the 

person did not make 25 or fewer 

remittance transfers in 2013. In this 

case, in 2014, the person would be 

evaluated under the facts and 

circumstances test in determining 

whether the person is a remittance 

transfer provider for all transfers made 

in 2014. Under the proposed safe 

harbor, a person would not be subject to 

the definition of ‘‘remittance transfer 

provider’’ and thus, would not be 

required to comply with the disclosure 

and substantive protections set forth in 

subpart B of Regulation E relating to 

remittance transfers if it made no more 

than 25 remittance transfers for each 

calendar year. 

The proposed threshold number of no 

more than 25 transfers per calendar year 

for the safe harbor is consistent with the 

general threshold for coverage under the 

Bureau’s Regulation Z, which relates to 

credit transactions. Under Regulation Z, 

12 CFR part 1026, a ‘‘creditor’’ as 

defined by the regulation, must comply 

with certain disclosure requirements 

and substantive protections related to 

credit transactions contained in 

Regulation Z. Under Regulation Z, a 

creditor is 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 § 1026.2(a)(17) and comment 

2(a)(17)(i)–4.7 However, the Bureau 

solicits comment on whether a 

threshold safe harbor is appropriate in 

this context, and if so, whether other 

threshold numbers for the safe harbor, 

such as 10 or 50 transfers, may be 

appropriate as the threshold number to 

carve out persons that provide 

remittance transfers on a limited basis, 

primarily as an accommodation to the 

customers of its regular business. 

Without a safe harbor, persons who 

currently provide remittance transfers, 

or are contemplating doing so, may face 


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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. These persons may 

decide to discontinue providing these 

transfers, or choose not to start making 

these transfers, to the detriment of their 

customers, rather than taking on the 

burden of complying with the 

remittance transfer rules for only a small 

number of transfers per year. The 

Bureau believes that the safe harbor may 

be particularly useful to relatively small 

financial services providers that provide 

remittance transfers on an infrequent 

basis. 

The Bureau recognizes that if a safe 

harbor is adopted, in some cases, 

consumers would not receive the 

disclosures and protections set forth in 

the remittance transfer rules because the 

person providing these transfers would 

not be deemed a ‘‘remittance transfer 

provider’’ for purposes of subpart B of 

Regulation E. However, Congress itself 

created this result by providing that the 

disclosure and other provisions apply 

only to persons that provide remittance 

transfers in the normal course of 

business. The statutory language, by 

defining ‘‘remittance transfer provider’’ 

as any person that provides remittance 

transfers for a consumer in the normal 

course of its business, implies that there 

will be persons that provide remittance 

transfers outside the normal course of 

business that are not subject to the 

statutory disclosure and protection 

requirements related to remittance 

transfers. The Bureau believes that the 

inclusion of the phrase ‘‘normal course 

of business’’ in the statutory definition 

was meant to exclude persons that 

provide remittance transfers on a 

limited basis, such as an 

accommodation to the customers of its 

regular business. In addition, as 

described above, the Bureau is 

concerned that persons may discontinue 

providing a small number of transfers 

per year to accommodate customers of 

its regular business, or choose not to 

start making these transfers, to the 

detriment of their customers, rather than 

taking on the burden of complying with 

the remittance transfer rules for only a 

small number of transfers per year. 

The Bureau notes that industry 

commenters in response to the Board’s 

May 2011 Proposed Rule provided 

suggestions for a de minimis threshold 

amount that were extremely high. 

Suggestions ranged from 1,200 or fewer 

transfers annually to 2,400 transfers 

annually, per method (i.e., 2,400 wire 

transfers plus 2,400 international ACH 

transfers). The commenters did not 

provide any data on the overall 

distribution and frequency of remittance 

transfers across various providers to 

support treating such high numbers of 

transactions as being outside the normal 

course of business. Nor did they suggest 

other means of determining when 

remittance transfer providers are 

engaging in transfers merely as an 

accommodation to occasional consumer 

requests rather than part of a business 

line of payment services. Absent 

significant additional information, the 

Bureau is skeptical that Congress 

intended to exclude companies 

averaging 100 or more remittance 

transfers per month from the statutory 

scheme. Based on the data presented by 

commenters, such a range would appear 

to exclude the majority of providers of 

open network transfers, such as 

international wire transfers and ACH 

transactions, from the rule. For example, 

one trade association commenter stated 

that most respondents to an information 

request said that they make fewer than 

2,400 international transactions per 

year. As discussed in the 

SUPPLEMENTARY INFORMATION to the 

January 2012 Final Rule, the Bureau 

believes that the statute clearly covers 

open network transfers, such as wire 

transfers and ACH transactions. 

Providing an exception based on the 

ranges suggested by these commenters 

would allow many financial institutions 

that arguably regularly and in the 

normal course of business provide 

remittance transfers to not be subject to 

the regulation. The Bureau believes in 

general that the term ‘‘normal course of 

business’’ covers remittance transfer 

activities at a level significantly lower 

than the ranges suggested by these 

commenters. 

The Bureau requests comment on the 

proposed safe harbor. As discussed 

above, the Bureau requests comment on 

whether a threshold safe harbor is 

appropriate in this context, and whether 

the maximum number of transfers per 

calendar year to qualify for the safe 

harbor should be higher or lower than 

25 transfers, and if so, what the 

maximum number should be and why. 

The Bureau also specifically seeks 

information regarding how many 

persons would likely qualify for any 

such a safe harbor; whether such a safe 

harbor would be more or less likely to 

apply to particular types of businesses, 

as compared to others; the potential 

benefits for consumers if a higher or 

lower number were chosen; and any 

specific costs that would be implicated 

by a higher or lower figure. The Bureau 

would benefit from comments both from 

companies or other persons that send far 

more than 25 transfers per year and 

from companies or other persons that 

send around 25 transfers per year. 

Section 1005.31 Disclosures 

Section 1005.31 generally sets forth 

the disclosure requirements for 

remittance transfers, except for 

disclosures provisions for preauthorized 

remittance transfers which are set forth 

in § 1005.36. Under § 1005.31, 

remittance providers are required to 

provide two sets of disclosures to a 

sender in connection with a remittance 

transfer: (i) a pre-payment disclosure 

when a sender requests a transfer; and 

(ii) a written receipt to the sender when 

payment is made, which is when the 

payment is authorized. The prepayment disclosure provides 

information about the transfer, such as 

the exchange rate, fees, and the amount 

to be received by the designated 

recipient. The receipt includes the 

information provided on the prepayment disclosure, as well as 

additional information, such as the 

promised date of delivery, contact 

information for the designated recipient, 

and information regarding the sender’s 

error resolution rights. Consistent with 

the statute, which permits remittance 

transfer providers to provide estimates 

only in two narrow circumstances as set 

forth in § 1005.32, the final rule 

generally requires that disclosures 

provide the actual exchange rate and 

amount to be received. 

For the reasons discussed in the 

section-by-section analysis to § 1005.36, 

the Bureau solicits comment on whether 

a provider should be permitted to use 

estimates for certain information in the 

pre-payment disclosures and receipts 

where a consumer schedules a one-time 

transfer or the first in a series of 

preauthorized transfers to occur more 

than 10 days after the transfer is 

authorized. See proposed 

§ 1005.32(b)(2). Also, as discussed in 

more detail in the section-by-section 

analysis to § 1005.36, the Bureau also 

solicits comment on whether a provider 

that uses estimates in the situation 

described above should be required to 

provide a second receipt with accurate 

information within a reasonable time 

prior to the scheduled date of the 

transfer. 

Section 1005.32 Estimates 

Generally, remittance transfer 

providers are not permitted to use 

estimates for the information provided 

in the pre-payment disclosures and 

receipts. The January 2012 Final Rule 

implements the two statutory 

exceptions that permit a remittance 

transfer provider to disclose an estimate 

of the amount of currency to be 


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6316 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

received, as well as other information 

such as the exchange rate that is used 

to calculate the amount of currency. 

Section 1005.32(a) contains the first 

exception, which applies to depository 

institutions that cannot determine 

certain disclosed amounts for reasons 

beyond their control. Section 1005.32(b) 

contains the second exception, which 

applies when the provider cannot 

determine certain amounts to be 

disclosed because of: (i) the laws of a 

recipient country; or (ii) the method by 

which transactions are made in the 

recipient country. 

To effectuate the purposes of the 

EFTA and facilitate compliance, the 

Bureau proposes to use its EFTA section 

904(a) and (c) authority to add a third 

exception in a new § 1005.32(b)(2) that 

would provide additional flexibility for 

providers to use estimates in prepayment disclosures and receipts where 

a consumer schedules a one-time 

transfer or the first in a series of 

preauthorized transfers to occur more 

than 10 days after the transfer is 

authorized. This exception is discussed 

in more detail in the section-by-section 

analysis to § 1005.36 below. The current 

exception relating to transfers to certain 

countries that is contained in 

§ 1005.32(b) would be moved to 

§ 1005.32(b)(1), and conforming changes 

would be made to interpretation 

provisions that reference this exception. 

Section 1005.36 Transfers Scheduled 

in Advance 

The January 2012 Final Rule sets forth 

special requirements for the timing and 

accuracy of disclosures relating to 

preauthorized remittance transfers, 

which are remittance transfers 

authorized in advance to recur at 

substantially regular intervals. This 

proposal seeks comment both on a 

relatively narrow question regarding 

whether to provide a safe harbor 

regarding certain timing requirements 

under the final rule and more broadly 

on whether to make further adjustments 

in the disclosure rules for preauthorized 

remittance transfers and other 

remittance transfers requested more 

than a certain number of days (e.g., 10 

days) in advance of the transfer date 

(advance transfers). The options 

presented explore whether there are 

ways to better balance consumer 

benefits and potential industry 

compliance burdens in light of the 

potential risks associated with setting 

exchange rates and the potential 

difficulty of determining the amount to 

be received by designated recipients far 

in advance of a particular transfer. The 

proposal first considers modification of 

the final rule as applied to a transfer 

scheduled more than a certain number 

of days (e.g., 10 days) in advance of the 

consumer’s requested transfer date, 

whether that transfer is a standalone 

transaction or the first in a series of 

preauthorized remittance transfers. The 

proposal also solicits comment on 

modifications of the final rule for the 

first transfer in a series of preauthorized 

remittance transfers where the amount 

of the preauthorized remittance 

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 proposal 

then also requests comment on whether 

the Bureau should modify the 

disclosure rules for subsequent transfers 

in a preauthorized series. 

The Bureau recognizes that the market 

for preauthorized remittance transfers is 

still developing. The Bureau is 

concerned that without specific rules 

and flexibility for providers in 

complying with certain disclosure 

requirements, providers may either 

discontinue providing preauthorized 

remittance transfer products, or may not 

begin to offer those products in the 

future, to the detriment of senders who 

may enjoy the convenience that these 

products provide. The final rule 

provides remittance transfer providers 

some relief by allowing them to shift 

their obligation to provide pre-payment 

disclosures for subsequent transfers to a 

‘‘reasonable time’’ prior to the particular 

transfer; this provision should reduce 

the potential costs associated with 

setting exchange rates far in advance of 

a transfer. However, the Bureau 

recognizes that similar issues may arise 

in situations in which a consumer 

schedules the first in a series of 

preauthorized transfers or a single 

standalone transfer significantly in 

advance of the transfer date. 

The Bureau also solicits comment on 

possible changes to the cancellation 

requirements for certain remittance 

transfers scheduled in advance. The 

Bureau wants to ensure that the threebusiness-day deadline to cancel 

remittance transfers scheduled in 

advance as set forth in the final rule 

provides appropriate protections for 

senders and does not impose undue 

burden on providers, and that senders 

are informed properly of the right to 

cancel a transfer. 

Timing and Accuracy Requirements for 

Disclosures About Initial Advance 

Transfers 

The January 2012 Final Rule treats the 

first transaction in a series of 

preauthorized remittance transfers the 

same as all other remittances transfers 

by requiring disclosure of the actual 

exchange rate and amount to be 

provided to the designated recipient 

unless one of the statutory exceptions 

permitting use of estimates applies. The 

final rule recognizes for subsequent 

transfers in the same preauthorized 

series, however, that setting exchange 

rates far in advance may require more 

sophisticated risk management 

strategies and remittance transfer 

providers may choose not to offer 

advance scheduling rather than 

developing such strategies (or finding 

partners that are willing to do so). The 

Bureau lacks data on how frequently 

consumers request transfers many days 

in advance, and seeks comment on 

whether further adjustment of the 

disclosure regime is warranted to 

address such situations. 

As discussed in more detail below, 

the proposal solicits comment on 

whether use of estimates should be 

permitted in the following two 

circumstances: (i) A consumer 

schedules a one-time transfer or the first 

in a series of preauthorized transfers to 

occur more than 10 days after the 

transfer is authorized; or (ii) a consumer 

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 also solicits 

comment on whether a 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 

prior to the schedule date of the 

transfer. 

Estimates Where the Transfer Is 

Scheduled To Occur More Than 10 Days 

After the Transfer Is Authorized 

The Bureau proposes to add an 

exception in § 1005.32 that would 

provide additional flexibility for 

providers to use estimates in disclosures 

for certain transfers scheduled in 

advance. Under proposed 

§ 1005.32(b)(2)(i), a provider would be 

permitted to use estimates for certain 

information in the pre-payment 

disclosure and receipt for a one-time 

transfer or the first in a series of 

preauthorized transfers to occur more 

than 10 days after the transfer is 

authorized. Specifically, under 

proposed § 1005.32(b)(1)(i), a provider 

generally would be allowed to provide 

estimates in accordance with 

§ 1005.32(c) for the following 

information contained in the prepayment disclosure and receipt, as 

applicable: (i) The exchange rate used 

by the provider for the remittance 


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8Some foreign exchange rates are set by monetary 

authorities. There are a variety of business models 

that providers use to purchase currency and fund 

transfers that are received in foreign currency. The 

timing of when foreign currency is purchased, the 

role of the provider in such a purchase, and the role 

of other intermediaries, partners, agents, and other 

parties can vary. 

transfer; (ii) the amount that will be 

transferred to the designated recipient, 

in the currency in which the funds will 

be received by the designated recipient, 

if required to be disclosed under 

§ 1005.31(b)(1)(v); (iii) any fees and 

taxes imposed on the remittance transfer 

by a person other than the provider, in 

the currency in which the funds will be 

received by the designated recipient; 

and (iv) the amount that will be 

received by the designated recipient, in 

the currency in which the funds will be 

received. See §§ 1005.36(b)(1), 

1005.31(b)(1)(iv) through (vii), 

1005.31(b)(2) and 1005.31(f); see also 

proposed comment 32–1. 

Under proposed § 1005.32(b)(2)(ii), a 

provider would be permitted to estimate 

taxes imposed on the remittance transfer 

by a person other than the provider, in 

the currency in which the funds will be 

received by the designated recipient, for 

transfers scheduled more than 10 days 

in advance only if those taxes are a 

percentage of the amount transferred to 

the designated recipient. Thus, a 

provider would be permitted to estimate 

taxes imposed in a recipient country 

only if they are calculated as a 

percentage of the estimated amount 

transferred to the designated recipient. 

The provider does not need additional 

flexibility to estimate taxes imposed in 

a recipient country in other cases, 

because in such instances, the taxes do 

not depend on an estimate of the 

amount of the funds transferred to the 

recipient. 

