29902 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

1Public Law 111–203, 124 Stat. 1376 (2010). 

2As discussed below, due to the timing of the 

statute and this proposal, the Board anticipates that 

final rules on remittance transfers will be issued by 

the Consumer Financial Protection Bureau 

(‘‘Bureau’’). 

3World Bank, Migration and Remittances 

Factbook 2011 17 (2011). The World Bank includes 

cash and in-kind transfers, earnings of temporary 

workers, and other transfers in its calculations. 

4 Id. at 15. 

5U.S. Bureau of Economic Analysis [BEA], 

Personal Transfers, 1992:I –2010:I (Dec. 16, 2010). 

For more on the BEA’s methodology, see 

Christopher L. Bach, BEA, ‘‘Annual Revision of the 

U.S. International Accounts, 1991–2004,’’ Surv. Of 

Current Bus. No. 7 (July 2005) at 64–66. 

6Elizabeth M. Grieco, Patricia de la Cruz et al, 

Who in the United States Sends and Receives 

Remittances? An Initial Analysis of the Monetary 

Transfer Data from the August 2008 CPS Migration 

Supplement, U.S. Census Bureau Working Paper 

No. 87 (Nov. 2010), available at: http:// 

www.census.gov/population/www/documentation/

FEDERAL RESERVE SYSTEM 

12 CFR Part 205 

[Regulation E; Docket No. R–1419] 

RIN 7100–AD76 

Electronic Fund Transfers 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Proposed rule; request for 

public comment. 

SUMMARY: The Board is proposing to 

amend Regulation E, which implements 

the Electronic Fund Transfer Act, and 

the official staff commentary to the 

regulation, which interprets the 

requirements of Regulation E. The 

proposal contains new protections for 

consumers who send remittance 

transfers to consumers or entities in a 

foreign country, by providing 

consumers with disclosures and error 

resolution rights. The proposed 

amendments implement statutory 

requirements set forth in the DoddFrank Wall Street Reform and Consumer 

Protection Act. 

DATES: Comments must be received on 

or before July 22, 2011. All comment 

letters will be transferred to the 

Consumer Financial Protection Bureau. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1419 and 

RIN 7100–AD76, by any of the following 

methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include the docket number in the 

subject line of the message. 

• FAX: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http://

www.federalreserve.gov/generalinfo/

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Streets, NW.) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Dana Miller, Mandie Aubrey or 

Samantha Pelosi, Senior Attorneys, or 

Vivian Wong, Counsel, Division of 

Consumer and Community Affairs, 

Board of Governors of the Federal 

Reserve System, Washington, DC 20551, 

at (202) 452–2412 or (202) 452–3667. 

For users of Telecommunications 

Device for the Deaf (TDD) only, contact 

(202) 263–4869. 

SUPPLEMENTARY INFORMATION: 

I. Statutory Background 

The Electronic Fund Transfer Act 

(15 U.S.C. 1693 et seq.) (EFTA or Act), 

enacted in 1978, provides a basic 

framework establishing the rights, 

liabilities, and responsibilities of 

participants in electronic fund transfer 

(EFT) systems. The EFTA is 

implemented by the Board’s Regulation 

E (12 CFR part 205). Examples of the 

types of transactions covered by the 

EFTA and Regulation E include 

transfers initiated through an automated 

teller machine (ATM), point-of-sale 

terminal, automated clearinghouse 

(ACH), telephone bill-payment plan, or 

remote banking service. The Act and 

regulation provide for the disclosure of 

terms and conditions of an EFT service; 

documentation of EFTs by means of 

terminal receipts and periodic 

statements; limitations on consumer 

liability for unauthorized transfers; 

procedures for error resolution; and 

certain rights related to preauthorized 

EFTs. Further, the Act and regulation 

restrict the unsolicited issuance of ATM 

cards and other access devices. 

The official staff commentary (12 CFR 

part 205 (Supp. I)) interprets the 

requirements of Regulation E to 

facilitate compliance and provides 

protection from liability under Sections 

916 and 917 of the EFTA for financial 

institutions and other persons subject to 

the Act who act in conformity with the 

Board’s commentary interpretations. 15 

U.S.C. 1693m(d)(1). The commentary is 

updated periodically to address 

significant questions that arise. 

On July 21, 2010, the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act) was 

signed into law.1 Section 1073 of the 

Dodd-Frank Act adds a new Section 919 

to the EFTA to create new protections 

for consumers who send remittance 

transfers to designated recipients 

located in a foreign country. The DoddFrank Act requires that remittance 

transfer providers give senders of 

remittance transfers certain disclosures, 

including information about fees, the 

applicable exchange rate, and the 

amount of currency to be received by 

the recipient. In addition, the DoddFrank Act provides error resolution 

rights for senders of remittance transfers 

and directs the Board to promulgate 

standards for resolving errors and 

recordkeeping rules. Finally, the DoddFrank Act requires the Board to issue 

rules regarding appropriate cancellation 

and refund policies. Final rules must be 

prescribed not later than 18 months 

after enactment, which is January 21, 

2012.2

II. Background 

A. General 

The term ‘‘remittance transfer’’ 

typically describes a transaction where 

a consumer sends funds to a relative or 

other individual located in another 

country, often the consumer’s country of 

origin. Traditional remittance transfers 

often consist of consumer-to-consumer 

payments of low monetary value. 

Information on the volume of 

remittance transfers varies widely, in 

part because of the difficulty in 

obtaining reliable data regarding the 

subject population, and in part because 

of differences in the scope of 

transactions included in estimates. The 

World Bank estimates that the total 

volume of remittance transfers 

worldwide to developing countries 

reached $325 billion in 2010.3 The 

World Bank further estimates that the 

United States has the highest volume of 

remittances, totaling $48.3 billion in 

2009.4 The U.S. Bureau of Economic 

Analysis estimates that cash and in-kind 

‘‘personal transfers’’ made by foreignborn residents in the United States to 

households abroad totaled $37.6 billion 

in 2009,5 while the U.S. Census Bureau 

estimates that cash ‘‘monetary transfers’’ 

from U.S. residents to nonresident 

households totaled approximately $12 

billion in 2008.6 The majority of 


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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29903 

twps0087/twps0087.html. The report recognizes the 

substantial difference between its estimate and that 

of the BEA and offers several possible explanations, 

but does not come to a conclusion. 7U.S. Gov’t Accountability Office, GAO–06–204, 

International Remittances: Information on 

Products, Costs, and Consumer Disclosures 7 

(November 2005) (‘‘GAO Report’’); see also Cong. 

Budget Office, Migrants’ Remittances and Related 

Economic Flows 7 (Feb. 2011). 

8Federal law requires money transmitters to 

register with the Financial Crimes Enforcement 

Network of the U.S. Department of the Treasury. 31 

U.S.C. 5330; 31 CFR 103.41. Most states also require 

money transmitters to be licensed by the state. 

9Manuel Orozco, Elizabeth Burgess et al, InterAmerican Dialogue, A Scorecard in the Market for 

Money Transfers: Trends in Competition in Latin 

American and the Caribbean 6 (June 18, 2010) 

(‘‘Scorecard’’). 

remittances from the United States are 

sent to the Caribbean and Latin 

America, and primarily to Mexico.7

Significant sums are also sent to Asia, 

and to the Philippines in particular. 

B. Methods for Sending Remittance 

Transfers 

Remittance transfers can be sent in a 

variety of ways. The primary methods 

for sending remittances transfers are 

discussed below. 

Remittance Transfers Through Money 

Transmitters 

Traditionally, consumers send 

remittance transfers through a money 

transmitter 8 operating through its own 

store or through an agent, such as a 

grocery store or neighborhood 

convenience store. The remittance 

transfer provider may have an exclusive 

arrangement with the agent, or may be 

one of several providers available to 

consumers through that agent. 

Typically, the consumer provides basic 

identifying information about himself 

and the recipient, and pays cash 

sufficient to cover the transfer amount 

and any transfer fees charged by the 

money transmitter. The consumer is 

provided a confirmation code, which 

the consumer relays to the recipient. 

The money transmitter sends an 

instruction to a specified payout 

location or locations in the recipient’s 

country where the recipient may pick 

up the transferred funds, often in local 

currency, on or after a specified date, 

upon presentation of the confirmation 

code and other identification. These 

transfers are generally referred to as 

cash-to-cash remittances. In some cases, 

the consumer can also use other 

methods of payment for the transfer, 

such as a credit or debit card, or can 

provide a checking or savings account 

number from which funds can be 

debited for the transfer. 

Although most money transmitters 

focus on cash-to-cash remittance 

transfers, many have also broadened 

their product offerings, with respect to 

both the method for sending and the 

method for receiving remittance 

transfers. A recent survey of remittance 

transfer providers operating in Latin 

America showed that approximately 

75% also permit consumers to send 

transfers of funds that can be deposited 

directly into a recipient’s bank account, 

and about 15% offer Internet-based 

transfers.9 Several money transmitters 

permit consumers to send remittances 

only via the Internet. Money 

transmitters may also permit transfers to 

be sent through a dedicated telephone at 

an agent, at a stand-alone kiosk, or by 

telephone. 

In most cases where funds are made 

available to the recipient in the local 

currency, the exchange rate is set when 

the sender tenders payment, although 

some money transmitters offer floating 

rate products where the exchange rate is 

not determined until the recipient picks 

up the funds. Funds sent through a 

money transmitter are generally 

available in one to three business days, 

although faster delivery may be 

available for a higher fee. 

International Wire Transfers 

Consumers may also send remittances 

through banks and credit unions. 

Traditionally, consumers have sent 

remittances through financial 

institutions by international wire 

transfer. Consumers may choose to send 

funds by wire transfer when traditional 

money transmitters do not send funds 

where a recipient is located, or when 

consumers feel that depositing funds 

directly to a recipient’s account 

provides a more secure method of 

transmitting funds, particularly when 

sending larger amounts. A wire transfer 

is generally an account-to-account 

transaction. Funds are transferred from 

the consumer’s account into a 

recipient’s account at a foreign financial 

institution. The two account-holding 

financial institutions will not 

communicate directly if they do not 

have a correspondent relationship. 

Rather, the sending institution will send 

funds or a payment instruction to a 

correspondent institution, which will 

then be transmitted to the recipient 

institution directly or indirectly through 

a series of intermediary institutions. 

Each wire transfer sent from the 

sender’s financial institution to the 

recipient’s institution may travel 

through a different transmittal route of 

financial institutions. 

Fees for international wire transfers 

are typically higher than fees for cashto-cash transfers. Intermediary 

institutions along the transmittal route 

for international wire transfers may 

deduct fees from the amount 

transferred, which are often referred to 

as ‘‘lifting fees.’’ The recipient 

institution may also deduct a fee from 

the recipient’s account for converting 

the funds into local currency and 

depositing them into the recipient’s 

account. Further, depending on the 

number of institutions involved in the 

transmittal route, it may take longer for 

funds to be deposited into the 

recipient’s account via international 

wire transfer than is typically the case 

for transfers conducted through money 

transmitters. If the sending institution 

does not have a direct relationship with 

the intermediary or receiving 

institutions, it likely does not have 

knowledge of all fees that might be 

imposed on the recipient, or when the 

funds ultimately will be deposited into 

the recipient’s account. 

Financial institutions also do not 

always know the exchange rate that will 

apply to wire transfers. In some 

instances, financial institutions 

purchase foreign currency at wholesale 

prices on the commodities market. 

Before sending a wire transfer, the 

institution will convert U.S. dollars into 

local currency using an exchange rate it 

sets (usually based on the wholesale rate 

plus a margin), and it thus can 

determine the exchange rate applicable 

to the wire transfer. Other financial 

institutions, however, do not purchase 

foreign currency on the market, or 

certain currencies may not be readily 

available for purchase on the market. In 

these circumstances, the sending 

financial institution will send a wire 

transfer in U.S. dollars, and will not set 

the exchange rate. In those cases, either 

the first cross-border intermediary 

institution in the recipient’s country, or 

the recipient’s institution, will set the 

rate. If the sending financial institution 

does not have a correspondent 

relationship with these parties, it 

generally will not be able to determine 

the applicable rate. 

International ACH 

More recently, financial institutions 

have begun to offer other methods for 

sending remittances, such as through 

international automated clearing house 

(ACH) transactions. In 2001, the Federal 

Reserve Banks began offering crossborder ACH services to Canada. In 2003, 

the United States and Mexico launched 

the ‘‘Partnership for Prosperity’’ 

initiative aimed at fostering economic 

development. One of the efforts under 

this initiative was to lower the cost of 

remittance transfers from the United 

States to Mexico. Under this initiative, 

the Federal Reserve Banks worked with 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29904 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

10Fed. Reserve Bank Services, FedGlobal® ACH 

Payments Service Origination Manual, available at: 

http://www.frbservices.org/files/serviceofferings/

pdf/fedach_global_service_orig_manual.pdf. 11See, e.g., Lenora Suki, Competition and 

Remittances in Latin America: Lower Prices and 

More Efficient Markets, Working Paper at 27 (Feb. 

2007), available at: http://www.oecd.org/dataoecd/

31/52/38821426.pdf (‘‘Competition and 

Remittances’’). 

12Fed. Reserve Bank Services, FedGlobal ACH 

Payments, available at: http://www.frbservices.org/

serviceofferings/fedach/fedach_international_ach

_payments.html. 

13See, e.g., Competition and Remittances at 27; 

Scorecard at 7. 

14Consumers may also use informal methods to 

send money abroad, such as sending funds through 

the mail or with a friend, relative, or courier 

traveling to the destination country. See, e.g., 

Bendixen & Amandi, Survey of Latin American 

Immigrants in the United States (2008), available at: 

http://www.bendixenandassociates.com/

studies2008.html (estimating about 12% of 

remittances to Latin America are through informal 

means) (‘‘Bendixen Survey’’). 

15Marianne A. Hilgert, Jeanne M. Hogarth, et al. 

‘‘Banking on Remittances: Extending Financial 

Services to Immigrants.’’ 15 Partners No. 2 at 18 

(2005); Competition and Remittances at 25. See also 

the discussion below regarding the Board’s 

consumer testing. 

16 GAO Report at 8. See also Appleseed, The Fair 

Exchange: Improving the Market for International 

Remittances 7 (Apr. 2007). 

17Scorecard at 7. Technology is also a driving 

factor. 

18 Inter-American Development Bank, 

Multilateral Investment Fund. Ten Years of 

Innovation in Remittances: Lessons Learned and 

Models for the Future 8 (2005). The market has 

recently seen remittance transfer provider 

consolidation. 

19World Bank Migration and Development Brief 

No. 13 at 10 (Nov. 2010). 

20See, e.g., Testimony of Annette LoVoi, 

Appleseed, in Hearing Before House Subcomm. on 

Fin. Insts. And Cons. Credit, No. 111–39 (June 3, 

2009). 

21Scorecard at 10. 

the central bank of Mexico to create an 

interbank mechanism, later branded 

‘‘Directo a Me ́xico,’’ to carry out crossborder ACH transactions between the 

United States and Mexico. The Directo 

a Me ́xico service was introduced in 

2004, and the Federal Reserve Banks 

now offer international ACH services to 

over 35 countries in Europe, Canada, 

and Latin America through agreements 

with private-sector or government 

entities. 

In each case, the Federal Reserve and 

the entity or entities with which the 

Federal Reserve has an agreement 

receive, process, and distribute ACH 

payments to financial institutions or 

recipients within the respective 

domestic payment systems.10 The 

Federal Reserve provides U.S. financial 

institutions access to its FedGlobal ACH 

Payments Service for a small charge. 

Financial institutions, in turn, offer the 

product to their customers for a 

competitive fee.11 Institutions may offer 

customers account-to-account transfers, 

or allow customers to send transfers that 

may be picked up at a participating 

institution or other payout location 

abroad.12 In some instances, the 

financial institution will know the 

exchange rate when the transfer is 

requested. In other cases, however, the 

exchange rate is determined by the 

foreign ACH counterpart and applied 

the next business day when funds are 

deposited into the recipient’s account or 

made available to be picked up. 

Other Account-Based Methods 

Over the last decade, some financial 

institutions have independently 

developed lower-cost remittance 

transfer products, or have directly 

partnered with or joined a larger 

distribution network of financial 

institutions or other payout locations. 

These products generally are account-toaccount or account-to-cash products 

that resemble those offered by 

traditional money transmitters. 

Transferred funds are generally 

available in one to three days, similar to 

the traditional money transmitter 

model, for a competitive fee.13

Additional Methods 

In addition to the primary remittance 

transfer methods described above, there 

are various other methods and products 

for delivering funds to a person located 

abroad. For example, consumers may 

send funds to recipients abroad using 

prepaid cards. In one model, a 

consumer purchases a prepaid card 

from a remittance transfer provider, 

which loads funds onto the card and 

sends it to a specified recipient in 

another country. The recipient may then 

use the prepaid card at an ATM or at a 

point of sale. The consumer can reload 

the recipient’s prepaid card through the 

provider’s Web site. In this model, the 

exchange rate is set when the recipient 

uses the card. Other card-based 

products permit the cardholder to send 

funds using his or her debit or credit 

card to the debit or credit card account 

of a recipient. 

A consumer may also add a recipient 

in another country as an authorized user 

on his or her checking or savings 

account. A debit card linked to the 

consumer’s account is provided to the 

recipient, who can use it to withdraw 

funds at an ATM or at a point of sale. 

Remittance transfer providers are also 

exploring the use of mobile applications 

to send remittances.14

C. Consumer Choice, Pricing, and 

Disclosure 

Consumers choose a particular 

remittance transfer provider or product 

over another for a number of reasons. 

Significant factors include trust in the 

provider, security, reliability (i.e., 

having funds available at the specified 

time), and convenience to the recipient, 

particularly in markets where the 

recipient may have limited options 

where funds can be picked up.15 Fees 

and exchange rates are also key factors 

in choosing a provider. Some studies 

have shown consumers may agree to 

pay more to ensure that recipients 

receive the entire amount promised at 

the promised delivery time, and that 

consumers also tend to continue using 

a service provider once it proves 

reliable.16

Studies also suggest that increasing 

diversification and competition in the 

remittance transfer market have 

contributed to downward market 

pressure on prices.17 One study shows 

that transfer costs to Latin America, the 

largest recipient of remittances from the 

United States, have decreased from 

about 15% of the value transferred 

before 2000 to approximately 5% of the 

value transferred, although the rate of 

decline has slowed in the last few 

years.18 Similarly, the World Bank 

estimates that worldwide, transfer costs 

declined to an estimated 8.7% of the 

value of the transfer in first quarter of 

2010.19

Although the remittance transfer 

market has seen an overall price 

decline, concerns remain regarding the 

adequacy of disclosures. Even though 

consumers often can obtain exchange 

rate and fee information orally upon 

request, many consumers currently do 

not receive written information about 

their remittance transaction until after 

payment is tendered. Consumer 

advocates have argued that providing 

written disclosures prior to payment is 

essential to help the consumer 

understand the transaction before 

committing to pay.20 However, one 

survey indicated that a majority of 

consumers are satisfied with the 

transparency of the exchange rate and 

fees.21 Concerns have also been raised 

that state money transmitter laws 

address licensing and money laundering 

issues, but largely do not require 

disclosures. 

Further, there is inconsistency in the 

type of information disclosed by 

different providers. In some instances, 

the provider may disclose the total cost 

of the transaction to the sender, but not 

the amount the recipient will receive. In 

other instances, the consumer may 

believe that the recipient will receive a 

specified amount, but lifting fees, 

recipient agent fees, or foreign taxes 

reduce the amount the recipient 


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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29905 

22Nat. Council of La Raza, Wiring Change: New 

Protections for Remittances Can Help Families, at: 

http://www.nclr.org/images/uploads/pages/

Remittances_and_Banking_Reform_5_5_2010_

Final.pdf (May 2010). 

23Summaries of these meetings are available on 

the Board’s Web site at: http://www.federalreserve.

gov/newsevents/reform_consumer.htm. 

24Existing provisions of Regulation E would be 

incorporated into a new Subpart A. 

25As discussed in more detail below, the 

proposed rule is applicable to senders who are 

consumers. 

ultimately receives. Thus, consumers 

could benefit from consistent, accessible 

disclosures regarding remittance 

transfers. Concerns have also been 

raised about a consumer’s ability to 

pursue the resolution of errors with 

providers, particularly given variations 

in state law regulation of money 

transmitters.22

Outreach and Consumer Testing 

In the fall of 2010, Board staff 

conducted outreach with various parties 

regarding remittances and 

implementation of the statute. Board 

staff met with representatives from a 

variety of money transmitters, financial 

institutions, industry trade associations, 

consumer advocates, and other 

interested parties to discuss current 

remittance transfer business models, 

consumer disclosure and error 

resolution practices, operational issues, 

and specific provisions of the statute.23

The Board also engaged a testing 

consultant, ICF Macro (Macro), to 

conduct focus groups and one-on-one 

interviews regarding remittance 

transfers. Participants represented a 

range of ages, education levels, amount 

of time lived in the United States, and 

country or region to which remittances 

were sent. 

In December 2010, Macro conducted 

a series of six focus groups with eight 

to ten participants each, to explore 

current remittance provider practices 

and attitudes about remittance 

disclosures. Three focus groups were 

held in Bethesda, Maryland, and three 

were held in Los Angeles, California. At 

each location, two of the three focus 

groups were conducted in English, and 

the third in Spanish. Among other 

things, participants were asked about 

the factors they consider when choosing 

a remittance provider, and information 

they receive from providers before and 

after their transaction. Consistent with 

the research described above, focus 

group participants identified cost, 

convenience, and security among the 

most important factors when choosing a 

provider, and tended to use the same 

provider over time. Most participants 

said they did not receive any written 

information before completing an inperson remittance transfer, but said they 

could get information about fees and 

exchange rates orally if they asked an 

agent. Only a few participants regularly 

compared provider prices. Those who 

did compare would generally call or 

look on-line for approximate fees and 

exchange rates. When asked about the 

usefulness of a storefront sign showing 

how much a recipient would receive in 

local currency if $100 were sent, most 

participants responded by highlighting 

the limitations and obstacles of such a 

sign. 

In early 2011, Macro conducted a 

series of one-on-one interviews in New 

York City, Atlanta, Georgia, and 

Bethesda, Maryland, with nine to ten 

participants in each city. During the 

interview, participants were given 

scenarios in which they completed a 

hypothetical remittance transfer and 

received one or more disclosure forms. 

For each scenario, participants were 

asked specific questions to test their 

understanding of the information 

presented in the disclosure form. Nearly 

all participants understood the 

information presented in the disclosure 

forms. Most participants said that 

getting information prior to completing 

the transaction could be useful in that 

it would give consumers the 

opportunity to review or confirm 

information before sending money. 

Participants also generally responded 

positively to disclosures about their 

error resolution rights. 

III. Summary of Proposal 

The Board is proposing to implement 

the Dodd-Frank Act remittance transfer 

provisions in a new Subpart B of 

Regulation E, § 205.30 et seq.24 The 

proposed rule contains new protections 

for consumers who send remittance 

transfers to designated recipients in a 

foreign country by providing consumers 

with disclosures and error resolution 

rights. 

Under the proposed rule, a remittance 

transfer provider must generally provide 

a written pre-payment disclosure to a 

sender 25 containing information about 

the specific transfer, such as the 

exchange rate, applicable fees and taxes, 

and the amount to be received by the 

designated recipient. Oral pre-payment 

disclosures would be permitted if the 

transaction is conducted entirely by 

telephone. 

The remittance transfer provider must 

also generally provide a written receipt 

when payment is made for the 

remittance transfer that includes 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. Alternatively, the 

proposed rule permits remittance 

transfer providers to provide senders a 

single written pre-payment disclosure 

containing all of the information 

required on the receipt. 

The proposal also implements two 

statutory exceptions that permit a 

remittance transfer provider to disclose 

an estimate of the amount of currency 

to be received, rather than the actual 

amount. The first exception applies for 

five years from the date of enactment of 

the Dodd-Frank Act. This temporary 

exception applies to insured depository 

institutions and insured credit unions 

that cannot determine certain disclosed 

amounts for reasons beyond their 

control, which primarily occurs with 

international wire transfers. The second 

exception is a permanent exception and 

applies where the provider cannot 

determine certain amounts to be 

disclosed because of (a) the laws of a 

recipient country or (b) the method by 

which transactions are made in the 

recipient country. Under the proposed 

rule, the permanent exception applies 

when the government of a foreign 

country sets the exchange rate after a 

transfer has been sent, or where the 

exchange rate, by law, is not set until 

the recipient picks up the funds. The 

permanent exception also applies to 

certain international ACH transactions, 

where the central bank of the foreign 

country sets the exchange rate after the 

transfer has been sent. 

The proposed rule also implements 

the statutory requirement that 

disclosures must generally be provided 

in English and in each of the foreign 

languages principally used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfer services at a particular office, 

with several modifications. The 

proposed rule provides guidance on 

how and when foreign language 

disclosures must be provided, and 

proposes several foreign language 

disclosure alternatives. 

Additionally, the proposed rule 

prescribes error resolution standards, 

including recordkeeping standards, 

consistent with the statute. The 

proposed rule requires a sender to 

provide notice of an error to the 

remittance transfer provider within 180 

days of the stated date of availability of 

a remittance transfer. The notice triggers 

a provider’s duty to investigate the 

claim and correct any error within 90 

days of receiving the notice of error. The 

proposed rule would establish error 

resolution procedures similar to those 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29906 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

26 75 FR 57252 (Sept. 20, 2010). 

that apply to a financial institution 

under Regulation E with respect to 

errors involving electronic fund 

transfers. The proposal also provides 

senders specified cancellation and 

refund rights. 

Finally, the proposed rule sets forth 

two alternative approaches for 

implementing the standards of liability 

for remittance transfer providers, 

including those that act through an 

agent. Under the first alternative, a 

remittance transfer provider would be 

liable for violations by an agent, when 

such agent acts for the provider. Under 

the second alternative, a remittance 

transfer provider would be liable for 

violations by an agent acting for the 

provider unless the provider establishes 

and maintains policies and procedures 

for agent compliance, including 

appropriate oversight measures, and the 

provider corrects any violation, to the 

extent appropriate. 

Request for Comment 

The Board requests comment on all 

aspects of this remittances proposal, 

including on the various alternatives set 

forth in the proposal, as well as 

projected implementation and 

compliance costs. The Board also 

solicits comment on whether an 

effective date of one year from the date 

the final rule is published, or an 

alternative effective date, would be 

appropriate. Specifically, the Board 

requests comment on the length of time 

remittance transfer providers may need 

to implement the rule. 

Transition Issues 

The Dodd-Frank Act requires the 

Board to issue rules implementing the 

remittance transfer provisions within 18 

months from the date of enactment, or 

by January 21, 2012. However, the Act 

transfers rulemaking authority for most 

consumer protection statutes, including 

the EFTA, from the Board to the Bureau 

as of the designated transfer date, which 

has been designated as July 21, 2011.26

As a result, the Board anticipates that 

final rules on remittance transfers will 

be issued by the Bureau. 

IV. Legal Authority 

Section 1073 of the Dodd-Frank Act 

creates a new Section 919 of the EFTA 

and requires remittance transfer 

providers to make disclosures to senders 

of remittance transfers, pursuant to rules 

prescribed by the Board. 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); 15 U.S.C. 1693o–1(a). 

In addition, EFTA Section 919 

provides for specific error resolution 

procedures. The Act directs the Board to 

promulgate error resolution standards 

and rules regarding appropriate 

cancellation and refund policies. EFTA 

Section 919(d); 15 U.S.C. 1693o–1(d). 

Finally, EFTA Section 919 requires the 

Board to establish standards of liability 

for remittance transfer providers, 

including those that act through agents. 

EFTA Section 919(f); 15 U.S.C. 1693o– 

1(f). Except as described below, the 

remittance transfer rule is proposed 

under the authority provided to the 

Board 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 Board 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); 

15 U.S.C. 1693. As described in more 

detail in the SUPPLEMENTARY

INFORMATION, the following provisions 

are proposed in part or in whole 

pursuant to the Board’s authority in 

EFTA Section 904(a): §§ 205.31(b)(1)(i), 

(b)(1)(iii), (b)(1)(v), (b)(1)(vi), (g)(2), and 

205.33(c)(1). The proposed Model 

Forms in Appendix A are also proposed 

pursuant to EFTA Section 904(a). The 

Section-by-Section analysis, Initial 

Regulatory Flexibility Analysis, and 

Paperwork Reduction Act analysis serve 

as the economic impact analysis 

pursuant to EFTA Section 904(a)(2). 

EFTA Section 904(c) further provides 

that regulations prescribed by the Board 

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 Board deems necessary or 

proper to effectuate the purposes of the 

title, to prevent circumvention or 

evasion, or to facilitate compliance. As 

described in more detail in the 

SUPPLEMENTARY INFORMATION, proposed 

§§ 205.31(g)(1)(ii), (g)(2), (g)(3), 

205.32(a), and 205.31(e)(2) are proposed 

in part or in whole pursuant to the 

Board’s authority in EFTA Section 

904(c). 

V. Section-by-Section Analysis 

Section 205.3 Coverage 

Section 205.3(a), which describes 

Regulation E’s coverage, is proposed to 

be revised to provide that the 

requirements of Subpart B apply to 

remittance transfer providers. The 

revision reflects that the scope of the 

Dodd-Frank Act’s remittance transfer 

provisions is not limited to financial 

institutions. Specifically, EFTA Section 

919(g)(3) defines a remittance transfer 

provider as ‘‘any person that provides 

remittance transfers for a consumer in 

the normal course of its business, 

whether or not the consumer holds an 

account with such person’’ (emphasis 

added). Thus, Subpart B would also 

apply to non-financial institutions, such 

as money transmitters, that send 

remittance transfers. 

Section 205.30 Remittance Transfer 

Definitions 

EFTA Section 919(g) sets forth several 

definitions applicable to the remittance 

transfer provisions in Subpart B. 

Proposed § 205.30 incorporates these 

definitions, with modifications, and 

other terms used in the rule, with 

proposed commentary for further 

clarification. 

30(a) Agent 

Proposed § 205.30(a) states that an 

‘‘agent’’ means an agent, authorized 

delegate, or person affiliated with a 

remittance transfer provider under state 

or other applicable law, when such 

agent, authorized delegate, or affiliate 

acts for that remittance transfer 

provider. EFTA Section 919 does not 

use consistent terminology concerning 

agents of remittance transfer providers. 

For example, EFTA Section 919(f)(1) 

uses the phrase ‘‘agent, authorized 

delegate, or person affiliated with a 

remittance transfer provider,’’ when that 

person ‘‘acts for that remittance transfer 

provider,’’ while other provisions use 

the phrase ‘‘agent or authorized 

delegate’’ (EFTA Section 919(f)(2)) or 

simply ‘‘agent’’ (EFTA Section 919(b)). 

The Board does not believe that these 

statutory wording differences are 

intended to establish different standards 

across the rule. Therefore, the proposed 

rule generally refers to ‘‘agents,’’ as 

defined in proposed § 205.30(a), to 

provide consistency across the proposed 

rule. Because the concept of agency is 

historically tied to state law, the 

proposed definition references these 

parties under state or other applicable 

law. 


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30(b) Business Day 

Several provisions in the proposed 

rule use the term ‘‘business day.’’ See, 

e.g., §§ 205.31(e)(2) and 205.33(c)(1). 