Under proposed § 1005.32(b)(2)(iii), 

fees imposed on the remittance transfer 

by a person other than the provider, in 

the currency in which the funds will be 

received by the designated recipient, 

may be estimated in only two 

circumstances: (i) Where the fees are 

calculated as a percentage of the 

estimated amount transferred to the 

designated recipient, as described in 

§ 1005.31(b)(1)(v); or (2) where an 

‘‘insured institution’’ as defined in 

§ 1005.32(a)(3) is permitted to estimate 

fees under the temporary exemption in 

§ 1005.32(a). See proposed comment 

32(b)(2)-1. Thus, a provider would not 

be permitted to estimate these fees for 

transfers scheduled more than 10 days 

in advance if the fees are a specific sum 

fee, unless a depository institution is 

otherwise allowed to estimate that fee 

under the temporary exemption in 

§ 1005.32(a). 

The Bureau believes that a provider 

might be reluctant to allow a sender to 

schedule a transfer too far in advance if 

the provider is required to fix the 

exchange rate that will apply to the 

transfer (i.e., the retail rate) at the time 

that it is scheduled. This reluctance 

could arise due to the risk associated 

with participating in foreign exchange 

markets, and the manners in which 

providers and their partners manage 

such risk. Many retail exchange rates are 

set through reference to wholesale 

currency markets in which rates can 

fluctuate frequently.8 As a result, 

whenever there are time lags in between 

the time when the retail rate applied to 

a transfer is set, the time when the 

relevant foreign currency is purchased, 

and the time when funds are delivered, 

a provider (and/or its business partner) 

may face losses due to unexpected 

changes in the value of the relevant 

foreign currency. Providers (and/or their 

partners) generally use a variety of 

pricing, business processes, or hedging 

techniques to manage or minimize this 

exchange rate risk. For some, and 

perhaps many providers (or their 

partners), the task of managing or 

minimizing exchange risk may become 

more complicated or more costly if the 

amount of time between when the rate 

is set for a customer and when the 

transfer is sent increases. Setting the 

retail rate that applies to a transfer far 

in advance of when that transfer is sent 

may require the provider or other 

parties involved in processing the 

remittance transfer to use additional or 

more sophisticated risk management 

tools. 

As a result, the Bureau is concerned 

that providers—particularly relatively 

small remittance transfer providers— 

may choose not to offer remittance 

transfers scheduled too far in advance, 

particularly preauthorized remittance 

transfers that may extend over a series 

of months. The Bureau believes that the 

market for preauthorized remittance 

transfers is still in its nascent stages. 

Reluctance to further develop and/or 

offer such products could reduce 

consumers’ access to the convenience of 

advance transfers. In other cases, 

providers may pass any additional costs 

of risk management on to consumers 

who schedule preauthorized transfers, 

in the form of less favorable exchange 

rates or higher fees. 

The proposal would give providers an 

option to schedule advance remittance 

transfers, while potentially limiting the 

need for additional exchange rate risk 

assumption, management, or 

minimization techniques. Under the 

proposal, if a transfer is scheduled to 

occur more than 10 days after the 

transfer is authorized, a provider could 

disclose an estimate of the exchange 

rate, and other information that depends 

on the exchange rate. The proposal links 

the time frame for use of estimates to the 

proposed safe harbor described below 

for when a provider would be deemed 

to have provided the pre-payment 

disclosure for subsequent preauthorized 

transfers within a ‘‘reasonable time’’ 

prior to the scheduled transfer of the 

respective subsequent transfer. 

Accordingly, remittance transfer 

providers would be able to use estimates 

under proposed § 1005.32(b)(2) only 

where a consumer requests a transfer 

more than 10 days in advance, but 

would be expected to provide actual 

exchange rates and the amount to be 

provided to the recipient if the transfer 

is scheduled 10 or fewer days in 

advance. To effectuate the purposes of 

the EFTA and facilitate compliance, the 

Bureau proposes to use its authority 

under EFTA sections 904(a) and (c) to 

permit this additional flexibility to 

provide estimates. 

The Bureau solicits comment on the 

proposed changes allowing providers 

additional flexibility to provide 

estimates on pre-payment disclosures 

and receipts when the transfer is 

scheduled by the sender to be made 

more than 10 days after it is authorized. 

Specifically, the Bureau requests 

comment on whether estimates should 

be allowed in such cases, and if so, the 

number of days in each case should be 

more or less than 10 days and why. The 

Bureau specifically seeks information 

and comment regarding the nature of 

any burden or cost associated with 

setting exchange rates more than 10 

days in advance of a payment, and the 

potential effect on consumers to doing 

so. The Bureau has structured the 

proposed threshold number of days to 

mesh with the safe harbor proposed 

below regarding provision of disclosures 

relating to subsequent preauthorized 

transfers within a ‘‘reasonable time’’ 

prior to the individual transfer. The 

Bureau requests comment on whether 

this linkage is appropriate and whether 

10 days is the appropriate cut off for 

both purposes. 

The Bureau also recognizes that 

compared to disclosure of exact 

exchange rates, disclosure of estimated 

exchange rates will likely provide 

consumers less clear information about 

the service that they are buying, and 

whether that service is more or less 

expensive than the services offered by 

competitors. The Bureau therefore also 

solicits comment as described below on 

whether remittance transfer providers 

should be required to provide a followVerDate Mar<15>2010 18:20 Feb 06, 2012 Jkt 226001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 E:\FR\FM\07FEP2.SGM 07FEP2

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6318 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

up disclosure listing the actual 

exchange rate and related numbers. 

Finally, the Bureau solicits comment on 

whether in lieu of providing an estimate 

of the exchange rate on the disclosures 

for an advance transfer, the Bureau 

should allow a provider to disclose a 

formula that will be used to calculate 

the exchange rate that will apply to a 

transfer, and that is based on 

information that is publicly available 

prior to the time of transfer, such that 

a sender could use that formula to 

calculate the exchange rate that will 

apply to the transfer. 

Estimates When the Amount of the 

Preauthorized Remittance Transfers Can 

Vary 

In some cases, a sender may set up a 

preauthorized remittance transfer 

arrangement where the amount of the 

first transfer and the scheduled date of 

the first transfer are not known at the 

time the arrangement is established. 

This may occur where the preauthorized 

remittance transfer arrangement is 

established to pay a bill each month 

(such as a utilities bill) and the amount 

of the bill and the date the bill is due 

may vary each month. In this case, the 

sender may not have received the next 

bill at the time the sender is establishing 

the preauthorized remittance transfer 

arrangement, and thus would not know 

the amount of the next bill and the date 

it is due. 

The Bureau requests comment on 

whether a provider should be given 

flexibility to estimate certain 

information in the disclosures for the 

first scheduled transfer where the 

preauthorized remittance transfers can 

vary in amount, and the provider does 

not know the exact amount of the first 

transfer at the time the disclosures for 

that transfer are given. Specifically, the 

Bureau requests comment on whether 

the Bureau should allow providers in 

this case to use estimates for the 

following information included on the 

pre-payment disclosure and receipt 

given at the time the first transfer is 

requested and authorized: (i) The 

amount of the transfer (in the currency 

in which the transfer is funded); (ii) fees 

and taxes if they depend on the amount 

of the transfer; (iii) the total amount of 

the transfer and fees; (iv) the date in the 

foreign country on which the funds will 

be available, if the provider does not 

know the exact due date of the next bill; 

(v) the exchange rate used by the 

provider for the remittance transfer; (vi) 

the amount that will be transferred to 

the designated recipient, in the currency 

in which the funds will be received by 

the designated recipient, if required to 

be disclosed under § 1005.31(b)(1)(v); 

(vii) any fees and taxes imposed on the 

remittance transfer by a person other 

than the provider, in the currency in 

which the funds will be received by the 

designated recipient; and (viii) the 

amount that will be received by the 

designated recipient, in the currency in 

which the funds will be received. To 

effectuate the purposes of the EFTA and 

facilitate compliance, the Bureau 

proposes to use its authority under 

EFTA sections 904(a) and (c) to permit 

this additional flexibility to provide 

estimates. 

If these estimates are allowed, what 

should be the basis for the estimates for 

the transfer amount and the date the 

funds will be available? Should a 

provider be allowed to rely on estimates 

from the consumer of the transfer 

amount and the date the next bill is 

due? Section 1005.32(c) sets forth a 

basis for estimating the other 

disclosures described above. Where the 

amount of the preauthorized remittance 

transfers can vary, will providers need 

the flexibility to estimate the amount of 

the first transfer where the transfer is 

scheduled to occur within 10 days of 

when the preauthorized remittance 

transfer was established? Or in this case 

is it likely that senders at the time of 

establishing the preauthorized 

remittance transfer arrangement will 

have received the next bill to be paid 

under this arrangement and thus, would 

know the exact amount of the first 

transfer and when it is due? 

As discussed above, the Bureau 

solicits comment on whether a 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 

transfers arrangement varies, and the 

provider does not know the exact 

amount of the first transfer and the exact 

due date of the next bill at the time the 

disclosures are given for the first 

transfer. The Bureau solicits specific 

comment on whether this additional 

flexibility to estimate the date in the 

foreign county on which the funds will 

be available is necessary. The Bureau 

notes that under the January 2012 Final 

Rule, a provider must disclose in the 

receipt the date in the foreign country 

on which the funds will be available 

and may provide a statement that funds 

may be available to the designated 

recipient earlier than the date disclosed, 

using the term ‘‘may be available 

sooner’’ or a substantially similar term. 

See § 1005.31(b)(2)(ii). In the case 

described above, will providers have 

sufficient information to know the time 

frame of when the next bill will be due 

(such that the next bill will be due 

within the next month), even if the 

provider does not know the exact date 

the next bill is due at the time the 

disclosures are given? If so, the Bureau 

solicits comment on whether the 

January 2012 Final Rule already 

provides providers with sufficient 

flexibility to handle situations where 

the provider does not know the exact 

date the next bill is due when the 

disclosures are given for the first 

transfer. Similarly, the Bureau also 

solicits comments on whether there are 

preauthorized remittance arrangements 

where the amount of the transfers will 

not vary, but the date on which the bills 

are due each payment period varies. If 

so, do providers need additional 

flexibility for the first transfer to 

estimate the date in the foreign country 

on which the funds will be available, if 

the provider does not know the exact 

due date of the next bill at the time the 

disclosures for the first transfer are 

given? 

Second Receipt 

As discussed above, the proposal 

solicits comment on whether providers 

should be allowed additional flexibility 

to provide estimates for certain 

information in the pre-payment 

disclosure and receipt given at the time 

the transfer is requested and authorized 

if: (i) The transfer is scheduled to occur 

more than 10 days after the transfer is 

authorized; or (ii) the amount of the 

transfers under the preauthorized 

remittance transfer arrangement 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 recognizes that if 

providers are allowed to provide 

estimates in these two situations, there 

is an increased likelihood that the prepayment disclosure and receipt given at 

the time the sender requests the transfer 

will contain estimates. 

If estimates are used, the sender will 

not receive precise information related 

to the exchange rate, the amount of 

currency to be received, and other 

information for that transfer, unless the 

provider is required to provide another 

disclosure to the sender with accurate 

information closer to the time the 

transfer is scheduled to occur. For 

example, assume a transfer is scheduled 

to occur more than 10 days after the 

transfer is authorized. Under the 

proposal, a provider would be permitted 

to use an estimate of the exchange rate 

and other information that depend on 

the exchange rate, such as the amount 

of currency to be received by the 

designated recipient, in providing the 

pre-payment disclosure and receipt that 

are given at the time the transfer is 

requested and authorized. Under the 


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final rule, these are the only disclosures 

that a sender would receive about the 

transfer, and the sender would not 

receive precise information about the 

exchange rate, the amount of currency 

to be received by the designated 

recipient, and other information about 

the transfer. Thus, if the Bureau allows 

providers additional flexibility to use 

estimates in the two situations 

described above in disclosures for the 

transfer that are given at the time the 

transfer is requested and authorized, the 

Bureau requests comment on whether it 

should also require a provider to 

provide a second receipt with accurate 

information within a reasonable time 

prior to the scheduled date of the 

transfer. 

The Bureau contemplates that this 

second receipt would be required only 

if the provider uses estimates because: 

(i) The transfer is scheduled to occur 

more than 10 days after the transfer is 

authorized; or (ii) the amount of the 

transfers under the preauthorized 

remittance transfer arrangement 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. In other words, this second 

receipt would be required only for 

certain transfers that are one-time or the 

first transactions in series of 

preauthorized transfers. To effectuate 

the purposes of the EFTA and facilitate 

compliance, the Bureau proposes to use 

its authority under EFTA sections 904(a) 

and (c) to require this second receipt if 

a provider uses estimates in the two 

situations described above. The Bureau 

does not contemplate that this second 

receipt would be required if providers 

are otherwise permitted to use estimates 

under current §§ 1005.32(a) and (b). See 

discussion of § 1005.32 above. 

The timing and accuracy standards for 

this second receipt would be the same 

as those that apply to the disclosure of 

the pre-payment disclosure for 

subsequent transfers. For example, the 

Bureau would require that this second 

receipt must be mailed or delivered 

within a reasonable time prior to the 

scheduled date of the transfer. The 

Bureau would provide a safe harbor for 

meeting the ‘‘reasonable time’’ standard 

consistent with the one proposed for 

subsequent transfers. Thus, the safe 

harbor could provide that a provider 

meets the ‘‘reasonable time’’ standard if 

the provider mails or delivers the 

second receipt no later than 10 days 

before the schedule date of the transfer. 

The error resolution procedures in 

§ 1005.33 would relate to information 

disclosed in this second receipt. This 

second receipt would ensure that 

senders receive accurate information 

with respect to the transfer, where 

estimates are permitted in the two 

situations above. In this case, for certain 

transfers that are one-time transfers or 

the first transaction in a series of 

preauthorized transfers, the sender 

would receive three disclosures for a 

transfer: (i) A pre-payment disclosure 

given at the time the transfer is 

requested that contains estimated 

information about the transfer; (ii) a 

receipt given at the time the transfer is 

authorized that contains estimated 

information about the transfer; and (iii) 

a second receipt given within a 

reasonable time prior to the schedule 

date of the transfer that contains 

accurate information about the transfer. 

The Bureau requests comment on the 

burden to providers of providing this 

second receipt and the benefit to 

senders of receiving this additional 

disclosure. Specifically, the Bureau 

requests comment on whether providing 

multiple disclosures (one pre-payment 

disclosure and two receipts) for each 

transfer described above would create 

information overload for consumers. 

The Timing and Accuracy Requirements 

for Disclosures About Subsequent 

Transfers 

For subsequent preauthorized 

remittance transfers under the January 

2012 Final Rule, the remittance transfer 

provider must provide a pre-payment 

disclosure as described in 

§ 1005.31(b)(1) to the sender for each 

subsequent transfer. The pre-payment 

disclosure must be mailed or delivered 

within a reasonable time prior to the 

scheduled date of each subsequent 

transfer. See § 1005.36(a)(2)(i). The 

remittance transfer provider also must 

provide a receipt as described in 

§ 1005.31(b)(2) to the sender for each 

subsequent transfer. The receipt 

generally must be mailed or delivered to 

the sender no later than one business 

day after the date on which the transfer 

is made. If the transfer involves the 

transfer of funds from the sender’s 

‘‘account’’ (as defined by Regulation E) 

held by the provider, the receipt may be 

provided on or with the next regularly 

scheduled periodic statement for that 

account or within 30 days after payment 

is made for the remittance transfer if a 

periodic statement is not required. See 

§ 1005.36(a)(2)(ii). The pre-payment 

disclosure and the receipt provided for 

each subsequent transfer must be 

accurate when the respective 

subsequent transfer is made, except to 

the extent estimates are allowed under 

§ 1005.32. See § 1005.36(b)(2). 

The proposal solicits comment on two 

alternative approaches to possible 

changes to the disclosures rules for 

subsequent transfers: (i) Whether the 

Bureau should retain the requirement 

that a provider give a pre-payment 

disclosure for each subsequent transfer, 

and should provide a safe harbor 

interpreting the ‘‘within a reasonable 

time’’ standard for providing this 

disclosure; or (ii) whether the Bureau 

instead should eliminate the 

requirement to provide a pre-payment 

disclosure for each subsequent transfer. 

First Alternative Approach for Revising 

the Disclosure Requirements for 

Subsequent Transfers 

As discussed above, § 1005.36(a)(2)(i) 

provides that the pre-payment 

disclosure for subsequent transfers must 

be mailed or delivered within a 

reasonable time prior to the scheduled 

date of the respective subsequent 

transfer. However, the final rule does 

not provide further guidance on what 

constitutes a ‘‘reasonable time.’’ With 

respect to the first alternative approach 

to revising the disclosure requirements 

for subsequent transfers, the Bureau 

would retain the requirement that a 

provider mail or deliver a pre-payment 

disclosure within a reasonable time 

prior to the scheduled date of the 

transfer. The Bureau solicits comment 

on whether it should provide a safe 

harbor interpreting the ‘‘within a 

reasonable time’’ standard for providing 

this disclosure. Specifically, the Bureau 

proposes to add comment 36(a)–1 to 

specify that if a provider mails or 

delivers the pre-payment disclosure not 

later than 10 days before the scheduled 

date of the respective subsequent 

transfer, the provider will be deemed to 

have provided that disclosure within a 

reasonable time prior to the scheduled 

date of the respective subsequent 

transfer. Without a safe harbor, 

providers may face uncertainty and 

litigation risk over whether they are 

complying with the requirement to 

provide the pre-payment disclosure 

within a reasonable time prior to the 

scheduled date of the respective 

subsequent transfer. 

The Bureau is proposing 10 days for 

the safe harbor because it believes that 

this length of time ensures that a sender 

is provided timely advance notice of the 

upcoming transfer. The pre-payment 

disclosure would notify the sender of 

the amount of the upcoming transfer 

and other important information about 

the transfer. Senders may need time to 

make sure that sufficient funds are in 

their deposit or other accounts to fund 

the upcoming transfers. This prepayment disclosure may be particularly 

useful in cases where the amount that 

will be transferred to the designated 

recipient will vary. The 10-day period 


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6320 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

9The Bureau notes that there are several 

exceptions to the notice requirement in 

§ 1005.10(d)(1) related to preauthorized EFTs, as set 

forth in § 1005.10(d)(2) and comment 10(d)(2)–2. 

would also facilitate consumers’ ability 

to exercise their cancellation rights as 

discussed further below. 

The Bureau also notes that this 10-day 

period for the safe harbor is consistent 

with a 10-day notice provision in 

§ 1005.10(d)(1) that relates to 

preauthorized EFTs. Specifically, under 

§ 1005.10(d)(1), when a preauthorized 

EFT 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 must send the consumer 

written notice of the amount and date of 

the electronic fund transfer at least 10 

days before the scheduled date of the 

transfer.9

The Bureau solicits comment on the 

proposed safe harbor in comment 36(a)– 

1. Specifically, the Bureau requests 

comment on whether the length of time 

for the safe harbor should be more or 

less than 10 days and if so, what the 

length of time for the safe harbor should 

be and why. In addition, the Bureau 

solicits comment on whether the safe 

harbor also should include a limit on 

how far in advance of the specified 

transfer the pre-payment disclosure may 

be given, such as also specifying that 

under the safe harbor the pre-payment 

disclosure could be given no earlier 

than a certain number of days before the 

scheduled date of the transfer. The 

Bureau also requests comment on 

whether two safe harbors should be 

provided—one applicable to disclosures 

that are mailed and one applicable to 

disclosures provided electronically— 

and if so, what the length of time for 

each safe harbor should be and why. 

The Bureau recognizes that a shorter 

time frame for a safe harbor for 

electronic disclosures may be 

appropriate, given that this safe harbor 

would not need to account for time 

needed for the disclosures to reach 

senders through the mail. The Bureau 

also requests comment on cases where 

the amount of the preauthorized 

remittance transfers can vary or the date 

the bill is due each payment period may 

vary. How far in advance will providers 

typically receive the next bill to be paid 

under preauthorized remittance 

arrangements? Are there cases where 

providers will not have received the 

next bill at least 10 days prior to when 

the bill must be paid, so that the 

providers will not know the amount of 

the transfer and the scheduled date of 

the transfer at least 10 days prior to the 

scheduled date of the transfer? The 

Bureau solicits comment on whether a 

special safe harbor should be provided 

for preauthorized remittance transfers 

where the amount of the transfers may 

vary or the date the bill is due each 

payment period may vary, and if so, 

what the length of time for that safe 

harbor should be and why. 

In setting the proper length of time for 

the safe harbor(s), the Bureau also 

requests comment on the potential 

impact on senders, and in particular 

whether senders are likely to use the 

pre-payment disclosures to decide 

whether to cancel preauthorized 

remittance transfers. As discussed in 

more detail below, the Bureau requests 

comment on whether the pre-payment 

disclosures will be useful to a sender in 

his or her decision about whether to 

continue the preauthorized remittance 

transfer arrangement. In setting the 

proper length of time for the safe 

harbor(s), is it important to ensure that 

a sender has sufficient time to review 

the disclosure and cancel the scheduled 

transfer in accordance with 

§ 1005.36(c)? Or are senders likely to 

use the pre-payment disclosures only 

for other purposes, such as reminders of 

the upcoming transfers so that the 

senders can ensure that sufficient funds 

are in their deposit or other accounts to 

fund the upcoming transfers? 

The Bureau also requests comment on 

the burden to providers of providing an 

accurate pre-payment disclosure 10 

days before the scheduled date of the 

transfer, to the extent the provider is not 

allowed to use estimates for certain 

disclosures under § 1005.32, and how 

those benefits and burdens compare to 

those associated with a longer or shorter 

disclosure period. The Bureau notes that 

under § 1005.36(b)(2), the pre-payment 

disclosure for each subsequent transfer 

must be accurate when the transfer is 

made, except to the extent estimates are 

permitted by § 1005.32. The Bureau 

recognizes that the further in advance 

that the pre-payment disclosure is 

given, the greater need there may be for 

the provider or other parties involved in 

processing the remittance transfer to use 

more sophisticated risk management 

tools to protect themselves against 

exchange rate fluctuations. 

Second Alternative Approach for 

Revising Disclosure Requirements for 

Subsequent Transfers 

With respect to the second alternative 

approach for revising the disclosure 

requirements for subsequent transfers, 

the Bureau solicits comment on whether 

the Bureau instead should eliminate the 

requirement that a provider mail or 

deliver a pre-payment disclosure for 

each subsequent transfer. To effectuate 

the purposes of the EFTA and facilitate 

compliance, the Bureau proposes to use 

its authority under EFTA sections 904(a) 

and (c) to eliminate this disclosure 

requirement for subsequent transfers. 

The Bureau solicits comment on how 

the benefit to senders of receiving a prepayment disclosure for each subsequent 

transfer compare to the cost to providers 

of providing this disclosure for each 

subsequent transfer. Specifically, the 

Bureau requests comment on how 

senders are likely to use pre-payment 

disclosures given for each subsequent 

transfer. Is a sender like to use the prepayment disclosure in preparing for 

each subsequent transfer? For example, 

a sender may need time to make sure 

that sufficient funds are in his or her 

deposit or other account to fund the 

subsequent transfer. The Bureau also 

solicits comment on whether the prepayment disclosure would be helpful to 

a sender in verifying that the transfer is 

scheduled as expected (e.g., that the 

amount to be transferred is accurate). 

Alternatively, the Bureau solicits 

comment on whether a pre-payment 

disclosure would be most useful to a 

sender in certain circumstances, such as 

when the amount that will be 

transferred to the designated recipient 

will vary, and the amount to be 

transferred for the upcoming transfer 

falls outside a specified range or differs 

by more than a specified amount from 

the most recent transfer. 

The Bureau also requests comment on 

whether senders will likely use prepayment disclosures for each 

subsequent transfer in deciding whether 

to continue preauthorized remittance 

transfer arrangements. For example, if a 

sender receives a pre-payment 

disclosure where the exchange rate 

seems significantly less advantageous to 

the sender than the exchange rate used 

for the previous transfer, will the sender 

cancel that transfer and end the entire 

preauthorized remittance transfer 

arrangement? Is it important that 

senders receive pre-payment disclosures 

for the purpose of deciding whether to 

continue preauthorized remittance 

transfer arrangements, or will the 

receipts that are provided for each 

subsequent transfer provide senders 

with sufficient information in a timely 

manner to make decisions about 

whether to continue the preauthorized 

remittance transfer arrangement? In 

evaluating whether to continue 

preauthorized remittance transfer 

arrangements, will senders tend to 

review the receipts over a period of time 

(e.g., review the receipts they received 

in the past six months) to decide 

whether to continue the arrangements? 


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10The term ‘‘business day’’ is defined in the 

January 2012 Final Rule to mean ‘‘any day on 

which the offices of a remittance transfer provider 

are open to the public for carrying on substantially 

all business functions.’’ See § 1005.30(b). 

The Bureau also requests comment on 

the burden to providers in providing 

pre-payment disclosures for each 

subsequent transfer. The Bureau solicits 

comment on whether the benefit to 

senders of receiving a pre-payment 

disclosure for each subsequent transfer 

justifies the cost to providers of 

providing this disclosure for each 

subsequent transfer. 

Cancellation of Certain Remittance 

Transfers Scheduled in Advance, 

Including Preauthorized Remittance 

Transfers 

The January 2012 Final Rule 

implements a special cancellation rule 

for certain remittance transfers 

scheduled in advance by a sender, 

including preauthorized remittance 

transfers. Specifically, where the sender 

schedules a remittance transfer at least 

three business days 10 before the date of 

the transfer, the sender must notify the 

provider at least three business days 

before the scheduled date of the transfer 

to cancel the transfer. See § 1005.36(c). 

The general cancellation rule applies 

where the sender schedules a remittance 

transfer within three business days of 

the date of the transfer. In these cases, 

the sender must notify the provider 

within 30 minutes of when the sender 

makes payment in connection with the 

remittance transfer to cancel the 

transfer. See § 1005.34(a). For purposes 

of subpart B, payment is considered 

made when the payment is authorized. 

See comment 31(e)–2. In any event, the 

receipt for the transfer must include a 

disclosure of the deadline for cancelling 

the transfer. See § 1005.31(b)(2)(iv). As 

discussed in more detail below, the 

Bureau wants to ensure that the threebusiness-day deadline to cancel 

remittance transfers scheduled in 

advance as set forth in the final rule 

provides appropriate protections for 

senders and does not impose undue 

burden on providers, and that senders 

are informed properly of the right to 

cancel a transfer. 

Three-Business-Day Deadline To Cancel 

In the final rule, the Bureau adopted 

special cancellation provisions for 

transfers scheduled more than threebusiness-days in advance (in lieu of the 

general 30 minute cancellation rule) 

because the Bureau believes it is 

appropriate to provide senders with 

additional time to change their minds 

about sending a transfer if, for example, 

circumstances change between when 

the transfer is authorized and when the 

transfer is to be made. At the same time, 

the Bureau believes that it is necessary 

to give providers sufficient time to 

process any cancellation requests before 

a transfer is made. 

The Bureau wants to ensure that the 

special cancellation procedures for 

remittance transfers scheduled in 

advance as set forth in the final rule 

provide appropriate protections for 

senders and do not impose undue 

burden on providers. As a result, the 

Bureau solicits comment on whether the 

three-business-day deadline to cancel 

accomplishes these goals, or whether 

the deadline to cancel these types of 

remittance transfers should be set earlier 

or later than three business days prior 

to the scheduled date of the transfer, 

and if so, why. The current threebusiness-day deadline for cancelling 

this type of remittance transfer is 

consistent with the three-business-day 

deadline for cancelling a preauthorized 

EFT under § 1005.10(c)(1). Specifically, 

under § 1005.10(c)(1), a consumer may 

stop payment of a preauthorized EFT 

from the consumer’s account by 

notifying the financial institution orally 

or in writing at least three business days 

before the scheduled date of the 

transfer. The Bureau requests comment 

on whether it is important to maintain 

consistency between the deadline for 

cancellation for preauthorized 

remittance transfers and the deadline for 

cancellation for preauthorized EFTs. 

The Bureau notes that the transfers that 

would be subject to the special 

cancellation rule in § 1005.36(c) would 

change depending on whether the 

deadline to cancel was earlier or later 

than three business days before the 

scheduled transfer. For example, if the 

deadline to cancel was no later than two 

business days prior to the scheduled 

date of the transfer, the transfers that 

would be subject to the special 

cancellation rule in § 1005.36 would be 

those where the sender schedules the 

remittance transfer at least two days 

before the date of the transfer. 

Disclosure of Deadline To Cancel 

The Bureau also wants to ensure that 

senders are informed properly of the 

right to cancel a transfer and the 

deadline to cancel, without undue 

burden on providers in providing these 

disclosures. The January 2012 Final 

Rule requires that a provider disclose 

the deadline to cancel in the receipt. 

Under the final rule, a provider must 

only disclose in the receipt for a transfer 

the deadline to cancel that is applicable 

to that transfer. Thus, for any remittance 

transfer scheduled by the sender at least 

three business days before the date of 

the transfer, a provider may solely 

disclose in the receipt information about 

the three-business-day deadline to 

cancel the transfer. For other transfers, 

the receipt may solely disclose the 30 

minute deadline to cancel. In addition, 

in disclosing the three-business-day 

deadline to cancel, under the final rule, 

the provider is not required to disclose 

a specific date on which the right to 

cancel will expire, such as disclosing: 

‘‘You can cancel for a full refund no 

later than [insert calendar date].’’ Thus, 

under the final rule, a provider could 

use a generic disclosure, such as 

disclosing: ‘‘You can cancel for a full 

refund no later than three business days 

prior to the scheduled date of the 

transfer.’’ The Bureau solicits comment 

on three issues related to the disclosure 

of the deadline to cancel as set forth in 

the final rule: (i) Whether the threebusiness-day deadline to cancel 

transfers scheduled in advance should 

be disclosed in a different manner to 

consumers, such as by requiring a 

provider to disclose in the receipt the 

specific date on which the right to 

cancel will expire; (ii) whether a 

provider should be allowed on a receipt 

to describe both the three-business-day 

and 30 minute deadline-to-cancel time 

frames and either describe to which 

transfers each deadline to cancel is 

applicable, or alternatively, use a check 

box or other method to indicate which 

deadline is applicable to the transfer; 

and (iii) whether a provider should be 

required to disclose the deadline to 

cancel in the pre-payment disclosure for 

each subsequent transfer, rather than in 

the receipt given for each subsequent 

transfer. 