The existing definition of ‘‘business day’’ 

in Regulation E applies only to financial 

institutions and includes inapt 

commentary. See 12 CFR 205.2(d). 

Because remittance transfer providers 

include non-financial institutions, 

proposed § 205.30(b) contains a new 

definition of ‘‘business day’’ applicable 

to Subpart B. The proposed rule states 

that ‘‘business day’’ means any day on 

which a remittance transfer provider 

accepts funds for sending remittance 

transfers. 

Proposed comment 30(b)–1 explains 

that a business day includes the entire 

24-hour period ending at midnight, and 

that a notice required by any section in 

Subpart B is effective even if given 

outside of normal business hours. 

However, the comment clarifies that no 

section of Subpart B requires that a 

remittance transfer provider make 

telephone lines available on a 24-hour 

basis. 

30(c) Designated Recipient 

EFTA Section 919(g)(1) provides that 

a ‘‘designated recipient’’ is ‘‘any person 

located in a foreign country and 

identified by the sender as the 

authorized recipient of a remittance 

transfer to be made by a remittance 

transfer provider, except that a 

designated recipient shall not be 

deemed to be a consumer for purposes 

of [the EFTA].’’ The statute uses the term 

‘‘person,’’ indicating that the statute 

applies to remittance transfers sent to 

businesses, as well as to consumers. See 

proposed comment 30(c)–1. 

Proposed § 205.30(c) implements 

EFTA Section 919(g)(1), with edits for 

clarity. A remittance transfer provider 

will generally only know the location 

where funds are to be sent, rather than 

where a designated recipient is 

physically located. For instance, 

although the sender may indicate that 

funds are to be sent to the recipient in 

Mexico City, the recipient could 

actually be in the United States at the 

time of the transfer. The Board believes 

that the statutory reference to a ‘‘person 

located in a foreign country’’ should be 

read with a view to the location where 

funds are to be sent. Additionally, the 

statute references a remittance transfer 

‘‘to be made by a remittance transfer 

provider.’’ As discussed below, the 

definition of remittance transfer requires 

that it be sent by a remittance transfer 

provider. Thus, this language is 

unnecessary. Accordingly, proposed 

§ 205.30(c) states that a designated 

recipient is any person specified by the 

sender as an authorized recipient of a 

remittance transfer to be received at a 

location in a foreign country. 

Proposed comment 30(c)–2 explains 

that a remittance transfer is received at 

a location in a foreign country if funds 

are to be received at a location 

physically outside of any state, as 

defined in § 205.2(l). The Board 

understands that a provider will 

generally know the location where 

funds can be picked up or will be 

deposited as part of its normal operating 

procedures. However, the Board solicits 

comment on whether there are instances 

where a remittance provider may only 

receive a recipient’s email address and 

therefore be unable to determine the 

location where funds are to be received. 

30(d) Remittance Transfer 

30(d)(1) General Definition 

EFTA Section 919(g)(2)(A) defines a 

remittance transfer as an electronic (as 

defined in Section 106(2) of the 

Electronic Signatures in Global and 

National Commerce Act, 15 U.S.C. 7007 

et seq. (‘‘E–Sign Act’’)) transfer of funds 

requested by a sender located in any 

state to a designated recipient that is 

sent by a remittance transfer provider. 

Under the statute, such a transaction is 

a remittance transfer whether or not the 

sender holds an account with the 

remittance transfer provider and 

whether or not the remittance transfer is 

also an electronic fund transfer, as 

defined in EFTA Section 903. The 

statute thus brings within the scope of 

the EFTA certain transactions that have 

traditionally been outside the scope of 

the EFTA, if those transactions meet 

elements of the definition of ‘‘remittance 

transfer.’’ Such transactions include 

cash-based remittance transfers sent 

through a money transmitter as well as 

consumer wire transfers. Proposed 

§ 205.30(d) implements the definition of 

‘‘remittance transfer’’ in EFTA Section 

919(g)(2), with revisions for clarity. The 

Board is also proposing commentary to 

provide further guidance on the 

definition, as well as examples of 

transactions that are and are not 

remittance transfers under the rule. 

Proposed § 205.30(d)(1) implements 

the general definition set forth in EFTA 

Section 919(g)(2)(A). Proposed 

§ 205.30(d)(1) states that a remittance 

transfer means the electronic transfer of 

funds requested by a sender to a 

designated recipient that is sent by a 

remittance transfer provider. Proposed 

§ 205.30(d)(1) further states that the 

term applies regardless of whether the 

sender holds an account with the 

remittance transfer provider and 

regardless of whether the transfer is also 

an electronic fund transfer, as defined in 

§ 205.3(b). 

Proposed comments 30(d)–1 through 

–4 provide further guidance on each of 

the elements of the proposed definition 

of ‘‘remittance transfer.’’ Proposed 

comment 30(d)–1 provides that there 

must be an electronic transfer of funds. 

The term electronic has the meaning 

given in Section 106(2) of the E-Sign 

Act. There may be an electronic transfer 

of funds if a provider makes an 

electronic book entry between different 

settlement accounts to effectuate the 

transfer. However, the proposed 

comment explains that where a sender 

mails funds directly to a recipient, or 

provides funds to a courier for delivery 

to a foreign country, there has not been 

an electronic transfer of funds. 

Therefore, non-electronic remittance 

methods are not remittance transfers. 

Proposed comment 30(d)–2 provides 

that the definition of remittance transfer 

requires a specific sender request that a 

remittance transfer provider send a 

remittance transfer. The proposed 

comment explains that a deposit by a 

consumer into a checking or savings 

account does not itself constitute such 

a request, even if a person in a foreign 

country is an authorized user on that 

account, where the consumer retains the 

ability to withdraw funds in the 

account. 

Proposed comment 30(d)–3 provides 

that the definition of remittance transfer 

also requires that the transfer be sent to 

a designated recipient. As noted above, 

the definition of ‘‘designated recipient’’ 

requires a person to be identified by the 

sender as the authorized recipient of a 

remittance transfer to be sent by a 

remittance transfer provider. Proposed 

comment 30(d)–3 explains that there is 

no designated recipient unless the 

sender specifically identifies the 

recipient of a transfer. Thus, there is a 

designated recipient if, for example, the 

sender instructs a remittance transfer 

provider to send a prepaid card to a 

specified recipient in a foreign country, 

and the sender does not retain the 

ability to draw down funds on the 

prepaid card. In contrast, there is no 

designated recipient where the sender 

retains the ability to withdraw funds, 

such as when a person in a foreign 

country is made an authorized user on 

the sender’s checking account, because 

the remittance transfer provider cannot 

identify the ultimate recipient of the 

funds. For instance, a consumer may 

add his daughter, who is studying 

abroad, as an authorized user to his 

account so that the daughter has access 

to funds while abroad. When the 

consumer deposits funds to the account, 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29908 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

27However, when a consumer uses his or her 

debit or credit card to send funds to a recipient’s 

debit or credit card, the debit or credit card issuer 

offering the service could be considered a 

remittance transfer provider, and the transfer of 

funds a remittance transfer, under the proposed 

rule. See, e.g., proposed comment 30(d)–5. 

28Commercial wire transfers are not affected 

because a ‘‘sender’’ must be a consumer. 

the consumer’s financial institution 

cannot know whether the purpose of 

that deposit is to provide funds to the 

daughter, or is merely a deposit that the 

consumer will later withdraw himself. 

Finally, proposed comment 30(d)–4 

provides that the definition of 

remittance transfer requires that the 

remittance transfer must be sent by a 

remittance transfer provider. The 

proposed comment explains that this 

means that there must be an 

intermediary actively involved in 

sending the transfer of funds. Examples 

include a person (other than the sender) 

sending an instruction to a receiving 

agent in a foreign country to make funds 

available to a recipient; executing a 

payment order pursuant to a consumer’s 

instructions; executing a consumer’s 

online bill payment request; or 

otherwise engaging in the business of 

accepting or debiting funds for 

transmission to a recipient and 

transmitting those funds. 

However, the proposed comment 

explains that a payment card network or 

other third party payment service that is 

functionally similar to a payment card 

network does not send a remittance 

transfer when a consumer designates a 

debit or credit card as the payment 

method to purchase goods or services 

from a foreign merchant. In such a case, 

the payment card network or third party 

payment service is not directly engaged 

with the sender to send a transfer of 

funds to a person in a foreign country; 

rather, the network or third party 

payment service is merely providing 

contemporaneous third-party payment 

processing and settlement services on 

behalf of the merchant or the remittance 

transfer provider, rather than on behalf 

of the sender.27

Similarly, where a consumer provides 

a checking or other account number 

directly to a merchant as payment for 

goods or services, the merchant is not 

acting as a remittance transfer provider 

when it submits the payment 

information for processing. Proposed 

comment 30(d)–5 provides a nonexclusive list of examples of 

transactions that are, and are not, 

remittance transfers. 

Under proposed § 205.30(d), some 

transactions that have not traditionally 

been considered remittance transfers, 

such as a consumer’s online bill 

payment through his or her financial 

institution to a recipient abroad, will 

fall within the scope of the rule. In 

contrast, other transfer methods 

specifically marketed for use by a 

consumer to send remittances, but that 

do not meet all elements of the 

definition of remittance transfer, may 

fall outside the scope of the rule (e.g., 

a prepaid card where the sender retains 

the ability to draw down funds). The 

Board believes that proposed § 205.30(d) 

implements the statutory definition of 

‘‘remittance transfer.’’ However, the 

Board solicits comment on whether it 

should exempt online bill payments 

made through the sender’s institution, 

and specifically preauthorized bill 

payments, from the rule, as it could be 

challenging for institutions to provide 

timely disclosures. 

30(d)(2) Exception for Small-Value 

Transfers 

EFTA Section 919(g)(2)(B) states that 

a remittance transfer does not include a 

transfer described in EFTA Section 

919(g)(2)(A) ‘‘in an amount that is equal 

to or lesser than the amount of a smallvalue transaction determined, by rule, to 

be excluded from the requirements 

under section 906(a)’’ of the EFTA. 

EFTA Section 906(a) addresses the 

requirements for electronic terminal 

receipts. The Board has previously 

determined, by rule, that financial 

institutions are not subject to the 

requirement to provide electronic 

terminal receipts for small-value 

transfers of $15 or less. 12 CFR 

§ 205.9(e). Proposed § 205.30(d)(3) 

incorporates this exception for smallvalue transfers by providing that 

remittance transfers do not include 

transfer amounts of $15 or less. 

Application of the EFTA; Relationship 

to Uniform Commercial Code 

As described above, the statute 

applies to remittance transfers whether 

or not they are electronic fund transfers. 

This raises certain issues with respect to 

traditional cash-based remittance 

transfers sent through money 

transmitters, which have not generally 

been regulated under the EFTA, as well 

as international wire transfers, which 

are not EFTs. 

During the Board’s outreach, some 

money transmitters asked how and to 

what extent the EFTA would apply to 

providers that would ordinarily be 

outside its scope. The statute outlines 

the application of the EFTA to 

remittance transfers that are not 

electronic fund transfers. Specifically, 

EFTA Section 919(e)(1) states that a 

remittance transfer that is not an 

electronic fund transfer is not subject to 

any of the provisions of EFTA Sections 

905 through 913. For example, a money 

transmitter sending a remittance transfer 

would not be subject to the requirement 

in EFTA Section 906(b), as implemented 

in 12 CFR 205.9(b), to provide periodic 

statements to consumers. The 

transmitter would, however, generally 

be subject to other provisions of the 

EFTA, including provisions on liability 

under EFTA Sections 916 through 918. 

EFTA Section 919(e)(2)(A) also clarifies 

that a transaction that would not 

otherwise be an electronic fund transfer 

under the EFTA, such as a wire transfer, 

does not become an electronic fund 

transfer because it is a remittance 

transfer under EFTA Section 919. 

Prior to the enactment of the DoddFrank Act, wire transfers were entirely 

exempt from the EFTA and instead were 

governed by state law through state 

enactment of Article 4A of the Uniform 

Commercial Code. Among other things, 

Article 4A primarily governs the rights 

and responsibilities among the 

commercial parties to a wire transfer, 

including payment obligations among 

the parties and allocation of risk of loss 

for unauthorized or improperly 

executed payment orders. 

UCC Article 4A–108 provides that 

Article 4A does not apply ‘‘to a funds 

transfer, any part of which is governed 

by the [EFTA]’’ (emphasis added). Under 

EFTA Section 919, wire transfers sent 

on a consumer’s behalf that are 

remittance transfers will now be 

governed in part by the EFTA. As a 

result, it appears that, by operation of 

Article 4A–108, Article 4A will no 

longer apply to such consumer wire 

transfers.28

Some institutions have urged the 

Board to clarify that remittance transfers 

are not governed by the EFTA for 

purposes of state law, so that UCC 

Article 4A will continue to apply to 

such transfers. However, as noted above, 

EFTA Section 919(e)(1) explicitly 

applies the EFTA to remittance transfers 

that are not electronic fund transfers, 

except for certain enumerated 

provisions. Further, the remittance 

disclosure and error resolution 

requirements are set forth under the 

EFTA. 

In the alternative, institutions have 

urged the Board to preempt any 

provision of state law that prevents a 

remittance transfer from being treated as 

a funds transfer under UCC Article 4A 

based solely upon the inclusion of the 

remittance transfer provisions in EFTA 

Section 919. Under this suggested 

approach, the error resolution 

provisions of EFTA Section 919(b)(1) 

would govern remittance transfers as 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29909 

29See Credit Card Act § 402, Public Law 111–24, 

123 Stat. 1734 (2009). 

between a sender and a remittance 

transfer provider, but the remaining 

provisions in UCC Article 4A would 

continue to govern the allocation of risk 

of loss as between the remittance 

transfer provider and another financial 

institution that carries out part of the 

transfer. 

Under EFTA Section 921 and 

§ 205.12, the Board may determine 

whether a state law relating to, among 

other things, electronic fund transfers is 

preempted by a provision of the EFTA 

or Regulation E. However, a provision 

can only preempt a state law that is 

inconsistent with the provision and 

only to the extent of its inconsistency. 

Moreover, the statute and regulation 

provide that a state law is not 

inconsistent with any provision if it is 

more protective of consumers. 

EFTA Section 902(b) states that the 

primary purpose of the EFTA is the 

provision of individual consumer rights. 

In contrast, as discussed above, Article 

4A is primarily intended to govern the 

rights and responsibilities among the 

commercial parties to a funds transfer, 

that is, the financial institution that 

accepts a payment order for a funds 

transfer and any other financial 

institutions that may be involved in 

carrying out the transfer. Thus, because 

the two statutes focus on different 

relationships, it is not clear that EFTA 

Section 919 is inconsistent with UCC 

Article 4A. 

In addition, the Board notes that 

Congress amended the EFTA’s 

preemption provision to specifically 

include a reference to state gift card 

laws when it enacted new EFTA 

protections for gift cards as part of the 

Credit Card Accountability 

Responsibility and Disclosure Act of 

2009 (Credit Card Act).29 By contrast, 

Congress did not amend the EFTA’s 

preemption provision with respect to 

state laws relating to remittance 

transfers, including those that are not 

electronic fund transfers, when it 

enacted the Dodd-Frank Act. 

The Board recognizes that one 

consequence of covering remittance 

transfers under the EFTA could be legal 

uncertainty for certain remittance 

transfer providers. Specifically, 

providers of international wire transfers 

may no longer be able to rely on UCC 

Article 4A’s rules governing the rights 

and responsibilities among the parties to 

a wire transfer. However, because this 

issue arises from a provision of state 

law, not federal law, the Board believes 

that the authority for resolving this 

uncertainty rests with the states or 

through the rules applicable to the 

relevant wire transfer system. The final 

rule must be issued in final form no 

later than January 21, 2012, and will be 

effective at a subsequent date. Thus, 

before the rule is finalized and becomes 

effective, states have the opportunity to 

amend UCC Article 4A to restore its 

application to consumer international 

wire transfers, or wire transfer systems 

could amend their operating rules to 

incorporate UCC Article 4A. 

30(e) Remittance Transfer Provider 

Proposed § 205.30(e) implements the 

definition of ‘‘remittance transfer 

provider’’ in EFTA Section 919(g)(3). 

Proposed § 205.30(e) states that a 

remittance transfer provider (or 

provider) means any person that 

provides remittance transfers for a 

consumer in the normal course of its 

business, regardless of whether the 

consumer holds an account with such 

person. To eliminate redundancy, 

statutory references to ‘‘any person or 

financial institution’’ have been revised 

to state ‘‘any person’’ in the proposed 

rule, because the term ‘‘person’’ under 

Regulation E already includes financial 

institutions. Proposed comment 30(e)–1 

clarifies that an agent is not deemed to 

be a remittance transfer provider by 

merely providing remittance transfer 

services on behalf of the remittance 

transfer provider. The Board solicits 

comment on whether it should adopt 

guidance interpreting the phrase 

‘‘normal course of business’’ as sending 

a minimum number of remittance 

transfers in a given year. If so, the Board 

solicits comment on what that number 

should be. 

30(f) Sender 

Proposed § 205.30(f) implements the 

definition of ‘‘sender’’ in EFTA Section 

919(g)(4) with minor edits for clarity. 

Under the proposed rule, a sender is a 

consumer in a state who requests a 

remittance transfer provider to send a 

remittance transfer to a designated 

recipient. Accordingly, the proposed 

rule does not apply to business-toconsumer or business-to-business 

transactions. 

Section 205.31 Disclosures 

The Dodd-Frank Act contains several 

disclosure requirements relating to 

remittance transfers. Among these, 

EFTA Sections 919(a)(2)(A) and (B) 

require a remittance transfer provider to 

provide two disclosures to a sender in 

connection with a remittance transfer. 

First, a remittance transfer provider 

must provide a written pre-payment 

disclosure to a sender with information 

about the sender’s remittance transfer, 

such as the exchange rate, fees, and the 

amount to be received by the designated 

recipient. A remittance transfer provider 

must also provide a written receipt that 

includes the information provided on 

the pre-payment 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. EFTA Section 

919(a)(5) provides the Board with 

certain exemption authority, including 

the authority to permit a remittance 

transfer provider to provide, in lieu of 

a pre-payment disclosure and receipt, a 

single written disclosure to a sender 

prior to payment for the remittance 

transfer that accurately discloses all of 

the information required on both the 

pre-payment disclosure and the receipt. 

See EFTA Section 919(a)(5)(C). EFTA 

Section 919(b) also provides that 

disclosures under Section 919 must be 

made in English and in each foreign 

language principally used by the 

remittance transfer provider, or any of 

its agents, to advertise, solicit, or 

market, either orally or in writing, at 

that office. 

Proposed § 205.31(a) sets forth the 

requirements for the general form of 

disclosures required under Subpart B. 

Proposed §§ 205.31(b)(1) and (2) 

implement the EFTA Section 

919(a)(2)(A) and (B) pre-payment 

disclosure and receipt requirements. 

Proposed § 205.31(b)(3) sets forth the 

requirements for providing a combined 

disclosure, as permitted by EFTA 

Section 919(a)(5)(C). Proposed 

§ 205.31(b)(4) sets forth disclosure 

requirements with respect to a sender’s 

error resolution and cancellation rights. 

Proposed § 205.31(c) sets forth specific 

format requirements required under 

Subpart B, including grouping, 

proximity, prominence and size, and 

segregation requirements. Proposed 

§ 205.31(d) sets forth the disclosure 

requirements for providing estimates, to 

the extent they are permitted by 

§ 205.32. Proposed § 205.31(e) 

implements the timing requirements of 

EFTA Sections 919(a)(2) and 

919(a)(5)(C). Proposed § 205.31(f) 

clarifies that the disclosures required by 

§ 205.31(b) must be accurate when 

payment is made. Finally, proposed 

§ 205.31(g) implements the foreign 

language requirement in EFTA Section 

919(b). 

31(a) General Form of Disclosures 

31(a)(1) Clear and Conspicuous 

Proposed § 205.31(a) sets forth the 

requirements for the general form of 

disclosures required under proposed 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29910 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

30EFTA Section 919(a)(5)(C) incorporates the 

requirements of EFTA Section 919(a)(3)(A) by 

reference, including the clear and conspicuous 

requirement. 

Subpart B. Pursuant to EFTA Sections 

919(a)(3)(A) and (a)(5)(C),30 proposed 

§ 205.31(a)(1) provides that disclosures 

required by Subpart B must be clear and 

conspicuous. These include the 

disclosures required by proposed 

§ 205.31, as well as disclosures 

providing a description of the sender’s 

error resolution and cancellation rights 

under proposed §§ 205.33 and .34, 

discussed below. Proposed comment 

31(a)(1)–1 clarifies that disclosures are 

clear and conspicuous for purposes of 

Subpart B if they are readily 

understandable and, in the case of 

written and electronic disclosures, the 

location and type size are readily 

noticeable to senders. Oral disclosures, 

to the extent permitted by proposed 

§ 205.31(a)(3) and (4), are clear and 

conspicuous when they are given at a 

volume and speed sufficient for a sender 

to hear and comprehend them. 

Proposed § 205.31(a)(1) also provides 

that disclosures required by Subpart B 

may contain commonly accepted or 

readily understandable abbreviations or 

symbols. Proposed comment 31(a)(1)–2 

clarifies that using abbreviations or 

symbols such as ‘‘USD’’ to indicate 

currency in U.S. dollars or ‘‘MXN’’ to 

indicate currency in Mexican pesos is 

permissible. 

31(a)(2) Written and Electronic 

Disclosures 

Proposed § 205.31(a)(2) sets forth the 

requirements for written and electronic 

disclosures under Subpart B. 

Disclosures required by Subpart B 

generally must be provided to the 

sender in writing. See EFTA Sections 

919(a)(2), (a)(5)(C), and (d)(1)(B)(iv). 

However, EFTA Section 919(a)(5)(D) 

permits a remittance transfer provider to 

disclose a pre-payment disclosure 

electronically if a sender initiates a 

transaction electronically. The Board 

believes the intent of this exemption 

was to permit a remittance transfer 

provider to give electronic disclosures 

when a sender electronically requests 

the provider to send the remittance 

transfer. See also comment 31(e)–1. 

Therefore, pursuant to the Board’s 

authority in EFTA Section 919(a)(5)(D), 

proposed § 205.31(a)(2) permits a prepayment disclosure under § 205.31(b)(1) 

to be provided to the sender in 

electronic form, if the sender 

electronically requests the remittance 

transfer provider to send a remittance 

transfer. In such a case, proposed 

comment 31(a)(2)–1 explains that 

electronic disclosures required by 

§ 205.31(b)(1) may be provided without 

regard to the consumer consent and 

other applicable provisions of the ESign Act. Proposed comment 31(a)(2)–1 

also clarifies that if a sender 

electronically requests the remittance 

transfer provider to send a remittance 

transfer, receipts required by 

§ 205.31(b)(2) also may be provided to 

the consumer in electronic form. 

However, electronic receipts must 

comply with the consumer consent and 

other applicable provisions of the 

E-Sign Act. 

Proposed comment 31(a)(2)–2 clarifies 

that written disclosures may be 

provided on any size paper, as long as 

the disclosures are clear and 

conspicuous. For example, disclosures 

may be provided on a register receipt or 

on an 8.5 inch by 11 inch sheet of paper, 

consistent with current practices in the 

industry. The Board believes that the 

required disclosures are sufficiently 

simple and limited in scope that they 

may be provided clearly and 

conspicuously on various paper sizes, as 

long as a remittance transfer provider 

complies with the formatting 

requirements of proposed § 205.31(a) 

and (c). 

In addition, proposed § 205.31(a)(2) 

provides that the written and electronic 

disclosures required by Subpart B must 

be made in a retainable form, pursuant 

to EFTA Section 919(a)(2) and 

consistent with the authority provided 

to the Board in EFTA Section 

919(a)(5)(C). Proposed comment 

31(a)(2)–3 clarifies that a remittance 

transfer provider may satisfy the 

requirement to provide electronic 

disclosures in a retainable form if it 

provides an on-line disclosure in a 

format that is capable of being printed. 

Electronic disclosures cannot be 

provided through a hyperlink or in 

another manner by which the sender 

can bypass the disclosure. A provider is 

not required to confirm that the sender 

has read the electronic disclosures. 

The Board requests comment on how 

the requirement to provide electronic 

disclosures in a retainable form in 

proposed § 205.31(a)(2) could be 

applied to transactions conducted via 

text messaging or mobile phone 

application. 

31(a)(3) Oral Disclosures for Telephone 

Transactions 

Relying upon the exemption authority 

in EFTA § 919(a)(5)(B), proposed 

§ 205.31(a)(3) permits pre-payment 

disclosures required by § 205.31(b)(1) to 

be disclosed orally if the transaction is 

conducted entirely by telephone and if 

the remittance transfer provider 

complies with the foreign language 

disclosure requirements of 

§ 205.31(g)(2), discussed below. 

Proposed comment 31(a)(3)–1 clarifies 

that, for transactions conducted 

partially by telephone, disclosures may 

not be provided orally. For example, a 

sender may begin a remittance transfer 

at a remittance transfer provider’s 

dedicated phone in a retail store, and 

then provide payment in person to a 

store clerk to complete the transaction. 

In such cases, the proposed comment 

clarifies that all disclosures must be 

provided in writing. The Board believes 

that by limiting oral disclosures to 

transactions performed entirely by 

telephone, Congress did not intend to 

permit providers to satisfy the 

disclosure requirements orally for 

transactions conducted partially by 

telephone. See EFTA Section 

919(a)(5)(B). Proposed comment 

31(a)(3)–1 clarifies that for such a 

transaction, a provider complies with 

the disclosure requirements, for 

example, by providing the written prepayment disclosure in person prior to 

the sender’s payment for the 

transaction, and the written receipt 

when payment is made for the 

remittance transfer. 

31(a)(4) Oral Disclosures for Certain 

Error Resolution Notices 

Proposed § 205.31(a)(4) permits the 

report of the results of an investigation 

of a notice of error required by proposed 

§ 205.33(c)(1) to be provided orally, if 

the remittance transfer provider 

determines that an error occurred as 

described by the sender, and if the 

remittance transfer provider complies 

with the foreign language disclosure 

requirements of § 205.31(g)(2), 

discussed below. As discussed in 

§ 205.33, below, the Board believes that 

it is appropriate to permit a remittance 

transfer provider to orally report its 

findings that the specified error did 

occur, alert the sender of the results of 

the investigation, and facilitate a 

sender’s ability to remedy errors 

promptly. 

In outreach conducted by the Board, 

some remittance transfer providers 

suggested that the Board should permit 

a disclosure made prior to payment to 

be provided at the point-of-sale either 

orally or electronically by showing a 

consumer a computer screen displaying 

the required disclosures. Alternatively, 

some remittance transfer providers 

suggested permitting a disclosure made 

prior to payment to be provided only 

upon request of the sender. The 

providers argued that requiring written 

disclosures prior to payment would be 

less convenient and more confusing for 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
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31See U.S. Department of State Consular 

Information Sheet for El Salvador at http:// 

travel.state.gov/travel/cis_pa_tw/cis/cis_1109.html. 

consumers, and would create an 

unnecessary compliance burden. 

For point-of-sale transactions, the 

proposed rule does not permit the prepayment disclosure required by 

§ 205.31(b)(1) or the combined 

disclosure required by § 205.31(b)(3), 

discussed below, to be provided orally 

or to be shown to a consumer on a 

computer screen at the point-of-sale 

prior to payment. As discussed above, 

EFTA Section 919 requires disclosures 

to be written and retainable, and only 

permits oral disclosures in limited 

circumstances. Therefore, the Board 

believes that the statute does not permit 

a remittance transfer provider to provide 

an oral pre-payment disclosure at the 

point-of-sale. 

Moreover, the statute requires 

disclosures under EFTA Section 919 to 

be provided to senders, and not simply 

made available. Showing a sender the 

required disclosures on a computer 

screen at the point-of-sale or providing 

a written disclosure only upon request 

of the sender would not comply with 

the requirement to provide the 

disclosures to the sender. Therefore, the 

Board believes that permitting these 

disclosures to be made available, rather 

than be provided to a sender, would be 

inconsistent with the statute. 

31(b) Disclosures 

Section 205.31(b) sets forth 

substantive disclosure requirements for 

remittance transfers. EFTA Sections 

919(a)(2)(A) and (B) require a remittance 

transfer provider to provide to a sender: 

(1) A written pre-payment disclosure 

with information applicable to the 

sender’s remittance transfer— 

specifically, the exchange rate, the 

amount of transfer and other fees, and 

the amount that would be received by 

the designated recipient; and (2) a 

written receipt that includes the 

information provided on the prepayment disclosure, plus the promised 

date of delivery, contact information for 

the designated recipient, information 

regarding the sender’s error resolution 

rights, and contact information for the 

remittance transfer provider and 

applicable regulatory agencies. EFTA 

Section 919(a)(5)(C) also authorizes the 

Board to permit a remittance transfer 

provider to provide a single written 

disclosure to a sender, instead of a prepayment disclosure and receipt, that 

accurately discloses all of the 

information required on both the prepayment disclosure and the receipt (a 

‘‘combined disclosure’’). 

Pursuant to EFTA Section 919(a)(2), 

information on a pre-payment 

disclosure and a receipt need only be 

provided to the extent applicable to the 

transaction. Similarly, the information 

required on a combined disclosure need 

only be provided as applicable because 

the combined disclosure is simply a 

consolidation of disclosures on the prepayment disclosure and the receipt. See 

EFTA Section 919(a)(2)(A) and (B). 

Proposed comment 31(b)-1 clarifies that 

a remittance transfer provider could 

choose to omit an inapplicable item 

provided in § 205.31(b). Alternatively, a 

remittance transfer provider could 

disclose a term and state that an amount 

or item is ‘‘not applicable,’’ ‘‘N/A,’’ or 

‘‘None.’’ 

For example, if fees or taxes are not 

imposed in connection with a particular 

transaction, the provider need not 

provide the disclosures required by 

§ 205.31(b)(1)(ii) or (b)(1)(vi). Similarly, 

a Web site need not be disclosed under 

§ 205.31(b)(2)(v) if the provider does not 

maintain a Web site. 

In some instances, a sender may 

choose to send funds to a designated 

recipient to be picked up in U.S. dollars 

or deposited into a dollar-denominated 

account. For example, El Salvador is a 

dollarized economy,31 so remittance 

transfers to El Salvador may be sent as 

dollar-to-dollar transactions. Proposed 

comment 31(b)-1 clarifies that a 

provider need not provide the exchange 

rate disclosure required by 

§ 205.31(b)(1)(iv) if a recipient receives 

currency in U.S. dollars or currency is 

delivered into an account in U.S. 

dollars, rather than in another currency. 

Section 205.31(b) requires that 

disclosures be described using the terms 

set forth in § 205.31(b) or substantially 

similar terms. The Board developed and 

tested the terms in consumer testing to 

ensure that consumers could 

understand the information disclosed to 

them. However, the proposed rule 

provides remittance transfer providers 

with some flexibility in developing their 

disclosures. Proposed comment 31(b)-2 

clarifies that terms may be more specific 

than the terms provided in the proposed 

rule. For example, a remittance transfer 

provider sending funds to Colombia 

may describe a tax disclosed under 

§ 205.31(b)(1)(vi) as a ‘‘Colombian Tax’’ 

in lieu of describing it as ‘‘Other Taxes.’’ 