Disclosure of Deadline To Cancel 

Transfers Scheduled in Advance 

Under the final rule, where the sender 

schedules a remittance transfer at least 

three business days before the date of 

the transfer, the sender must notify the 

provider at least three business days 

before the scheduled date of the transfer 

to cancel the transfer. See § 1005.36(c). 

The term ‘‘business day’’ is defined in 

the final rule to mean ‘‘any day on 

which the offices of a remittance 

transfer provider are open to the public 

for carrying on substantially all business 

functions.’’ See § 1005.30(b). Under the 

final rule, an abbreviated statement 

about the sender’s cancellation rights 

generally must be disclosed in the 

receipt for the transfer. See 

§ 1005.31(b)(2)(iv). Under the final rule, 

the provider is not required to disclose 

a specific date on which the right to 

cancel will expire, such as disclosing: 

‘‘You can cancel for a full refund no 

later than [insert calendar date].’’ Thus, 


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6322 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

under the final rule, in disclosing the 

three-business-day deadline to cancel, a 

provider could use a generic disclosure, 

such as disclosing: ‘‘You can cancel for 

a full refund no later than three business 

days prior to the scheduled date of the 

transfer.’’ As discussed above, the 

current three-business-day deadline for 

cancelling this type of remittance 

transfer set forth in the January 2012 

Final Rule is consistent with the threebusiness-day deadline for cancelling a 

preauthorized EFT under 

§ 1005.10(c)(1). In addition, the generic 

disclosure of the current three-businessday deadline for cancelling this type of 

remittance transfer set forth in the 

January 2012 Final Rule is consistent 

with the generic disclosure that is 

permitted under § 1005.10(c)(1) in 

disclosing the three-business-day 

deadline for cancelling a preauthorized 

EFT. 

The Bureau is concerned that senders 

may have difficulty determining the 

specific date the right to cancel expires 

for a particular remittance transfer. This 

difficulty might arise because the sender 

may not know the exact business days 

of the provider. For example, assume 

the scheduled date of the transfer is 

Monday, March 11, 2013. Also, assume 

that a provider’s business days are 

Monday through Saturday, except for 

State and Federal holidays. In this 

example, if a sender believed that the 

provider’s business days generally were 

Monday through Friday, the sender 

might calculate the deadline to cancel as 

Wednesday, March 6, 2013, when the 

deadline to cancel actually is Thursday, 

March 7, 2013. If the sender believed 

that the provider’s business days 

generally were Monday through 

Sunday, the sender might calculate 

mistakenly the deadline to cancel as 

Friday, March 8, 2013. In addition, the 

fact in this example that a provider’s 

business days do not include State and 

Federal holidays could also make it 

difficult for senders to calculate the 

exact date on which the right to cancel 

a particular transfer expires. For 

example, assume in the example above 

that Friday is a State holiday. The 

sender would need to know that Friday 

is a State holiday in calculating the date 

the right to cancel expires. 

The Bureau solicits comments on 

whether the disclosure in the final rule 

of the three-business-day deadline to 

cancel adequately informs senders of 

their right to cancel. The Bureau also 

solicits comments on alternatives for 

disclosing the three-business-day 

deadline to cancel. Under the first 

alternative, the Bureau solicits comment 

on whether a provider should be 

required to disclose its business days on 

the receipt, so that senders will know 

this information and could use it in 

calculating the deadline to cancel the 

particular transfer. In the example 

above, the provider would disclose in 

the receipt that its business days are 

Monday through Saturday, excluding 

State and Federal holidays. The Bureau 

notes that under Regulation E, in 

§ 1005.7(b)(3), a financial institution is 

required to disclose its business days in 

the disclosures required at the time a 

consumer contracts for an electronic 

fund transfer service or before the first 

electronic fund transfer is made 

involving the consumer’s account. 

Nonetheless, not all providers are 

‘‘financial institutions,’’ as that term is 

defined in § 1005.2(i). In addition, even 

in cases where a financial institution 

has provided a disclosure of its business 

days to a sender under § 1005.7(b)(3), 

the sender may not recall this 

information when a remittance transfer 

is conducted at a significantly later time 

than when the consumer contracts for 

an electronic fund transfer service. 

Specifically, the Bureau solicits 

comment on whether disclosure of a 

provider’s business days in receipts are 

necessary for senders to determine the 

date the right to cancel expires for a 

particular transfer. Are senders likely to 

be familiar with the State and Federal 

holidays to know when to take them 

into account in calculating the 

deadline? Will senders that are 

contemplating cancelling transfers 

consult the receipt and attempt to 

calculate the three-business-day 

deadline to cancel based on information 

in the receipt, or will senders typically 

call providers to find out when the right 

to cancel expires for those transfers? 

Under a second alternative, the 

Bureau solicits comment on whether the 

provider should be required to disclose 

in the receipt a specific date on which 

the right to cancel will expire, such as 

disclosing ‘‘You can cancel for a full 

refund no later than [insert calendar 

date].’’ This alternative would relieve 

senders from the potential difficulty of 

calculating the deadline to cancel. The 

provider would know its business days 

and would be able to calculate the 

deadline date for the sender. 

Nonetheless, the Bureau solicits 

comments on any operational burdens 

on providers in providing the specific 

deadline on the receipt. As noted above, 

the current three-business-day deadline 

for cancelling remittance transfers 

scheduled in advance is consistent with 

the three-business-day deadline for 

cancelling a preauthorized EFT under 

§ 1005.10(c)(1). The Bureau requests 

comment on whether it is important to 

maintain consistency between the 

deadline for cancellation for 

preauthorized remittance transfers and 

the deadline for cancellation for 

preauthorized EFTs. 

The Bureau also solicits comment on 

other alternatives for improving the 

disclosure of the deadline to cancel for 

transfers scheduled in advance. The 

Bureau notes that it considered whether 

the deadline to cancel might be easier 

for the sender to calculate if the 

deadline to cancel were based on 

calendar days instead of business days. 

For example, in this case, the deadline 

to cancel could be three calendar days 

prior to the scheduled date of the 

transfers, instead of three business days. 

Nonetheless, the Bureau is concerned 

that if calendar days were used to 

calculate the deadline to cancel, the 

date of deadline could fall on a nonbusiness day for the provider. For 

example, assume the scheduled date of 

the transfer is Wednesday, February 20, 

2013 and that Monday, February 18, 

2013 is a Federal holiday. Also, assume 

that a provider’s business days are 

Monday through Friday, except for State 

and Federal holidays. In addition, 

assume that a sender could cancel the 

transfer no later than three calendar 

days prior to scheduled date of the 

transfer. In this example, the deadline to 

cancel would be Sunday, February 17, 

2013. In this case, though, Sunday is not 

a business day for the provider. The 

sender may not be able to exercise his 

or her right to cancel on that Sunday 

because the provider would not be open 

for business that day. In addition, to the 

extent a sender could notify the 

provider of the desire to cancel on 

Sunday, such as sending an email to the 

provider, the provider may not have 

sufficient time to process the 

cancellation once it receives the notice. 

In this example, the next business day 

would be Tuesday, February 19, 2013 

(because Monday, February 18, 2013 is 

a Federal holiday), and the provider 

would have only one business day to act 

on this cancellation. Thus, the Bureau 

does not believe that using calendar 

days is an alternative to business days 

for structuring the deadline to cancel, 

but solicits comment on this. 

The Bureau also considered whether 

redefining the term ‘‘business day’’ for 

purposes of the deadline to cancel might 

help senders better understand how to 

calculate the deadline to cancel. For 

example, the Bureau could define 

‘‘business day’’ for purposes of 

calculating the deadline to cancel as 

‘‘Monday through Friday excluding 

Federal holidays.’’ Nonetheless, it is not 

clear that redefining ‘‘business day’’ in 

this way would help senders calculate 

the deadline to cancel. Senders would 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 6323 

11Section 1022(b)(2)(A) of the Dodd-Frank Act 

requires the Bureau to consider the potential 

benefits and costs of its regulations to consumers 

and industry, including the potential reduction of 

access by consumers to consumer financial 

products or services. The statute also requires the 

Bureau to consider the impact of proposed rules 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. 

12Section 1022(b)(2)(B) of the Dodd-Frank Act 

requires that the Bureau consult with the 

appropriate prudential regulators or other Federal 

Agencies prior to proposing a rule and during the 

comment process regarding consistency of the 

proposed rule with prudential, market, or systemic 

objectives administered by such agencies. 

still need to know that a particular date 

is a Federal holiday in calculating the 

deadline to cancel for a particular 

transfer. In addition, redefining the term 

‘‘business day’’ in this way might 

actually in some cases cause the 

deadline to cancel to be set earlier than 

if the provider’s actual business days 

were used (i.e., any day on which the 

offices of a remittance transfer provider 

are open to the public for carrying on 

substantially all business functions). For 

example, assume that a provider’s actual 

business days were Monday through 

Saturday, except Federal and State 

holidays. Assume also that the 

scheduled date of a transfer is Monday, 

March 11, 2013. If the term ‘‘business 

day’’ was defined as ‘‘Monday through 

Friday, excluding Federal holidays’’ for 

purposes of the deadline to cancel, the 

deadline to cancel would be 

Wednesday, March 6, 2013. 

Nonetheless, if the provider’s actual 

business days were used to calculate the 

deadline to cancel, the deadline to 

cancel would be Thursday, March 7, 

2013. Thus, the Bureau does not believe 

that redefining the term ‘‘business day’’ 

in this way is a preferable alternative, 

but the Bureau solicits comment on this. 

Disclosure of Both the Three-BusinessDay Deadline and the 30 Minute 

Deadline in Same Receipt 

Under the final rule, the notice of the 

deadline to cancel a transfer must be 

disclosed in the receipt for the transfer. 

Under the final rule, a provider must 

disclose in the receipt for a transfer the 

deadline to cancel that is applicable to 

that transfer. Thus, for any remittance 

transfer scheduled by the sender at least 

three business days before the date of 

the transfer, a provider may solely 

disclose in the receipt information about 

the three-business-day deadline to 

cancel the transfer. For other transfers, 

the receipt may solely disclose the 30 

minute deadline to cancel. Thus, under 

the final rule, a provider that offers both 

types of transfers must create two 

receipts—one that contains the threebusiness-day deadline to cancel and one 

that contains the 30 minute deadline to 

cancel. The provider also must ensure 

that it gives the sender the proper 

receipt. 

To ease burden on providers in 

developing two different receipts and 

making sure they give a sender the 

proper receipt, the Bureau is requesting 

comment on whether a provider that 

provides both types of transfers should 

be permitted to describe both 

cancellation provisions on one receipt. 

For example, the provider could 

disclose on the receipt both the threebusiness-day and the 30 minute time 

frames and either: (i) describe to which 

transfers each deadline is applicable; or 

(ii) use a check box or other method to 

indicate which deadline is applicable to 

the transfer. A provider using the option 

in the first scenario would provide, on 

one receipt, the language describing 

each deadline to cancel and describe to 

which types of transfers each deadline 

applies. A provider using the option in 

the second scenario would describe 

both cancellation provisions on one 

receipt, but would also use a check box 

or other method to indicate which 

deadline is applicable to the transfer. 

The Bureau solicits comment on 

whether senders receiving this type of 

notice under either the first scenario or 

the second scenario would be able to 

understand easily which deadline to 

cancel applies to their particular 

transfers. The Bureau also solicits 

comment on the operational burdens on 

providers to comply with the final rule, 

if the providers make both types of 

transfers. The Bureau recognizes that 

whether the Bureau should adopt this 

type of provision depends on how the 

three-business-day day deadline to 

cancel is disclosed to the sender, such 

as whether it is a generic disclosure or 

a specific date, as discussed in more 

detail above. 

Disclosure of Deadline To Cancel for 

Subsequent Transfers 

Under the final rule, a sender may not 

receive a receipt for each subsequent 

transfer until the transfer has already 

occurred. When this happens, the 

deadline to cancel that transfer will 

have already expired by the time a 

sender receives the receipt for that 

subsequent transfer. As discussed 

above, the Bureau solicits comment on 

whether it should eliminate the 

requirement that a provider mail or 

deliver a pre-payment disclosure for 

each subsequent transfer. Nonetheless, 

to the extent the pre-payment disclosure 

requirement for each subsequent 

transfer is retained, the Bureau solicits 

comment on whether a provider should 

be required to disclose the deadline to 

cancel in the pre-payment disclosure for 

each subsequent transfer, rather than in 

the receipt given for each subsequent 

transfer, to ensure that senders receive 

disclosure of the deadline to cancel a 

subsequent transfer prior to the time 

that deadline expires. If the requirement 

to provide a pre-payment disclosure for 

each subsequent transfer is not retained, 

the Bureau would leave the disclosure 

of the deadline to cancel in the receipt 

for each subsequent transfer. In this 

case, the Bureau recognizes that it 

would be confusing to consumers to 

disclose the three-business-day deadline 

to cancel as a specific date, rather than 

as a generic disclosure, where the prepayment disclosure is not retained 

because the specific date by which the 

sender may cancel the transfer may have 

passed by the time the sender receives 

the receipt for the transfer. Nonetheless, 

a generic disclosure about the threebusiness-day deadline to cancel in the 

receipt may still provide helpful 

information to the sender about the 

deadline to cancel upcoming 

subsequent transfers and help ensure 

that senders are informed of their 

cancellation rights before the 

cancellation period has passed for those 

subsequent transfers. 

VII. Section 1022(b)(2) of the DoddFrank Act 

In developing the proposed rule, the 

Bureau has conducted an analysis of 

potential benefits, costs, and impacts as 

required by section 1022(b)(2)(A) of the 

Dodd-Frank Act.11 The Bureau also 

consulted with appropriate Federal 

agencies regarding the consistency of 

the proposed rule with prudential, 

market, or systemic objectives 

administered by such agencies as 

required by section 1022(b)(2)(B) of the 

Dodd-Frank Act.12

In this rulemaking, the Bureau is 

proposing to amend Regulation E, 

which implements the EFTA, and the 

official interpretation to the regulation, 

which interprets the requirements of 

Regulation E. The proposal is related to 

the January 2012 Final Rule, published 

elsewhere in today’s Federal Register, 

that implements section 1073 of the 

Dodd-Frank Act regarding remittance 

transfers. The proposal requests 

comment on a safe harbor with respect 

to the phrase ‘‘normal course of 

business’’ in the definition of 

‘‘remittance transfer provider.’’ The 

proposal also requests comment on 

several aspects of the final rule 

regarding remittance transfers that are 

scheduled in advance, including 

preauthorized remittance transfers. 


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6324 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

The proposal contains both specific 

proposed provisions with regulatory or 

commentary language (proposed 

provisions) as well as requests for 

comment on modifications where 

regulatory or commentary language was 

not specifically included (additional 

proposed modifications). The analysis 

below considers the benefits, costs and 

impacts of each proposed provision and 

the additional proposed modifications. 