As discussed in § 205.31(g) below, 

disclosures generally must be provided 

in English and in each of the foreign 

languages principally used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfers, either orally or in writing, at 

that office. The Board recognizes that 

not all words or phrases lend 

themselves to exact word-for-word 

translations in a foreign language. 

Therefore, proposed comment 31(b)–2 

also clarifies that foreign language 

disclosures required under § 205.31(g) 

must contain accurate translations of the 

terms, language, and notices required by 

§ 205.31(b). 

31(b)(1) Pre-Payment Disclosures 

Pursuant to EFTA Section 

919(a)(2)(A), proposed § 205.31(b)(1) 

requires a remittance transfer provider 

to make specified pre-payment 

disclosures to a sender, as applicable. 

Proposed § 205.31(b)(1)(i) requires that 

the remittance transfer provider disclose 

the amount that will be transferred to 

the designated recipient using the term 

‘‘Transfer Amount’’ or a substantially 

similar term. The transfer amount must 

be provided in the currency in which 

the funds will be transferred. For 

example, if the funds will be transferred 

from U.S. dollars to Mexican pesos, the 

transfer amount required by 

§ 205.31(b)(1) must be disclosed in U.S. 

dollars. The Board is proposing the 

disclosure of the transfer amount 

pursuant to the Board’s authority under 

EFTA Section 904(a). The Board 

believes the disclosure of the transfer 

amount helps demonstrate to a sender 

how a provider calculates the total 

amount of the transaction, discussed 

below. 

Proposed § 205.31(b)(1)(ii) requires 

that a remittance transfer provider 

disclose any fees and taxes that are 

imposed on the remittance transfer by 

the remittance transfer provider, in the 

currency in which the funds will be 

transferred. The proposed disclosure 

must be described using the term 

‘‘Transfer Fees,’’ ‘‘Transfer Taxes,’’ or 

‘‘Transfer Fees and Taxes,’’ or a 

substantially similar term. These 

disclosures are proposed pursuant to 

EFTA Section 919(a)(2)(A)(ii), which 

requires a remittance transfer provider 

to disclose the amount of transfer fees 

and any other fees charged by the 

remittance transfer provider for the 

remittance transfer. The Board believes 

the statute requires the disclosure of all 

charges that would affect the cost of a 

remittance transfer to the sender, 

including any applicable taxes that are 

passed on to the sender. See proposed 

comment 31(b)(1)–1. 

Proposed comment 31(b)(1)–1 

clarifies that taxes imposed by the 

remittance transfer provider include 

taxes imposed on the remittance transfer 

by a state or other governmental body. 

The proposed comment further clarifies 

that a remittance transfer provider need 

only disclose fees or taxes required by 

§§ 205.31(b)(1)(ii) and (b)(1)(vi), as 


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29912 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

applicable. For example, if no transfer 

taxes are imposed on a remittance 

transfer, a provider only needs to 

disclose applicable transfer fees. If both 

fees and taxes are imposed, the fees and 

taxes may be disclosed as one disclosure 

or as separate, itemized disclosures. 

Proposed comment 31(b)(1)–1 

distinguishes between the fees and taxes 

required to be disclosed in proposed 

§ 205.31(b)(1)(ii) and those in proposed 

§ 205.31(b)(1)(vi). The fees and taxes 

required to be disclosed by 

§ 205.31(b)(1)(ii) include all fees and 

taxes imposed on the remittance transfer 

by the provider. For example, a provider 

must disclose a service fee and any state 

taxes imposed on the remittance 

transfer. By contrast, as discussed 

below, the fees and taxes required to be 

disclosed by § 205.31(b)(1)(vi) include 

fees and taxes imposed on the 

remittance transfer by a person other 

than the provider. 

Proposed comment 31(b)(1)–1 also 

clarifies that the terms used to describe 

the fees and taxes in proposed 

§§ 205.31(b)(1)(ii) and (b)(1)(vi) must 

differentiate between such fees and 

taxes. For example, the terms used to 

describe the fees for proposed 

§§ 205.31(b)(1)(ii) and (b)(1)(vi) may not 

both be described as ‘‘Fees.’’ The Board 

requests comment on whether a 

provider should be permitted to 

describe the disclosures in proposed 

§ 205.31(b)(1)(ii) or (b)(1)(vi) using the 

term ‘‘Fees and Taxes’’ or a substantially 

similar term if either only fees or only 

taxes are being charged, or if a provider 

should be required to describe the 

amounts being disclosed more 

specifically using the term ‘‘Fees’’ or 

‘‘Taxes’’ or a substantially similar term. 

Proposed § 205.31(b)(1)(iii) requires 

disclosure of the total amount of the 

transaction, which is the sum of 

§§ 205.31(b)(1)(i) and (b)(1)(ii) in the 

currency in which the funds will be 

transferred. The total amount of the 

transaction would be required to be 

described using the term ‘‘Total’’ or a 

substantially similar term. Although this 

total is not required by the statute, the 

Board believes that it is appropriate to 

include it in the proposed pre-payment 

disclosure, so that a sender can 

understand the total amount to be paid 

out-of-pocket for the transaction. Some 

consumer testing participants stated that 

they would use such a disclosure to 

ensure that they had the funds 

necessary to complete the transaction on 

hand. Therefore, the Board proposes to 

require the disclosure of the total 

amount of the transaction pursuant to 

its authority under EFTA Section 904(a). 

Proposed § 205.31(b)(1)(iv) requires 

the disclosure of any exchange rate used 

by the provider for the remittance 

transfer, rounded to the nearest 1/100th 

of a decimal point, consistent with 

EFTA Section 919(a)(2)(A)(iii). The 

exchange rate would be required to be 

described using the term ‘‘Exchange 

Rate’’ or a substantially similar term. 

The proposed rule does not require the 

disclosure of either the wholesale rate or 

the spread between the wholesale rate 

and the exchange rate offered by the 

provider. 

Several outreach participants urged 

the Board to propose a rule that would 

permit remittance transfer providers to 

continue offering ‘‘floating rate’’ 

remittance transfers. A floating rate 

remittance transfer is a transfer 

requested by a sender for which the 

exchange rate is set when the designated 

recipient claims the funds. When 

making a floating rate transfer, the 

remittance transfer provider does not set 

or disclose a foreign exchange rate to the 

sender. It was suggested that the Board 

permit a remittance transfer provider 

making a floating rate transfer to 

disclose terms such as ‘‘unknown,’’ 

‘‘floating,’’ ‘‘variable,’’ or ‘‘to be 

determined,’’ instead of a specified 

exchange rate. 

However, the statute requires a 

remittance transfer provider to disclose 

to the sender the exchange rate to be 

used for the remittance transfer to the 

sender both before and at the time the 

sender pays for the transaction. This 

disclosure provides senders with 

certainty regarding the exchange rate 

and the amount of currency their 

designated recipients would receive. 

Proposed comment 31(b)(1)(iv)–1 

clarifies that if the designated recipient 

will receive funds in a currency other 

than the currency in which it will be 

transferred, a remittance transfer 

provider must disclose an exchange 

rate. An exchange rate that is estimated 

must be disclosed pursuant to the 

requirements of § 205.32. A remittance 

transfer provider may not disclose, for 

example, that an estimated exchange 

rate is ‘‘unknown,’’ ‘‘floating,’’ or ‘‘to be 

determined.’’ The Board recognizes that 

the result of proposed § 205.31(b)(1)(iv) 

would likely be that providers will no 

longer offer floating rate products. 

Proposed comment 31(b)(1)(iv)–2 

clarifies that the exchange rate used by 

the provider for the remittance transfer 

must be rounded to the nearest 1/100th 

of a decimal point. However, an 

exchange rate need not be expressed to 

the nearest 1/100th of a decimal point 

if the amount need not be rounded. For 

example, if one U.S. dollar exchanges 

for 11.9483 Mexican pesos, a provider 

must disclose that the U.S. dollar 

exchanges for 11.95 Mexican pesos. 

However, if one U.S. dollar exchanges 

for 11.9 Mexican pesos, the provider 

may disclose that ‘‘US$1 = 11.9 MXN,’’ 

instead of ‘‘11.90MXN.’’ 

Proposed § 205.31(b)(1)(v) requires 

the disclosure of the transfer amount in 

§ 205.31(b)(1)(i), in the currency in 

which the funds will be received by the 

designated recipient, but only if fees or 

taxes are imposed under proposed 

§ 205.31(b)(1)(vi). The disclosure must 

be described using the term ‘‘Transfer 

Amount’’ or a substantially similar term. 

As discussed above, a remittance 

transfer provider is always required to 

disclose the transfer amount, pursuant 

to proposed § 205.31(b)(1)(i). The 

proposal would require a remittance 

transfer provider to repeat the 

disclosure of the amount transferred, 

expressed in the currency in which the 

funds will be received by the designated 

recipient, if other fees and taxes are 

charged under proposed 

§ 205.31(b)(1)(vi). As is the case with the 

transfer amount required to be disclosed 

by proposed § 205.31(b)(1)(i), the 

transfer amount required to be disclosed 

by proposed § 205.31(b)(1)(v) is 

proposed pursuant to the Board’s 

authority under EFTA Section 904(a). 

This disclosure is only required to the 

extent fees and taxes are imposed by 

parties other than the remittance 

transfer provider. When disclosed with 

such fees and taxes, the Board believes 

the disclosure of the transfer amount 

will help demonstrate to the sender how 

a provider calculates the amount that 

will ultimately be received by a 

designated recipient. For example, a 

sender could request to send $100 to 

Nigeria. Assuming an exchange rate of 

1 U.S. dollar = 150.00 Nigerian naira, 

and assuming the recipient is charged 

an additional fee of 100 naira, the 

amount to be received would be 14,900 

naira. By disclosing the transfer amount 

as 15,000 naira, and the fee as 100 naira, 

a sender will better understand why the 

recipient will receive only 14,900 naira 

in spite of the exchange rate. However, 

when the amount to be received is not 

reduced by any third party fees or taxes, 

the transfer amount under 

§ 205.31(b)(1)(v) and the amount to be 

received will be the same number, so 

the disclosure under § 205.31(b)(1)(v) is 

unnecessary. 

The proposed commentary provides 

more guidance on this requirement. 

Proposed comment 31(b)(1)–2 clarifies 

that two transfer amounts are required 

to be disclosed by §§ 205.31(b)(1)(i) and 

(b)(1)(v). First, a provider must disclose 

the transfer amount in the currency in 

which the funds will be transferred to 

show the calculation of the total amount 

of the transaction. Typically, funds will 


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be transferred in U.S. dollars, so the 

transfer amount would be expressed in 

U.S. dollars. However, if funds will be 

transferred, for example, from a Eurodenominated account, the transfer 

amount would be expressed in Euros. 

Second, a provider must disclose the 

transfer amount in the currency in 

which the funds will be made available 

to the designated recipient. For 

example, if the funds will be picked up 

by the designated recipient in Japanese 

yen, the transfer amount would be 

expressed in Japanese yen. However, as 

discussed above, the proposed comment 

also clarifies that this second transfer 

amount need not be disclosed if fees 

and taxes are not imposed for the 

remittance transfer under proposed 

§ 205.31(b)(1)(vi). In such cases, there is 

no consumer benefit to the additional 

information if the transferred amount is 

not reduced by other fees and taxes. 

Finally, proposed § 205.31(b)(1)(v) 

also requires a remittance transfer 

provider to use the term ‘‘Transfer 

Amount’’ or a substantially similar term 

to describe the disclosure required 

under this paragraph. Proposed 

comment 31(b)(1)–2 clarifies that the 

terms used to describe each transfer 

amount should be the same. 

Proposed § 205.31(b)(1)(vi) requires a 

remittance transfer provider to disclose 

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. Such fees and 

taxes could include lifting fees charged 

in connection with an international wire 

transfer, a fee charged by a recipient 

institution or agent, or a tax imposed by 

a government in the designated 

recipient’s country. In contrast to fees 

and taxes paid by the sender to the 

remittance transfer provider, which are 

added to the total amount paid by the 

sender, these fees and taxes typically 

reduce the amount received by the 

designated recipient. In many cases, the 

sender may not be aware of the impact 

of these fees and taxes. The Board 

believes that it is critical for senders to 

be aware of all fees and taxes charged 

in connection with the transfer, even if 

not imposed by the remittance transfer 

provider, because such fees and taxes 

affect the amount ultimately received by 

the designated recipient. Therefore, the 

Board is proposing the disclosure of 

other fees and taxes pursuant to its 

authority under EFTA Section 904(a). 

The remittance transfer provider 

would be required to describe the 

disclosures using the term ‘‘Other 

Transfer Fees,’’ ‘‘Other Transfer Taxes,’’ 

or ‘‘Other Transfer Fees and Taxes,’’ or 

a substantially similar term. As 

discussed above, proposed comment 

31(b)(1)–1 clarifies that the fees and 

taxes required to be disclosed by 

proposed § 205.31(b)(1)(vi) must include 

all fees and taxes that are charged for 

the remittance transfer by a person other 

than the remittance transfer provider. 

For example, a provider would disclose 

fees imposed by the receiving 

institution or agency at pick-up, fees 

imposed by intermediary institutions in 

connection with an international wire 

transfer, and taxes imposed by a foreign 

government. 

Proposed comment 31(b)(1)(vi)–1 

clarifies that § 205.31(b)(1)(vi) requires 

the disclosure of fees and taxes in the 

currency in which the funds will be 

received by the designated recipient. A 

fee or tax required by § 205.31(b)(1)(vi) 

may be imposed in one currency, but 

the funds may be received by the 

designated recipient in another 

currency. In such cases, the remittance 

transfer provider should calculate the 

fee or tax to be disclosed using the 

exchange rate required by 

§ 205.31(b)(1)(iv). For example, an 

intermediary institution in an 

international wire transfer may impose 

a fee in U.S. dollars, but funds are 

ultimately deposited in the recipient’s 

account in Euros. Here, the provider 

would disclose the fee to the sender 

expressed in Euros, calculated using the 

exchange rate used by the provider for 

the remittance transfer. This is intended 

to facilitate the sender’s understanding 

of the calculation of the amount to be 

received. 

Proposed § 205.31(b)(1)(vii) requires a 

remittance transfer provider to disclose 

to the sender the amount that will be 

received by the designated recipient, in 

the currency in which the funds will be 

received. See EFTA Section 

919(a)(2)(A)(i). The disclosures should 

be described using the term ‘‘Total to 

Recipient’’ or a substantially similar 

term. EFTA Section 919(a)(2)(A)(i) 

requires a remittance transfer provider 

to disclose the amount received by the 

designated recipient using the values of 

the currency into which the funds will 

be exchanged. As discussed above, the 

Board believes that the amount to be 

received by the designated recipient is 

intended to be the amount net of all fees 

and taxes that would affect the amount 

received by the designated recipient. An 

exchange rate, if one is applied, is just 

one of the factors that could affect the 

actual amount received by the 

designated recipient. Providing a total 

amount to be received that does not take 

into account all cost elements would not 

be consistent with the statute’s goal of 

providing disclosures of the costs of a 

remittance transfer. 

Proposed comment 31(b)(1)(vii)–1 

clarifies that the disclosed amount to be 

received by the designated recipient 

must reflect all charges that affect the 

amount received, including the 

exchange rate and all fees and taxes 

imposed by the remittance transfer 

provider, the receiving institution, and 

any other party in the transmittal route 

of a remittance transfer. The disclosed 

amount received must be reduced by the 

amount of any fee or tax that is imposed 

by a person other than the provider, 

even if that amount is imposed or 

itemized separately from the transaction 

amount. 

31(b)(2) Receipt 

Proposed § 205.31(b)(2) requires a 

remittance transfer provider to disclose 

a written receipt to a sender when 

payment is made for the remittance 

transfer. As with the proposed prepayment disclosure, the disclosures 

required to be provided on the receipt 

may be provided as applicable. 

Proposed § 205.31(b)(2)(i) requires the 

same disclosures required in the prepayment disclosure to be disclosed on 

the receipt, pursuant to EFTA Section 

919(a)(2)(B)(i)(I). Proposed 

§ 205.31(b)(2) also requires disclosure of 

additional elements on the receipt. 

Proposed § 205.31(b)(2)(ii) requires a 

remittance transfer provider to disclose 

the date of availability of funds to the 

designated recipient, using the term 

‘‘Date Available’’ or a substantially 

similar term. EFTA Section 

919(a)(2)(B)(i)(II) requires the disclosure 

of the promised date of delivery to the 

designated recipient on a receipt. While 

a transfer may be made available to a 

designated recipient within a specified 

time frame at a specified pick-up 

location, the recipient may not pick up 

the funds for some period of time. The 

Board interprets the statute to require 

disclosure of the date the currency will 

be available to the designated recipient, 

not on the date the funds are physically 

picked up by the designated recipient. 

Time zone differences may result in a 

date in the United States being different 

from the date in the country of the 

designated recipient. Thus, proposed 

comment 31(b)(2)–1 clarifies that the 

date of availability that must be 

disclosed is the date in the foreign 

country on which the funds will be 

available to the designated recipient. 

In some instances, it may be difficult 

to determine the exact date on which a 

remittance transfer will be available to 

a designated recipient. For example, an 

international wire transfer may pass 

through several intermediary 

institutions prior to becoming available 

at the institution of a designated 


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29914 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

recipient, and the time it takes to pass 

through these intermediaries may be 

difficult to determine. Nonetheless, 

EFTA Section 919(a)(2)(B)(i)(II) requires 

disclosure of a single, promised date of 

delivery of the funds. EFTA Section 919 

does not permit a remittance transfer 

provider to provide an estimate of this 

promised date. Therefore, proposed 

comment 31(b)(2)–1 clarifies that a 

remittance transfer provider may not 

provide a range of dates that the 

remittance transfer may be available, 

nor an estimate of the date on which 

funds will be available. 

As a result, remittance transfer 

providers will likely disclose the latest 

date that the funds will be available, 

even if funds are available sooner most 

of the time. The Board believes it is 

appropriate for a remittance transfer 

provider to indicate that funds may be 

available sooner than the disclosed date. 

Thus, proposed § 205.31(b)(2)(ii) 

permits a provider to include 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. For example, if funds may 

be available on January 3, but are not 

certain to be available until January 10, 

then January 10 should be disclosed as 

the date of availability. However, the 

provider may disclose ‘‘January 10 (may 

be available sooner).’’ See proposed 

comment 31(b)(2)–1. 

The Board tested various terms in 

consumer testing for communicating the 

fact that funds may be available earlier 

than the date disclosed. Participants 

generally understood the meaning of the 

statement that funds ‘‘may be available 

sooner’’ better than other terms. 

Proposed § 205.31(b)(2)(iii) 

implements EFTA Section 

919(a)(2)(B)(i)(III) by requiring a 

remittance transfer provider to disclose 

the name and, if provided by the sender, 

the telephone number and/or address of 

the designated recipient. The proposed 

rule would require the remittance 

transfer provider to describe the 

disclosure using the term ‘‘Recipient’’ or 

a substantially similar term. 

As discussed in more detail below, 

EFTA Section 919(d) provides the 

sender with substantive error resolution 

and cancellation rights. EFTA Section 

919(a)(2)(B)(ii)(I) requires a remittance 

transfer provider to provide a statement 

containing information about the rights 

of the sender regarding the resolution of 

errors on the receipt or combined 

disclosure. However, the Board 

recognizes that a long disclosure 

routinely provided to the sender may be 

ineffective at conveying the most 

important information that a sender 

would need to resolve an error or cancel 

a transaction. At the same time, the 

Board believes a sender must have 

access to a complete description of the 

sender’s error resolution and 

cancellation rights in order to effectively 

exercise those rights. Together, 

proposed §§ 205.31(b)(2)(iv) and 

§ 205.31(b)(4), discussed below, attempt 

to balance the interest in providing a 

sender a concise disclosure with the 

sender’s ability to obtain a full 

explanation of those rights. 

Specifically, proposed 

§ 205.31(b)(2)(iv) would require a 

remittance transfer provider to include 

an abbreviated statement about the 

sender’s error resolution and 

cancellation rights on the receipt and on 

the combined disclosures using 

language set forth in Model Form A–37 

of Appendix A or substantially similar 

language. The statement requires a brief 

disclosure of the sender’s error 

resolution and cancellation rights, and 

includes a notification that a sender 

may contact the remittance transfer 

provider for a written explanation of 

these rights. Consumer testing 

participants understood and responded 

positively to the concise, abbreviated 

disclosure. 

EFTA Section 919(a)(2)(B)(ii)(II) 

generally requires that the remittance 

transfer provider disclose appropriate 

contact information for the remittance 

transfer provider, its state regulator, and 

the Board. The Board believes that 

appropriate contact information 

includes the name, telephone number, 

and Web site of these entities, so that 

senders have multiple options for 

addressing any issues that may arise 

with respect to a remittance transfer 

provider. 

Therefore, proposed § 205.31(b)(2)(v) 

requires the disclosure of the name, 

telephone number, and Web site of the 

remittance transfer provider. Proposed 

§ 205.31(b)(2)(vi) requires a statement 

that the sender can contact the state 

agency that regulates the remittance 

transfer provider and the Bureau for 

questions or complaints about the 

remittance transfer provider, using 

language set forth in Model Form A–37 

of Appendix A or substantially similar 

language. The statement must include 

contact information for these agencies, 

including the toll-free telephone 

number of the Bureau established under 

section 1013 of the Consumer Financial 

Protection Act of 2010. The proposed 

paragraph requires the disclosure of the 

Bureau, rather than the Board, because 

the Bureau will be the appropriate 

contact when the rules are issued in 

final form after the designated transfer 

date. Consumer testing participants 

understood the brief disclosure of the 

contact information, and many stated 

that they would call one or more of the 

entities to resolve any problems that the 

provider did not resolve. 

The Board requests comment on 

whether and how a remittance transfer 

provider should be required to disclose 

information regarding a state agency 

that regulates the remittance transfer 

provider for remittance transfers 

conducted through a toll-free telephone 

number or on-line and, if so, what is the 

appropriate state agency to disclose to a 

sender. For example, it may be 

appropriate to require disclosure of the 

state agency that regulates the 

remittance transfer provider in the state 

in which the sender is located. 

The Board also requests comment on 

whether it is appropriate to disclose the 

contact information for the Bureau, 

including the toll-free telephone 

number, in cases where the Bureau is 

not the primary Federal regulator for 

consumer complaints against the 

remittance transfer provider. For 

example, under the proposed rule, the 

contact information of the Bureau 

would be disclosed to a sender who 

uses a financial institution to send an 

international wire transfer. The sender 

may encounter an error and, based on 

the disclosure, contact the Bureau for 

assistance with error resolution. 

However, the Bureau may not have the 

authority to investigate such complaints 

against the financial institution. 

Therefore, the Board requests comment 

on whether it is appropriate to require 

the disclosure of the contact information 

of the Bureau in all circumstances. The 

Board further requests comment on 

whether it is appropriate to instead 

require the contact information of the 

appropriate Federal regulator of the 

remittance transfer provider for 

consumer complaints. 

Finally, the Board requests comment 

on whether financial institutions that 

are primarily regulated by federal 

banking agencies, such as national 

banks, should be required to disclose 

state regulatory agency information. The 

Board requests comment regarding the 

circumstances in which it might be 

appropriate to disclose such a state 

regulatory agency. 

31(b)(3) Combined Disclosure 

As discussed above, EFTA Section 

919(A)(5)(C) grants the Board authority 

to permit a remittance transfer provider 

to provide to a sender a single written 

disclosure instead of the pre-payment 

disclosure and receipt, if the 

information disclosed is accurate at the 

time at which payment is made in 

connection with the remittance transfer. 


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The disclosure must include the content 

provided in the disclosures under EFTA 

Sections 919(a)(2)(A) and (B). 

The Board believes it is appropriate to 

provide the combined disclosure as a 

compliance option to give flexibility to 

remittance transfer providers. The Board 

determined through consumer testing 

that participants understood the 

disclosures provided on the combined 

disclosure. Moreover, approximately 

half of the consumers stated that they 

would prefer to receive the single, 

combined disclosure rather than the 

pre-payment disclosure and receipt. 

Therefore, proposed § 205.31(b)(3) 

generally permits a remittance transfer 

provider to provide the disclosures 

described in proposed §§ 205.31(b)(1) 

and (b)(2) in a single disclosure prior to 

payment, as applicable, as an alternative 

to providing the two disclosures 

described in proposed §§ 205.31(b)(1) 

and (b)(2). 

Some participants who stated they 

would prefer to receive a pre-payment 

disclosure and a receipt expressed 

concern about receiving the combined 

disclosure without also receiving proof 

of payment for the remittance transfer. 

Particularly if an issue arose with the 

transaction, these participants felt that 

they would not have sufficient official 

documentation to assert an error with 

the provider. Some participants also 

expressed concerns about different 

methods for providing proof of payment 

with the combined disclosure. For 

example, some participants believed 

that stamping the combined disclosure 

as ‘‘paid’’ constituted sufficient proof of 

payment, while others believed that it 

was insufficient because a disclosure 

could easily be fraudulently stamped as 

‘‘paid.’’ The Board solicits comment on 

whether proof of payment should also 

be required for remittance transfer 

providers using the combined 

disclosure and, if so, solicits comment 

on appropriate methods of 

demonstrating proof of payment for the 

combined disclosure. 

31(b)(4) Long Form Error Resolution and 

Cancellation Notice 

As discussed above, the Board 

believes a sender must have access to a 

complete description of the sender’s 

error resolution and cancellation rights, 

in addition to an abbreviated statement 

about the sender’s error resolution and 

cancellation rights on the receipt and 

combined disclosures required by 

proposed § 205.31(b)(2)(iv). The Board 

believes that a sender should have 

access to a full description of his or her 

rights in order to effectively exercise 

those rights. Therefore, proposed 

§ 205.31(b)(4) provides that, upon the 

sender’s request, a remittance transfer 

provider must provide to the sender a 

notice providing a description of the 

sender’s error resolution and 

cancellation rights under §§ 205.33 and 

.34 using Model Form A–36 of 

Appendix A or a substantially similar 

notice. 

31(c) Specific Format Requirements 

Proposed § 205.31(c) sets forth 

specific format requirements for the 

written and electronic disclosures 

required by this section. The Board’s 

consumer testing indicated that 

grouping certain disclosures together or 

in close proximity to one another 

helped consumers with calculations and 

facilitated their comprehension of the 

disclosures, including fees and costs. 

Therefore, proposed §§ 205.31(c)(1) and 

(2) set forth grouping and proximity 

requirements for certain disclosures 

required under § 205.31. Proposed 

§ 205.31(c)(3) sets forth prominence and 

size requirements for disclosures 

required by Subpart B, and proposed 

§ 205.31(c)(4) imposes segregation 

requirements for disclosures provided 

under Subpart B, with certain specified 

exceptions. 

31(c)(1) Grouping 

Proposed § 205.31(c)(1) provides that 

the disclosures required by proposed 

§§ 205.31(b)(1)(i), (ii), and (iii) (transfer 

amount, transfer fees and taxes, and 

total amount of transaction) must be 

grouped together. Grouping these 

disclosures together would make clear 

to the sender that the total amount 

charged is comprised of the transfer 

amount plus any transfer fees and taxes. 

Proposed § 205.31(c)(1) also provides 

that the disclosures required by 

proposed §§ 205.31(b)(1)(v), (vi), and 

(vii) (transfer amount in the currency to 

be made available to the designated 

recipient, other transfer fees and taxes, 

and amount received by the designated 

recipient) must be grouped together. 

Grouping these disclosures together 

would make clear to the sender how the 

total amount to be transferred to the 

designated recipient, in the currency to 

be made available to the designated 

recipient, will be reduced by fees or 

taxes charged by a person other than the 

remittance transfer provider. 

Proposed comment 31(c)(1)–1 clarifies 

that information is grouped together for 

purposes of Subpart B if multiple 

disclosures are in close proximity to one 

another and a sender can reasonably 

determine how to calculate the total 

amount of the transaction, and the 

amount that will be received by the 

designated recipient. Proposed Model 

Forms A–30 through A–35 in Appendix 

A, discussed in more detail below, 

illustrate how information may be 

grouped to comply with the rule. The 

proposed comment also clarifies that a 

remittance transfer provider may group 

the information in another manner. For 

example, a provider could provide the 

grouped information as a horizontal, 

rather than a vertical, calculation. 

31(c)(2) Proximity 

Proposed § 205.31(c)(2) provides that 

the exchange rate required by 

§ 205.31(b)(1)(iv) must be disclosed in 

close proximity to the other disclosures 

on the pre-payment disclosure. The 

Board believes that disclosing the 

exchange rate in close proximity to both 

the calculations that demonstrate the 

total transaction amount, as well as the 

total amount the recipient will receive, 

will help a sender understand the effect 

of the exchange rate on the transaction. 

Proposed § 205.31(c)(2) also provides 

that the error resolution and 

cancellation disclosures required by 

§ 205.31(b)(2)(iv) must be disclosed in 

close proximity to the other disclosures 

on the receipt. The Board determined in 

consumer testing that providing a brief 

statement regarding error resolution and 

cancellation rights in a location that is 

near the other disclosures effectively 

communicated these rights to a 

consumer. Most participants in 

consumer testing noticed the error 

resolution statement and liked its 

brevity and proximity to the other 

disclosure elements. Therefore, the 

Board believes that the error resolution 

and cancellation disclosures should be 

closely proximate to the other 

disclosures required under 

§ 205.31(b)(2) to prevent such 

disclosures from being overlooked by a 

sender. 

The Board believes that many 

remittance transfer providers currently 

could comply with the proposed 

grouping and proximity requirements 

for written and electronic disclosures. 

However, as remittance transfer 

products continue to evolve, providing 

key disclosures about the terms of a 

remittance transfer may present new 

challenges. For example, remittance 

transfers may, in the future, increasingly 

be sent from the U.S. via text messaging 

or mobile phone applications. 

Therefore, the Board requests comment 

on how the grouping and proximity 

requirements in proposed 

§§ 205.31(c)(1) and (2) could be applied 

to transactions conducted via text 

messaging or mobile phone application. 

31(c)(3) Prominence and Size 

Proposed § 205.31(c)(3) sets forth the 

requirements regarding the prominence 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29916 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

and size of the disclosures required 

under Subpart B. The proposed rule 

provides that written and electronic 

disclosures required by Subpart B must 

be made in a minimum eight-point font. 

The disclosures that the Board 

developed for consumer testing used 

eight-point font, consistent with the font 

size used in a register receipt, and were 

provided on the front of the page shown 

to consumer testing participants. 

Participants in consumer testing 

generally found that the disclosures 

were readable, and they were able to 

locate the different disclosure elements 

during testing. The Board believes that 

disclosures provided in a smaller font 

could diminish the readability and 

noticeability of the disclosures. The 

Board solicits comment on whether a 

minimum font size should be required 

and, if so, whether an eight-point font 

size is appropriate. 

Proposed § 205.31(c)(3) further 

provides that written disclosures 

required by Subpart B must be on the 

front of the page on which the 

disclosure is printed. In testing, 

participants reacted positively to frontof-page disclosures. Proposed 

§ 205.31(c)(3) also provides that each of 

the written and electronic disclosures 

required under § 205.31(b) must be in 

equal prominence to each other. 

Participants in consumer testing 

generally responded positively to the 

model forms, and particularly to the 

statement regarding error resolution and 

cancellation, which was displayed in 

the same font and type size as the other 

disclosures. For example, some 

participants specifically contrasted the 

disclosures to error resolution or 

cancellation disclosures currently 

provided by remittance transfer 

providers that they stated were typically 

provided in ‘‘fine print’’ or on the back 

of this disclosure. Given the importance 

of each of the new disclosures in 

Subpart B, and particularly the new 

error resolution and cancellation rights, 

the Board believes that each of the 

disclosures should be provided in equal 

prominence to each other. 

The Board requests comment on how 

the prominence and size requirements 

in proposed § 205.31(c)(3) could be 

applied to transactions performed via 

text messaging or mobile phone 

application. 

31(c)(4) Segregation 

Proposed § 205.31(c)(4) provides that 

written and electronic disclosures 

required by Subpart B must be 

segregated from everything else and 

must contain only information that is 

directly related to the disclosures 

required under Subpart B. Proposed 

comment 31(c)(4)–1 clarifies that 

disclosures may be segregated from 

other information in a variety of ways. 

For example, the disclosures may 

appear on a separate sheet of paper or 

may be set off from other information on 

a notice by outlining them in a box or 

series of boxes, bold print dividing 

lines, or a different color background. 

Proposed comment 31(c)(4)–2 clarifies 

that, for purposes of segregation, the 

following information is directly related 

information: (i) The date and/or time of 

the transaction; (ii) the sender’s name 

and contact information; (iii) the 

location at which the designated 

recipient may pick up the funds; (iv) the 

confirmation or other identification 

code; (v) a company name or logo; (vi) 

an indication that a disclosure is or is 

not a receipt or other indicia of proof of 

payment; (vii) a designated area for 

signatures or initials; and (viii) a 

statement that funds may be available 

sooner, as permitted by 

§ 205.31(b)(2)(ii). 

In general, the Board believes that 

permitting additional information to be 

included on the disclosure could 

adversely affect the comprehensibility 

of the disclosures. Nonetheless, the 

Board recognizes that certain 

information not required by the statute 

or regulation is integral to the 

transaction, such as the confirmation 

code that a designated recipient must 

tender in order to receive the funds, and 

a remittance transfer provider should be 

able to communicate this information to 

a consumer. The Board tested the 

required disclosures in a segregated 

format that complies with the 

requirements of proposed § 205.31(c)(4) 

and that included most of the additional 

information discussed above. The 

Board’s testing indicated that the 

additional information permitted by 

paragraph (c)(4) was useful to the 

consumer and did not lead to 

information overload. Thus, the 

proposed rule would permit, but would 

not require, such additional information 

to be included with the required, 

segregated disclosures. The Board 

requests comment on the proposed 

segregation requirement and whether 

additional information should be 

permitted to be included with the 

required segregated disclosures. 

The Board recognizes that the specific 

formatting requirements set forth in 

proposed § 205.31(c) are more 

prescriptive than other disclosures 

under Regulation E. The Board believes 

that certain formatting requirements are 

necessary in order to ensure that 

consumers notice and understand the 

disclosures provided under Subpart B. 

Many of the disclosures required by 

Subpart B have a mathematical 

relationship to each other, and 

presenting this information to 

consumers in a logical sequence is 

important for consumer understanding. 

The Board requests comment, however, 

on whether certain requirements set 

forth in proposed § 205.31(c) could be 

less prescriptive, while still ensuring 

that consumers are provided with clear 

and conspicuous disclosures. 

31(d) Estimates 

Proposed § 205.31(d) provides that 

estimated disclosures may be provided 

to the extent permitted by § 205.32. See 

§ 205.32, below. The proposed rule 

would require that such disclosures be 

described as estimates, using the term 

‘‘Estimated’’ or a substantially similar 

term and in close proximity to the 

estimated term or terms described. 

Consumer testing participants generally 

understood that where the term 

‘‘estimated’’ was used in close proximity 

to the estimated term or terms, the 

actual amount could vary (for example, 

the amount of currency to be received 

could be higher or lower than the 

amount disclosed). Proposed comment 

31(d)–1 provides examples of terms that 

may be used to indicate that a disclosed 

amount is estimated. For instance, a 

remittance transfer provider could 

describe an estimated disclosure as 

‘‘Estimated Transfer Amount,’’ ‘‘Other 

Estimated Fees and Taxes,’’ or ‘‘Total to 

Recipient (Est.).’’ 

31(e) Timing 

Proposed § 205.31(e) sets forth the 

timing requirements for the disclosures 

required by § 205.31 in accordance with 

the statute. Proposed § 205.31(e)(1) 

provides that the disclosures required 

by § 205.31(b)(1) or a combined 

disclosure provided under § 205.31(b)(3) 

must be provided to the sender when 

the sender requests the remittance 

transfer, but prior to payment for the 

remittance transfer. 

Although current practice generally is 

to provide written disclosures after 

payment is made, the Board believes 

that the statute precludes such an 

approach with respect to the combined 

disclosures. Specifically, EFTA Section 

919(a)(5)(C) affirmatively requires that 

the combined disclosure be accurate at 

the time at which payment is made 

(emphasis added). Such a requirement 

would be superfluous if the combined 

disclosure could be provided after 

payment, because a disclosure provided 

after payment should accurately reflect 

the terms of the completed transaction. 

Therefore, the Board believes the statute 

requires that the combined disclosure be 

given prior to payment. 


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Proposed comment 31(e)–1 clarifies 

that whether a sender has requested a 

remittance transfer depends on the facts 

and circumstances. Under the proposed 

comment, a sender that asks a provider 

to send a remittance transfer, and that 

provides transaction-specific 

information to the provider in order to 

send funds to a designated recipient, 

has requested a remittance transfer. For 

example, a sender who asks the 

provider to send money to a recipient in 

Mexico and provides the sender and 

recipient information to the provider 

has requested the remittance transfer 

provider to send a remittance transfer. 

In contrast, a sender who solely inquires 

about that day’s rates and fees has not 

requested the remittance transfer 

provider to send a remittance transfer. 

EFTA Section 919(a)(2)(B) requires 

that a receipt be provided to a sender at 

the time at which the sender makes 

payment in connection with the 

remittance transfer. The Board believes 

the statute intends to permit a sender to 

provide a receipt after the sender pays 

for a transaction. However, the Board 

also believes that the statute generally 

intends the receipt to be provided 

within a short time period of when the 

sender pays for the transaction. 

Therefore, proposed § 205.31(e)(2) 

provides that a receipt provided under 

§ 205.31(b)(2) must be provided to the 

sender when payment is made for the 

transaction. Proposed comment 31(e)–2 

provides examples of when a remittance 

transfer provider may provide the 

sender a receipt. For example, a 

provider could give the sender a receipt 

after the consumer pays for the 

remittance transfer, but before the 

sender leaves the counter. A provider 

could also give the sender a receipt 

immediately before the sender pays for 

the transaction. 

Proposed § 205.31(e)(2) further states 

that if a transaction is conducted 

entirely by telephone, a written receipt 

may be mailed or delivered to the 

sender no later than one business day 

after the date on which payment is 

made for the remittance transfer. If a 

transaction is conducted entirely by 

telephone and involves the transfer of 

funds from the sender’s account held by 

the provider, the written receipt may be 

provided on or with the next regularly 

scheduled periodic statement. See EFTA 

Section 919(a)(5)(B). In some 

circumstances, a provider conducting 

such a transfer from the sender’s 

account held by the provider is not 

required to provide a periodic 

statement. The Board believes that in 

such circumstances, it is appropriate to 

permit the provider to provide a written 

receipt within a similar period of time 

as a periodic statement. Therefore, the 

Board is also proposing in § 205.31(e)(2) 

that the written receipt may be provided 

within 30 days after payment is made 

for the remittance transfer if a periodic 

statement is not required, pursuant to its 

authority under EFTA Section 904(c). In 

order for the written receipt to be 

mailed or delivered to a sender 

conducting a transaction entirely by 

telephone at these later times, however, 

the remittance transfer provider must 

comply with the foreign language 

requirements of § 205.31(g)(3), 

discussed below. 

Proposed comment 31(e)–3 clarifies 

that a sender may transfer funds from 

his or her account, as defined by 

§ 205.2(b), that is held by the remittance 

transfer provider. For example, a 

financial institution may send an 

international wire transfer for a sender 

using funds from the sender’s account 

with the institution. If the sender 

conducts such a transfer entirely by 

telephone, the institution may provide a 

written receipt on or with the sender’s 

next regularly scheduled periodic 

statement or within 30 days after 

payment is made for the remittance 

transfer if a periodic statement is not 

required. 

The Board requests comment on the 

timing requirements for the disclosures 

required by § 205.31. 

31(f) Accurate When Payment Is Made 

Proposed § 205.31(f) provides that 

disclosures required by § 205.31(b) must 

be accurate when a sender pays for the 

remittance transfer, except as permitted 

by proposed § 205.32. As discussed 

above in proposed § 205.31(e)(1), a 

combined disclosure provided under 

§ 205.31(b)(3) must be provided to the 

sender when the sender requests the 

remittance transfer, but prior to 

payment for the remittance transfer. 

EFTA Section 919 does not require that 

the information provided in the 

required disclosures be guaranteed for 

any period of time. However, EFTA 

Section 919(a)(5)(C) requires that the 

combined disclosure must be accurate 

when payment is made. The Board 

believes the statute intends to ensure 

that the information disclosed to 

senders in the required disclosures 

reflects the terms of the transaction. 

Proposed comment 31(f)–1 clarifies 

that a remittance transfer provider is not 

required to guarantee the terms of the 

remittance transfer in the disclosures 

required by § 205.31(b) for any specific 

period of time. However, if any of the 

disclosures required by § 205.31(b) are 

not accurate when a sender pays for the 

remittance transfer, a provider must give 

new disclosures before receiving 

payment for the remittance transfer. For 

example, a sender at a retail store may 

be provided a pre-payment disclosure 

under § 205.31(b)(1) at a customer 

service desk, but the sender may decide 

to leave the desk to go shopping. Upon 

the sender’s return to the customer 

service desk an hour later, the sender 

must be provided a new pre-payment 

disclosure if any of the information has 

changed. However, the sender need not 

be provided a new disclosure if the 

information has not changed. 

31(g) Foreign Language Disclosures 

EFTA Section 919(b) provides that 

disclosures required under EFTA 

Section 919 must be made in English 

and in each of the foreign languages 

principally used by the remittance 

transfer provider, or any of its agents, to 

advertise, solicit, or market, either orally 

or in writing, at that office. Proposed 

§ 205.31(g)(1) implements EFTA Section 

919(b) for written or electronic 

disclosures generally, with the 

modifications discussed below. In 

addition, the Board proposes to exempt 

oral disclosures and written receipts for 

telephone transactions from the general 

foreign language disclosure 

requirements of EFTA Section 919(b) 

and proposed § 205.31(g)(1). Instead, the 

Board is proposing different foreign 

language requirements for those 

disclosures under proposed 

§§ 205.31(g)(2) and (g)(3), respectively. 

31(g)(1) General 

Proposed § 205.31(g)(1) contains the 

general requirements for foreign 

language disclosures. Specifically, 

proposed § 205.31(g)(1) provides that 

disclosures required under Subpart B, 

other than oral disclosures and written 

receipts for telephone transactions, must 

be made in English and either: (i) In 

each of the foreign languages principally 

used by the remittance transfer provider 

to advertise, solicit, or market 

remittance transfer services, either 

orally, in writing, or electronically, at 

that office; or (ii) if applicable, in the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to conduct the transaction (or 

for written or electronic disclosures 

made pursuant to § 205.33, in the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to assert the error), provided 

that such foreign language is principally 

used by the remittance transfer provider 

to advertise, solicit, or market 

remittance transfer services, either 

orally, in writing, or electronically, at 

that office. 

Proposed § 205.31(g)(1) generally 

implements EFTA Section 919(b) with 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29918 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

the following modifications. First, 

proposed § 205.31(g)(1) only applies to 

written or electronic disclosures. Oral 

disclosures are addressed separately in 

proposed § 205.31(g)(2), discussed 

below. Second, to simplify the statutory 

language in EFTA Section 919(b), 

proposed § 205.31(g)(1) does not 

incorporate the term ‘‘or any of its 

agents.’’ This is consistent with other 

sections of Subpart B that reference the 

remittance transfer provider, where the 

reference also applies to any of the 

remittance transfer provider’s agents to 

the extent such agents act for the 

provider. Third, while EFTA Section 

919(b) does not explicitly reference 

electronic advertising, soliciting, or 

marketing, proposed § 205.31(g)(1) 

provides that foreign languages 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market electronically are also triggered. 

Fourth, proposed § 205.31(g)(1) is 

triggered only by foreign language 

advertisements, solicitations, or 

marketing of remittance transfer 

services, and not by foreign language 

advertisements, solicitations, or 

marketing of other products or services. 

Many remittance transfer provider agent 

offices are located in retail 

establishments where other financial 

and non-financial products or services 

are advertised, solicited, or marketed. 

For example, an agent of a remittance 

transfer provider may be located at a 

grocery store or convenience store. A 

remittance transfer provider should be 

able to institute controls on an agent’s 

advertising of the provider’s remittance 

transfer services, but a provider would 

have little or no control over an agent’s 

advertising practices for any other 

product or service. Therefore, proposed 

§ 205.31(g)(1) clarifies that only 

advertisements, solicitations, or 

marketing of the provider’s remittance 

transfer services trigger foreign language 

disclosures under the rule. 

Finally, proposed § 205.31(g)(1) 

would allow a remittance transfer 

provider to fulfill its obligations by 

providing the consumer with 

disclosures in English and, if applicable, 

the one triggered foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction or assert an error in lieu 

of each of the triggered foreign 

languages. Permitting this flexibility 

facilitates compliance with the 

provision, particularly for a remittance 

transfer provider who advertises, 

solicits, and markets in several foreign 

languages. In such cases, the remittance 

transfer provider may find it 

cumbersome to provide disclosures in 

English and in multiple foreign 

languages. Such flexibility may also 

benefit consumers because disclosures 

containing several foreign languages 

may also be confusing for consumers to 

read and understand. 

As a result, the Board proposes to use 

its authority under EFTA Section 904(c) 

to give remittance transfer providers the 

flexibility to provide senders with 

written or electronic disclosures in 

English and either: (i) In each foreign 

language that the remittance transfer 

provider principally uses to advertise, 

solicit, or market remittance transfer 

services at that office; or (ii) if 

applicable, in the foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction (or for written 

disclosures provided pursuant to 

proposed § 205.33, the foreign language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error), provided that such foreign 

language is principally used to 

advertise, solicit, or market remittance 

transfer services at that office. Proposed 

§§ 205.31(g)(1)(i) and (ii). 

In order to clarify proposed 

§ 205.31(g)(1), the Board also proposes 

several comments to provide guidance 

on the terms ‘‘principally used,’’ 

‘‘advertise, solicit, and market,’’ and ‘‘at 

that office.’’ 

Principally Used 

Proposed comment 31(g)(1)–1 clarifies 

when a foreign language is principally 

used. The term ‘‘principally used’’ could 

be interpreted to mean the foreign 

language that is used most frequently or 

most prominently. The Board, however, 

does not believe this meaning is 

consistent with the statutory language, 

which provides that disclosures must be 

provided ‘‘in each of the foreign 

languages’’ principally used. Thus, the 

statute indicates that more than one 

foreign language may be principally 

used. Consequently, the term 

‘‘principally used’’ does not appear to be 

limited to the one foreign language that 

is used most by the remittance transfer 

provider. 

The Board also does not believe that 

any use of a foreign language by a 

remittance transfer provider to 

advertise, solicit, or market should 

automatically trigger the foreign 

language disclosure requirement. Such a 

reading would essentially read out the 

term ‘‘principally’’ from the statute. 

Therefore, the Board believes that 

proper interpretation of the statute 

requires a reading that is between these 

two extremes. 

The term ‘‘principally used’’ could 

signify the use of a foreign language in 

a manner that is not minor or incidental. 

The Board believes this interpretation 

may be more consistent with the statute. 

The Board also believes that whether a 

foreign language is principally used 

must be determined based on the facts 

and circumstances. In the Board’s view, 

factors that contribute to whether a 

foreign language is principally used 

include: (i) The frequency with which 

the remittance transfer provider 

advertises, solicits, or markets 

remittance transfers in a foreign 

language at a particular office; (ii) the 

prominence of such advertising, 

soliciting, or marketing in that language 

at that office; and (iii) the specific 

foreign language terms used to 

advertise, solicit, or market remittance 

transfer services at that office. The 

Board believes that when a foreign 

language is used frequently and is 

featured prominently to advertise, 

solicit, or market remittance transfer 

services at a particular office, and when 

the specific foreign language terms used 

in such advertisements, solicitations, 

and marketing convey the availability of 

remittance transfer services, it may lead 

a reasonable consumer to expect to 

receive information on remittance 

transfer services in that language at that 

office. In such a case, the Board believes 

the foreign language has been 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfer services at 

that office. 

Proposed comment 31(g)(1)–1 

provides guidance on when a foreign 

language may be principally used to 

advertise, solicit, or market remittance 

transfer services and includes examples 

to illustrate when a foreign language is 

principally used and when there is 

incidental use of the language. 

Specifically, proposed comment 

31(g)(1)–1 provides that an 

advertisement for remittance transfer 

services, including rate and fee 

information, that is featured 

prominently at an office and is entirely 

in English, except for a sentence 

advising consumers to ‘‘Ask us about 

our foreign remittance services’’ in a 

foreign language, may create an 

expectation that a consumer could 

receive information on remittance 

transfer services in that foreign 

language. Thus, based on the 

prominence of the advertisement using 

the foreign language and the specific 

terms of the foreign language used in the 

advertisement inviting a consumer to 

inquire about remittance transfer 

services, the foreign language would be 

considered to be principally used to 

advertise, solicit, or market remittance 

transfer services. In contrast, the 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29919 

32Regulation E contains some guidance on 

whether a card, code, or other device is ‘‘marketed 

or labeled as a gift card or gift certificate’’ or 

‘‘marketed to the general public’’ for purposes of the 

Board’s gift card rule. See comments 20(b)(2)–2, 

20(b)(2)–3, and 20(b)(4)–1. However, that guidance 

focuses on a narrow set of circumstances and does 

not address more broadly what actions generally 

constitute advertising, soliciting, or marketing. 

proposed comment provides that an 

advertisement for remittance transfer 

services, including rate and fee 

information, that is featured 

prominently at an office and is entirely 

in English, except for the incidental use 

of one word of greeting in a foreign 

language, may not create an expectation 

that a consumer could receive 

information on remittance transfer 

services in that foreign language, and 

would, therefore, not trigger the foreign 

language disclosure requirement, based 

on the specific foreign language term 

used. 

The Board also considered an 

objective standard based on whether a 

foreign language meets a certain 

percentage threshold of a remittance 

transfer provider’s advertisements at a 

particular office as an appropriate way 

to measure if such a language is 

principally used. However, such a 

standard would be arbitrary, may be 

difficult to administer, and may 

inappropriately exclude instances 

where a foreign language is principally 

used to advertise, solicit or market 

remittance transfers, even if the number 

of advertisements in the foreign 

language is nominally low. For these 

reasons, the Board believes that a factsand-circumstances approach that 

considers not only the frequency with 

which the foreign language is used, but 

also the prominence with which the 

foreign language is featured and the 

specific foreign language terms used in 

any advertisement, soliciting, or 

marketing, would best effectuate the 

statute and protect consumers. 

Advertise, Solicit, or Market 

Neither the EFTA nor Regulation E 

defines advertising, soliciting, or 

marketing.32 The general concept of 

advertising, soliciting, or marketing is 

explained in other Board regulations. 

See, e.g., Regulation Z, 12 CFR 

226.2(a)(2) and associated commentary; 

Regulation DD, 12 CFR 230.2(b) and 

11(b) and associated commentary. 

Proposed comment 31(g)(1)–2 

provides both positive and negative 

examples of advertising, soliciting, or 

marketing in a foreign language. The 

proposed comment borrows applicable 

examples from the commentary to 

§§ 226.2(a)(2) and 230.2(b) regarding the 

definition of ‘‘advertisement,’’ as well as 

examples related to the promotion of 

overdrafts under § 230.11(b). The 

proposed comment includes examples 

that could apply to a remittance transfer 

provider’s interactions with a consumer. 

At That Office 

Under EFTA Section 919(b) and 

proposed § 205.31(g)(1), the requirement 

that a remittance transfer provider 

provide foreign language disclosures is 

based on whether the foreign language 

is principally used to advertise, solicit, 

or market ‘‘at that office.’’ Proposed 

comment 31(g)(1)–3 clarifies the 

meaning of ‘‘office’’ as used in 

§ 205.31(g)(1). The Board believes that 

an office of a remittance transfer 

provider includes both physical and 

non-physical locations where 

remittance transfer services are offered 

to consumers. Because transactions may 

be conducted, and errors may be 

asserted, by telephone and through the 

Internet, the proposal states that an 

office includes any telephone number or 

Web site through which a consumer can 

complete a transaction or assert an error. 

Therefore, a telephone number or Web 

site that provides general information 

about the remittance transfer provider, 

but through which a consumer does not 

have the ability to complete a 

transaction or assert an error, is not an 

office. 

Proposed comment 31(g)(1)–3 also 

clarifies that a location need not 

exclusively offer remittance transfer 

services in order to be considered an 

office for purposes of § 205.31(g)(1). 

Many agents of remittance transfer 

providers are located in retail 

establishments where other financial 

and non-financial products or services 

may be sold. The proposed comment 

includes an example stating that if an 

agent of a remittance transfer provider is 

located in a grocery store, the grocery 

store is considered an office for 

purposes of § 205.31(g)(1). 

Proposed comment 31(g)(1)–4 

provides guidance on the term ‘‘at that 

office.’’ Specifically, the proposed 

comment states that any advertisement, 

solicitation, or marketing that is posted, 

provided, or made at a physical office is 

considered to be advertising, soliciting, 

or marketing at that office. Moreover, 

proposed comment 31(g)(1)–4 also 

provides that advertisements, 

solicitations, or marketing posted, 

provided, or made on a Web site of a 

remittance transfer provider, or during a 

telephone call with the remittance 

transfer provider also constitute 

advertising, soliciting, or marketing at 

an office of a remittance transfer 

provider. 

The proposed comment also states 

that for error resolution disclosures 

provided pursuant to § 205.33, the 

relevant office is the office in which the 

sender first asserts the error and not the 

office where the remittance transfer was 

conducted. The Board believes the 

office in which the sender first asserts 

the error is the appropriate office to 

determine whether the foreign language 

advertising disclosure requirement has 

been triggered because the remittance 

transfer provider may not know where 

the disputed remittance transfer was 

conducted or may not be able to 

determine whether the foreign language 

advertising disclosure requirement was 

triggered at that office. 

31(g)(2) Oral Disclosures 

As noted above, the Board proposes to 

exempt oral disclosures from the general 

foreign language disclosure rule. 

Instead, proposed § 205.31(g)(2) would 

require that disclosures permitted to be 

provided orally under § 205.31(a)(3) for 

transactions conducted entirely by 

telephone must be made in the language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. Proposed § 205.31(g)(2) 

would also provide that disclosures 

permitted to be provided orally under 

proposed § 205.31(a)(4) for error 

resolution purposes must be made in 

the language primarily used by the 

sender with the remittance transfer 

provider to assert the error. 

The Board believes that application of 

the foreign language disclosure 

requirement in EFTA Section 919(b) to 

oral disclosures may not be effective or 

optimal. First, under EFTA Section 

919(b), a foreign language must be 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfers at an office 

in order to be required for disclosures. 

If this trigger applied to oral disclosures, 

a sender conducting a transaction or 

asserting an error in a foreign language 

that did not meet the foreign language 

advertising trigger may only receive 

required oral disclosures in English. 

Such a result could undermine a 

sender’s ability to comprehend 

important information related to the 

transaction. This is especially 

problematic if the remittance transfer 

provider conducted the actual 

transaction or communicated with the 

sender regarding the error asserted by 

the sender in a foreign language, then 

switched to English to disclose the 

required information under Subpart B. 

Instead, the Board believes senders 

would benefit from having the required 

disclosures provided in the same 

language primarily used by the sender 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29920 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

with the remittance transfer provider to 

conduct the transaction or assert the 

error, regardless of whether the language 

meets the foreign language advertising 

trigger. As a result, the Board believes 

foreign language disclosures are 

especially important in this context. 

Second, the Board believes 

disclosures that are permitted to be 

provided orally under §§ 205.31(a)(3) 

and (4) should be provided only in the 

language primarily used to conduct the 

transaction or assert the error. EFTA 

Section 919(b) requires that disclosures 

be given in English and in each of the 

triggered foreign languages. Thus, if 

EFTA Section 919(b) applied to oral 

transactions, a sender conducting a 

telephone transaction or receiving the 

results of an error investigation orally 

could be given disclosures in English 

and in every foreign language triggered 

by the regulation. It is unlikely that 

providing oral disclosures in two or 

more languages would be helpful to 

senders. 

For these reasons, the Board proposes 

to use its authority under EFTA Section 

904(c) to exempt oral disclosures from 

the foreign language requirement under 

EFTA Section 919(b). At the same time, 

the Board proposes to use its authority 

under EFTA Section 919(a)(5)(A) to 

condition the availability of oral 

disclosures for transactions conducted 

entirely by telephone on the remittance 

transfer provider making such 

disclosures in the language primarily 

used by the sender with the remittance 

transfer provider to conduct the 

transaction. Furthermore, the Board 

proposes to use its EFTA Section 904(a) 

authority to permit oral disclosure of 

certain error resolution investigation 

results, as discussed below in the 

supplementary information to 

§ 205.33(c)(1), provided that the oral 

disclosure of such error resolution 

investigation results must be made in 

the language primarily used by the 

sender with the remittance transfer 

provider to assert the error. 

31(g)(3) Written Receipt for Telephone 

Transactions 

Proposed § 205.31(g)(3) would require 

that written receipts required to be 

provided to the sender after payment 

under proposed § 205.31(e)(2) for 

transactions conducted entirely by 

telephone must be made in English and, 

if applicable, in the foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. The Board proposes to 

implement this provision by using its 

authority under EFTA Section 904(c) to 

exempt such written receipts from the 

foreign language disclosure requirement 

of EFTA Section 919(b). At the same 

time, the proposal imposes a new 

requirement that the remittance transfer 

provider make such disclosures in 

English, and if applicable, in the 

language primarily used by the sender 

with the remittance transfer provider to 

conduct the transaction, regardless of 

whether such foreign language is 

primarily used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfers. See EFTA 

Section 919(a)(5)(B). 

The Board believes that because the 

pre-payment disclosures will be 

provided orally in the language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction entirely by telephone 

under proposed § 205.31(g)(2), the same 

language should be used in the written 

receipt provided to the sender under 

proposed § 205.31(g)(3) for consistency, 

regardless of whether the language 

meets the foreign disclosure advertising 

trigger. 

Alternatively, the Board could apply 

the general rule proposed in 

§ 205.31(g)(1) to the written receipt 

provided for transactions conducted 

entirely by telephone. This would mean 

that a remittance transfer provider 

would not be obligated to provide the 

written receipt in a foreign language, 

even if such foreign language was used 

to conduct the telephone transaction, 

unless the foreign language was 

principally used to advertise, solicit, or 

market remittance transfers during the 

telephone call. 

In the Board’s outreach with industry, 

remittance transfer providers generally 

stated that providing written disclosures 

in a foreign language can be more costly 

and burdensome than providing oral 

disclosures in a foreign language. 

Therefore, the Board requests comment 

on whether proposed § 205.31(g)(3) 

might have the unintended consequence 

of reducing the number of foreign 

languages remittance transfer providers 

may offer for telephone transactions. 

General Clarifications 

The Board also proposes additional 

commentary to provide general 

guidance on issues that affect each of 

the subsections of § 205.31(g) discussed 

above. Proposed comment 31(g)–1 

addresses the number of languages 

contained in a written or electronic 

disclosure. EFTA Section 919(b) does 

not limit the number of languages that 

may be used on a single disclosure. 

However, the Board is concerned that 

too many languages on a single written 

document may diminish a consumer’s 

ability to read and understand the 

disclosures. The Board’s proposed rule 

in § 205.31(g)(2) and (g)(3) regarding 

oral disclosures and written receipts for 

telephone transactions, as discussed 

above, limit the number of languages 

used in the disclosures. For written or 

electronic disclosures under 

§ 205.31(g)(1), however, there is no 

stated limit to the number of languages 

appearing on a disclosure. 

Proposed comment 31(g)–1 suggests 

that a single written or electronic 

document containing more than three 

languages is not likely to be helpful to 

a consumer. The proposed commentary 

is not a strict limit and leaves open the 

possibility that a single written or 

electronic document may contain more 

than three languages yet still be helpful 

to a consumer, depending on how the 

information is presented. The Board 

seeks comment on whether three 

languages is an appropriate suggested 

limit to the number of languages in a 

single written or electronic document 

and whether the regulation should 

strictly limit the number of languages 

that may be contained in a single 

written or electronic disclosure. 

As discussed above, proposed 

§ 205.31(g)(1) provides flexibility to 

remittance transfer providers to provide 

senders with written or electronic 

disclosures in English and either: (i) In 

each foreign language that the 

remittance transfer provider principally 

uses to advertise, solicit, or market at 

that office; or (ii) if applicable, in the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to conduct the transaction (or 

for written or electronic disclosures 

pursuant to § 205.33, the foreign 

language primarily used by the sender 

with the remittance transfer provider to 

assert the error), provided that the 

foreign language is principally used to 

advertise, solicit, or market at that 

office. Proposed comment 31(g)–1 

clarifies that the remittance transfer 

provider may provide disclosures in a 

single document with both languages or 

in two separate documents with one 

document in English and the other 

document in the applicable foreign 

language. 

To illustrate this concept, the Board 

proposes several examples in comment 

31(g)–1. If a remittance transfer provider 

principally uses only Spanish and 

Vietnamese to advertise, solicit, or 

market remittance transfer services at a 

particular office, the proposed comment 

provides that the remittance transfer 

provider may provide all of its 

consumers with disclosures in English, 

Spanish, and Vietnamese, regardless of 

the language the consumer uses with the 

remittance transfer to conduct the 

transaction or assert the error. 


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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29921 

Alternatively, if a sender primarily uses 

Spanish to conduct the transaction or 

assert an error, the proposed comment 

states that the remittance transfer 

provider may provide the written 

disclosure in English and Spanish, 

whether in a single document or two 

separate documents. If the sender 

primarily uses English with the 

remittance transfer provider to conduct 

the transaction or assert an error, the 

remittance transfer provider may 

provide the written or electronic 

disclosure solely in English. If the 

sender primarily uses a language with 

the remittance transfer provider to 

conduct the transaction or assert an 

error that the remittance transfer 

provider does not use to advertise, 

solicit, or market either orally, in 

writing, or electronically, at that office, 

the proposed comment provides that the 

remittance transfer provider may 

provide the written or electronic 

disclosure solely in English. 