It bears note that one of the purposes of 

the proposed provisions and the 

additional proposed modifications is to 

remove barriers to the development of 

the market for remittance transfers that 

are scheduled in advance. Since the 

market for these services is still 

developing, there is little information 

with which to evaluate the proposed 

provisions and modifications that will 

be most useful to providers and 

consumers. The Bureau generally 

requests comment on the proposed 

provisions and additional proposed 

modifications and on the Bureau’s 

assessment of the benefits, costs and 

impacts of the proposed provisions and 

additional proposed modifications. 

The analysis generally examines the 

benefits, costs and impacts of the 

provisions of the proposed provisions 

and additional proposed modifications 

against the baseline of the January 2012 

Final Rule published elsewhere in 

today’s Federal Register. This baseline 

focuses the discussion of benefits, costs 

and impacts on the incremental effect of 

this rulemaking on the development of 

the market for remittance transfers 

scheduled in advance. 

The Bureau will further consider the 

benefits, costs and impacts of the 

proposed provisions and additional 

proposed modifications before finalizing 

the proposal. The Bureau asks interested 

parties to provide general information, 

data, and research results on the number 

of firms that schedule remittance 

transfers in advance, the number of 

transfers they schedule over a given 

period of time, the characteristics of the 

transfers (e.g., the typical amount of the 

transfers and whether multiple transfers 

are scheduled in advance), the revenue 

earned from these transfers, and related 

general information. The Bureau also 

requests specific information on the 

number and characteristics of 

consumers who send remittance 

transfers via remittance transfer 

providers who would meet the 

conditions of the safe harbor for normal 

course of business in the proposed rule, 

information on the number and 

characteristics of the remittance transfer 

providers just described, and the 

quantitative and qualitative 

characteristics of the service provided 

and the transfers. The Bureau asks for 

similar factual information regarding 

consumers who schedule remittance 

transfers in advance, the number and 

characteristics of providers of this 

service, and the quantitative and 

qualitative characteristics of the service 

and the transfers. 

Costs and Benefits to Consumers and 

Covered Persons 

The analysis below discusses (i) the 

proposed provisions; and (ii) the 

additional proposed modifications. 

Proposed Provisions 

Each specific proposed provision 

reduces the cost of complying with the 

January 2012 Final Rule for some 

remittance transfer providers and leaves 

the costs of other providers unaffected. 

The proposed rule provisions therefore 

provide only benefits to covered persons 

and no costs. 

The proposed provisions include a 

proposed revision to comment 30(f)–2 of 

the January 2012 Final Rule. Comment 

30(f)–2 in the January 2012 Final Rule 

states that whether a person provides 

remittance transfers in the ‘‘normal 

course of business’’ depends on the 

‘‘facts and circumstances.’’ The 

proposed revision provides a safe harbor 

under which this facts and 

circumstances test is met. Specifically, a 

person that performs 25 or fewer 

remittance transfers in the previous 

calendar year will not be deemed to be 

providing remittance transfers ‘‘in the 

normal course of business’’ on the first 

25 remittance transfers in the current 

year. If that person, however, makes a 

26th remittance transfer in the current 

calendar year, the person would be 

evaluated under the facts and 

circumstance test to determine whether 

the person is a remittance transfer 

provider for that transfer and any 

additional transfers provided through 

the rest of the year. 

Consumers may experience benefits 

and costs from the proposed safe harbor 

provision for ‘‘normal course of 

business.’’ Some consumers will benefit 

if the entities they use to send 

remittance transfers would stop offering 

remittance transfers if not for the safe 

harbor. Other consumers may incur 

costs associated with not receiving the 

disclosures and protections set forth in 

the remittance transfer rules from 

entities who do not provide remittance 

transfers ‘‘in the normal course of 

business.’’ Businesses should only 

benefit. The proposed provision 

removes the burden from businesses 

that perform few remittance transfers 

from having to argue that they meet a 

general facts and circumstances test. 

This reduces the cost of complying with 

the January 2012 Final Rule. The 

proposed provision imposes no new 

burden on providers that do not meet 

the safe harbor. Thus, these other 

providers are not affected by the 

proposed provision. 

Proposed § 1005.32(b)(2) mitigates the 

burden on providers imposed by 

§§ 1005.31(f) and 1005.36(b)(1) of the 

January 2012 Final Rule. This proposed 

provision allows providers to estimate 

certain amounts in the pre-payment 

disclosure and receipt for certain 

standalone transfers or the first 

scheduled transfer in a series of 

preauthorized transfers. Specifically, 

proposed § 1005.32(b)(2) would permit 

estimates for these transfers when they 

are scheduled by the sender more than 

10 days in advance of the consumer’s 

requested transfer date. 

There may be both benefits and costs 

for consumers from the proposed 

provision relative to the January 2012 

Final Rule. Certain providers may not 

schedule transfers more than 10 days in 

advance without the option of 

estimating certain information in the 

disclosures. Consumers who want to 

schedule transfers more than 10 days in 

advance may therefore find it easier to 

find a provider or they may find more 

competition among providers of this 

service. Some consumers may incur 

costs from receiving estimated 

disclosures instead of accurate 

disclosures. The cost would depend on 

the size of any discrepancy between 

estimated and accurate disclosures. 

Providers can only benefit from the 

proposed provision. The proposed 

provision removes from providers the 

burden of having to give accurate prepayment disclosures and receipts for 

transfers scheduled more than 10 days 

in advance. The proposed provision 

does not affect providers that would not 

allow senders to schedule transfers 

more than 10 days in advance, and it 

benefits all others. 

Proposed comment 36(a)–1 provides 

guidance on the ‘‘within a reasonable 

time’’ requirement for pre-payment 

disclosures in § 1005.36(a)(2)(i). Under 

§ 1005.36(a)(2)(i), a provider must 

provide a pre-payment disclosure for 

each subsequent transfer (after the first 

scheduled transfer) in a series of 

preauthorized remittance transfers, and 

the pre-payment disclosure for each 

subsequent transfer must be provided 

‘‘within a reasonable time’’ prior to the 

scheduled date of the transfer. The 

proposed comment clarifies that a 

provider is deemed to have provided a 

pre-payment disclosure within a 

reasonable time prior to the scheduled 

date of the transfer if the provider mails 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 6325 

or delivers the disclosure 10 or more 

days prior to the scheduled date of the 

transfer. 

There may be both benefits and costs 

for consumers from the proposed 

provision relative to the January 2012 

Final Rule. Consumers will benefit from 

the proposed provision relative to the 

January 2012 Final Rule if some 

consumers use providers that would not 

schedule transfers in advance without 

clarification of the ‘‘within a reasonable 

time’’ requirement. It is possible that a 

provider might shorten the time 

between the issuance of the prepayment disclosure and the transfer 

because of the safe harbor (e.g., from 

more than 10 days without the safe 

harbor to just 10 days with it). This 

might impose a cost on some consumers 

who benefit from having the longer 

period between receiving the prepayment disclosure and the transfer. 

Providers can benefit from the 

proposed provision relative to the 

January 2012 Final Rule. The proposed 

provision removes the burden of 

uncertainty and litigation risk from 

providers that meet the terms of the 

proposed provision in regards to 

whether they are complying with the 

requirement to provide the pre-payment 

disclosure within a reasonable time 

prior to the scheduled date of the 

respective subsequent transfer. The 

proposed provision does not impact 

providers that choose not to comply 

with the safe harbor. 

Regarding access to remittance 

transfer services by consumers, each 

proposed provision reduces the cost of 

complying with the January 2012 Final 

Rule for some remittance transfer 

providers and leaves other providers 

unaffected. For this reason, the Bureau 

believes that all provisions of this 

rulemaking will tend to increase access 

by consumers to consumer financial 

products or services. 

As stated above, in finalizing the 

proposal, the Bureau will further 

consider the benefits, costs and impacts 

of the provisions of the proposed rule. 

The Bureau asks interested parties to 

provide data, research results and other 

factual information that may be useful 

for this analysis. 

Additional Proposed Modifications to 

the January 2012 Final Rule 

The Bureau is requesting for comment 

on a number of additional proposed 

modifications to the final rule but has 

not included specific regulatory or 

commentary language in the proposal 

on them. In addition, the Bureau 

requests comment on whether to allow 

providers to provide estimates in the 

pre-payment disclosure and receipt for 

certain standalone transfers or the first 

scheduled transfer in a series of 

preauthorized transfers, subject to the 

requirement that providers who disclose 

estimates give a second and accurate 

receipt. Consumers would benefit from 

this proposed modification to the extent 

that the additional option to provide 

initial disclosures with estimates and a 

second accurate receipt after the transfer 

causes more providers to schedule 

remittance transfers in advance 

compared to the final rule, which 

requires that they provide accurate prepayment disclosures and receipts at the 

time the transfer is requested and 

authorized. Even more providers might 

schedule remittance transfers in 

advance if the proposed modification 

did not require the second receipt, but, 

in that circumstance, the proposed 

modification would provide greater 

access but less precise disclosures. 

Providers are no worse off under these 

proposed modifications to the January 

2012 Final Rule compared with the 

requirements under the final rule since 

they would still have the option to 

provide accurate disclosures at the time 

the transfers are authorized, as currently 

required under the final rule. Providers 

in this case would not be required to 

provide a second receipt. 

The Bureau is also requesting 

comment on an additional proposed 

modification to mitigate the burden on 

providers imposed by § 1005.36(b)(1) of 

the final rule by allowing providers to 

use estimates for the first preauthorized 

remittance transfer if the amount of the 

transfer can vary. Another additional 

proposed modification to the proposal 

would require providers who use 

estimates for this purpose to give a 

second and accurate receipt. The 

analysis of these additional proposed 

modifications are identical to the 

analysis for proposed § 1005.32(b)(2) 

and the additional proposed 

modification to that provision discussed 

above. 

The Bureau is also requesting 

comment on mitigating the burden on 

providers imposed by § 1005.31(b)(1) in 

the January 2012 Final Rule as it 

pertains to subsequent transfers by 

eliminating the pre-payment disclosure 

for transfers that occur after the first 

transfer in a series of preauthorized 

remittance transfers. See 

§ 1005.36(a)(2)(i). Consumers may 

benefit from the proposed modification 

insofar as it provides an incentive for 

more providers to offer preauthorized 

remittance transfers. However, 

consumers would forego any benefits 

from the reminder that a transfer is 

going to occur and from knowing some 

of the terms of the transfer prior to the 

transfer. The proposed provision would 

not impose any additional costs on 

providers. 

The Bureau is also soliciting comment 

on whether changes should be made to 

the cancellation rights for certain 

transfers, as provided for in 

§ 1005.36(c). Under the January 2012 

Final Rule, when a sender schedules a 

remittance transfer at least three 

business days before the date of the 

transfer, the provider must cancel the 

transfer if the sender notifies the 

provider to cancel the transfer at least 

three business days before the 

scheduled date of the transfer. Requiring 

providers to allow senders to cancel the 

transfer less than three business days 

before the date of the transfer likely 

provides greater benefits to consumers 

but imposes greater costs on providers. 

Senders may benefit from the flexibility 

to cancel the transfer closer to the 

transfer date if circumstances change for 

the senders, and they decide they do not 

want to complete the transfer. On the 

other hand, providers may have 

difficulty processing the sender’s 

request to cancel the transfer in time to 

stop the transfer if the notice of 

cancellation is given too close to the 

date of the transfer. Requiring senders to 

cancel the transfer more than three 

business days from the date of the 

transfer likely has the opposite benefits 

and costs for consumers and providers, 

respectively, compared with a shorter 

cancellation period. 

The remaining issues on which the 

Bureau is soliciting comment concern 

the disclosure of the sender’s 

cancellation rights (deadline to cancel). 

Under § 1005.31(b)(2)(iv) in the January 

2012 Final Rule, a provider must only 

disclose the deadline to cancel that is 

applicable to a transfer in the receipt for 

the transfer. Thus, under the January 

2012 Final Rule, providers must prepare 

receipts with different descriptions of 

cancellation rights for remittance 

transfers scheduled more than three 

business days before the date of the 

transfer and for remittance transfers 

scheduled within three business days of 

the date of the transfer and make sure 

they give the sender the proper receipt. 

One modification on which the 

Bureau is requesting comment allows a 

provider that provides both types of 

transfers to describe both cancellation 

provisions on one receipt. For example, 

the provider could disclose on the 

receipt both the three-business-day and 

the 30 minute time frames and either: (i) 

describe to which transfers each 

deadline is applicable; or (ii) use a 

check box or other method to indicate 

which deadline is applicable to the 

transfer. 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
6326 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

A provider using the option in the 

first scenario would provide, on one 

receipt, the language describing each 

deadline to cancel and describe to 

which types of transfers each deadline 

applies. Relative to the January 2012 

Final Rule, providers would be relieved 

of the burden of developing two 

different receipts and making sure they 

give a sender the proper receipt. This 

option may lower costs for providers. 

This additional proposed modification 

would be optional, such that providers 

might, at their discretion, instead 

comply with the notice provision in the 

January 2012 Final Rule. Thus, this 

additional proposed modification to the 

January 2012 Final Rule would not 

increase costs for providers relative to 

the January 2012 Final Rule. On the 

other hand, it is possible that senders 

given the type of notice permitted by the 

additional proposed modification would 

not understand which deadline to 

cancel applied to their particular 

transfers compared with the notice 

requirements under the January 2012 

Final Rule. The Bureau solicits 

comment on this consideration of costs 

and benefits. 

A provider using the option in the 

second scenario under the additional 

proposed modification would describe 

both cancellation provisions on one 

receipt, but would also use a check box 

or other method to indicate which 

deadline is applicable to the transfer. 

This disclosure would therefore be 

customized to the particular transaction. 

The cost of this option might be lower 

than the cost of the notice provision in 

the January 2012 Final Rule. In 

addition, under the additional proposed 

modification, providers could, at their 

discretion, still comply with the notice 

provision in the January 2012 Final 

Rule. Thus, the additional proposed 

modification to the January 2012 Final 

Rule would not increase costs for 

providers relative to the January 2012 

Final Rule. 

The Bureau does not have data from 

which it could evaluate whether the 

disclosure in the second scenario or the 

disclosure required under the January 

2012 Final Rule provides senders with 

a better understanding of the deadline to 

cancel for their particular transfers. Both 

disclosures are customized to the 

transaction, but the customization is 

different. Both of them may cause 

senders to better understand which 

deadline to cancel applies to their 

transaction than would the disclosure 

from the first scenario, which may be 

the least expensive for providers. Again, 

the Bureau solicits comments on this 

consideration of costs and benefits. 

The Bureau is also requesting 

comment on whether a provider should 

be required to provide the disclosure of 

the deadline to cancel in the prepayment disclosure for transfers 

subsequent to the first in a series of 

preauthorized remittance transfers. 

Under the January 2012 Final Rule, a 

sender may not receive a receipt for 

transfers subsequent to the first (and 

with it, the disclosure of the deadline to 

cancel) until the transfer has already 

occurred. At that point, the deadline to 

cancel will generally have expired. See 

§§ 1005.31(b)(2)(iv) and 

1005.36(a)(2)(ii). 