Proposed comment 31(g)–2 clarifies 

when a language is primarily used by 

the sender with the remittance transfer 

provider to conduct a transaction and 

assert an error. As discussed above, 

under proposed § 205.31(g)(1)(ii), 

remittance transfer providers have the 

flexibility to provide written or 

electronic disclosures in English, and if 

applicable, in the foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. Proposed 

§ 205.31(g)(1)(ii) also provides that for 

written or electronic disclosures 

provided pursuant to § 205.33, 

remittance transfer providers have the 

flexibility to provide such disclosures in 

English, and if applicable, in the foreign 

language primarily used by the sender 

with the remittance transfer provider to 

assert the error. Also, as discussed 

above, proposed §§ 205.31(g)(2) and 

(g)(3) require disclosures in the language 

that is primarily used by the sender 

with the remittance transfer provider to 

conduct the transaction or assert an 

error. 

Proposed comment 31(g)–2 provides 

guidance on determining the language 

that is primarily used by the sender 

with the remittance transfer provider to 

conduct a transaction or assert an error. 

The proposed comment clarifies that the 

language primarily used by the sender 

with the remittance transfer provider to 

conduct the transaction is the primary 

language used to convey the information 

necessary to complete the transaction. 

Proposed comment 31(g)–2 also states 

that the language primarily used by the 

sender with the remittance transfer 

provider to assert an error is the primary 

language used by the sender with the 

remittance transfer provider to provide 

the information required by § 205.33(b) 

to assert an error. 

The proposed comment also provides 

examples to clarify this concept. Under 

one proposed example, a sender 

initiates a conversation with a 

remittance transfer provider in English 

and expresses interest in sending a 

remittance transfer to Mexico. If, based 

on that knowledge, the remittance 

transfer provider offers to communicate 

in Spanish with the sender, and the 

sender conveys the other information 

necessary to complete the transaction in 

Spanish, including the designated 

recipient’s information and the amount 

and funding source of the transfer, then 

Spanish is the language primarily used 

by the sender with the remittance 

transfer provider to conduct the 

transaction. Under a second example, a 

sender initiates a conversation with the 

remittance transfer provider and tells 

the remittance transfer provider that 

there was a problem with a prior 

remittance transfer to Vietnam. If, based 

on that knowledge, the remittance 

transfer provider offers to communicate 

in Vietnamese with the sender, and the 

sender conveys the information required 

by § 205.33(b) to assert an error in 

Vietnamese, then Vietnamese is the 

language primarily used by the sender 

with the remittance transfer provider to 

assert the error. 

Section 205.32 Estimates 

In some instances, a remittance 

transfer provider will not know the 

amount of currency that a designated 

recipient will receive. This may happen 

because the provider does not know the 

applicable exchange rate or the 

applicable fees or taxes that may be 

deducted from the amount transferred. 

To address these circumstances, the 

statute provides two exceptions to the 

requirement to disclose the amount of 

currency that will be received by the 

designated recipient. 

The first exception (the ‘‘temporary 

exception’’) is in EFTA Section 919(a)(4) 

and states that, subject to rules 

prescribed by the Board, disclosures 

regarding the amount of currency that 

will be received by the designated 

recipient will be deemed to be accurate 

so long as the disclosure provides a 

reasonably accurate estimate of the 

amount of foreign currency to be 

received. A remittance transfer provider 

may use this exception only if: (1) It is 

an insured depository institution or 

insured credit union (collectively, an 

‘‘insured institution’’ as described in 

more detail below) conducting a transfer 

through an account that the sender 

holds with it; and (2) it is unable to 

know, for reasons beyond its control, 

the amount of currency that will be 

made available to the designated 

recipient. See EFTA Section 919(a)(4). 

This exception expires five years after 

the enactment of the Dodd-Frank Act, or 

July 20, 2015. If the Board determines 

that expiration of the exception would 

negatively affect the ability of insured 

institutions to send remittances to 

foreign countries, the Board may extend 

the exception to not longer than ten 

years after enactment. See EFTA Section 

919(a)(4)(B). 

The second exception (the 

‘‘permanent exception’’) is in EFTA 

Section 919(c). It states that if the Board 

determines that a recipient country does 

not legally allow, or the method by 

which transactions are made in the 

recipient country do not allow, a 

remittance transfer provider to know the 

amount of currency that will be received 

by the designated recipient, the Board 

may prescribe rules addressing the 

issue. EFTA Section 919(c) further states 

that the Board’s rules shall include 

standards for the remittance transfer 

provider to provide: (1) A receipt that is 

consistent with EFTA Sections 919(a) 

and (b); and (2) a reasonably accurate 

estimate of the foreign currency to be 

received. The second exception does not 

have a sunset date. 

The Board proposes § 205.32 to 

implement the exceptions set forth in 

EFTA Sections 919(a)(4) and (c). 

Proposed § 205.32 would permit a 

remittance transfer provider to disclose 

estimates if it cannot determine exact 

amounts for the reasons specified in the 

statute. 

32(a) Temporary Exception for Insured 

Institutions 

Proposed § 205.32(a)(1) implements 

the temporary exception set forth in 

EFTA Section 919(a)(4)(A) by permitting 

estimates to be provided in accordance 

with proposed § 205.32(c) for the 

disclosures required by proposed 

§§ 205.31(b)(1)(iv)–(vii), if: (1) A 

remittance transfer provider cannot 

determine exact amounts for reasons 

beyond its control; (2) a remittance 

transfer provider is an insured 

institution; and (3) the remittance 

transfer is sent from the sender’s 

account with the insured institution. 

For purposes of proposed § 205.32, the 

term ‘‘insured institution’’ includes 

insured depository institutions as 

defined in Section 3 of the Federal 

Deposit Insurance Act (12 U.S.C. 1813) 

and insured credit unions as defined in 

Section 101 of the Federal Credit Union 

Act (12 U.S.C. 1752). See proposed 

§ 205.32(a)(3). 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29922 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

33A correspondent relationship is where one 

financial institution has a contractual arrangement 

to hold deposits and provide services to another 

financial institution, which has limited access to 

certain financial markets. Such agreements permit 

the financial institution to provide services to 

account holders without incurring the expense of 

setting up a branch in another city or country. 

EFTA Section 919(a)(4) only 

addresses estimates for the amount of 

currency that will be received by a 

designated recipient. Nonetheless, 

proposed § 205.32(a) also would permit 

disclosure of an estimate for the 

exchange rate, the transfer amount in 

the currency made available to the 

designated recipient, the fees imposed 

by intermediaries in the transmittal 

route, and taxes imposed in the 

recipient country that are a percentage 

of the amount transferred to the 

designated recipient. These items must 

be disclosed under proposed 

§ 205.31(b)(1)(iv), (v), and (vi), 

respectively. The inability to determine 

the exact amount of one or more of these 

additional items is the reason why the 

amount of currency that will be received 

by the designated recipient must be 

estimated. The Board believes that, by 

permitting an estimate of the amount of 

currency that will be received, Congress 

intended to permit estimates of the 

components that determine that 

amount. Furthermore, the Board 

believes that permitting estimates of 

these additional items will help 

consumers to understand why the 

amount of currency that will be received 

is displayed as an estimate. 

EFTA Section 919(a)(4) permits the 

use of an estimate of the amount of 

foreign currency that will be received by 

a designated recipient. However, 

proposed § 205.32(a) permits an insured 

institution to provide an estimate of the 

currency that will be received, whether 

it is in U.S. dollars or foreign currency. 

Many consumers send remittance 

transfers which are to be paid to the 

designated recipient in U.S. dollars. 

When an insured institution sends a 

remittance via international wire 

transfer, fees are sometimes deducted by 

intermediary institutions in the 

transmittal route with which the 

sending institution has no 

correspondent relationship.33 Although 

the insured institution may not know 

the total amount of these fees in 

advance, it must disclose them to the 

sender under proposed 

§ 205.31(b)(1)(vi). The amount of 

currency that will be received by the 

designated recipient, whether that 

currency is U.S. dollars or foreign 

currency, will be an estimate if fees 

imposed by intermediaries are 

estimates. Therefore, the Board is 

exercising its authority under EFTA 

Section 904(c) to allow an estimate of 

the amount of currency that will be 

received, even if that currency is in U.S. 

dollars. 

The proposed commentary to 

proposed § 205.32(a)(1) provides further 

guidance on the temporary exception. 

Proposed comment 32(a)(1)–1 explains 

that an insured institution cannot 

determine exact amounts ‘‘for reasons 

beyond its control’’ when: (1) The 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) is set by a 

person with which the insured 

institution has no correspondent 

relationship after the insured institution 

sends the remittance transfer; or (2) fees 

required to be disclosed under 

§ 205.31(b)(1)(vi) are imposed by 

intermediary institutions along the 

transmittal route and the insured 

institution has no correspondent 

relationship with those institutions. 

Proposed comment 32(a)(1)–2 

provides examples of scenarios that 

qualify for the temporary exception. For 

instance, an insured institution cannot 

determine the exact exchange rate 

required to be disclosed under 

§ 205.31(b)(1)(iv) for an international 

wire transfer if the insured institution 

does not set the exchange rate, and the 

rate is instead later set by the designated 

recipient’s institution with which the 

insured institution does not have a 

correspondent relationship. The insured 

institution will not know the date on 

which funds will be deposited into the 

recipient’s account, and will not know 

the exchange rate that will be applied 

on that date. Proposed comment 

32(a)(1)–2.i. Further, an insured 

institution cannot determine the exact 

fees required to be disclosed under 

§ 205.31(b)(1)(vi) if an intermediary 

institution or the designated recipient’s 

institution, with which the insured 

institution does not have a 

correspondent relationship, imposes a 

transfer or conversion fee. Proposed 

comment 32(a)(1)–2.ii. Finally, an 

insured institution cannot determine the 

exact taxes required to be disclosed 

under § 205.31(b)(1)(vi) if the insured 

institution cannot determine the 

applicable exchange rate or other fees, 

as described in proposed comments 

32(a)(1)–2.i and –2.ii, and the recipient 

country imposes a tax that is a 

percentage of the amount transferred to 

the designated recipient, less any other 

fees. Proposed comment 32(a)(1)–2.iii. 

Proposed comment 32(a)(1)–3 

provides several examples of when an 

insured institution will not qualify for 

the exception in § 205.32(a). In each 

case, the insured institution can 

determine the exact amount for the 

relevant disclosure. First, the proposed 

comment explains that an insured 

institution can determine the exact 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) if it converts the 

funds into the local currency to be 

received by the designated recipient 

using an exchange rate that it sets. 

Proposed comment 32(a)(1)–3.i. Second, 

the proposed comment states that an 

insured institution can determine the 

exact fees required to be disclosed 

under § 205.31(b)(1)(vi) if it has 

negotiated specific fees with a 

correspondent institution, and the 

correspondent institution is the only 

institution in the transmittal route to the 

designated recipient’s institution. 

Proposed comment 32(a)(1)–3.ii. 

Finally, the proposed comment notes 

that an insured institution can 

determine the exact taxes required to be 

disclosed under § 205.31(b)(1)(vi) if the 

recipient country imposes a tax that is 

a percentage of the amount transferred 

to the designated recipient, less any 

other fees, and the insured institution 

can determine the exact amount of the 

applicable exchange rate and other fees. 

Similarly, the insured institution can 

determine these taxes if the recipient 

country imposes a flat tax that is not 

tied to the amount transferred. Proposed 

comment 32(a)(1)–3.iii. 

If an insured institution can 

determine the exact exchange rate, fees, 

and taxes required to be disclosed under 

proposed § 205.31(b)(1)(iv) and (vi), it 

can determine the exact amounts to be 

derived from calculations involving 

them. For instance, the insured 

institution could determine both the 

transfer amount expressed as local 

currency and the amount in local 

currency that will be received by the 

designated recipient required to be 

disclosed under proposed 

§ 205.31(b)(1)(v) and (vii), respectively. 

Proposed § 205.32(a)(2) provides that 

proposed § 205.32(a)(1) expires on July 

20, 2015, consistent with the five-year 

term set forth in EFTA Section 

919(a)(4)(B). EFTA Section 919(a)(4)(B) 

gives the Board authority to extend the 

application of proposed § 205.32(a)(2) to 

July 20, 2020, if it determines that 

termination of the exception would 

negatively affect the ability of insured 

institutions to send remittances to 

foreign countries. The Board 

understands that this exception was 

intended to avoid immediate disruption 

of remittance transfer services by 

insured institutions using international 

wire transfers. The exception gives these 

financial institutions time to reach 

agreements and modify systems to 

provide accurate disclosures. 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29923 

32(b) Permanent Exception for Transfers 

to Certain Countries 

Proposed § 205.32(b) implements the 

permanent exception set forth in EFTA 

Section 919(c) by allowing estimates to 

be provided in accordance with 

proposed § 205.32(c) for amounts 

required to be disclosed under proposed 

§ 205.31(b)(1)(iv)–(vii) for transfers to 

certain countries. Like the temporary 

exception in EFTA Section 919(a)(4), 

the permanent exception in EFTA 

Section 919(c) only addresses estimates 

for the amount of currency that will be 

received by a designated recipient. For 

the reasons described above, proposed 

§ 205.32(b) also permits disclosure of 

estimates for the exchange rate, the 

transfer amount in the currency made 

available to the designated recipient, 

and taxes imposed in the recipient 

country that are a percentage of the 

amount transferred to the designated 

recipient. These items are required to be 

disclosed under proposed 

§ 205.31(b)(1)(iv), (v), and (vi), 

respectively. 

32(b)(1) Laws of Recipient Country 

Proposed § 205.32(b)(1) allows 

estimates to be provided in accordance 

with proposed § 205.32(c) for the 

disclosures required by proposed 

§ 205.31(b)(1)(iv)–(vii), if a remittance 

transfer provider cannot determine 

exact amounts because the laws of the 

recipient country do not permit such a 

determination. 

The proposed commentary provides 

guidance on this standard. Specifically, 

proposed comment 32(b)(1)–1 clarifies 

that the ‘‘laws of the recipient country’’ 

do not permit a remittance transfer 

provider to determine exact amounts 

when a law or regulation of the 

recipient country requires the person 

making funds directly available to the 

designated recipient to apply an 

exchange rate that is: (1) Set by the 

government of the recipient country 

after the remittance transfer provider 

sends the remittance transfer; or (2) set 

when the designated recipient chooses 

to claim the funds. 

Proposed comments 32(b)(1)–2.i and 

–2.ii provide examples illustrating the 

application of the exception. Proposed 

comment 32(b)(1)–2.i explains that the 

laws of the recipient country do not 

permit a remittance transfer provider to 

determine the exact exchange rate 

required to be disclosed under 

§ 205.31(b)(1)(iv) when, for example, the 

government of the recipient country sets 

the exchange rate daily and the funds 

are made available to the designated 

recipient in the local currency the day 

after the remittance transfer provider 

sends the remittance transfer. Under 

such circumstances, an estimate for the 

exchange rate is permitted because the 

remittance transfer provider cannot 

determine a rate that a foreign 

government has yet to set. 

In contrast, proposed comment 

32(b)(1)–2.ii explains that the laws of 

the recipient country permit a 

remittance transfer provider to 

determine the exact exchange rate 

required to be disclosed under 

§ 205.31(b)(1)(iv) if, for example, the 

government of the recipient country 

pegs the value of its currency to the U.S. 

dollar. 

32(b)(2) Method by Which Transactions 

Are Made in the Recipient Country 

Proposed § 205.32(b)(2) allows 

estimates to be provided in accordance 

with proposed § 205.32(c) for the 

disclosures required by proposed 

§ 205.31(b)(1)(iv)–(vii), if a remittance 

transfer provider cannot determine 

exact amounts because the method by 

which transactions are made in the 

recipient country does not permit such 

a determination. 

Based on the Board’s outreach and 

interpretation of the statute, the Board 

believes that the exception for methods 

by which transactions are made in the 

recipient country was intended to 

permit estimates for certain 

international ACH transactions. 

Specifically, the Board interprets the 

exception to apply to remittances sent 

via international ACH on terms 

negotiated by the government of the 

United States and the government of a 

recipient country where the exchange 

rate is set after the transfer is sent. 

Accordingly, proposed comment 

32(b)(2)–1 states that the ‘‘method by 

which transactions are made in the 

recipient country’’ does not permit a 

remittance transfer provider to 

determine exact amounts when 

transactions are sent via international 

ACH on terms negotiated between the 

United States government and recipient 

country’s government, under which the 

exchange rate is set by the recipient 

country’s central bank after the provider 

sends the remittance transfer. 

Proposed comment 32(b)(2)–2 

provides examples illustrating the 

application of the exception provided 

under proposed § 205.32(b)(2). Proposed 

comment 32(b)(2)–2.i provides an 

example of when a remittance transfer 

would qualify for the exception. It 

explains that a transfer would qualify 

for the exception when sent 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 on 

the business day after the provider has 

sent the remittance transfer. Under such 

circumstances, the provider cannot 

determine the exact exchange rate 

required to be disclosed under 

§ 205.31(b)(1)(iv). Remittance transfers 

sent via Directo a Me ́xico currently 

would qualify for the proposed 

§ 205.32(b)(2) exception. 

Proposed comments 32(b)(2)–2.ii and 

–2.iii provide examples of when a 

remittance transfer would not qualify 

for the § 205.32(b)(2) exception. 

Proposed comment 32(b)(2)–2.ii 

explains that a remittance transfer 

provider would not be permitted to 

provide estimates under the proposed 

§ 205.32(b)(2) exception if it sends a 

remittance transfer via international 

ACH on terms negotiated between the 

United States government and a privatesector entity 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. In this 

case, transactions are made using a 

method negotiated between the United 

States and a private entity. Nonetheless, 

remittance transfers sent using such a 

method may qualify for the § 205.32(a) 

temporary exception. In addition, 

proposed comment 32(b)(2)–2.iii 

explains that a remittance transfer 

provider would not qualify for the 

§ 205.32(b)(2) exception if, for example, 

it sends transfers 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. In such a case, the 

remittance transfer provider can 

determine the exchange rate required to 

be disclosed. 

During outreach, several industry 

members expressed the view that 

international wire transfers are a 

method by which transactions are made 

in a recipient country that does not 

allow the remittance transfer provider to 

know the amount of currency that will 

be received by a designated recipient 

and should qualify for the permanent 

exception in EFTA Section 919(c). The 

Board does not believe that the 

permanent exception in EFTA Section 

919(c) applies to international wire 

transfers because wire transfers are not 

a method by which transactions are 

made that are particular to a specific 

country or group of countries. 

Additionally, the application of the 

permanent exception to international 

wire transfers would make the 

temporary exception superfluous. 

Accordingly, the proposed exception in 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29924 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

§ 205.32(b)(2) does not apply to 

international wire transfers. 

32(c) Bases for Estimates 

If a remittance transfer qualifies for 

either the temporary exception in EFTA 

Section 919(a)(4) or the permanent 

exception in EFTA Section 919(c), the 

statute permits the provider to disclose 

a reasonably accurate estimate to the 

sender. The Board believes that 

providing an exhaustive list of 

approaches that will result in a 

reasonably accurate estimate may be 

more helpful to remittance transfer 

providers than a less specific standard 

for calculating estimates. Thus, 

proposed § 205.32(c) states that 

estimates provided pursuant to the 

exceptions in proposed § 205.32(a) and 

(b) must be based on an approach listed 

in the regulation for the required 

disclosure. 

Proposed § 205.32(c) further states 

that if a remittance transfer provider 

bases an estimate on an approach that 

is not listed, the provider complies with 

§ 205.32(c) so long as the designated 

recipient receives the same, or a greater 

amount, of currency that it would have 

received had the estimate been based on 

a listed approach. Thus, use of an 

approach other than one listed in the 

proposed rule will not result in a 

violation, to the extent that the sender 

is not harmed by such use. 

32(c)(1) Exchange Rate 

Proposed § 205.32(c)(1) sets forth the 

approaches that a remittance transfer 

provider may use as the basis of an 

estimate of the exchange rate required to 

be disclosed under proposed 

§ 205.31(b)(1)(iv). Proposed 

§ 205.32(c)(1)(i) states that for 

remittance transfers qualifying for the 

§ 205.32(b)(2) exception, the estimate 

must be based on the most recent 

exchange rate set by the recipient 

country’s central bank and reported by 

a Federal Reserve Bank. Proposed 

comment 32(c)(1)(i)–1 clarifies that if 

the exchange rate for a remittance 

transfer sent via international ACH that 

qualifies for the § 205.32(b)(2) exception 

is set the following business day, the 

most recent exchange rate available for 

a transfer will be the exchange rate set 

for the day that the disclosure is 

provided, i.e., the current business day’s 

exchange rate. 

Proposed § 205.32(c)(1)(ii) provides 

that, for other transfers, the estimate 

must be based on the most recent 

publicly available wholesale exchange 

rate. Proposed comment 32(c)(1)(ii)–1 

provides that publicly available sources 

of information containing the most 

recent wholesale exchange rate for a 

currency include, for example, U.S. 

news services, such as Bloomberg, the 

Wall Street Journal, and the New York 

Times, a recipient country’s national 

news service, and a recipient country’s 

central bank or other government 

agency. 

However, the Board recognizes that 

U.S. news services do not list the 

exchange rate for every currency and 

that some remittance transfer providers 

may not have access to the national 

news services or the information 

provided by the central bank of a 

recipient country. Therefore, proposed 

§ 205.32(c)(1)(iii) permits use of the 

most recent exchange rate offered by the 

person making funds available directly 

to the designated recipient as the basis 

for providing an estimate. This may 

require a provider to contact the 

designated recipient’s institution or 

payout location to obtain such a rate. 

The Board solicits comment on other 

approaches a remittance transfer 

provider might use as the basis for an 

estimate of the exchange when the 

currency that will be paid to the 

designated recipient is infrequently 

traded or when the remittance transfer 

provider sends transfers to a recipient 

country infrequently. 

32(c)(2) Transfer Amount in the 

Currency Made Available to the 

Designated Recipient 

Proposed § 205.32(c)(2) states that in 

disclosing the transfer amount in the 

currency made available to the 

designated recipient, as required under 

proposed § 205.31(b)(1)(v), an estimate 

must be based upon the estimated 

exchange rate provided in accordance 

with § 205.31(c)(1). 

32(c)(3) Other Fees Imposed by 

Intermediaries 

Proposed § 205.32(c)(3) provides that 

one of two approaches must be used to 

estimate the fees imposed by 

intermediary institutions in connection 

with an international wire transfer 

required to be disclosed under proposed 

§ 205.31(b)(1)(vi). Under the first 

approach, an estimate must be based on 

the remittance transfer provider’s most 

recent transfer to an account at the 

designated recipient’s institution. Under 

the second approach, an estimate must 

based on the representations of the 

intermediary institutions along a 

representative route identified by the 

remittance transfer provider that the 

requested transfer could travel. 

Proposed comment 32(c)(3)(ii)–1 

clarifies that a remittance transfer from 

a 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. Proposed comment 

32(c)(3)(ii)–1 further clarifies that, in 

providing an estimate of the fees 

required to be disclosed under proposed 

§ 205.31(b)(1)(vi) pursuant to the 

proposed § 205.32(a) temporary 

exception, an insured institution may 

rely upon the representations of the 

institutions that act as intermediaries in 

any one of the potential transmittal 

routes that it reasonably believes a 

requested remittance transfer may 

travel. 

The Board solicits comment on other 

approaches that a remittance transfer 

provider might use as the basis for 

calculating an estimate of the fees 

imposed by intermediaries for an 

international wire transfer when the 

remittance transfer provider rarely 

sends transfers to a requested location. 

32(c)(4) Other Taxes Imposed in the 

Recipient Country 

Proposed § 205.32(c)(4) states that, in 

disclosing taxes imposed in the 

recipient country as required under 

proposed § 205.31(b)(1)(vi) that are a 

percentage of the amount transferred to 

the designated recipient, an estimate 

must be based on the estimated 

exchange rate provided in accordance 

with § 205.32(c)(1) and the estimated 

fees imposed by institutions that act as 

intermediaries in connection with an 

international wire transfer provided in 

accordance with § 205.32(c)(3). 

Proposed comment 32(c)(4)–1 clarifies 

that proposed § 205.32(c)(4) permits a 

provider to give an estimate only when 

the taxes imposed in a recipient country 

are a percentage of the amount 

transferred to the designated recipient. 

In other contexts where taxes may be 

imposed, a remittance transfer provider 

can determine the exact amount, such as 

in the case of a flat tax. 

32(c)(5) Amount of Currency That Will 

Be Received by the Designated 

Recipient 

Proposed § 205.32(c)(5) states that, in 

disclosing the amount of currency that 

will be received by the designated 

recipient as required under proposed 

§ 205.31(b)(1)(vii), an estimate must be 

based on the estimates provided in 

accordance with §§ 205.32(c)(1), (3), and 

(4), as applicable. 

Storefront and Internet Disclosures 

Statutory Requirements 

EFTA Section 919(a)(6)(A) states that 

the Board may prescribe rules to require 

a remittance transfer provider to 

prominently post, and timely update, a 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29925 

34A significant number of focus group 

participants request that their transfers be paid to 

their designated recipient in U.S. dollars. These 

participants would not use the exchange rate and 

local currency amount information provided by a 

statutory storefront notice. 

notice describing a model remittance 

transfer for one or more amounts, as the 

Board may determine, which notice 

shall show the amount of currency that 

will be received by the designated 

recipient, using the values of the 

currency into which the funds will be 

exchanged. EFTA Section 919(a)(6)(A) 

also states that the Board may require 

the notice prescribed to be displayed in 

every physical storefront location 

owned or controlled by the remittance 

transfer provider. Further, EFTA Section 

919(a)(6)(A) states that the Board shall 

prescribe rules to require a remittance 

transfer provider that provides 

remittance transfers via the Internet to 

provide a notice, comparable to the 

storefront notice described in the 

statute, located on the home page or 

landing page (with respect to such 

remittance transfer services) owned or 

controlled by the remittance transfer 

provider. 

EFTA Section 919(a)(6)(B) states that, 

prior to proposing rules under EFTA 

Section 919(a)(6)(A), the Board shall 

undertake appropriate studies and 

analyses, which shall be consistent with 

EFTA Section 904(a)(2), to determine 

whether a storefront notice or Internet 

notice facilitates the ability of a 

consumer (1) to compare prices for 

remittance transfers, and (2) to 

understand the types and amounts of 

any fees or costs imposed on remittance 

transfers. EFTA Section 904(a)(2) 

requires an economic impact analysis 

that considers the costs and benefits of 

a regulation to financial institutions, 

consumers, and other users, including 

the extent to which additional 

paperwork would be required, the 

effects upon competition in the 

provision of services among large and 

small financial institutions, and the 

availability of services to different 

classes of consumers, particularly low 

income consumers. 

Summary of the Board’s Study and 

Findings 

Consistent with EFTA Section 

919(a)(6)(B), the Board has reviewed 

and analyzed the statute and a variety 

of independent articles, studies, and 

Congressional testimony; conducted 

outreach with industry and consumer 

advocates; and held focus groups with 

consumers who send remittance 

transfers. Based on its findings, 

discussed in more detail below, the 

Board is not proposing a rule that would 

require the posting of model remittance 

transfer notices at a storefront or on the 

Internet. 

The notice described by the statute 

would illustrate only one of several 

costs of a remittance transfer. Thus, the 

Board believes that the statutory notice 

would not facilitate a consumer’s ability 

to compare prices or to understand the 

fees and costs imposed on remittance 

transfers. In addition, most consumers 

would be unable to apply the 

information provided by the statutory 

notice to their own transfers. 

The Board considered alternatives to 

the type of notice described in the 

statute. The Board considered requiring 

the posting of transfer fee information 

for model send amounts, but believes 

that this alternative notice would have 

many of the same limitations as the 

statutory notice. The Board also 

considered requiring a notice that 

would reflect all the costs of a transfer 

as well as the different variables that 

affect the total cost of the transaction. A 

notice with this alternative content 

could help consumers to obtain a better 

understanding of the costs and fees 

imposed on remittance transfers. 

Nonetheless, the Board believes that the 

length and complexity of such notices 

could limit their utility. In addition, the 

frequent manual updates that would be 

required for any of these storefront 

notices raise concerns about accuracy. 

As described in more detail below, these 

factors led to the Board to decide against 

proposing a rule requiring remittance 

transfer providers to post storefront 

model remittance transfer notices. 

Because the Board is not proposing a 

rule mandating the posting of storefront 

notices, it is not proposing a rule 

mandating the posting of Internet 

notices. As noted above, EFTA Section 

919(a)(6)(A) states that the Board shall 

prescribe rules to require a remittance 

transfer provider that provides 

remittance transfers via the Internet to 

provide a notice comparable to a 

storefront notice. The Board 

understands that the word ‘‘shall’’ could 

be read as mandating the Board to 

require model Internet notices 

regardless of whether it proposes model 

storefront notices. However, the Board 

believes that the provision is better read 

as not requiring Internet notices in the 

absence of any model storefront notices. 

The Board believes such a reading is 

more consistent with the statute as a 

whole. For instance, because the Board 

is not requiring a storefront notice, there 

would be no ‘‘comparable’’ Internet 

notice. Moreover, the Board’s study of 

model Internet notices indicated that 

consumers using Internet remittance 

transfer providers to request remittance 

transfers would be even less likely to 

use a model transfer notice than those 

using providers at a physical location. 

Most Internet providers currently 

disclose transaction-specific 

information prior to the consumer’s 

payment for a transfer. Proposed 

§ 205.31(b)(1) would make this common 

practice a regulatory requirement. 

Discussion 

Statutory Notice 

First, the Board’s study showed that 

the storefront notice as described by 

EFTA Section 919(a)(6)(A) would not 

facilitate a consumer’s ability to 

compare prices or to understand the fees 

and costs imposed on remittance 

transfers. The statutory storefront notice 

would illustrate only one of several 

costs of a remittance transfer—that is, 

the exchange rate offered by that 

remittance transfer provider for the 

particular model transfer amount. In 

addition to the exchange rate, the total 

cost of a remittance transfer includes 

fees charged by the remittance transfer 

provider, any intermediary in the 

transfer, and the receiving entity, and 

any taxes that may be charged in the 

sending and receiving jurisdictions (all 

of which must be disclosed pursuant to 

proposed § 205.31(b)(1)). Because the 

statutory storefront notice would not 

address these fees and taxes, it would 

not present a complete picture to the 

consumer of all potential fees and costs 

for a remittance transfer, even for the 

‘‘model’’ send amount.34

The participants in the focus groups 

for the Board’s consumer testing 

generally recognized the limitations of 

the storefront notice described in the 

statute. Participants noted that the 

information provided by the storefront 

notice would permit a customer to 

calculate the exchange rate being used 

by the remittance transfer provider, but 

that the information did not disclose the 

remittance transfer provider’s transfer 

fee or specify whether there would be a 

deduction from the amount to be 

received by the recipient entity or 

jurisdiction. 

Second, the Board believes that most 

consumers would be unable to apply the 

information provided by a statutory 

storefront notice to their own transfers. 

The fees, exchange rate, and taxes for a 

remittance transfer can vary based upon 

the amount sent, transfer corridor (i.e., 

the sending location to the receiving 

location), speed of transfer (e.g., the next 

day, the same day, or in one hour), 

method of delivery (e.g., an electronic 

deposit into a bank account or a cash 

disbursement), and type of receiving 

entity (e.g., a bank or a money 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29926 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

transmitter’s payout partner). Because of 

these variations, it is unlikely that a 

storefront notice as described by the 

statute would contain a model transfer 

pertinent to the consumer’s intended 

transfer. For example, some remittance 

transfer providers offer a discount on 

their exchange rate margin for large 

send amounts. Therefore, even if the 

consumer’s transfer were identical to 

the model transfer posted in the 

storefront notice except for the send 

amount, the consumer still may be 

unable to determine the exchange rate 

that would apply to the consumer’s 

transfer based on the storefront notice. 

Focus group participants also 

recognized these shortcomings of the 

statutory storefront notices. Participants 

commented that if they were sending 

more than the posted send amount, they 

would need to ask the provider how 

much local currency would be received 

because the notice would not 

necessarily provide the information 

needed to independently calculate that 

amount. Some participants indicated 

that the statutory storefront notice 

would not help them because it would 

not show how much money in U.S. 

dollars they would need to send so that 

the recipient would receive a specific 

amount in local currency. 

Third, the Board believes consumers 

may proceed with their transfer requests 

as planned even with the posting of the 

statutory storefront notices. A few focus 

group participants said that they would 

use the information in the statutory 

storefront notice to calculate the 

exchange rate offered by that provider 

and compare it to the wholesale bank 

exchange rate published in a national 

newspaper or the exchange rate offered 

by other providers when contemplating 

future transactions. However, most 

participants stated that if they went to 

a particular store intending to send 

money and learned that the exchange 

rate would result in the delivery of less 

local currency to the recipient than 

expected, they would still complete the 

transaction. Because these participants 

generally transferred smaller amounts, a 

slightly lower exchange rate would have 

little impact on the total amount of local 

currency received. 

Alternative Notices 

In light of the concerns raised by the 

statutory storefront notices, the Board 

considered proposing two alternative 

storefront notices. The first alternative 

notice would have required remittance 

transfer providers to show the transfer 

fees imposed by the provider for one or 

more model send amounts. The second 

alternative notice would have required 

remittance transfer providers to show all 

the cost variables for one or more model 

send amounts. The cost variables would 

include: Location of the receiving entity; 

speed of delivery; fees charged by the 

remittance transfer provider, any 

intermediaries, and the recipient entity; 

taxes imposed by sending and receiving 

jurisdictions; exchange rate; and amount 

of currency to be received by the 

designated recipient. 

The Board considered requiring 

remittance transfer providers to display 

storefront notices showing the transfer 

fee charged for one or more model send 

amounts based on comments made 

during the focus groups that posted fee 

information could be useful. A few 

focus group participants noted that a 

remittance transfer provider’s fee, rather 

than its exchange rate, accounts for the 

largest percentage of the total cost for a 

transfer. One focus group participant 

said that he currently uses fee 

information posted by two providers to 

help him to decide which provider he 

should use for an upcoming transfer. 

Another participant said that he would 

use a storefront notice with fee 

information to shop among providers. 

However, a storefront notice 

containing information regarding the 

remittance transfer provider’s fees still 

would not present a complete picture of 

all potential costs for a transfer. A 

storefront notice with a provider’s fee 

information would not necessarily 

disclose the exchange rate, fees imposed 

by any intermediary in the transfer or 

the receiving entity, and taxes imposed 

by the receiving jurisdiction. 

Participants in the Board’s one-on-one 

consumer interviews universally 

expressed their wish to know if a 

recipient would be charged a fee by the 

receiving entity or would be taxed by 

the receiving jurisdiction. 

The Board believes that many 

consumers would not be able to apply 

the fee information provided by an 

alternative notice to their own transfers. 

As mentioned above with respect to the 

statutory storefront notices, the fee 

charged by the remittance transfer 

provider also varies based on the 

transfer corridor, speed of transfer, 

method of delivery, and type of 

receiving entity. For example, some 

providers charge different fees for 

sending funds to an urban versus a rural 

area in a particular country. Again, 

because of these variations, a notice 

would not necessarily contain a model 

transfer identical to the consumer’s 

intended transfer. Further, some 

remittance transfer providers use a 

tiered pricing structure for their fees 

that would prevent the consumer from 

accurately extrapolating the fee for his 

or her transfer from the information 

provided, even if the consumer’s 

transfer were identical to the model 

transfer except for the send amount. 

Customers who are members of a 

remittance transfer provider’s loyalty 

program might be eligible for fee 

discounts that would not be reflected in 

a storefront notice. 

A remittance transfer provider’s fee 

generally changes less frequently than 

the exchange rate offered for a given 

transfer, and accordingly would become 

outdated less frequently. Some 

remittance transfer providers operate in 

just one or two corridors and charge a 

flat fee for transfers under a certain 

amount within those corridors. Thus, 

for these providers, a storefront notice 

with fee information arguably would be 

less burdensome and costly than the 

statutory storefront notice to produce, 

and could ameliorate concerns about the 

accuracy of posted information. But, a 

storefront notice with fee information 

posted by global remittance transfer 

providers would be long and complex 

and could be burdensome and costly to 

produce. 

Many focus group participants raised 

similar concerns when presented with 

the idea of a storefront notice showing 

fee information as they did regarding a 

storefront notice showing the amount of 

local currency to be received. Thus, the 

Board believes that, in practice, 

alternative storefront notices containing 

fee information would have many of the 

same limitations as the statutory 

storefront notices containing 

information about the amount of 

currency to be received. 

The Board also considered requiring 

remittance transfer providers to post a 

notice that would reflect all the costs of 

a transfer as well as the different 

variables that affect the total cost of the 

transaction. However, as described 

below, the Board believes that the 

length and complexity of such notices 

could discourage consumers’ use of the 

notice and prove overly burdensome for 

industry. 

Remittance transfer providers that 

operate in just one or two corridors with 

little price variability could produce a 

storefront notice reflecting all cost 

variables that is inexpensive and 

relatively simple in nature although, as 

discussed below, accuracy would 

continue to be a concern because 

currency values frequently fluctuate. A 

notice with this content could help 

consumers to obtain a better 

understanding of the costs and fees 

imposed on remittance transfers. 

However, for other providers, a 

storefront notice for sending a specified 

amount to just a single country could 

contain multiple rows of information to 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29927 

35Appleseed, Remittance Transparency: 

Strengthening Business, Building Community 8 

(2009). 

36See, e.g., Testimony of Mark Thompson, The 

Western Union Company, in Hearing Before House 

Subcomm. on Fin. Insts. And Cons. Credit, No. 

111–39 (June 3, 2009). 

account for differences in pricing based 

on the transfer method, timing option, 

receipt location, and cost permutations 

described above. Many providers offer 

remittance transfers to multiple 

countries, and several locations within 

each country, which would multiply the 

number of data points on the notice. 

The Board believes that a consumer 

could be overwhelmed by the amount of 

data appearing in a long, complex 

storefront notice posted by these 

providers and, therefore, might not use 

it. One pilot study on storefront notices 

containing comprehensive cost 

information showed that only 37% of 

bank and money transmitter customers 

sending remittances checked the 

posting.35 Thus, taken as a whole, the 

Board does not believe this alternative 

would benefit consumers. 

Both the statutory and the more 

comprehensive alternate storefront 

notice would become inaccurate 

whenever the exchange rate for a model 

transfers changed. As a result, the Board 

believes a storefront notice could be 

unhelpful and even misleading to 

consumers, while creating unnecessary 

legal risks for remittance transfer 

providers. In Congressional hearings 36

and during the Board’s outreach, 

industry representatives and others 

expressed concern that, because 

currency exchange rates frequently 

fluctuate, remittance transfer providers 

would have to update the storefront 

notice for each send location several 

times a week, or as frequently as several 

times a day. These rates could also be 

different at a single provider’s different 

send locations. Remittance transfer 

providers would need to distribute the 

updated notices to each send location 

and each send location would need to 

replace the outdated notice just as 

frequently. Non-exclusive send 

locations that offer the services of two 

or more money transmitters would have 

to post and update the storefront notices 

for each remittance transfer provider. 

Compliance concerns are magnified for 

providers that have a large network of 

agents where the providers would have 

to rely on store clerks to update 

disclosures on a timely basis. Echoing 

the concerns of industry representatives, 

focus group participants also questioned 

the ability of remittance transfer 

providers to keep the notices up to date. 

Finally, the Board is concerned about 

the effect the storefront notice 

requirement would have on competition 

and costs to the consumer. Remittance 

transfer providers that sell their 

products through agents have expressed 

concern that the work involved in 

posting and updating storefront notices 

could cause some agents to stop offering 

remittance transfers. Further, credit 

unions and small banks that 

infrequently conduct transfers may find 

the burden and cost of producing 

storefront notices prohibitive and 

discontinue the service. Given the costs 

and risks associated with posting and 

updating the storefront notices 

contemplated by the statute, some 

providers may exit the market, which 

could reduce competition among 

providers and increase costs for 

consumers. For these reasons, the Board 

is not proposing to require providers to 

post model storefront or Internet 

notices. 

Section 205.33 Procedures for 

Resolving Errors 

EFTA Section 919(d) addresses error 

resolution procedures for errors in 

connection with remittance transfers, 

and requires a sender to provide notice 

of an error within 180 days of the 

promised date of delivery of a 

remittance transfer. The notice triggers a 

remittance transfer provider’s duty to 

investigate the claim and correct any 

error within 90 days of receiving the 

notice. Proposed § 205.33 implements 

the new error resolution requirements 

for remittance transfers and establishes, 

where appropriate, error resolution 

procedures similar to those that apply to 

a financial institution under § 205.11 

with respect to errors involving 

electronic fund transfers. 

33(a) Definition of Error 

Proposed § 205.33(a)(1) defines the 

term ‘‘error’’ for purposes of the error 

resolution provisions applying to 

remittance transfers. The proposed 

definition lists the types of transfers or 

inquiries that constitute errors. 

Proposed § 205.33(a)(2) lists types of 

transfers or inquiries that do not 

constitute errors. The proposed 

commentary provides additional 

guidance illustrating errors under the 

rule. 

Under proposed § 205.33(a)(1)(i), the 

term ‘‘error’’ includes an incorrect 

amount paid by a sender in connection 

with a remittance transfer. The 

proposed provision is similar to 

§ 205.11(a)(1)(ii), which defines as an 

error an incorrect EFT to or from a 

consumer’s account. Proposed comment 

33(a)–1 clarifies that this provision is 

intended to cover circumstances in 

which the amount paid by the sender 

differs from the total transaction amount 

stated in the receipt provided under 

§ 205.31(b)(2) or the combined 

disclosure provided under 

§ 205.31(b)(3). See also 

§ 205.31(b)(1)(iii). 

Proposed comment 33(a)–1 also states 

that an error under § 205.33(a)(1)(i) 

covers incorrect amounts paid by a 

sender regardless of the form or method 

of payment tendered by the sender for 

the transfer, including when a debit, 

credit, or prepaid card is used to pay an 

amount in excess of the amount of the 

transfer requested by the consumer plus 

applicable fees. For example, if a 

remittance transfer provider incorrectly 

charged a sender’s credit card account 

for $150 to send $120 to the sender’s 

relative in a foreign country, plus a 

transfer fee of $10, and the provider sent 

only $120, the sender could assert an 

error with the remittance transfer 

provider for the incorrect charge. In 

addition, however, as discussed below 

under proposed § 205.33(f), the right to 

assert an error with a remittance transfer 

provider for incorrect amounts paid in 

connection with a transfer is 

independent of any other existing rights 

that the sender may also have under 

other applicable law with respect to an 

incorrect payment amount. 

Proposed § 205.33(a)(1)(ii) defines as 

an error ‘‘a computational or 

bookkeeping error made by a remittance 

transfer provider relating to a remittance 

transfer.’’ Similar to an existing error 

provision for EFTs in § 205.11(a)(iv), an 

error is intended to include 

‘‘arithmetical errors, posting errors, 

errors in printing figures, and figures 

that were jumbled due to mechanical or 

electronic malfunction.’’ See 44 FR 

59480 (Oct. 15, 1979). The proposed 

error would cover, for example, 

circumstances in which a remittance 

transfer provider fails to reflect all fees 

that will be imposed in connection with 

the transfer or misapplies the applicable 

exchange rate in calculating the amount 

of currency that will be received by the 

designated recipient. Thus, 

notwithstanding that the designated 

recipient may receive the amount of 

currency stated on the receipt or 

combined disclosure, an error could be 

asserted because the provider 

incorrectly calculated the amount that 

should have been received. 

Proposed § 205.33(a)(1)(iii) provides 

that an error also generally includes the 

failure by a remittance transfer provider 

to make available to a designated 

recipient the amount of currency 

identified in the receipt (or combined 

notice) given to the sender. Proposed 

comment 33(a)-2 contains guidance 

regarding the scope of the error under 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29928 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

§ 205.33(a)(1)(iii). For example, as 

discussed above under proposed 

§ 205.31, the amount of currency to be 

received by the designated recipient 

stated on the transfer receipt must 

accurately reflect any third party fees or 

taxes that may be imposed in the course 

of the remittance transfer (for example, 

fees imposed by the recipient agent or 

bank in the foreign country or by an 

intermediary institution). Accordingly, 

if the remittance transfer provider fails 

to account for such third party fees or 

taxes, resulting in the designated 

recipient’s receipt of less than the 

amount disclosed on the transaction 

receipt, the sender may assert an error 

(except in the case of an estimate). The 

proposed definition would also cover 

circumstances in which the remittance 

transfer provider initially transmits or 

sends an amount that differs from the 

amount requested by the sender. 

The proposed definition in 

§ 205.33(a)(1)(iii) does not, however, 

apply to circumstances in which the 

amount received by a designated 

recipient differs from the stated amount 

of currency where the remittance 

transfer provider provides an estimate 

as permitted in proposed § 205.32, 

discussed above. For example, where 

the law in the foreign country prohibits 

the remittance transfer provider from 

offering a fixed currency exchange rate 

and the provider gives an estimate of the 

currency to be received in compliance 

with § 205.32(c), the fact that the 

designated recipient received less than 

the estimated currency amount would 

not constitute an error under proposed 

§ 205.33(a)(1)(iii). 

Proposed comment 33(a)–3 provides 

examples illustrating circumstances in 

which an incorrect amount of currency 

may be received by a designated 

recipient. 

Proposed § 205.33(a)(1)(iv) generally 

treats as an error a remittance transfer 

provider’s failure to make funds in 

connection with a remittance transfer 

available to the designated recipient by 

the date of availability stated on the 

receipt (or combined disclosure). See 

proposed § 205.31(b)(2)(ii). Proposed 

comment 33(a)-4 provides examples of 

the circumstances that would be errors. 

These circumstances include the late 

delivery of a remittance transfer after 

the stated date of availability or nondelivery of the transfer, and the deposit 

of a remittance transfer to the wrong 

account. See, however, proposed 

§ 205.33(a)(1)(iv)(B), discussed below. 

An error could also be asserted if a 

recipient agent or institution retains the 

transferred funds after the stated date of 

availability, rather than making the 

funds available to the designated 

recipient. 

In addition, an error under 

§ 205.33(a)(1)(iv) includes a 

circumstance in which a person other 

than the person identified by the sender 

as the designated recipient of the 

transfer fraudulently picks up a 

remittance transfer in the foreign 

country. An error would not, however, 

include circumstances in which a 

designated recipient picks up a 

remittance transfer from the provider’s 

agent as authorized, but subsequently 

has the funds stolen from the recipient’s 

possession. 

The proposed approach with respect 

to the fraudulent pick-up of a remittance 

transfer is consistent with the scope of 

unauthorized EFTs under § 205.2(m), 

which include unauthorized EFTs 

initiated through fraudulent means. See 

comment 2(m)-3. Moreover, the Board 

believes it is appropriate to treat these 

circumstances as errors under the 

proposed rule because the remittance 

transfer provider, rather than the sender, 

is in the best position to ensure that a 

remittance transfer is picked up only by 

the person designated by the sender. For 

example, the provider could establish 

appropriate policies and procedures for 

its agents to verify the identity of the 

recipient of the transfer. 

The proposed rule provides two 

exceptions to the definition of error in 

§ 205.33(a)(1)(iv). First, under proposed 

§ 205.33(a)(1)(iv)(A), the failure to make 

funds from a remittance transfer 

available by the stated date of 

availability does not constitute an error 

where the failure resulted from 

circumstances outside the remittance 

transfer provider’s control. As clarified 

in proposed comment 33(a)–5, the 

exception is limited to circumstances 

that are generally referred to under 

contract law as force majeure, or 

uncontrollable or extraordinary 

circumstances that cannot be reasonably 

anticipated by the remittance transfer 

provider and that prevent the provider 

from delivering a remittance transfer, 

such as war, civil unrest, or a natural 

disaster. The exception for 

circumstances beyond a provider’s 

control also covers government actions 

or restrictions that occur after the 

transfer has been sent but that could not 

have been reasonably anticipated by the 

remittance transfer provider, such as the 

imposition of foreign currency controls 

or the garnishment or attachment of 

funds by a foreign government. 

Comment is requested regarding 

whether additional examples or 

guidance is necessary to illustrate the 

exception for circumstances outside the 

remittance transfer provider’s control. 

Under proposed § 205.33(a)(1)(iv)(B), 

the failure to make funds from a 

remittance transfer available on the 

stated date of availability does not 

constitute an error if it was caused by 

the sender providing incorrect 

information in connection with the 

remittance transfer to the provider. For 

example, a transfer may not be delivered 

by the stated date of delivery as a result 

of the sender’s provision of incorrect 

information in connection with the 

transfer if the sender misspells the 

recipient’s name or otherwise 

incorrectly identifies the designated 

recipient or account to which the 

transferred funds are to be deposited. 

Under these circumstances, however, 

the provider must give the sender the 

opportunity to correct the information 

and resend the transfer at no additional 

cost in order to avoid triggering the error 

resolution requirements. 

The exception in § 205.33(a)(1)(iv)(B) 

applies only where funds from a transfer 

were not made available by the stated 

date of availability as a result of 

incorrect information provided by the 

sender. Accordingly, proposed comment 

33(a)–6 clarifies that if the failure to 

make funds from a transfer available by 

the stated date of availability occurred 

due to the provider’s 

miscommunication of information 

necessary for the designated recipient to 

pick up the transfer, such as providing 

the incorrect location where the transfer 

may be picked up or providing the 

wrong confirmation number or code for 

the transfer, such failure would be 

treated as an error under 

§ 205.33(a)(1)(iv). 

Finally, proposed § 205.33(a)(1)(v) 

includes as an error a sender’s request 

for documentation provided in 

connection with a remittance transfer or 

additional information or clarification 

concerning a remittance transfer. An 

error under proposed § 205.33(a)(1)(v) 

would also cover a sender’s request to 

determine whether an error exists under 

the proposed errors discussed above 

under proposed §§ 205.33(a)(1)(i) 

through (a)(1)(iv). The proposal is 

similar to an existing provision in 

§ 205.11(a)(1)(vii). 

Proposed § 205.33(a)(2) lists 

circumstances that do not constitute 

errors. Under proposed § 205.33(a)(2)(i), 

an inquiry about a transfer of $15 or less 

does not constitute an error, since these 

small-value transfers do not fall within 

the scope of the definition of remittance 

transfer. See § 205.30(d)(2), discussed 

above. Proposed § 205.33(a)(2)(ii) states 

that an inquiry about the status of a 

remittance transfer—for example, if the 

sender calls to ask whether the funds 

have been made available in the foreign 


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37See also EFTA Section 919(g)(1) (providing that 

a designated recipient ‘‘shall not be deemed to be 

a consumer for purposes of this Act’’). 

country—is not an error (unless the 

funds have not been made available by 

the stated date of availability). Finally, 

proposed § 205.33(a)(3)(iii) provides 

that the term ‘‘error’’ does not include a 

sender’s request for information for tax 

or other recordkeeping purposes. 

The Board solicits comment on all 

aspects of the proposed definition of 

error in § 205.33(a), including whether 

additional circumstances should be 

treated as errors under the proposed 

rule and whether additional examples of 

non-errors are necessary to provide 

clarity. 

33(b) Notice of Error From Sender 

Proposed § 205.33(b) sets forth the 

timing and content requirements for a 

notice of error provided by a sender in 

connection with a remittance transfer. 

Under proposed § 205.33(b)(1)(i), a 

sender must generally provide a notice 

of error orally or in writing to the 

remittance transfer provider no later 

than 180 days after the date of 

availability of the remittance transfer 

stated in the receipt (or combined 

disclosure). See EFTA Section 

919(d)(1)(A). Such notice of error must 

be sufficient to enable the remittance 

transfer provider to identify the sender’s 

name and telephone number or address; 

the recipient’s name, and if known, the 

telephone number or address of the 

recipient; and the remittance transfer to 

which the notice of error applies. See 

proposed § 205.33(b)(1)(ii). Except for 

requests for documentation, additional 

information, or clarification under 

proposed § 205.33(a)(1)(v), the notice 

must also indicate why the sender 

believes the error exists and include to 

the extent possible the type, date, and 

amount of the error. See proposed 

§ 205.33(b)(1)(iii). 

Proposed § 205.33(b)(2) provides that 

when a notice of error is based on 

documentation, additional information, 

or clarification that the sender had 

previously requested under 

§ 205.33(a)(1)(v), the sender’s notice of 

error is timely if received by the 

provider no later than 60 days after the 

provider sends the requested 

documentation, information, or 

clarification. The proposed 60-day time 

frame for the sender to provide a new 

notice of error following the sender’s 

receipt of documentation, information, 

or clarification from the remittance 

transfer provider is consistent with the 

60-day time frame established for 

similar circumstances under the general 

error resolution provisions in 

Regulation E, § 205.11(b)(3). The Board 

believes that under these circumstances, 

60 days, rather than the 180-day error 

resolution time frame generally 

applicable to remittance transfers, 

provides sufficient time for a sender to 

review the additional information 

provided by the remittance transfer 

provider and determine whether an 

error occurred in connection with a 

transfer. 

Proposed comment 33(b)–1 clarifies 

that the error resolution procedures for 

remittance transfers apply only when a 

notice of error is received from the 

sender of the transfer. Thus, under the 

proposed rule, a notice of error provided 

by the designated recipient does not 

trigger the remittance transfer provider’s 

error resolution obligations. This 

interpretation is consistent with EFTA 

Section 919(d)(1)(A), which establishes 

error resolution obligations for a 

remittance transfer provider only when 

a notice is received from the ‘‘sender.’’ 37

The proposed comment also clarifies 

that the error resolution provisions do 

not apply when the remittance transfer 

provider itself discovers and corrects an 

error. 

Proposed comment 33(b)–2 provides 

that a notice of error is effective so long 

as the remittance transfer provider is 

able to identify the remittance transfer 

in question. For example, many 

remittance transfer providers may use 

the confirmation number or code given 

to the sender for the pick-up of a 

remittance transfer to identify the 

particular transfer in their tracking 

systems and records. In those 

circumstances, if a sender provides the 

confirmation number or code in the 

notice of error, or any other 

identification number or code supplied 

by the provider in connection with the 

remittance transfer, such number or 

code should be sufficient to enable the 

provider to identify the transfer. 

Proposed comment 33(b)–3 provides 

that a remittance transfer provider may 

request, or the sender may provide, an 

e-mail address of the sender or the 

designated recipient, as applicable, 

instead of a physical address if the email address would be sufficient to 

enable the provider to identify the 

remittance transfer to which the notice 

applies. 

Proposed comment 33(b)–4 clarifies 

that if the sender fails to provide a 

timely notice of error within 180 days 

from the stated date of delivery, the 

remittance transfer provider is not 

required to comply with the error 

resolution requirements set forth in the 

rule. See, e.g., comment 11(b)(1)–7 

(providing that a financial institution 

need not comply with the error 

resolution provisions of § 205.11 for 

untimely notices of error). 

In many cases, a sender that has a 

problem or issue with a particular 

remittance transfer may contact the 

agent location that the sender used to 

send the transfer to resolve the problem 

or issue, rather than notifying the 

provider directly. Proposed comment 

33(b)–5 states that a notice of error from 

a sender received by a remittance 

transfer provider’s agent is deemed to be 

received by the provider for purposes of 

the 180-day time frame for reporting 

errors under proposed § 205.33(b)(1)(i). 

The Board believes that it is appropriate 

to treat notices of error given to the 

agent as notice to the provider because 

in most cases, it will be the agent with 

which the sender has the direct 

relationship, and not the provider. In 

addition, treating a notice of error given 

to the agent as notice to the provider 

ensures that a sender does not lose his 

or her error resolution rights merely 

because the sender was unaware of a 

need to directly notify the provider. 

Proposed comment 33(b)–6 crossreferences the disclosure requirements 

in proposed § 205.31, discussed above, 

to reiterate that a remittance transfer 

provider must include an abbreviated 

notice of the consumer’s error resolution 

rights on the receipt under 

§ 205.31(b)(2) or combined disclosure 

under § 205.31(b)(3), as applicable. In 

addition, the remittance transfer 

provider must make available to a 

sender upon request, a notice providing 

a full description of error resolution 

rights that is substantially similar to the 

proposed model error resolution and 

cancellation notice set forth in 

Appendix A of this regulation (Model 

Form A–36). 

33(c) Time Limits and Extent of 

Investigation 

EFTA Section 919(d)(1)(B) generally 

provides that a remittance transfer 

provider must investigate and resolve an 

error not later than 90 days after receipt 

of a sender’s timely notice of error. 

EFTA Section 919(d)(1)(B) also specifies 

certain remedies for errors in 

connection with a remittance transfer; 

however, the statute also authorizes the 

Board to provide ‘‘such other remedy’’ as 

the Board determines appropriate ‘‘for 

the protection of senders.’’ 

Proposed § 205.33(c) implements the 

statutory time frame for investigating 

errors and sets forth the procedures for 

resolving an error, including the 

applicable remedies. Consistent with 

the statute, proposed § 205.33(c)(1) 

requires a remittance transfer provider 

to promptly investigate a notice of error 

to determine whether an error occurred 


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29930 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

within 90 days of receiving the sender’s 

notice. 

Pursuant to the Board’s authority 

under EFTA Section 904(a), the 

proposed rule further requires the 

remittance transfer provider to report 

the results to the sender within three 

business days after completing its 

investigation, which is consistent with 

the time frame for reporting the results 

of an error investigation under 

Regulation E, § 205.11(c)(2)(iv). The 

report or notice of results must also alert 

the sender of any remedies available for 

correcting any error that the provider 

determines has occurred. 

Although EFTA Section 919(d)(1) 

does not expressly require a notice to be 

provided to the sender when the 

provider determines that an error has 

occurred, the Board believes that a 

notice is appropriate under these 

circumstances to alert the sender of the 

results of the investigation as well as to 

inform the sender of available remedies. 

The proposed rule does not require a 

written notice to a sender that an error 

occurred because such a requirement 

could unnecessarily delay a sender’s 

ability to receive an appropriate remedy. 

Accordingly, proposed comment 33(c)– 

1 clarifies that if the error occurred as 

described by the sender, the provider 

may inform the sender of its findings 

either orally or in writing. However, if 

the error did not occur as described, the 

remittance transfer provider must 

provide a written notice of its findings 

under § 205.33(d), discussed below. 

Proposed § 205.33(c)(2) establishes 

the procedures and remedies for 

correcting an error. The proposed rule 

implements the two remedies that are 

specified in the statute and adds a third 

remedy that would apply if the transfer 

was not made available to the 

designated recipient by the stated date 

of availability under proposed 

§ 205.33(a)(1)(iv). As in the statute, the 

proposed rule allows the sender to 

designate the preferred remedy in the 

event of an error. See EFTA Section 

919(d)(1)(B). Under proposed 

§ 205.33(c)(2), the sender could choose 

to obtain a full refund of the amount 

tendered where the remittance transfer 

was not properly transmitted, or an 

amount appropriate to resolve the error. 

Alternatively, the sender could choose 

to have the remittance transfer provider 

send to the designated recipient the 

amount appropriate to resolve the error, 

at no additional cost to the sender or the 

designated recipient. See proposed 

§§ 205.33(c)(2)(i) and (ii). 

In addition, if the remittance transfer 

was not sent or delivered to the 

designated recipient by the stated date 

of availability, the remittance transfer 

provider would be required to refund all 

fees charged or imposed in connection 

with the transfer, even if the consumer 

asks the provider to send the remittance 

transfer to the designated recipient as 

the preferred remedy. See proposed 

§ 205.33(c)(2)(iii). The Board believes 

that requiring the provider to refund all 

fees imposed in connection with the 

remittance transfer, including the 

transfer fee, is appropriate under such 

circumstances because the sender did 

not receive the contracted service, 

specifically the availability of funds in 

connection with the transfer by the 

stated date. Moreover, in some cases, 

the sender may have paid an additional 

fee for expedited delivery of funds. See 

proposed comment 33(c)–4. Of course, 

in the event that the funds have already 

been delivered to the recipient, even if 

on an untimely basis, the sole remedy 

in such case would be the refund of 

fees. 

Under proposed § 205.33(c)(2), the 

remittance transfer provider must 

correct the error within one business 

day of, or as soon as reasonably 

practicable after, receiving the sender’s 

instructions regarding the appropriate 

remedy. The Board expects that in most 

cases, a remittance transfer provider 

will correct an error in accordance with 

the sender’s instructions within one 

business day of receiving the 

instructions. However, the proposed 

rule provides additional flexibility to 

address the limited circumstances 

where the particular method of sending 

a remittance transfer may present 

practical impediments to a provider’s 

ability to correct an error within one 

business day. For example, as discussed 

above, a wire transfer sent 

internationally may go through several 

intermediary institutions before getting 

to the designated recipient. In such 

cases, it may not be practicable to make 

the amount in error available to the 

recipient within one business day in 

accordance with a sender’s request. The 

Board solicits comment on whether the 

proposed time frame for correcting an 

error under § 205.33(c)(2) is appropriate. 

Proposed comment 33(c)–2 clarifies 

that the remittance transfer provider 

may request that the sender designate 

the preferred remedy at the time the 

sender provides notice of error. 

Permitting such requests may enable 

providers to process error claims more 

expeditiously without waiting for the 

sender’s subsequent instructions after 

notifying the sender of the results of the 

investigation. Nonetheless, if the sender 

does not indicate the desired remedy at 

the time of providing a notice of error, 

the provider would still be required to 

notify the sender of any available 

remedies in the report provided under 

§ 205.33(c)(1) if the provider determines 

an error occurred. See proposed 

comment 33(c)–2. 

The Board notes that under the statute 

and proposed rule, a provider may be 

unable to promptly correct an error if 

the consumer fails to designate an 

appropriate remedy either at the time of 

providing the notice of error or in 

response to the provider’s notice 

informing the consumer of its error 

determination and available remedies. 

Comment is requested on whether the 

Board should alternatively permit 

remittance transfer providers to select a 

default method of correcting errors, 

provided that the sender retains the 

option of selecting a different remedy if 

appropriate. For example, a sender 

could choose to automatically refund to 

senders any amounts necessary to 

correct the error, but each sender could 

decide in an individual case to decline 

the refund and instead request that the 

provider deliver the appropriate amount 

to the designated recipient. 

Proposed comment 33(c)–3 provides 

additional guidance regarding the 

appropriate remedies where the sender 

has paid an excess amount to send a 

remittance transfer. Under that 

circumstance, the sender may request a 

refund of the amount paid in excess or 

may request that the remittance transfer 

provider make that excess amount 

available to the designated recipient at 

no additional cost. Proposed comment 

33(c)–4 states that fees that must be 

refunded to a sender for a failure to 

make funds from a remittance transfer 

available by the stated date of 

availability under § 205.33(a)(1)(iv) 

include all fees imposed for the transfer, 

regardless of the party that imposed the 

fee, and are not limited to fees imposed 

by the provider. 