This proposed modification to the 

January 2012 Final Rule requires 

providers to have two standard types of 

pre-payment disclosures and possibly 

three standard types of receipts. One 

pair of disclosures would be used for 

individual remittance transfers and the 

first transfer in a series of preauthorized 

remittance transfers that are scheduled 

within three business days of the 

scheduled date of the transfer. The 30- 

minute deadline to cancel would be on 

the receipt only. Another pair of 

disclosures would be used for 

individual remittance transfers and the 

first transfer in a series of preauthorized 

remittance transfers that are scheduled 

more than three business days prior to 

the scheduled date of the transfer. The 

three-business-day deadline to cancel 

would appear only on the receipt. The 

final pair would be used for transfers 

subsequent to the first in a series of preauthorized remittance transfers. The 

three-business-day deadline to cancel 

would be on the pre-payment 

disclosure. Relative to the January 2012 

Final Rule, the provider would have the 

additional cost of preparing another 

type of pre-payment disclosure and 

possibly another type of receipt and 

ensuring that senders receive the correct 

pre-payment disclosure and receipt for 

each type of transfer. Providers would 

not have to prepare a third standard 

type of receipt, however, if they could 

use the receipt with the three-businessday deadline to cancel as the receipt for 

both the first and for transfers 

subsequent to the first in a series of preauthorized remittance transfers. 

On the other hand, under these 

additional proposed modifications to 

the January 2012 Final Rule, consumers 

sending preauthorized remittance 

transfers would receive a disclosure that 

would more effectively inform them of 

their cancellation rights. However, 

consumers who wished to cancel would 

benefit from the proposed modification 

only insofar as they are not already 

aware of the deadline to cancel from 

prior disclosures, including prior 

receipts. 

Finally, the Bureau is considering two 

modifications to make consumers aware 

of when they can cancel a remittance 

transfer scheduled more than three days 

in advance of the transfer. Under the 

January 2012 Final Rule, consumers can 

cancel these transactions up to three 

business days before the transfer. 

Consumers also receive a disclosure on 

the receipt stating their cancellation 

rights. The statement of rights contains 

the term ‘‘business day,’’ however, and 

consumers may not know a particular 

provider’s business days. 

The Bureau is requesting comment on 

whether a provider should be required 

to state the provider’s business days on 

the receipt. There may be little cost to 

this modification, since under the 

January 2012 Final Rule providers must 

already generate a different receipt for 

transfers scheduled more than three 

days in advance from receipts for 

transfers scheduled within three 

business days of the transfer date. Under 

the additional proposed modification, 

however, providers would have to 

update the form if they were to change 

their business days. 

The Bureau is also soliciting comment 

on whether the receipt should actually 

state the specific date on which the right 

to cancel expires. This proposed 

modification would provide the sender 

with the most precise information about 

cancellation rights. The cost to 

providers of this modification would 

likely be greater, however, than a 

disclosure of the provider’s business 

days because it would require 

customization for each transfer. 

Potential Reduction of Access by 

Consumers to Consumer Financial 

Products or Services 

Regarding access to consumer 

financial products and services by 

consumers, each proposed provision 

would reduce the cost of complying 

with the January 2012 Final Rule for 

some remittance transfer providers and 

leave other providers unaffected. For 

this reason, the Bureau believes that all 

proposed provisions would tend to 

increase access by consumers to 

consumer financial products or services. 

However, some of the additional 

proposed modifications on which the 

Bureau is soliciting comment would 

provide greater consumer protections 

that might increase certain costs of 

certain providers. These include 

modifications to allow consumers to 

cancel remittance transfers scheduled in 

advance to cancel less than three days 

before the transfer, to require providers 

to disclose the deadline to cancel in the 


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pre-payment disclosure instead of the 

receipt for subsequent preauthorized 

transfers, and to provide consumers 

with a specific expiration date for the 

right to cancel when the transfer is 

scheduled more than three days in 

advance of the transfer. The Bureau 

therefore asks interested parties to 

provide data, research results and other 

factual information that may be useful 

for further analysis of the effect of the 

proposed provisions and the additional 

proposed modifications on access by 

consumers to consumer financial 

products and services. 

Impact of the Proposed Provisions and 

the Additional Proposed Modifications 

on Depository Institutions and Credit 

Unions With Total Assets of $10 Billion 

or Less as Described in Section 1026 

All depository institutions and credit 

unions that provide 25 or fewer 

remittance transfers per year would 

benefit from the proposed safe harbor 

provision, which would deem them not 

to be providing remittance transfers in 

the ‘‘normal course of business.’’ All 

depository institutions and credit 

unions that schedule remittance 

transfers in advance would benefit from 

the option to estimate certain 

information in disclosures given for 

standalone transfers or the first transfer 

in a series of preauthorized remittance 

transfers that are scheduled by the 

sender more than 10 days in advance. 

All depository institutions and credit 

unions that schedule remittance 

transfers in advance would benefit from 

the clarification of the ‘‘within a 

reasonable time’’ requirement in the 

proposal for pre-payment disclosures 

given for subsequent preauthorized 

remittance transfers. 

As discussed above, some of the 

additional proposed modifications on 

which the Board is seeking comment 

provide greater consumer protections 

that may increase certain costs of 

providers. These include modifications 

to allow consumers to cancel remittance 

transfers scheduled in advance to cancel 

less than three days before the transfer, 

to require providers to disclose the 

deadline to cancel in the pre-payment 

disclosure instead of the receipt for 

subsequent preauthorized transfers, and 

to provide consumers with a specific 

expiration date for the right to cancel 

when the transfer is scheduled more 

than three days in advance of the 

transfer. 

The Bureau does not have data to 

estimate how many depository 

institutions and credit unions with total 

assets of $10 billion or less as described 

in section 1026 of the Dodd-Frank Act 

will incur the benefits and costs 

provided by the proposed rule and 

additional proposed modifications to 

the final rule. The Bureau therefore asks 

interested parties to provide data, 

research results, and other factual 

information useful for the further 

consideration of the impact of the 

proposed provisions and additional 

proposed modifications to the January 

2012 Final Rule. 

Impact of the Proposed Provisions and 

the Additional Proposed Modifications 

on Consumers in Rural Areas 

Consumers in rural areas may 

experience benefits from the proposed 

provisions that are different in certain 

respects to those experienced by 

consumers in general. If consumers in 

rural areas choose among fewer 

remittance transfer providers than do 

consumers elsewhere, these consumers 

may benefit more from the tendency of 

the proposed provisions to reduce the 

costs of compliance than do consumers 

elsewhere. 

Similarly, the benefits and costs to 

consumers from the additional proposed 

modifications to the January 2012 Final 

Rule may be different for consumers in 

rural areas. The demand by consumers 

for remittance transfers scheduled in 

advance, including preauthorized 

remittance transfers, may be different in 

rural areas. As a result, the impact on 

consumers of the additional proposed 

modifications that may improve certain 

rights and disclosures but may also 

increase the costs to providers may be 

different in rural areas. 

The Bureau will further consider the 

impact of the proposed provisions and 

additional proposed modifications on 

consumers in rural areas. The Bureau 

therefore asks interested parties to 

provide data, research results, and other 

factual information on the numbers and 

characteristics of rural consumers who 

send remittance transfers, the types of 

businesses through which they send 

these transfers, and the quantitative and 

qualitative characteristics of the service 

provided and the transfers. 

VIII. Regulatory Flexibility Act 

When an agency issues a rulemaking 

proposal, the Regulatory Flexibility Act 

(RFA) requires the agency to, ‘‘prepare 

and make available for public comment 

an initial regulatory flexibility 

analysis,’’ which will ‘‘describe the 

impact of the proposed rule on small 

entities.’’ (5 U.S.C. 603(a)). Section 605 

of the RFA allows an agency to certify 

a rule, in lieu of preparing an analysis, 

if the proposed rulemaking is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. 

The proposal contains both specific 

proposed provisions with regulatory or 

commentary language (proposed 

provisions) as well as requests for 

comment on modifications where 

regulatory or commentary language was 

not specifically included (additional 

proposed modifications). The analysis 

below first discusses the proposed 

provisions before discussing the 

additional proposed modifications. 

The analysis generally examines the 

regulatory impact of the provisions of 

the proposed rule and additional 

proposed modifications against the 

baseline of the January 2012 Final Rule 

published elsewhere in today’s Federal 

Register. 

Proposed Provisions 

The proposal sets forth regulation text 

or commentary on three specific 

provisions. First, the proposal provides 

a safe harbor through which a person 

can establish that it is not a ‘‘remittance 

transfer provider’’ because it does not 

provide remittance transfers in the 

normal course of business and thus is 

not required to comply with the 

remittance transfer rules set forth in 

Subpart B of Regulation E. Second, the 

proposal allows providers to estimate 

certain amounts in the pre-payment 

disclosure and receipt for a standalone 

transfer or the first scheduled transfer in 

a series of preauthorized remittance 

transfers, where those transfers are 

scheduled more than 10 days in 

advance. Third, the proposal provides a 

safe harbor for complying with the 

requirement to provide a pre-payment 

disclosure for subsequent preauthorized 

remittance transfers ‘‘within a 

reasonable time’’ prior to the scheduled 

date of the transfer. 

These three proposed provisions are 

designed to facilitate compliance with 

the January 2012 Final Rule and ease 

possible compliance burden. All 

methods of compliance under the 

January 2012 Final Rule would remain 

available to remittance transfer 

providers if these provisions were 

adopted. However, certain business 

practices that may not be compliant, or 

about which a provider is uncertain 

whether they are compliant, under the 

January 2012 Final Rule would be 

deemed compliant under the proposal. 

Thus, the effect of these provisions is to 

give remittance transfer providers 

additional certainty about how to 

comply, flexibility in complying with 

the final rule, and additional methods 

for complying. 

Normal Course of Business 

Comment 30(f)–2 under the January 

2012 Final Rule states that whether a 


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13This proposed modification to the final rule is 

the same as the proposed provision that allows 

estimated disclosures discussed above with the 

addition of the second disclosure requirement. 14Providers in this case would not be required to 

provide a second receipt. 

person provides remittance transfers in 

the normal course of business depends 

on the facts and circumstances. The 

proposal would amend this comment to 

provide a safe harbor through which a 

person can establish that it does not 

provide remittance transfers in the 

normal course of business. Under the 

proposed safe harbor provision, if a 

person makes no more than 25 

remittance transfers in the previous 

calendar year, the person will not be 

deemed to be providing remittance 

transfers in the normal course of 

business for the current year if it 

provides no more than 25 remittance 

transfers in the current year. The 

proposed safe harbor provision relieves 

the person of having to meet the facts 

and circumstances test. 

Under the proposed provision, small 

businesses that meet the pattern and 

frequency requirements of the proposed 

safe harbor would be relieved of 

uncertainty about whether they provide 

remittance transfers in the normal 

course of business. In particular, those 

businesses that provide 25 or fewer 

remittance transfers in a particular year 

(including 2012, before providers must 

comply with the January 2012 Final 

Rule) and continue to do so in the 

subsequent year (e.g., 2013) would 

benefit by being relieved of the 

obligation to evaluate their activities 

under the facts and circumstances test 

for that subsequent year. Small 

businesses that provide more than 25 

remittance transfers in a particular year 

would not experience any impact from 

the proposed provision. Thus, small 

businesses that provide remittance 

transfers would only benefit from the 

proposed provision. 

Transfers Scheduled in Advance 

Proposed § 1005.32(b)(2) allows 

providers to estimate certain amounts in 

the pre-payment disclosure and receipt 

for a standalone transfer or the first 

scheduled transfer in a series of 

preauthorized remittance transfers 

where the transfer is scheduled more 

than 10 days in advance. This provision 

would remove the burden to providers 

of having to give an accurate, as 

opposed to an estimated, pre-payment 

disclosure and receipt for a standalone 

transfer scheduled more than 10 days in 

advance of the transfer date or the first 

scheduled transfer in a series of 

preauthorized remittance transfers 

scheduled more than 10 days in 

advance of the transfer date. The 

provision would not impact providers 

providing a standalone transfer within 

10 days of the scheduled transfer date 

or the first scheduled transfer in a series 

of preauthorized remittance transfers 

scheduled within 10 days of the transfer 

date. For those transfers, providers 

would still be required under the 

January 2012 Final Rule to provide 

accurate pre-payment disclosures and 

receipts. 

Proposed comment 36(a)–1 would 

provide guidance on the ‘‘within a 

reasonable time’’ requirement for prepayment disclosures in 

§ 1005.36(a)(2)(i). Under 

§ 1005.36(a)(2)(i) of the January 2012 

Final Rule, a provider must provide a 

pre-payment disclosure for each 

subsequent transfer (after the first 

scheduled transfer) in a series of 

preauthorized remittance transfers 

within a reasonable time prior to the 

scheduled date of the transfer. The 

proposed comment would clarify that a 

provider is deemed to have provided the 

pre-payment disclosure within a 

reasonable time prior to the scheduled 

date of the transfer if the provider mails 

or delivers the pre-payment disclosure 

10 or more days prior to the scheduled 

date of the transfer. For providers that 

meet this condition, this proposed 

provision would remove the burden of 

uncertainty and litigation risk regarding 

whether they are complying with the 

requirement to provide the pre-payment 

disclosure within a reasonable time 

prior to the scheduled date of the 

respective subsequent transfer. The 

proposed provision would not impact 

providers that choose not to comply 

with the safe harbor; they would still 

need to meet the ‘‘within a reasonable 

time’’ requirement in providing the prepayment disclosure for subsequent 

transfers under the January 2012 Final 

Rule. This provision imposes no burden 

on small providers that do not provide 

preauthorized remittance transfers. 

With respect to proposed 

§ 1005.32(b)(2) and proposed comment 

36(a)–1, small providers that currently 

permit standalone transfers to be 

scheduled more than 10 days in 

advance or that provide preauthorized 

remittance transfers would benefit from 

the proposed provisions. Other small 

remittance transfer providers would not 

experience any impact from these 

proposed provisions. Thus, small 

businesses that provide remittance 

transfers would only benefit from these 

proposed provisions. 

Additional Proposed Modifications to 

the Final Rule 

The Bureau has asked for comment on 

a number of additional modifications to 

the January 2012 Final Rule but did not 

include specific regulatory or 

commentary language in the proposal 

on these modifications. 

As discussed above, the Bureau is 

proposing to allow providers to estimate 

certain amounts in the pre-payment 

disclosure and receipt for certain 

standalone transfers or the first 

scheduled transfer in a series of 

preauthorized transfers for transfers 

scheduled (see proposed 

§ 1005.32(b)(2)). Additionally, the 

Bureau is requesting comment on 

whether providers taking advantage of 

such ability to estimate should be 

required to give a second and accurate 

receipt.13 This proposed modification to 

the January 2012 Final Rule would have 

no negative impact on small providers 

since they would still have the option 

to provide accurate disclosures at the 

time the transfers are authorized, as 

required under the January 2012 Final 

Rule.14

The Bureau is also requesting 

comment on a proposed modification to 

mitigate the burden on providers 

imposed by § 1005.36(b)(1) of the 

January 2012 Final Rule by allowing 

providers to use estimates for the first 

preauthorized remittance transfer if the 

amount of the transfer can vary. Similar 

to the proposed modification in 

connection with the ability to estimate 

under proposed § 1005.32(b)(2) for 

transfers scheduled more than 10 days 

in advance, the Bureau is further 

seeking comment on a proposed 

modification under which providers 

may use estimates for the first 

preauthorized remittance transfer if the 

amount of the transfer can vary, 

provided they give a second and 

accurate receipt closer to the date of 

transfer. The Bureau is also seeking 

comment on whether, for an advance 

transfer, a provider should be allowed to 

disclose a formula that will be used to 

calculate the exchange rate that will 

apply to a transfer. The analysis of these 

proposed modifications is identical to 

the analysis for proposed § 1005.32(b)(2) 

and the modification to that provision 

discussed above. Again, the proposed 

modification to the final rule would 

have no negative impact on small 

providers since they would still have 

the option to provide accurate 

disclosures at the time the transfers are 

authorized. 