Proposed comment 33(c)–5 clarifies 

that if an error occurred, whether as 

alleged or in a different amount or 

manner, a remittance transfer provider 

may not impose any charges related to 

any aspect of the error resolution 

process, including any charges for 

documentation or investigation. The 

Board is concerned that such fees or 

charges might have a chilling effect on 

a sender’s good faith assertion of errors. 

See, e.g., comment 11(c)–3. Nothing in 

this proposed rule, however, would 

prohibit a remittance transfer provider 

from imposing a fee for making copies 

of documentation for non-errorresolution related purposes, such as for 

tax documentation purposes. See, e.g., 

proposed § 205.33(a)(2)(iii). 

Under proposed comment 33(c)–6, a 

remittance transfer provider may correct 

an error, without further investigation, 


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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29931 

in the amount or manner alleged by the 

sender to be in error. However, the 

provider must otherwise comply with 

all other applicable requirements of 

§ 205.33, including providing notice of 

the resolution of the error under 

§ 205.33(c). See, e.g., comment 11(c)–4. 

33(d) Procedures if Remittance Transfer 

Provider Determines No Error or 

Different Error Occurred 

Proposed § 205.33(d) establishes 

procedures in the event that a 

remittance transfer provider determines 

that no error or a different error 

occurred from that described by the 

sender. Consistent with EFTA Section 

919(d)(1)(B)(iv), proposed § 205.33(d)(1) 

would require the remittance transfer 

provider to provide a written 

explanation of the provider’s finding 

that there was no error or that a different 

error occurred. Such explanation must 

respond to the sender’s specific 

complaint and note the sender’s right to 

request the documents that the provider 

relied on in making its determination. 

Proposed § 205.33(d)(2) further states 

that upon the sender’s request, the 

remittance transfer provider must 

promptly provide copies of such 

documentation. 

Proposed comment 33(d)–1 states that 

where a remittance transfer provider 

determines that an error occurred in a 

manner or amount different from that 

described by the sender, the provider 

must comply with applicable provisions 

of both § 205.33(c) and (d). The 

proposed commentary also clarifies that 

in such case, the provider may choose 

to give the notice of correction of error 

under § 205.33(c)(1) and the explanation 

that a different error occurred under 

§ 205.33(d) separately or in a combined 

form. See, e.g., comment 11(d)–1 

(establishing a similar provision for 

error investigations involving EFTs). 

33(e) Reassertion of Error 

Under proposed § 205.33(e), a 

remittance transfer provider that has 

fully complied with the error resolution 

requirements with respect to a 

particular notice of error has no further 

responsibilities in the event the sender 

later reasserts the same error, except in 

the case of an error asserted following 

the sender’s receipt of information 

provided under § 205.33(a)(1)(v). 

Proposed comment 33(e)–1 clarifies that 

the remittance transfer provider has no 

further error-resolution responsibilities 

if the sender voluntarily withdraws the 

notice alleging an error. In such case, 

however, the sender retains the right to 

reassert the allegation within the 

original 180-day period from the stated 

date of availability unless the remittance 

transfer provider had already complied 

with all of the error resolution 

requirements before the allegation was 

withdrawn. The proposed provision and 

comment are modeled on similar 

provisions under § 205.11(e). Comment 

is requested on whether additional 

guidance is necessary regarding the 

circumstances in which a sender has 

‘‘voluntarily withdrawn’’ a notice of 

error. 

33(f) Relation to Other Laws 

As noted above under 

§ 205.33(a)(1)(i), the error resolution 

rights for remittance transfers exist 

independently from other rights that a 

consumer may have under other 

existing federal law. For example, when 

a sender uses a credit card to pay for a 

remittance transfer, the sender may have 

billing error rights under Regulation Z, 

12 CFR 226.13, with respect to the 

extension of credit if there is an 

incorrect amount charged to the 

consumer’s account for the transfer, in 

addition to the error resolution rights 

the sender may assert against the 

remittance transfer provider. Similarly, 

a sender may use a debit card to pay for 

a remittance transfer and thus may have 

error resolution rights with respect to 

both the remittance transfer provider 

and the account-holding institution. 

Proposed § 205.33(f) contains guidance 

regarding the interplay between the 

error resolution provisions for 

remittance transfers and error resolution 

rights that may exist under other 

applicable consumer financial 

protection laws. 

In most cases when a consumer pays 

for a remittance transfer by means of an 

electronic fund transfer from his or her 

checking or savings account (for 

example, by providing a debit card as 

payment or authorizing an ACH transfer 

from the account), the institution 

providing the remittance transfer service 

will not be the same institution that 

holds the debited account. If, however, 

the sender uses his or her bank or credit 

union to send a remittance transfer via 

an international ACH service, the 

account-holding bank or credit union 

would also be the remittance transfer 

provider. In such case, a potential 

conflict arises between the error 

resolution time frames and procedures 

that would apply under EFTA Section 

908, implemented in § 205.11, and the 

error resolution provisions under this 

proposed rule. For example, under 

§ 205.11(c), a financial institution 

generally has 10 business days to 

investigate a consumer’s notice of error 

(and up to 45 calendar days if 

provisional credit is provided). 

However, under EFTA Section 

919(d)(1)(B) and proposed § 205.33(c), 

discussed above, a remittance transfer 

provider has up to 90 calendar days to 

investigate a sender’s notice of error. 

EFTA Section 919(e)(1) provides that 

under these circumstances—that is, 

where a remittance transfer is also an 

electronic fund transfer—the error 

resolution provisions for remittance 

transfers apply to the institution/ 

provider, rather than the error 

resolution provisions generally 

applicable to EFTs. 

Proposed § 205.33(f)(1) implements 

EFTA Section 919(e)(1)’s conflict of law 

provision. The proposed rule provides 

that if an alleged error in connection 

with a remittance transfer involves an 

incorrect EFT to a sender’s account and 

the account is also held by the 

remittance transfer provider, then the 

requirements of § 205.33, and its 

applicable time frames and procedures, 

govern the error resolution process. 

However, proposed § 205.33(f)(1) further 

provides that if the notice of error is 

asserted with an account-holding 

institution that is not the same entity as 

the remittance transfer provider, the 

error resolution procedures under 

§ 205.11, and not those under § 205.33, 

apply to the account-holding 

institution’s investigation of the alleged 

error. In both cases, the electronic fund 

transfer from a consumer’s account may 

also be a remittance transfer. 

Nonetheless, the Board believes that as 

a practical matter, an account-holding 

institution would be unable to identify 

a particular EFT as a remittance transfer 

unless it was also the remittance 

transfer provider. In the absence of 

direct knowledge that a particular EFT 

was used to fund a remittance transfer, 

the account-holding institution would 

face significant compliance risk if the 

error resolution requirements under 

proposed § 205.33 were deemed to 

apply to the error. The Board does not 

believe such an outcome is desirable. 

Accordingly, proposed § 205.33(f)(1) 

permits an account-holding institution 

to comply with the error resolution 

requirements of § 205.11 when the 

institution is not also the remittance 

transfer provider for the transaction in 

question. Of course, the consumer still 

has independent error resolution rights 

against the remittance transfer provider 

itself under proposed § 205.33. 

Proposed comment 33(f)–1 clarifies 

that the guidance in § 205.33(f)(1) 

applies only when an error could be 

asserted under both §§ 205.11 and 

205.33 with a financial institution that 

is also the remittance transfer provider. 

For example, the proposed comment 

provides that if the sender asserted an 

error under § 205.11 with a remittance 


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29932 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

transfer provider that holds the sender’s 

account, and the error was not also an 

error under § 205.33 (such as in the case 

of an omission of an EFT on a periodic 

statement), then the error-resolution 

provisions of § 205.11 would 

exclusively apply to the error. 

Proposed § 205.33(f)(2) addresses 

circumstances where an alleged error 

involves an incorrect extension of credit 

in connection with a remittance 

transfer, such as when a consumer 

provides a credit card to pay for a 

remittance transfer. If the consumer 

provides a notice of error to the creditor 

that issued the credit card, the 

provisions of Regulation Z, 12 CFR 

226.13, governing error resolution apply 

to the creditor, rather than the 

requirements under § 205.33. However, 

if the sender instead provides a notice 

of error asserting an incorrect payment 

amount involving the use of a credit 

card to the remittance transfer provider, 

then the error-resolution provisions of 

§ 205.33 apply to the remittance transfer 

provider. 

In certain circumstances, the creditor 

issuing a credit card may also act as a 

remittance transfer provider, for 

example, when the cardholder sends 

funds from his or her credit card 

through a service offered by the creditor 

to a recipient in a foreign country. In the 

case of an incorrect extension of credit 

in connection with the transfer, an error 

could potentially be asserted under 

either Regulation Z or the error 

resolution provisions applicable to 

remittance transfers in proposed 

§ 205.33. The proposed rule provides 

that under these circumstances, the 

error resolution provisions under 

Regulation Z § 226.13 would apply to 

the alleged error. Under these 

circumstances, the Board believes it is 

reasonable to apply the Regulation Z 

error resolution provisions because 12 

CFR 226.13(d)(1) permits a consumer to 

withhold disputed amounts while an 

error is being investigated. Nonetheless, 

the Board notes that if the error 

resolution provisions under proposed 

§ 205.33 were instead deemed to apply 

to the error, then a sender would have 

180 days from the stated date of 

availability for the transfer to assert a 

notice of error, rather than 60 days from 

the periodic statement reflecting the 

error. Accordingly, because the error 

resolution provisions under 12 CFR 

226.13 and proposed § 205.33 each 

provide greater protection to consumers 

in different respects, the Board solicits 

comment on the appropriate standard to 

apply when an error for an incorrect 

amount paid arises in connection with 

a remittance transfer sent by a creditor. 

Proposed § 205.33(f)(3) provides 

guidance where a person makes an 

unauthorized EFT or unauthorized use 

of a credit card to send a remittance 

transfer, such as when a stolen debit or 

credit card is used to send funds to a 

foreign country. Under such 

circumstances, the consumer holding 

the asset account or the credit card 

account is not the sender of the 

remittance transfer, and thus the error 

resolution provisions under § 205.33 do 

not apply. See proposed comment 

33(b)–1. However, proposed 

§ 205.33(f)(3) clarifies that the consumer 

retains existing rights under Regulation 

E §§ 205.6 and 205.11 in the case of an 

unauthorized EFT and Regulation Z 

§§ 226.12(b) and 226.13 in the case of an 

unauthorized use of a credit card. 

As discussed above, in certain cases a 

consumer may be able to assert error 

resolution rights in connection with a 

remittance transfer with both the 

remittance transfer provider as well as 

his or her account-holding institution or 

credit card issuer or creditor. 

Nonetheless, the Board does not believe 

that a consumer should be able to 

receive a windfall that could otherwise 

arise if the consumer were to 

successfully assert an error with both 

the provider and the account-holding 

institution and/or credit card issuer or 

creditor. Accordingly, proposed 

comment 33(f)–2 clarifies that if a 

sender receives credit to correct an error 

of an incorrect amount paid in 

connection with a remittance transfer 

from either the remittance transfer 

provider or the sender’s accountholding institution (or creditor), and 

then subsequently asserts the same error 

with the other party, the other party has 

no further responsibilities to investigate 

the error. In such case, the sender has 

already received sufficient credit to 

correct the error, thereby extinguishing 

the second party’s error resolution 

obligations. The proposed comment also 

clarifies that nothing in this section 

prevents an account-holding institution 

or creditor from reversing amounts it 

has previously credited to correct an 

error if the consumer receives more than 

one credit to correct the same error. For 

example, assume that a sender 

concurrently files notices of error with 

his or her account-holding institution 

and remittance transfer provider for the 

same error, and the sender receives 

credit from the account-holding 

institution for the error. If the 

remittance transfer provider 

subsequently provides a credit to the 

sender for the same error, the accountholding institution may reverse the 

amounts it had previously credited to 

the consumer’s account even after the 

45-day error resolution period set forth 

in § 205.11. 

33(g) Error Resolution Standards and 

Recordkeeping Requirements 

EFTA Section 919(d)(2) directs the 

Board to establish clear and appropriate 

standards for remittance transfer 

providers with respect to error 

resolution relating to remittance 

transfers, to protect senders from such 

errors. The statute specifically provides 

that such standards must include 

appropriate standards regarding 

recordkeeping, including retention of 

certain error-resolution related 

documentation. Proposed § 205.33(g) 

implements the new requirements 

regarding error resolution standards and 

recordkeeping requirements. 

Proposed § 205.33(g)(1) provides that 

a remittance transfer provider must 

develop and maintain written policies 

and procedures that are designed to 

ensure compliance with respect to the 

error resolution requirements applicable 

to remittance transfers under § 205.33. 

The proposed rule would also require 

remittance transfer providers to take 

steps to ensure that whenever a provider 

uses an agent to perform any of the 

provider’s error resolution obligations, 

the agent conducts such activity in 

accordance with the provider’s policies 

and procedures. This approach is 

similar to one taken by the federal 

banking agencies in other contexts. See, 

e.g., 12 CFR 222.90(e) (requiring that an 

identity theft red flags program exercise 

appropriate and effective oversight of 

service-provider arrangements). 

Proposed § 205.33(g)(2) provides that 

the remittance transfer provider’s 

policies and procedures concerning 

error resolution must include provisions 

regarding the retention of 

documentation related to an error 

investigation. Consistent with the 

statute, such provisions must ensure, at 

a minimum, the retention of any notices 

of error submitted by a sender, 

documentation provided by the sender 

to the provider with respect to the 

alleged error, and the findings of the 

remittance transfer provider regarding 

the investigation of the alleged error. 

See EFTA Section 919(d)(2). 

Proposed comment 33(g)–1 states that 

remittance transfer providers are subject 

to the record retention requirements 

under § 205.13, which apply to ‘‘any 

person subject to the [EFTA].’’ 

Accordingly, remittance transfer 

providers must retain documentation, 

including documentation related to 

error investigations, for a period of not 

less than two years from the date a 

notice of error was submitted to the 

provider or action was required to be 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29933 

38Such accounts need not be accounts held by a 

financial institution so long as the recipient may 

access the transferred funds without any 

restrictions regarding the use of such funds. For 

example, some Internet-based providers may track 

consumer funds in a virtual account or wallet and 

permit the holder of the account or wallet to make 

purchases or withdraw funds once funds are 

credited to the account or wallet. 

taken by the provider. However, the 

proposed comment further clarifies that 

the record retention requirements do not 

require a remittance transfer provider to 

maintain records of individual 

disclosures of remittance transfers that 

it has provided to each sender. Instead, 

a provider need only retain records to 

ensure that it can comply with a 

sender’s request for documentation or 

other information relating to a particular 

remittance transfer under 

§ 205.33(a)(1)(v), including a request for 

supporting documentation to enable the 

sender to determine whether an error 

exists with respect to that transfer. 

Section 205.34 Procedures for 

Cancellation and Refund of Remittance 

Transfers 

EFTA Section 919(d)(3) directs the 

Board to issue final rules regarding 

appropriate remittance transfer 

cancellation and refund policies for 

consumers within 18 months of the date 

of enactment of the Dodd-Frank Act. 

Proposed § 205.34 establishes new 

cancellation and refund rights for 

senders of remittance transfers as 

required by the Dodd-Frank Act. 

34(a) Sender Right of Cancellation and 

Refund 

Under proposed § 205.34(a), a 

remittance transfer provider must 

comply with a sender’s oral or written 

request to cancel a remittance transfer 

received no later than one business day 

from when the sender makes payment 

in connection with the remittance 

transfer provider. In determining the 

appropriate minimum time period for 

cancelling a remittance transfer, the 

Board considered a number of factors. 

Through its outreach, the Board 

understands that some remittance 

transfer providers permit a sender to 

cancel a remittance transfer and obtain 

a full refund of all funds tendered at any 

time so long as the transfer has not been 

picked up in the foreign country by the 

recipient or deposited into the 

recipient’s account. 

In contrast, however, remittance 

transfers sent by ACH or wire transfer 

generally cannot be cancelled once the 

payment order has been accepted by the 

sending institution. See, e.g., UCC 

Article 4A–211 (providing that a 

payment order cannot be cancelled or 

amended once it has been accepted 

unless the receiving bank agrees or a 

funds-transfer system rule allows 

cancellation or amendment without 

agreement of the bank). Thus, a 

prolonged cancellation period would 

present significant practical difficulties 

for remittance transfers sent by ACH 

and wire transfer. Under such 

circumstances, the bank or credit union 

would likely wait to execute the 

payment order until the cancellation 

period has passed, which could further 

delay the receipt of the funds in the 

foreign country. 

The Board also considered time 

frames for cancellation established 

under state laws applicable to 

remittance transfers, or money transfers 

more generally. See, e.g., TX Admin. 

Code § 278.052 (providing that a 

consumer may cancel a transfer for any 

reason within 30 minutes of initiating 

the transfer provided the customer has 

not left the premises). Finally, during 

the Board’s consumer testing, a few of 

the participants that believed that they 

had a right to cancel a remittance 

transfer expected that they would have 

to exercise their right to cancel the same 

day they requested the transfer be sent. 

For these reasons, the Board believes 

that one business day provides a 

reasonable time frame for a sender to 

evaluate whether to cancel a remittance 

transfer after providing payment for the 

transfer. Nothing in the proposed rule, 

however, prohibits remittance transfer 

providers from offering longer 

cancellation time frames to senders. 

Comment is requested regarding 

whether the proposed minimum time 

period should be longer or shorter than 

proposed. 

The proposed rule contains two 

conditions on the right to cancel. First, 

under proposed § 205.34(a)(1), a valid 

request to cancel a remittance transfer 

must enable the provider to identify the 

sender’s name and address or telephone 

number and the particular transfer to be 

cancelled. Proposed comment 34(a)–1 

clarifies that the request to cancel a 

remittance transfer is valid so long as 

the remittance transfer provider is able 

to identify the remittance transfer in 

question. For example, the sender could 

provide the confirmation number or 

code that would be used by the 

designated recipient to pick up the 

transfer, or other identification number 

or code supplied by the provider in 

connection with the transfer. The 

proposed comment also permits the 

provider to request, or the sender to 

provide, the sender’s e-mail address 

instead of a physical address, so long as 

the provider can identify the transfer to 

which the cancellation request applies. 

Second, proposed § 205.34(a)(2) 

provides that a sender’s timely request 

to cancel a remittance transfer is 

effective so long as the transferred funds 

have not been picked up by the 

designated recipient or deposited into 

an account held by the recipient.38

Proposed comment 34(a)–2 crossreferences the disclosure requirements 

in proposed § 205.31 to reiterate that a 

remittance transfer provider must 

include an abbreviated notice of the 

sender’s right to cancel a remittance 

transfer in the receipt or combined prepayment notice, as applicable. In 

addition, the remittance transfer 

provider must make available to a 

sender upon request, a notice providing 

a full description of the right to cancel 

a remittance transfer that is 

substantially similar to the proposed 

model error resolution and cancellation 

notice set forth in Appendix A of this 

regulation (Model Form A–36). 

34(b) Time Limits and Refund 

Requirements 

Proposed § 205.34(b) establishes the 

time frames and refund requirements 

applicable to remittance transfer 

cancellation requests. The proposed rule 

requires a remittance transfer provider 

to refund, at no additional cost to the 

sender, the total amount of funds 

tendered by the sender in connection 

with the remittance transfer, including 

any fees imposed in connection with the 

requested transfer, within three business 

days of receiving the sender’s valid 

cancellation request. The Board believes 

that three business days provides 

sufficient time for a remittance transfer 

provider to determine whether a 

remittance transfer has been picked up 

in the foreign country or deposited into 

the recipient’s account. Comment is 

requested regarding the appropriate 

time period for providing a refund 

following a sender’s request for 

cancellation. 

Proposed comment 34(b)–1 clarifies 

that a remittance transfer provider may, 

at the provider’s discretion, issue a 

refund in cash or in the same form of 

payment that was initially tendered by 

the sender for the remittance transfer. 

For example, if the sender originally 

provided a credit card as payment for 

the transfer, the remittance transfer 

provider may issue a credit to the 

sender’s credit card account in the 

amount of the payment. 

Proposed comment 34(b)–2 addresses 

fees that must be refunded upon a 

sender’s timely request to cancel a 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29934 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

39See proposed § 205.30(a), which defines the 

term agent for purposes of the proposed rule. 

40 12 CFR 205.18. See 71 FR 51437, 51441–42 

(August 30, 2006) (‘‘In many cases, the depository 

institution may use a third-party service provider to 

perform some or a substantial proportion of the 

compliance duties (e.g., in a turnkey arrangement), 

including mailing account terms and conditions 

and providing error resolution services’’; ‘‘[P]ayroll 

card account holders will, at a minimum, be able 

to assert their Regulation E rights against the 

depository institution holding their account in all 

cases * * *’’). 

remittance transfer. Under the proposed 

comment, the remittance transfer 

provider must refund all funds tendered 

by the sender in connection with the 

remittance transfer, including any fees 

that have been imposed for the transfer, 

regardless of whether the provider or a 

third party, such as an intermediary 

institution, imposed the fee. 

The Board solicits comment on any 

and all aspects of the proposed right to 

cancel a remittance transfer. 

Section 205.35 Acts of Agents 

In most cases, remittance transfers are 

sent through an agent of the remittance 

transfer provider, such as a convenience 

store that has contracted with the 

provider to offer remittance transfer 

services at that location. EFTA Section 

919(f)(1) generally makes remittance 

transfer providers liable for any 

violation of EFTA Section 919 by an 

agent, authorized delegate, or person 

affiliated with such provider, when 

such agent, authorized delegate, or 

affiliate acts for that remittance transfer 

provider. EFTA Section 919(f)(2) 

requires the Board to prescribe rules to 

implement appropriate standards or 

conditions of liability of a remittance 

transfer provider, including one that 

acts through its agent or authorized 

delegate.39

The Board is proposing two 

alternatives to implement EFTA Section 

919(f) with respect to acts of agents. 

Under the first alternative, a remittance 

transfer provider would be strictly liable 

for violations by an agent when such 

agent acts for the provider. Under the 

second alternative, a remittance transfer 

provider would not be liable under the 

EFTA for violations by an agent acting 

for the provider where the provider 

establishes and maintains policies and 

procedures for agent compliance, 

including appropriate oversight 

measures, and the provider corrects any 

violation, to the extent appropriate. The 

Board solicits comment on both 

alternatives. 

Alternative A 

EFTA Section 919(f)(1) states that 

remittance transfer providers are liable 

for any violation of EFTA Section 919 

by an agent, authorized delegate, or 

person affiliated with such provider, 

when such agent, authorized delegate, 

or affiliate acts for that remittance 

transfer provider. Under Alternative A, 

proposed § 205.35 provides that a 

remittance transfer provider is liable for 

any violation of Subpart B by an agent 

when such agent acts for the provider. 

Some agents have a non-exclusive 

arrangement with several remittance 

transfer providers, so that a sender may 

choose from among the remittance 

transfer providers at that location. If a 

sender chooses to use Provider A to 

send funds at the agent location, then 

Provider B would not be liable for the 

agent’s actions in that instance because 

the agent would be acting for 

Provider A. 

Proposed comment 35–1 explains that 

remittance transfer providers remain 

fully responsible for complying with the 

requirements of this subpart, including, 

but not limited to, providing the 

disclosures set forth in proposed 

§ 205.31 and remedying any errors as set 

forth in proposed § 205.33. This is the 

case even if a remittance transfer 

provider performs its functions through 

an agent, and regardless of whether the 

provider has an agreement with a third 

party that transfers or otherwise makes 

funds available to a designated 

recipient. 

The approach set forth in Alternative 

A is consistent with EFTA Section 

919(f)(1), as well as the approach 

generally taken in other Board 

regulations, including Regulation E. For 

example, under Regulation E’s payroll 

card rules, a financial institution is 

required to provide initial payroll card 

disclosures to a payroll account holder. 

If, by contractual agreement with the 

institution, a third-party service 

provider or the employer agrees to 

deliver these disclosures on the 

institution’s behalf and fails to do so, 

the issuing financial institution is 

nonetheless liable for the violation.40

Similarly, if an agent at a retail 

establishment fails to provide the 

disclosures required by proposed 

§ 205.31, under the proposed rule, the 

remittance transfer provider would be 

liable. 

Even where there is no contractual 

relationship between a provider and an 

agent, the proposed rule by its terms 

requires the remittance transfer provider 

to make accurate, timely disclosures and 

to provide error resolution rights to the 

sender. See, e.g., proposed § 205.31(b). 

A remittance transfer provider may not 

always have a contractual relationship 

with the location that is making funds 

available or depositing funds into the 

recipient’s account. For example, a 

financial institution that sends a wire 

transfer may not have a correspondent 

relationship or other contractual privity 

with an institution abroad where the 

wire transfer is deposited. Nonetheless, 

if the amount of currency paid to the 

designated recipient is reduced by an 

intermediary institution’s fee, such that 

the amount disclosed by the remittance 

transfer provider (or its agent) is no 

longer accurate, the remittance transfer 

is responsible for providing the 

appropriate remedy under proposed 

§ 205.33. See proposed 

§ 205.33(a)(1)(iii). 

Alternative B 

Remittance transfer providers have 

expressed concern that, under a strict 

liability approach, they may be held 

responsible for their agents’ failure to 

comply with the statute despite the 

provider’s best efforts to monitor and 

train their agents. As noted previously, 

the majority of senders send remittances 

through money transmitters at agent 

locations. Some providers have a 

network of thousands, or in some cases, 

hundreds of thousands of agent 

locations worldwide to oversee, making 

frequent on-site inspection of each 

location impracticable. Providers have 

expressed particular concern about 

administrative and civil liability under 

the EFTA for a single agent’s noncompliance. 

Alternative B recognizes the unique 

position of agents in the remittance 

transfer model, while still making an 

individual consumer whole for any 

problems experienced with the 

remittance transfer. Under Alternative 

B, proposed § 205.35 provides that a 

remittance transfer provider is liable for 

any violation of Subpart B by an agent 

when such agent acts for that provider, 

unless it meets two conditions. The first 

condition is that the remittance transfer 

provider must establish and maintain 

written policies and procedures 

designed to assure compliance with 

Subpart B by an agent, including 

policies, procedures and other 

appropriate oversight measures. See 

proposed § 205.35(a). The second 

condition is that the remittance transfer 

provider must correct the violation to 

the extent appropriate, including 

complying with the error resolution 

procedures set forth in proposed 

§ 205.33 and providing the sender the 

remedies set forth in proposed 

§ 205.33(c)(2). See proposed § 205.35(b). 

A remittance transfer provider that 

meets these two conditions would not 

be liable for the acts of its agents. 

Alternative B is proposed consistent 

with the Board’s authority under EFTA 


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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29935 

41See GAO Report at 7 (Nov. 2005). 

Section 919(f)(2) to prescribe rules to 

implement appropriate standards or 

conditions of liability of a remittance 

transfer provider, including one that 

acts through its agent or authorized 

delegate. 

Proposed comment 35–1 states that 

remittance transfer providers generally 

remain fully responsible for complying 

with the requirements of Subpart B, 

including but not limited to providing 

the disclosures set forth in proposed 

§ 205.31 and remedying any errors as set 

forth in proposed § 205.33. As in 

Alternative A, this is the case even if a 

remittance transfer provider performs its 

functions through an agent or other 

person, and regardless of whether the 

provider has an agreement with a third 

party that transfers or otherwise makes 

funds available to a designated 

recipient. 

Proposed comment 35–2 provides 

further guidance on proposed 

§ 205.35(a)(1). The proposed comment 

states that a remittance transfer provider 

must establish and maintain written 

policies and procedures for compliance 

with Subpart B applicable to its agents. 

Maintenance of policies and procedures 

includes periodic updates to and 

administration of such policies and 

procedures, including appropriate 

oversight over agents. Further, 

appropriate oversight measures include 

regular audits, training, and other 

measures designed to ensure an agent’s 

compliance with Subpart B. Under these 

circumstances, a provider will not be 

liable if an agent fails to follow the 

policies and procedures in an 

individual case, and so long as the 

remittance transfer provider makes the 

consumer whole for any error resulting 

from an agent’s acts, including as set 

forth under the error resolution 

provisions in proposed § 205.33. 

Appendix A—Model Disclosure Clauses 

and Forms 

The proposal would add to Appendix 

A twelve model forms that a remittance 

transfer provider may use in connection 

with remittance transfers. Proposed 

Model Forms A–30 through A–41 are 

intended to demonstrate several formats 

a remittance transfer provider may use 

to comply with the disclosure 

requirements of proposed § 205.31. The 

Board is proposing model forms 

pursuant to its authority under EFTA 

section 904(a), rather than model 

clauses pursuant to its authority under 

EFTA section 904(b), in order to clearly 

demonstrate the general form and 

specific format requirements of 

§ 205.31(a) and (c). Proposed Model 

Forms A–30 through A–32 were 

developed in consumer testing and 

reflect a format in which the flow and 

organization of information effectively 

communicates the remittance 

disclosures to most consumers. 

The proposed rule amends instruction 

2 to Appendix A regarding the use of 

model forms, which currently only 

references financial institutions and 

electronic fund transfers. The 

instruction is proposed to be revised to 

include references to remittance transfer 

providers and remittance transfers. The 

proposed instruction also updates the 

numbering of the liability provisions of 

the EFTA as sections 916 and 917. Thus, 

the proposed instruction clarifies that 

the use of the proposed model forms in 

making disclosures would protect a 

remittance transfer provider from 

liability under sections 916 and 917 of 

the EFTA if they accurately reflect the 

provider’s remittance transfer services. 

The proposal also adds instruction 4 

to Appendix A to describe how a 

remittance transfer provider may 

properly use and alter the model forms. 

Proposed instruction 4 to Appendix A 

explains that Model Forms A–30 

through A–32 demonstrate how a 

provider could provide the required 

disclosures for a remittance transfer 

exchanged into local currency. Proposed 

Model Forms A–33 through A–35 

demonstrate how a provider could 

provide the required disclosures for U.S. 

dollar-to-U.S. dollar remittance 

transfers. Proposed instruction 4 states 

that these forms also demonstrate 

disclosure of the required content, in 

accordance with the grouping and 

proximity requirements of § 205.31(c)(1) 

and (2), in both a register receipt format 

(as developed in consumer testing) and 

an 8.5 inch by 11 inch format. Proposed 

Model Form A–36 provides long-form 

model error resolution and cancellation 

disclosures in connection with 

§ 205.31(d), and Model Form A–37 

provides short-form model error 

resolution and cancellation disclosures 

in connection with § 205.31(b)(2)(iv). 

Proposed instruction 4 to Appendix A 

also explains that a remittance transfer 

provider could use the language and 

formatting provided in proposed Forms 

A–37 through A–41 for disclosures that 

are required to be provided in Spanish, 

pursuant to the requirements of 

proposed § 205.31(g). The Board 

understands that the majority of 

remittance transfers from the United 

States are sent to Mexico and the 

Caribbean, Central America, and South 

America.41 Spanish is the primary 

language in many of the countries in 

these regions, so many senders of 

remittance transfers that remit funds to 

the countries in these regions speak 

Spanish. Therefore, the Board believes 

that it is appropriate to provide model 

disclosures in Spanish to facilitate 

compliance. The Board requests 

comment on the provision of Spanish 

language disclosures, including whether 

the language used in the Spanish 

translation would effectively 

communicate the remittance transfer 

disclosures to Spanish-speaking 

consumers. 