The Bureau is also requesting 

comment on mitigating the burden on 

providers imposed by § 1005.31(b)(1) in 

the January 2012 Final Rule as it 

pertains to subsequent transfers that 

occur after the first transfer in a series 


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of preauthorized remittance transfers by 

eliminating the pre-payment disclosure 

for such transfers. See § 1005.36(a)(2)(i). 

The proposed modification to the 

January 2012 Final Rule would have no 

negative impact on small providers 

since it reduces the number of 

disclosures they must provide. 

The Bureau is also soliciting comment 

on whether changes should be made to 

the cancellation rights for certain 

transfers, as provided for in 

§ 1005.36(c). Under the January 2012 

Final Rule, when a sender schedules a 

remittance transfer at least three 

business days before the date of the 

transfer, the provider must cancel the 

transfer if the sender notifies the 

provider to cancel the transfer at least 

three business days before the 

scheduled date of the transfer. The 

Bureau is soliciting comment on 

whether the deadline to cancel should 

be more or less than three business 

days. The net impact of any change in 

this deadline is difficult to predict, 

because the Bureau has no data from 

which to predict how a change in the 

cancellation period will affect 

consumers’ likelihood of cancellation or 

a providers’ costs relative to the 

cancellation deadline. In any case, the 

Bureau believes that few providers, 

including small providers, have a large 

share of their business in transfers 

scheduled at least three business days in 

advance of the transfer. Thus, the 

Bureau does not believe that the 

proposed modification to the January 

2012 Final Rule would cause a 

substantial number of small providers to 

incur a significant increase in overall 

costs. 

The remaining issues on which the 

Bureau is soliciting comment concern 

the disclosure of the sender’s 

cancellation rights (deadline to cancel). 

Under § 1005.31(b)(2)(iv) in the January 

2012 Final Rule, a provider must only 

disclose in the receipt for a transfer the 

deadline to cancel that is applicable to 

that transfer. Thus, under the January 

2012 Final Rule, providers must prepare 

a different receipt for remittance 

transfers scheduled more than three 

business days before the date of the 

transfer from the one they use for 

remittance transfers scheduled within 

three business days of the date of the 

transfer and make sure they give the 

sender the proper receipt. 

One modification on which the 

Bureau is requesting comment allows a 

provider that provides both types of 

transfers to describe both cancellation 

provisions on one receipt. For example, 

the provider could disclose on the 

receipt both the three-business-day and 

the 30 minute time frames and either: (i) 

describe to which transfers each 

deadline is applicable; or (ii) use a 

check box or other method to indicate 

which deadline is applicable to the 

transfer. 

A provider using the option in the 

first scenario would provide, on one 

receipt, the language describing each 

deadline to cancel and describe to 

which types of transfers each deadline 

applies. Relative to the January 2012 

Final Rule, providers would be relieved 

of the burden of developing two 

different receipts and making sure they 

give a sender the proper receipt. This 

option may lower costs for providers. 

Under the additional proposed 

modification, rather than comply with 

the modified provision providers could, 

instead, at their discretion, comply with 

the notice provision in the January 2012 

Final Rule. Thus, this additional 

proposed modification to the January 

2012 Final Rule would not have a 

negative impact on small providers. 

A provider using the option in the 

second scenario would need to describe 

both cancellation provisions on one 

receipt and use a check box or other 

method to indicate which deadline is 

applicable to the transfer. This 

disclosure would therefore be 

customized to the particular transaction. 

Under the additional proposed 

modification, rather than comply with 

the modified provision providers could, 

instead, at their discretion, comply with 

the notice provision in the January 2012 

Final Rule. Therefore, this proposed 

modification to the January 2012 Final 

Rule would not increase costs for 

providers relative to the final rule. Thus, 

this proposed modification to the 

January 2012 Final Rule would have no 

negative impact on small providers. 

The Bureau is also requesting 

comment on whether providers should 

be required to disclose the deadline to 

cancel in the pre-payment disclosure for 

transfers subsequent to the first in a 

series of preauthorized remittance 

transfers, rather than being required to 

provide this disclosure in the receipt for 

such transfers. Under the January 2012 

Final Rule, a sender may not receive a 

receipt for transfers subsequent to the 

first (and with it the disclosure of the 

deadline to cancel) until the scheduled 

date of transfer has passed. At that 

point, the deadline to cancel will 

generally have expired. See 

§§ 1005.31(b)(2)(iv) and 

1005.36(a)(2)(ii). 

This proposed modification to the 

January 2012 Final Rule would require 

providers to have two standard types of 

pre-payment disclosures and possibly 

three standard types of receipts. One 

pair of disclosures would be used for 

individual remittance transfers and the 

first transfer in a series of preauthorized 

remittance transfers that are scheduled 

within three business days of the 

scheduled date of the transfer. The 30- 

minute deadline to cancel would be on 

the receipt only. Another pair of 

disclosures would be used for 

individual remittance transfers and the 

first transfer in a series of preauthorized 

remittance transfers that are scheduled 

more than three business days prior to 

the scheduled date of the transfer. The 

three-business-day deadline to cancel 

would appear only on the receipt. The 

final pair would be used for transfers 

subsequent to the first in a series of preauthorized remittance transfers. The 

deadline to cancel would be on the prepayment disclosure. A third standard 

type of receipt would not be required if 

a provider were permitted to include the 

disclosure of the deadline to cancel in 

the receipt, in addition to the prepayment disclosure. 

Under the additional proposed 

modification, relative to the January 

2012 Final Rule, the provider would 

have the additional cost of preparing 

another type of pre-payment disclosure 

and possibly another type of receipt and 

ensuring that the sender received the 

correct pre-payment disclosure and 

receipt for each type of transfer. 

However, the Bureau believes that few 

providers, including small providers, 

have a large share of their business in 

preauthorized remittance transfers. 

Thus, the Bureau does not believe that 

the proposed modification to the final 

rule would cause a substantial number 

of small providers to incur a significant 

increase in overall costs. 

Finally, the Bureau is considering two 

modifications to make consumers aware 

of when they can cancel a remittance 

transfer scheduled more than three 

business days in advance of the transfer. 

Under the January 2012 Final Rule, 

consumers can cancel these transactions 

up to three business days before the 

transfer. Consumers also receive a 

disclosure on the receipt stating their 

cancellation rights. The statement of 

rights contains the term ‘‘business day,’’ 

however, and consumers may not know 

a particular provider’s business days. 

The Bureau is requesting comment on 

whether a provider should be required 

to state the provider’s business days on 

the receipt. There may be little cost to 

this modification relative to the January 

2012 Final Rule, since under the final 

rule providers must already generate a 

different receipt for transfers scheduled 

more than three days in advance from 

receipts for transfers scheduled within 

three business days of the transfer date. 

Providers would have to change the 


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6330 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

form if they changed their business 

days, however. The Bureau does not 

believe that this proposed modification 

to the January 2012 Final Rule would 

cause a substantial number of small 

providers to incur a significant increase 

in overall costs. 

The Bureau is also soliciting comment 

on whether the receipt should actually 

state the specific date on which the right 

to cancel expires. This modification 

would provide the sender with the most 

precise information about cancellation 

rights. The cost to providers could be 

greater than a disclosure of the 

provider’s business days because it 

would require customization for each 

transfer, which might not be automated 

in all circumstances. However, as stated 

above, the Bureau believes that few 

providers, including small providers, 

have a large share of their business in 

remittance transfers scheduled at least 

three business days in advance of the 

transfer. Thus, the Bureau does not 

believe that the proposed modification 

to the January 2012 Final Rule would 

cause a substantial number of small 

providers to incur a significant increase 

in overall costs. 

Certification 

Accordingly, the Director of the 

Bureau of Consumer Financial 

Protection hereby certifies that if 

promulgated, this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

The Bureau invites comment from 

members of the public who believe 

there will be a significant impact on a 

substantial number of small entities. 

IX. Paperwork Reduction Act 

The collection of information 

contained in this notice of proposed 

rulemaking has been submitted to the 

Office of Management and Budget 

(OMB) for review in accordance with 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3507(d)). Under the 

Paperwork Reduction Act, the Bureau 

may not conduct or sponsor, and a 

person is not required to respond to, 

this information collection unless the 

information collection displays a 

currently valid control number. 

Comments on the collection of 

information requirements should be 

sent to the Office of Management and 

Budget, Attention: Desk Officer for the 

Consumer Financial Protection Bureau, 

Office of Information and Regulatory 

Affairs, Washington, DC 20503, or by 

the internet to http:// 

oira_submission@omb.eop.gov, with 

copies to the Bureau at the address 

previously specified. 

Comments are specifically requested 

concerning: (i) Whether the proposed 

collections of information are necessary 

for the proper performance of the 

functions of the Bureau, including 

whether the information will have 

practical utility; (ii) the accuracy of the 

estimated burden associated with the 

proposed collections of information; (iii) 

how to enhance the quality, utility, and 

clarity of the information to be 

collected; and (iv) how to minimize the 

burden of complying with the proposed 

collections of information, including the 

application of automated collection 

techniques or other forms of information 

technology. 

The collection of information that is 

subject to the Paperwork Reduction Act 

in this proposed regulation is in 12 CFR 

part 1005. The Bureau’s OMB control 

number for Regulation E is 3170–0014. 

This information collection is required 

to provide benefits for consumers and is 

mandatory. See 15 U.S.C. 1693 et seq. 

The respondents and/or recordkeepers 

are financial institutions and entities 

involved in the remittance transfer 

business, including small businesses. 

Respondents are required to retain 

records for 24 months, but this proposed 

regulation does not specify the types of 

records that must be maintained. 

This information is required to 

provide pre-payment disclosures and 

receipts to consumers in the United 

States who wish to send a remittance 

transfer to a recipient in a foreign 

country. The disclosures provide 

pricing information and information 

regarding cancellation and error 

resolution rights. This information can 

be used by consumers for budgeting and 

shopping purposes and by consumers 

and Federal agencies to determine when 

violations of the underlying rules and 

statute have occurred. 

As detailed in the SUPPLEMENTARY

INFORMATION above, the Bureau is 

publishing the January 2012 Final Rule 

elsewhere in today’s Federal Register to 

implement the remittance transfer 

provision in section 1073 of the DoddFrank Act. The Bureau is publishing 

this notice of proposed rulemaking to 

seek comment on whether to provide 

additional safe harbors and flexibility in 

applying the January 2012 Final Rule to 

certain transfers and remittance transfer 

providers. The proposal, if adopted, and 

the January 2012 Final Rule will be 

implemented on the same date. 

The proposal contains both specific 

proposed provisions with regulatory or 

commentary language (proposed 

provisions) as well as requests for 

comment on modifications where 

regulatory or commentary language was 

not specifically included (additional 

proposed modifications). Disclosures 

provided under the proposed provisions 

(new disclosures) would replace certain 

disclosures already required by the 

January 2012 Final Rule (old 

disclosures) and are not in addition to 

them. The new disclosures required 

under the proposed provisions are 

generally similar in format and content 

requirements to the old disclosures, 

except respondents may provide 

estimates of information in certain 

circumstances. 

Specifically, in proposed 

§ 1005.32(b)(2), providers would be 

permitted to estimate certain 

information in pre-payment disclosures 

and receipts given at the time of the 

request and authorization for standalone 

transfers or the first scheduled transfer 

in a series of preauthorized transfers 

that are scheduled by the sender more 

than 10 days in advance of the 

consumer’s requested transfer date. 

The proposed provisions also provide 

guidance on the ‘‘within a reasonable 

time’’ requirement for when prepayment disclosures must be mailed or 

delivered for each subsequent transfer 

(after the first scheduled transfer) in a 

series of preauthorized remittance 

transfers. Specifically, proposed 

comment 36(a)–1 provides a safe harbor 

under which a provider is deemed to 

have provided a pre-payment disclosure 

within a reasonable time prior to the 

scheduled date of the transfer if the 

provider mails or delivers the disclosure 

10 or more days prior to the scheduled 

date of the transfer. In addition, the 

proposed provisions provide 

respondents with additional flexibility 

that would also reduce burden, such as 

providing a safe harbor to determine 

when certain respondents are excluded 

from the rule because they are not 

deemed to be providing remittance 

transfers in the ‘‘normal course of 

business.’’ See proposed comment 

30(f)–2. 

Because the proposed provisions 

provide safe harbors and additional 

flexibility to provide estimates that 

respondents may use at their option in 

order to reduce compliance burden, the 

proposed provisions do not impose any 

additional burden on respondents for 

PRA purposes. Accordingly, the 

proposed provisions would not increase 

the one-time or ongoing burden 

estimates provided by the Bureau for 

PRA purposes in the January 2012 Final 

Rule. Section IX of the SUPPLEMENTARY

INFORMATION to the January 2012 Final 

Rule, which is published elsewhere in 

today’s Federal Register, sets forth the 

Bureau’s analysis and determinations 

under the PRA with respect to the 

burden associated with aspects of the 


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15The Bureau notes that there may be other 

entities that serve as remittance transfer providers 

and that are not depository institutions, credit 

unions, or money transmitters, as traditionally 

defined. These entities could include, for example, 

brokerages that send remittance transfers. Though 

the Bureau does not have an estimate of the number 

of any such providers, the Bureau believes that they 

would account for a number of entities that is 

significantly less than the sum of money 

transmitters and their agents. 

January 2012 Final Rule. Because the 

proposed provisions, if adopted, do not 

increase the Bureau’s estimates in 

Section IX of the SUPPLEMENTARY

INFORMATION of the January 2012 Final 

Rule, the Bureau continues to rely on 

that analysis and determination for the 

purposes of this rulemaking. 

The Bureau’s current annual burden 

to comply with the provision of 

Regulation E is estimated to be 

4,003,000 hours for the 155 large 

depository institutions and credit 

unions (including their depository and 

credit union affiliates) and money 

transmitters (accounting for the 

Bureau’s allocation of burden) 

supervised by the Bureau that are 

deemed to be respondents for the 

purposes of the PRA. 

The Bureau expects that the amount 

of time required to implement the 

proposed provisions for a given 

provider may vary based on the size and 

complexity of the respondent as well as 

whether the respondent qualifies for 

and elects to use the proposed safe 

harbors or additional flexibility to 

provide estimates. However, as 

discussed above, the Bureau believes 

that the burden associated with 

providing disclosures under the 

proposed provisions is already 

accounted for in the Bureau’s January 

2012 Final Rule estimates because the 

final rule already requires certain 

disclosures addressed by the proposed 

provisions. Specifically, the Bureau 

expects respondents that rely on 

proposed § 1005.32(b)(2) to provide 

estimates for certain disclosures would 

incorporate these changes into the 

updates to their systems already 

required in order to comply with the 

disclosure requirements addressed in 

§ 1005.31. Accordingly, for the reasons 

stated above, the Bureau estimates that 

there would be no increase in the onetime or ongoing burden to comply with 

the requirements under proposed 

§ 1005.32(b)(2). 

However, the Bureau notes that some 

of the additional proposed 

modifications to the January 2012 Final 

Rule could affect the burden for PRA 

purposes. As discussed above in the 

SUPPLEMENTARY INFORMATION to the 

proposal, the proposal solicits comment 

on whether use of estimates should be 

permitted in the following two 

circumstances: (i) a consumer schedules 

a one-time transfer or the first in a series 

of preauthorized transfers to occur more 

than 10 days after the transfer is 

authorized; or (ii) a consumer 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 also requests 

comment on whether in lieu of 

providing an estimate of the exchange 

rate on the disclosures for an advance 

transfer, a provider may disclose a 

formula and whether a provider that 

uses estimates in the pre-payment 

disclosure and receipt given at the time 

the transfer is requested and authorized 

in the two situations described above 

should be required to provide a second 

receipt with accurate information 

within a reasonable time prior to the 

scheduled date of the transfer. 

The Bureau notes these proposed 

modifications would provide additional 

flexibility and that the second receipt 

would only be required if the provider 

used estimates (or formula), at their 

option, in the two circumstances 

described above. Generally, these 

proposed modifications could lower 

ongoing costs from estimating certain 

amounts in the pre-payment disclosure 

and receipt given at the time the transfer 

is requested and authorized instead of 

determining accurate amounts; 

however, the additional accurate receipt 

could increase burden for PRA 

purposes. The Bureau notes, however, 

that this potential increase in burden 

would be voluntary. 

The Bureau estimates that for the 155 

large depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau, these proposed modifications 

would increase the one-time burden by 

620 hours and would increase the 

ongoing burden by 7,440 hours. In 

addition, the Bureau estimates that for 

money transmitters, these proposed 

modifications would increase the onetime burden by 24,000 hours and would 

increase the ongoing burden by 44,468 

hours. 

The Bureau is soliciting comment 

concerning the disclosure of the 

sender’s cancellation rights (deadline to 

cancel). One proposed modification 

allows, at their option, providers that 

provide both transfers scheduled more 

than three business days in advance and 

within three business days before the 

date of transfer to describe both 

cancellation provisions on one receipt. 

Under another proposed modification, 

the Bureau is requesting comment on 

whether providers should be required to 

disclose the deadline to cancel in the 

pre-payment disclosure for transfers 

subsequent to the first in a series of 

preauthorized remittance transfers, 

instead of being required to make that 

disclosure in the receipt for the transfer. 

The Bureau estimates that for the 155 

large depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau, the first proposed modification 

would increase the one-time burden by 

620 hours and the ongoing burden by 

7440 hours. In addition, the Bureau 

estimates that for money transmitters, 

the proposed modification would 

increase the one-time burden by 24,000 

hours and the ongoing burden by 44,468 

hours. The Bureau estimates that for the 

155 large depository institutions and 

credit unions (including their 

depository and credit union affiliates) 

supervised by the Bureau, the second 

proposed modification would increase 

the one-time burden by 1,240 hours and 

the ongoing burden by 14,880 hours. In 

addition, the Bureau estimates that for 

money transmitters, the second 

proposed modification would increase 

the one-time burden by 48,000 hours 

and the ongoing burden by 88,936 

hours.15

The Bureau also is soliciting comment 

on whether the disclosure of the threebusiness-day deadline to cancel in the 

receipt for these transfers should 

include a description of the provider’s 

business days or whether the provider 

should be required to disclose in the 

receipt the specific date on which the 

right to cancel that transfer expires. 

The Bureau estimates that for the 155 

large depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau, the proposed modification to 

provide a specific date on the receipt 

would increase the one-time burden by 

620 hours and the ongoing burden by 

7,440 hours. In addition, the Bureau 

estimates that for money transmitters, 

the proposed modification would 

increase the one-time burden by 24,000 

hours and the ongoing burden by 44,468 

hours. 

The Bureau is requesting comment on 

mitigating the burden on providers 

imposed by § 1005.31(b)(1) as it pertains 

to subsequent transfers by eliminating 

the pre-payment disclosure for transfers 

that occur after the first transfer in a 

series of preauthorized remittance 

transfers. See § 1005.36(a)(2)(i). The 

Bureau is also soliciting comment on 

whether changes should be made to the 

three-business-day cancellation 

deadline that applies to transfers 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
6332 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

scheduled by the sender more than 

three business days prior to the 

scheduled date of the transfer, such as 

whether the deadline to cancel these 

transfers should be earlier or later than 

three business days. The Bureau 

believes that these proposed 

modifications, if adopted, would not 

increase the one-time or ongoing burden 

for PRA purposes. However, the Bureau 

solicits comment on these modifications 

or any other aspect of the proposal for 

purposes of the PRA. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed changes to the 

text of the regulation and official 

interpretation. New language is shown 

inside flbold-faced arrowsfi, while 

language that would be deleted is set off 

with øbold-faced brackets¿. 

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 set forth above, the 

Bureau of Consumer Financial 

Protection proposes to amend 12 CFR 

part 1005, as amended February 7, 2012 

and effective February 7, 2013, as 

follows: 

PART 1005—ELECTRONIC FUND 

TRANSFERS (REGULATION E) 

1. The authority citation for part 1005 

continues 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; Pub. L. 111–203, 124 Stat. 1376 

(2010). 

Subpart B—Requirements for 

Remittance Transfers 

2. In § 1005.32, revise paragraph (b) to 

read as follows: 

§ 1005.32 Estimates. 

* * * * * 

(b) flPermanent exceptions. 

(1)fiøPermanent exception for 

t¿flTfiransfers to certain countries. fl 

(i)fiø(1)¿ General. For disclosures 

described in §§ 1005.31(b)(1) through (3) 

and 1005.36(a)(1) and (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 

§§ 1005.31(b)(1)(iv) through (vii), if a 

remittance transfer provider cannot 

determine the exact amounts at the time 

the disclosure is required because: 

fl(A)fiø(i)¿ The laws of the recipient 

country do not permit such a 

determination, or 

fl(B)fiø(ii)¿ The method by which 

transactions are made in the recipient 

country does not permit such 

determination. 

fl(ii)fi ø(2)¿ 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. 

fl(2) Transfers scheduled in advance. 

(i) Except as provided in paragraphs (ii) 

and (iii) of this section, for disclosures 

described in §§ 1005.31(b)(1) through (3) 

and 1005.36(a)(1), estimates may be 

provided in accordance with paragraph 

(c) of this section for the amounts to be 

disclosed under §§ 1005.31(b)(1)(iv) 

through (vii), if the transfer is scheduled 

by a sender to be made more than 10 

days after the date on which the sender 

authorizes the transfer. 

(ii) Taxes described in 

§ 1005.31(b)(1)(vi) may be estimated 

under paragraph (i) of this section only 

if those taxes are a percentage of the 

amount transferred to the designated 

recipient, as described in 

§ 1005.31(b)(1)(v). 

(iii) Fees described in 

§ 1005.31(b)(1)(vi) may be estimated 

under paragraph (i) of this section only 

if: 

(A) The fees are calculated as a 

percentage of the amount transferred to 

the designated recipient, as described in 

§ 1005.31(b)(1)(v); or 

(B) A remittance transfer provider is 

an insured institution as defined in 

§ 1005.32(a)(3), the provider cannot 

determine the exact amount of the fees 

for reasons beyond its control, and the 

remittance transfer is sent from the 

sender’s account with the institution. 

This paragraph (b)(2)(iii)(B) of this 

section expires on July 21, 2015.fi 

* * * * * 

3. In Supplement I to part 1005: 

a. Under Section 1005.30— 

Remittance Transfer Definitions, 30(f) 

Remittance Transfer Provider, 

paragraph 2 is revised. 

b. Under Section 1005.32—Estimates: 

1. Paragraph 1 is revised; 

2. The heading 32(b) Permanent 

Exceptions for Transfers to Certain 

Countries is revised to read as 32(b) 

Permanent Exceptions; 

3. Under 32(b) Permanent Exceptions, 

a new heading 32(b)(1) Transfers to 

Certain Countries is added. 

4. Under new heading 32(b)(1) 

Transfers to Certain Countries, 

paragraphs 4, 5, and 7 are revised; 

5. Under 32(b) Permanent Exceptions, 

a new heading 32(b)(2) Transfers 

Scheduled in Advance is added. 

6. Under new heading 32(b)(2) 

Transfers Scheduled in Advance, 

paragraph 1 is added; 

7. Under 32(c) Bases for Estimates, 

32(c)(1) Exchange Rate, paragraph 1 is 

revised; and 

8. Under 32(c)(3) Other Fees, 

paragraph 1 is revised. 

c. Under Section 1005.36—Transfers 

Scheduled in Advance: 

1. The heading 36(a) Timing and 

paragraph 1 is added; and 

2. The heading 36(b) Accuracy and 

paragraph 1 is added. 

The revisions and additions 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. 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 

international consumer wire transfers 

available to customers, but sends a couple of 

international consumer wire 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 international consumer wire transfers 

generally available to customers (whether 

described in the institution’s deposit account 

agreement, or in practice) and makes 

transfers multiple times per month, the 

institution provides remittance transfers in 

the normal course of business. flIf 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. If 

that person, however, 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 

transfer provided through the rest of the year. 

For instance, assume that in calendar year 

2012, a person provided 20 remittance 

transfers. This person is not providing 

remittance transfers in the normal course of 

business for calendar year 2013 if it provides 

no more than 25 remittance transfers in 

calendar year 2013. Assume further that the 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 6333 

person makes 15 transfers in calendar year 

2013. Because this person limited its 

remittance transfers to no more than 25 in 

2013, it would not be required to comply 

with the rules in subpart B of this regulation 

for any of its transfers in 2013. On the other 

hand, assume the person provides 25 

transfers by July 2013 and a 26th transfer in 

August 2013. In that case, the person would 

be evaluated under the facts and 

circumstances test to determine whether the 

person is a remittance transfer provider for 

the 26th transfer and any other transfer 

provided through the rest of the calendar 

year. In addition, if the person provides a 

26th transfer for calendar year 2013, this 

person would not qualify for the safe harbor 

in 2014 because the person did not make 25 

or fewer remittance transfers in 2013. In this 

case, in 2014, the person would be evaluated 

under the facts and circumstances test in 

determining whether the person is a 

remittance transfer provider for all transfers 

made in 2014.fi 

* * * * * 

Section 1005.32—Estimates 

1. Disclosures where estimates can be used. 

Sections 1005.32(a) and (b)fl(1)fi permit 

estimates to be used in certain circumstances 

for disclosures described in §§ 1005.31(b)(1) 

through (3) and 1005.36(a)(1) and (2). To the 

extent permitted in §§ 1005.32(a) and 

(b)fl(1)fi, estimates may be used in the prepayment disclosure described in 

§ 1005.31(b)(1), the receipt disclosure 

described in § 1005.31(b)(2), the combined 

disclosure described in § 1005.31(b)(3), and 

the pre-payment disclosures and receipt 

disclosures for both first and subsequent 

preauthorized remittance transfers described 

in §§ 1005.36(a)(1) and (a)(2). flSection 

1005.32(b)(2) permits estimates to be used for 

certain information if the transfer is 

scheduled by a sender to be made more than 

10 days after the date on which the sender 

authorizes the transfer, for disclosures 

described in §§ 1005.31(b)(1) through (3) and 

1005.36(a)(1). To the extent permitted by 

§ 1005.32(b)(2), estimates may be used in the 

pre-payment disclosure described in 

§ 1005.31(b)(1), the receipt disclosure 

described in § 1005.31(b)(2), the combined 

disclosure described in § 1005.31(b)(3), and 

the pre-payment disclosure and receipt 

disclosure for the first preauthorized 

remittance transfer described in 

§ 1005.36(a)(1). Section 1005.32(b)(2) does 

not apply to the pre-payment disclosures and 

receipt disclosures for subsequent 

preauthorized remittance transfers described 

in § 1005.36(a)(2).fi 

* * * * * 

fl32(b) Permanent Exceptionsfi 

32(b)fl(1)fi øPermanent Exception 

for¿Transfers to Certain Countries 

* * * * * 

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 § 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 

§ 1005.32(b)(1)fl(i)(B)fiø(ii)¿ 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 § 1005.32(a) 

temporary exception. 

iii. A remittance transfer provider would 

not qualify for the 

§ 1005.32(b)(1)fl(i)(B)fiø(ii)¿ 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 

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 § 1005.32(b)fl(1)(ii)fiø(2)¿, a 

remittance transfer provider may provide 

estimates of the amounts to be disclosed 

under §§ 1005.31(b)(1)(iv) through (vii). If a 

country does not appear on the Bureau’s list, 

a remittance transfer provider may provide 

estimates under § 1005.32(b)(1)fl(i)fi 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. 

* * * * * 

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 § 1005.32(b)(1)fl(i)fi even if 

that country does not appear on the list 

published by the Bureau. 

* * * * * 

fl32(b)(2) Transfers Scheduled in Advance 

1. Fees imposed on the remittance transfer 

by a person other than the provider. The 

exception in § 1005.32(b)(2)(iii) only allows 

estimates for fees disclosed in 

§ 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, as described in § 1005.31(b)(1)(v); 

or (ii) where an ‘‘insured institution’’ as 

defined in § 1005.32(a)(3) is permitted to 

estimate fees under the temporary exemption 

in § 1005.32(a). See § 1005.32(a) and 

accompanying comments.fi 

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 

§ 1005.32(b)(1)fl(i)(B)fiø(ii)¿ 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(c)(3) Other Fees 

1. Potential transmittal routes. A 

remittance transfer from the sender’s 

account at an insured institution to the 

designated recipient’s institution may 

take several routes, depending on the 

correspondent relationships each 

institution in the transmittal route has 

with other institutions. In providing an 

estimate of the fees required to be 

disclosed under § 1005.31(b)(1)(vi) 

pursuant to the § 1005.32(a) temporary 

exception flor the § 1005.32(b)(2) 

exemptionfi, an insured institution 

may rely upon the representations of the 

designated recipient’s institution and 

the institutions that act as 

intermediaries in any one of the 

potential transmittal routes that it 

reasonably believes a requested 

remittance transfer may travel. 

* * * * * 

Section 1005.36—Transfers Scheduled 

in Advance 

* * * * * 

fl36(a) Timing. 

1. Reasonable time. If a provider mails 

or delivers the pre-payment disclosure 

not later than 10 days before the 

scheduled date of the subsequent 

transfer, the provider is deemed to have 

provided that disclosure within a 

reasonable time prior to the scheduled 

date of the respective subsequent 

transfer. 

36(b) Accuracy 

1. Estimates. In providing the 

disclosures described in § 1005.36(a), 

providers may use estimates to the 

extent permitted by §§ 1005.32(a) and 

(b)(1). In addition, § 1005.32(b)(2) 

provides that providers may use 

estimates for certain information for the 

first scheduled preauthorized 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
6334 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Proposed Rules 

remittance transfer, if this transfer is 

scheduled by a sender to be made more 

than 10 days after the date on which the 

sender authorizes the transfer. When 

estimates are permitted, they must be 

disclosed in accordance with 

§ 1005.31(d).fi 

Dated: January 23, 2012. 

Richard Cordray, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2012–1726 Filed 1–30–12; 11:15 am] 

BILLING CODE 4810–AM–P 


srobinson on DSK4SPTVN1PROD with PROPOSALS2