The Board recognizes that disclosures 

may be required to be provided in 

languages other than English and 

Spanish. Nonetheless, the Board 

believes it would be impracticable to 

provide model forms in every possible 

language in which remittance transfer 

disclosures may be provided. 

Proposed instruction 4 to Appendix A 

clarifies that the model forms may 

contain information that is not required 

by Subpart B, such as a confirmation 

code and the sender’s name and contact 

information. The additional information 

not required by Subpart B is included 

on the model form to demonstrate one 

way of displaying this information in 

compliance with § 205.31(c)(4). The 

proposed instruction clarifies that any 

additional information must be 

presented consistent with a remittance 

transfer provider’s obligation to provide 

required disclosures in a clear and 

conspicuous manner. 

Proposed instruction 4 to Appendix A 

further clarifies that use of the model 

forms is optional. A remittance transfer 

provider may change the forms by 

rearranging the format or by making 

modifications to the language of the 

forms, without modifying the substance 

of the disclosures. Proposed instruction 

4 to Appendix A clarifies that 

rearrangement or modification of the 

format of the model forms is 

permissible, as long as it is consistent 

with the form, grouping, proximity, and 

other requirements of § 205.31(a) and 

(c). The proposed instruction states that 

providers making revisions that do not 

comply with this section will lose the 

benefit of the safe harbor for appropriate 

use of proposed model forms A–30 to 

A–41. The Board recognizes that many 

remittance transfer providers currently 

provide disclosures in a variety of 

forms. The Board intends to provide 

flexibility to remittance transfer 

providers in developing disclosure 

forms that comply with the proposed 

rule. 

Proposed instruction 4 to Appendix A 

also provides examples of permissible 

changes a remittance transfer provider 

may make to the language and format of 

the model forms without losing the 

benefit of the safe harbor. The proposed 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29936 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

42 13 CFR 121.201; SBA, Table of Small Business 

Size Standards (available at: http://www.sba.gov/

sites/default/files/Size_Standards_Table.pdf). 

43The estimate includes 1,459 institutions 

regulated by the Board, 659 national banks, and 

4,099 federally-chartered credit unions, as 

determined by the Board. The estimate also 

includes 2,872 institutions regulated by the FDIC 

and 369 thrifts regulated by the OTS. See 75 FR 

36016, 36020 (Jun. 24, 2010). 

44Notice of Proposed Rulemaking, Cross-Border 

Electronic Transmittal of Funds, 75 FR 60377, 

60392 (Sept. 30, 2010) (estimates based on 

FinCEN’s February 2010 Money Service Business 

Registration List). 

instruction clarifies that a remittance 

transfer provider could substitute the 

information entered into the model 

forms that is intended to demonstrate 

how to complete the information in the 

model forms—such as names, addresses, 

and Web sites; dates; numbers; and 

state-specific contact information—with 

information applicable to the remittance 

transfer. A remittance transfer provider 

could also eliminate disclosures that are 

not applicable to the transfer, as 

permitted under proposed § 205.31(b), 

or provide the required disclosures on a 

paper size that is different from a 

register receipt and 8.5 inch by 11 inch 

formats. The proposed instruction also 

clarifies that a remittance transfer 

provider could correct or update 

telephone numbers, mailing addresses, 

or Web site addresses that may change 

over time. This instruction applies to all 

telephone numbers and addresses on a 

model form, including the contact 

information of the provider, the state 

agency, and the Consumer Financial 

Protection Bureau. The proposed 

instruction also clarifies that a provider 

could provide the required disclosures 

in a foreign language, or multiple 

foreign languages, subject to the 

requirements of proposed § 205.31(g), 

without losing the benefit of the safe 

harbor. 

The proposed comment also clarifies 

that an impermissible change would be 

adding language to a form that is not 

segregated from the required 

disclosures, other than as permitted by 

§ 205.31(c)(4). 

Proposed instruction 4 to Appendix A 

further clarifies that adding the term 

‘‘Estimated’’ or a substantially similar 

term and in close proximity to the 

estimated term or terms, as permitted 

under proposed § 205.31(d), is a 

permissible change to the model forms. 

The Board is not proposing separate 

forms that demonstrate how estimated 

content would be presented on the 

forms, because the disclosures will be 

the same as the proposed model forms, 

except for the disclosures that certain 

information is estimated. The general 

form and specific formatting will be the 

same on forms that include estimates as 

they are in the model forms that are 

provided. 

VI. Initial Regulatory Flexibility 

Analysis 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (‘‘RFA’’) generally 

requires an agency to publish an initial 

regulatory flexibility analysis with a 

proposed rule whenever the agency is 

required to publish a general notice of 

proposed rulemaking for a proposed 

rule. The Board requests public 

comment on the following areas in 

connection with its initial regulatory 

flexibility analysis. The Board will 

conduct a final regulatory flexibility 

analysis after considering the comments 

received during the public comment 

period. 

1. Statement of the need for, and 

objectives of, the proposed rule. The 

EFTA, as amended by the Dodd-Frank 

Act, was enacted to provide a basic 

framework establishing the rights, 

liabilities, and responsibilities of 

participants in electronic fund and 

remittance transfer systems. The 

primary objective of the EFTA is the 

provision of individual consumer rights. 

15 U.S.C. 1693. The EFTA authorizes 

the Board to prescribe regulations to 

carry out the purpose and provisions of 

the statute. 15 U.S.C. 1693b(a). The 

EFTA expressly states that the Board’s 

regulations may contain ‘‘such 

classifications, differentiations, or other 

provisions . . . as, in the judgment of the 

Board, are necessary or proper to 

effectuate the purposes of [the EFTA], to 

prevent circumvention or evasion [of 

the EFTA], or to facilitate compliance 

[with the EFTA].’’ 15 U.S.C. 1693b(c). 

The Board is proposing revisions to 

Regulation E to implement Section 1073 

of the Dodd-Frank Act. The proposal 

creates new protections for consumers 

who send remittance transfers from the 

United States to a designated recipient 

in a foreign country. The proposal 

generally requires remittance transfer 

providers to provide the sender a 

written pre-payment disclosure 

containing information about the 

specific remittance transfer, such as the 

exchange rate, applicable fees and taxes, 

and the amount to be received by the 

designated recipient. The remittance 

transfer provider generally must also 

provide a written receipt for the 

remittance transfer that includes the 

above information, as well as additional 

information such as the date of 

availability and the recipient’s contact 

information. Alternatively, the proposal 

permits remittance transfer providers to 

provide the sender a single written prepayment disclosure containing all of the 

information required on the receipt. 

The proposal also requires remittance 

transfer providers to furnish the sender 

with a brief statement of the sender’s 

error resolution and cancellation rights, 

and requires providers to comply with 

related recordkeeping, cancellation, and 

refund policies. The proposed revisions 

also implement standards of liability for 

remittance transfer providers, including 

those that act through an agent. 

The Board believes that the revisions 

to Regulation E discussed above are 

consistent with the EFTA, as amended 

by Section 1073 of the Dodd-Frank Act, 

and within Congress’s broad grant of 

authority to the Board to adopt 

provisions that carry out the purposes of 

the EFTA. 

2. Small entities affected by the 

proposed rule. The number of small 

entities affected by this proposal is 

unknown. Under regulations issued by 

the Small Business Administration 

(‘‘SBA’’), an entity is considered ‘‘small’’ 

if it has $175 million or less in assets 

for banks and other depository 

institutions, or for other financial 

businesses, as one whose average 

annual receipts do not exceed $7 

million.42 Based on estimates compiled 

by the Board, the Federal Deposit 

Insurance Corporation, and the Office of 

Thrift Supervision, there are 

approximately 9,458 depository 

institutions that could be considered 

small entities.43 In addition, the 

Financial Crimes Enforcement Network 

(FinCEN) previously estimated that 

there are approximately 19,000 

registered money transmitters, an 

estimated 95% of which have less than 

$7 million in gross receipts annually.44

Remittance transfer providers will be 

required to review and potentially 

revise their disclosures and procedures 

to ensure that disclosures meet the 

content, format, timing, and foreign 

language requirements of the proposed 

rule, as described above. Remittance 

transfer providers will also be required 

to review and potentially update their 

error resolution and cancellation 

procedures to ensure compliance with 

the proposed rule, also as described 

above. Accordingly, remittance transfer 

providers that are small entities will 

incur implementation costs to comply 

with the rule. 

The Board believes that the rule as 

proposed offers flexibility that will 

mitigate the impact of the proposed rule 

on remittance transfer providers that are 

small entities. Although the proposed 

disclosure rules do contain certain 

formatting requirements in order to 

ensure that senders notice and 

comprehend the disclosures, the 

proposed rule also gives remittance 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 29937 

45The number of Board-supervised respondents 

was obtained from queries of entities that filed 

December 2010 Call Reports: 828 State member 

banks, 243 branches & agencies of foreign banks, 

three commercial lending companies, and 59 Edge 

Act or agreement corporations. 

transfer providers some flexibility in 

drafting their disclosures. For example, 

disclosures may be provided on a 

register receipt or 8.5 inches by 11 

inches piece of paper, consistent with 

current practices in the industry. The 

Board also believes that currently, some 

remittance transfer providers give the 

disclosures’ required content. 

Additionally, EFTA Section 919(a)(5) 

provides the Board with exemption 

authority with respect to several 

statutory requirements. The Board is 

exercising its exemption authority in the 

proposed rule in order to reduce 

providers’ compliance burden. For 

instance, the Board is exercising its 

authority under EFTA Section 

919(a)(5)(C) to permit remittance 

transfer providers to provide the sender 

a single written pre-payment disclosure 

under the conditions described above, 

instead of both pre-payment and receipt 

disclosures. Similarly, consistent with 

EFTA Section 919(a)(5)(A), the 

proposed rule permits remittance 

transfer providers to provide prepayment disclosures orally when the 

transaction is conducted entirely by 

telephone. 

Other measures intended to provide 

flexibility to remittance transfer 

providers are discussed above in this 

SUPPLEMENTARY INFORMATION. 

The proposed rule could have a 

significant economic impact on small 

financial institutions that are remittance 

transfer providers for consumer 

international wire transfers. 

Specifically, as discussed above, one 

consequence of covering remittance 

transfers under the EFTA could be legal 

uncertainty for financial institutions, as 

providers of consumer international 

wire transfers may no longer be able to 

rely on UCC Article 4A’s rules 

governing the rights and responsibilities 

among the parties to a wire transfer. As 

a result, some financial institutions may 

decide to stop offering international 

wire transfers to consumer customers. 

However, unless these international 

wire transfers constitute a high volume 

of a financial institution’s remittance 

transfer business, or business in general, 

such a decision is unlikely to have a 

significant economic impact on the 

institution. Based on the Board’s 

understanding that consumers are less 

likely to send remittance transfers by 

wire transfer compared to other 

methods, the Board does not believe 

that small financial institutions are 

likely to be significantly impacted by 

the rule. 

Nonetheless, the Board solicits 

comment on whether the proposed rule 

will have a significant economic impact 

on small remittance transfer providers. 

The Board also solicits comment on any 

significant alternatives that would 

reduce the regulatory burden associated 

with this proposed rule on small 

entities. 

3. Other federal rules. The Board has 

not identified any likely duplication, 

overlap and/or potential conflict 

between the proposed rule and any 

federal rule. 

4. Significant alternatives to the 

proposed revisions. The Board solicits 

comment on any significant alternatives 

that would reduce the regulatory burden 

associated with this proposed rule on 

small entities. 

VII. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (PRA) of 1995 (44 U.S.C. 

3506; 5 CFR part 1320 Appendix A.1), 

the Board reviewed the rule under the 

authority delegated to the Board by the 

Office of Management and Budget 

(OMB). The collection of information 

that is subject to the PRA by this 

proposed rule is found in 12 CFR part 

205. In addition, as permitted by the 

PRA, the Board also proposes to extend 

for three years the current 

recordkeeping and disclosure 

requirements in connection with 

Regulation E. The Federal Reserve may 

not conduct or sponsor, and an 

organization is not required to respond 

to, this information collection unless the 

information collection displays a 

currently valid OMB control number. 

The OMB control number is 7100–0200. 

This information collection is 

required to provide benefits for 

consumers and is mandatory. See 15 

U.S.C. 1693 et seq. Since the Board does 

not collect any information, no issue of 

confidentiality arises. The respondents/ 

recordkeepers are for-profit financial 

institutions and entities involved in the 

remittance transfer business, including 

small businesses. Respondents are 

required to retain records for 24 months, 

but this regulation does not specify 

types of records that must be retained. 

Any entities involved in the 

remittance transfer business potentially 

are affected by this collection of 

information because these entities will 

be required to provide disclosures 

containing information about 

consumers’ specific remittance 

transfers. Disclosures must be provided 

prior to and at the time of payment for 

a remittance transfer, or alternatively, in 

a single pre-transaction disclosure 

containing all required information. 

Remittance transfer providers also make 

available a written explanation of a 

consumer’s error resolution, 

cancellation and refund rights upon 

request. Disclosures must be provided 

in English and in each foreign language 

principally used to advertise, solicit or 

market remittance transfers at an office. 

Entities subject to the rule will have 

to review and revise disclosures that are 

currently provided to ensure that they 

accurately reflect the disclosure 

requirements in this proposed rule. 

Entities subject to the rule may need to 

develop new disclosures to meet the 

proposed rule’s timing requirements. 

The total estimated burden increase, 

as well as the estimates of the burden 

increase associated with each major 

section of the proposed rule as set forth 

below, represents averages for all 

respondents regulated by the Federal 

Reserve. The Federal Reserve expects 

that the amount of time required to 

implement each of the proposed 

changes for a given institution may vary 

based on the size and complexity of the 

respondent. 

The current annual burden to comply 

with the provisions of Regulation E is 

estimated to be 738,600 hours for the 

1,133 institutions 45 supervised by the 

Federal Reserve that are deemed to be 

respondents for the purposes of the 

PRA. 

The Board estimates that 1,133 

respondents regulated by the Federal 

Reserve would take, on average, 120 

hours (three business weeks) to update 

their systems to comply with the 

disclosure requirements addressed in 

§ 205.31. This one-time revision would 

increase the burden by 135,960 hours. 

On a continuing basis the Board 

estimates that 1,133 respondents would 

take, on average, 8 hours (one business 

day) monthly to comply with the 

requirements under § 205.31and would 

increase the ongoing burden by 108,768 

hours. In an effort to minimize the 

compliance cost and burden, 

particularly for small entities, the 

proposed rule contains model 

disclosures in appendix A (Model 

Forms A–10 through A–20) that may be 

used to satisfy the statutory 

requirements. 

The Board estimates that on average 

825,600 consumers would spend 

approximately 5 minutes in order to 

provide a notice of error as required 

under section 205.33(b). This would 

increase the total annual burden for this 

information collection by 68,798 hours. 

The Board estimates that 1,133 

respondents regulated by the Federal 

Reserve would take, on average, 1.5 

hours (monthly) to address a sender’s 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29938 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

46 75 FR 60377, 60392 (Sept. 30, 2010). 

47Appendix B—Federal Enforcement Agencies— 

of Regulation E lists those federal agencies that 

enforce the regulation for particular classes of 

business. The federal financial agencies include: the 

Office of the Comptroller of the Currency, Federal 

Deposit Insurance Corporation, Office of Thrift 

Supervision, and National Credit Union 

Administration. The federal non-financial agencies 

include: Department of Transportation, Securities 

and Exchange Commission, and Federal Trade 

Commission. 

notice of error as required by 

§ 205.33(c)(1) and would increase the 

ongoing burden by 20,349 hours. 

The Board estimates that 1,133 

respondents regulated by the Federal 

Reserve would take, on average, 40 

hours (one business week) to develop 

written policies and procedures 

designed to ensure compliance with 

respect to the error resolution 

requirements applicable to remittance 

transfers under § 205.33. This one-time 

revision would increase the burden by 

45,320 hours. On a continuing basis the 

Board estimates that 1,133 respondents 

would take, on average, 8 hours (one 

business day) annually to maintain the 

requirements under § 205.33 and would 

increase the ongoing burden by 9,064 

hours. 

The Board estimates that 1,133 

respondents regulated by the Federal 

Reserve would take, on average, 40 

hours (one business week) to establish 

policies and procedures for agent 

compliance as addressed under 

§ 205.35, This one-time revision would 

increase the burden by 45,320 hours. On 

a continuing basis the Board estimates 

that 1,133 respondents would take, on 

average, 8 hours (one business day) 

annually to maintain the requirements 

under § 205.35 and would increase the 

ongoing burden by 9,064 hours. 

The proposed rule would impose a 

one-time increase in the estimated 

annual burden 226,600 hours. On a 

continuing basis the proposed rule 

would increase in the estimated annual 

burden by 216,043 hours. Overall the 

total annual burden is estimated to 

increase by 442,643 hours, from 738,600 

to 1,181,243 hours. 

In a September 2010 rulemaking the 

Department of Treasury estimated that 

as of February 2010, the number of 

registered U.S. entities engaged in 

money transmission was approximately 

19,000.46 Using the Federal Reserve’s 

method the proposed rule would 

impose a one-time estimated annual 

burden for such entities of 3,800,000 

hours. On a continuing basis the 

proposed rule would impose an annual 

burden for such entities of 798,000 

hours. Overall the proposed total annual 

burden for such entities is estimated to 

be 4,598,000 hours. 

The other federal financial agencies 47

are responsible for estimating and 

reporting to OMB the total paperwork 

burden for the institutions for which 

they have administrative enforcement 

authority. They may, but are not 

required to, use the Federal Reserve’s 

burden estimation methodology. Using 

the Federal Reserve’s method, the 

current total estimated annual burden 

for all persons subject to Regulation E, 

including Federal Reserve-supervised 

institutions would be approximately 

5,166,413 hours. The above estimates 

represent an average across all 

respondents and reflect variations 

between persons based on their size, 

complexity, and practices. All covered 

persons, including depository 

institutions (of which there are 

approximately 19,000), potentially are 

affected by this collection of 

information, and thus are respondents 

for purposes of the PRA. The proposed 

rule would impose a one-time increase 

in the estimated annual burden for such 

institutions by 3,800,000 hours. On a 

continuing basis the proposed rule 

would increase in the estimated annual 

burden for such institutions by 798,000 

hours. The proposed total annual 

burden for the respondents regulated by 

the federal financial agencies is 

estimated to be 9,764,413 hours. 

Comments are invited on: (1) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the Board’s functions; including 

whether the information has practical 

utility; (2) the accuracy of the Board’s 

estimate of the burden of the proposed 

information collection, including the 

cost of compliance; (3) ways to enhance 

the quality, utility, and clarity of the 

information to be collected; and (4) 

ways to minimize the burden of 

information collection on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology. Comments on 

the collection of information should be 

sent to Cynthia Ayouch, Acting Federal 

Reserve Clearance Officer, Division of 

Research and Statistics, Mail Stop 95–A, 

Board of Governors of the Federal 

Reserve System, Washington, DC 20551, 

with copies of such comments sent to 

the Office of Management and Budget, 

Paperwork Reduction Project (7100– 

0200), Washington, DC 20503. 

Text of Proposed Revisions 

Certain conventions have been used 

to highlight the proposed changes to the 

text of the regulation and staff 

commentary. 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 205 

Consumer protection, Electronic fund 

transfers, Federal Reserve System, 

Reporting and recordkeeping 

requirements. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Board proposes to amend 

12 CFR part 205 and the Official Staff 

Commentary, as follows: 

PART 205—ELECTRONIC FUND 

TRANSFERS (REGULATION E) 

1. The authority citation for part 205 

continues to read as follows: 

Authority: 15 U.S.C. 1693b. 

Subpart A—General 

2. Add a new Subpart A heading as 

set forth above, and designate §§ 205.1 

through 205.20 under Subpart A. 

3. In § 205.3, revise paragraph (a) to 

read as follows: 

§ 205.3 Coverage. 

(a) General. This part applies to any 

electronic fund transfer that authorizes 

a financial institution to debit or credit 

a consumer’s account. Generally, this 

part applies to financial institutions. For 

purposes of §§ 205.3(b)(2) and (b)(3), 

205.10(b), (d), and (e), and 205.13, this 

part applies to any person. flThe 

requirements of Subpart B apply to 

remittance transfer providers.fi 

* * * * * 

4. Add Subpart B to part 205 to read 

as follows: 

Subpart B—Requirements for 

Remittance Transfers 

Sec. 

205.30 Remittance transfer definitions. 

205.31 Disclosures. 

205.32 Estimates. 

205.33 Procedures for resolving errors. 

205.34 Procedures for cancellation and 

refund of remittance transfers. 

205.35 Acts of agents. 

Subpart B—Requirements for 

Remittance Transfers 

Authority: 12 U.S.C. 5601; Pub. L. 111– 

203, 124 Stat. 1376 (2010). 

fl§ 205.30 Remittance transfer definitions. 

For purposes of this subpart, the 

following definitions apply. 

(a) Agent means an agent, authorized 

delegate, or person affiliated with a 

remittance transfer provider, as defined 

under state or other applicable law, 

when such agent, authorized delegate, 


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or affiliate acts for that remittance 

transfer provider. 

(b) Business day means any day on 

which a remittance transfer provider 

accepts funds for sending remittance 

transfers. 

(c) Designated recipient means any 

person specified by the sender as the 

authorized recipient of a remittance 

transfer to be received at a location in 

a foreign country. 

(d) Remittance transfer—(1) General 

definition. A remittance transfer means 

the electronic transfer of funds 

requested by a sender to a designated 

recipient that is sent by a remittance 

transfer provider. The term applies 

regardless of whether the sender holds 

an account with the remittance transfer 

provider, and regardless of whether the 

transaction is also an electronic fund 

transfer, as defined in § 205.3(b). 

(2) Exception for small value 

transactions. Remittance transfers do 

not include transfer amounts of $15 or 

less. 

(e) Remittance transfer provider or 

provider means any person that 

provides remittance transfers for a 

consumer in the normal course of its 

business, regardless of whether the 

consumer holds an account with such 

person. 

(f) Sender means a consumer in a state 

who requests a remittance transfer 

provider to send a remittance transfer to 

a designated recipient. 

§ 205.31 Disclosures. 

(a) General form of disclosures— 

(1) Clear and conspicuous. Disclosures 

required by this subpart must be clear 

and conspicuous. Disclosures required 

by this subpart may contain commonly 

accepted or readily understandable 

abbreviations or symbols. 

(2) Written and electronic disclosures. 

Disclosures required by this subpart 

generally must be provided to the 

sender in writing. Disclosures required 

by paragraph (b)(1) of this section may 

be provided electronically, if the sender 

electronically requests the remittance 

transfer provider to send the remittance 

transfer. Written and electronic 

disclosures required by this subpart 

must be made in a retainable form. 

(3) Oral disclosures for telephone 

transactions. The information required 

by paragraph (b)(1) of this section may 

be disclosed orally if: 

(i) The transaction is conducted 

entirely by telephone; and 

(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section. 

(4) Oral disclosures for certain error 

resolution notices. The information 

required by § 205.33(c)(1) may be 

disclosed orally if: 

(i) The remittance transfer provider 

determines that an error occurred as 

described by the sender; and 

(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section. 

(b) Disclosure requirements—(1) Prepayment disclosure. A remittance 

transfer provider must disclose to a 

sender, as applicable: 

(i) The amount that will be transferred 

to the designated recipient, in the 

currency in which the funds will be 

transferred, using the term ‘‘Transfer 

Amount’’ or a substantially similar term; 

(ii) Any fees and taxes imposed on the 

remittance transfer by the provider, in 

the currency in which the funds will be 

transferred, using the term ‘‘Transfer 

Fees,’’ ‘‘Transfer Taxes,’’ or ‘‘Transfer 

Fees and Taxes,’’ or a substantially 

similar term; 

(iii) The total amount of the 

transaction, which is the sum of 

paragraphs (b)(1)(i) and (b)(1)(ii) of this 

section, in the currency in which the 

funds will be transferred, using the term 

‘‘Total’’ or a substantially similar term; 

(iv) The exchange rate used by the 

provider for the remittance transfer, 

rounded to the nearest 1/100th of a 

decimal point, using the term ‘‘Exchange 

Rate’’ or a substantially similar term; 

(v) The amount in paragraph (b)(1)(i) 

of this section in the currency in which 

the funds will be received by the 

designated recipient, but only if fees or 

taxes are imposed under paragraph 

(b)(1)(vi) of this section, using the term 

‘‘Transfer Amount’’ or a substantially 

similar term; 

(vi) 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, using the term 

‘‘Other Transfer Fees,’’ ‘‘Other Transfer 

Taxes,’’ or ‘‘Other Transfer Fees and 

Taxes,’’ or a substantially similar term. 

(vii) The amount that will be received 

by the designated recipient, in the 

currency in which the funds will be 

received, using the term ‘‘Total to 

Recipient’’ or a substantially similar 

term. 

(2) Receipt. A remittance transfer 

provider must disclose to a sender, as 

applicable: 

(i) The disclosures described in 

paragraphs (b)(1)(i) through (b)(1)(vii) of 

this section; 

(ii) The date of availability of funds to 

the designated recipient, using the term 

‘‘Date Available’’ or a substantially 

similar term. A provider 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. 

(iii) The name and, if provided by the 

sender, the telephone number and/or 

address of the designated recipient, 

using the term ‘‘Recipient’’ or a 

substantially similar term; 

(iv) A statement about the rights of the 

sender regarding the resolution of errors 

and cancellation, using language set 

forth in Model Form A–37 of Appendix 

A to this part or substantially similar 

language; 

(v) The name, telephone number, and 

Web site of the remittance transfer 

provider; and 

(vi) A statement that the sender can 

contact the state agency that regulates 

the remittance transfer provider and the 

Consumer Financial Protection Bureau 

for questions or complaints about the 

remittance transfer provider, using 

language set forth in Model Form A–37 

of Appendix A to this part or 

substantially similar language, and the 

telephone number and Web site of the 

state agency that regulates the 

remittance transfer provider and the 

telephone number and Web site of the 

Consumer Financial Protection Bureau, 

including the toll-free telephone 

number established under Section 1013 

of the Consumer Financial Protection 

Act of 2010. 

(3) Combined disclosure. As an 

alternative to providing the disclosures 

described in paragraphs (b)(1) and (b)(2) 

of this section, a remittance transfer 

provider may provide the disclosures 

described in paragraph (b)(2) of this 

section, as applicable, in a single 

disclosure. 

(4) Long form error resolution and 

cancellation notice. Upon the sender’s 

request, a remittance transfer provider 

must provide to the sender a notice 

providing a description of the sender’s 

error resolution and cancellation rights 

under §§ 205.33 and 205.34 using Model 

Form A–36 of Appendix A to this part 

or a substantially similar notice. 

(c) Specific format requirements— 

(1) Grouping. The information required 

by paragraphs (b)(1)(i), (ii), and (iii) of 

this section must be grouped together in 

written and electronic disclosures. The 

information required by paragraphs 

(b)(1)(v), (vi), and (vii) of this section 

must be grouped together in written and 

electronic disclosures. 

(2) Proximity. The information 

required by paragraph (b)(1)(iv) of this 

section must be disclosed in close 

proximity to the other information 

required by paragraph (b)(1) of this 

section in written and electronic 

disclosures. The information required 

by paragraph (b)(2)(iv) of this section 


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29940 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

must be disclosed in close proximity to 

the other information required by 

paragraph (b)(2) of this section in 

written and electronic disclosures. 

(3) Prominence and size. Written 

disclosures required by this subpart 

must be provided on the front of the 

page on which the disclosure is printed. 

Written and electronic disclosures 

required by this subpart must be in a 

minimum eight-point font. Written and 

electronic disclosures required by 

paragraph (b) of this section must be in 

equal prominence to each other. 

(4) Segregation. Written and 

electronic disclosures required by this 

subpart must be segregated from 

everything else and must contain only 

information that is directly related to 

the disclosures required under this 

subpart. 

(d) Estimates. Estimated disclosures 

may be provided to the extent permitted 

by § 205.32. Estimated disclosures must 

be described using the term ‘‘Estimated’’ 

or a substantially similar term and in 

close proximity to the estimated term or 

terms. 

(e) Timing. (1) Disclosures required by 

paragraph (b)(1) or (b)(3) of this section 

must be provided to the sender when 

the sender requests the remittance 

transfer, but prior to payment for the 

remittance transfer. 

(2) A receipt required by paragraph 

(b)(2) of this section must be provided 

to the sender when payment is made for 

the remittance transfer. If a transaction 

is conducted entirely by telephone, a 

written receipt may be mailed or 

delivered to the sender no later than one 

business day after the date on which 

payment is made for the remittance 

transfer. If a transaction is conducted 

entirely by telephone and involves the 

transfer of funds from the sender’s 

account held by the provider, the 

written receipt may be provided on or 

with the next regularly scheduled 

periodic statement or within 30 days 

after payment is made for the remittance 

transfer if a periodic statement is not 

required and must comply with 

paragraph (g)(3) of this section. 

(f) Accurate when payment is made. 

Disclosures required by this section 

must be accurate when a sender pays for 

the remittance transfer, except to the 

extent permitted by § 205.32 

(g) Foreign language disclosures— 

(1) General. Except as provided in 

paragraphs (g)(2) and (g)(3) of this 

section, disclosures required by this 

subpart must be made in English and 

either: 

(i) In each of the foreign languages 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfer services, 

either orally, in writing, or 

electronically, at that office; or 

(ii) If applicable, in the foreign 

language primarily used by the sender 

with the remittance transfer provider to 

conduct the transaction (or for written 

or electronic disclosures made pursuant 

to § 205.33, in the foreign language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error), provided that such foreign 

language is principally used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfer services, either orally, in 

writing, or electronically, at that office. 

(2) Oral disclosures. Disclosures 

permitted to be provided orally under 

paragraph (a)(3) of this section for 

transactions conducted entirely by 

telephone shall be made in the language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. Disclosures permitted to 

be provided orally under paragraph 

(a)(4) of this section for error resolution 

purposes shall be made in the language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error. 

(3) Written receipts for telephone 

transactions. Receipts required to be 

provided to the sender after payment 

under paragraph (e)(2) of this section for 

transactions conducted entirely by 

telephone shall be made in English and, 

if applicable, in the foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. 

§ 205.32 Estimates. 

(a) Temporary exception for insured 

institutions—(1) General. Estimates may 

be provided in accordance with 

paragraph (c) of this section for the 

amounts required to be disclosed under 

§§ 205.31(b)(1)(iv) through (vii), if: 

(i) A remittance transfer provider 

cannot determine the exact amounts for 

reasons beyond its control; 

(ii) A remittance transfer provider is 

an insured institution; and 

(iii) The remittance transfer is sent 

from the sender’s account with the 

institution. 

(2) Sunset date. Paragraph (a)(1) of 

this section expires on July 20, 2015. 

(3) Insured institution. For purposes 

of this section, the term ‘‘insured 

institution’’ includes insured depository 

institutions as defined in Section 3 of 

the Federal Deposit Insurance Act (12 

U.S.C. 1813) and insured credit unions 

as defined in Section 101 of the Federal 

Credit Union Act (12 U.S.C. 1752). 

(b) Permanent exception for transfers 

to certain countries. Estimates may be 

provided in accordance with paragraph 

(c) of this section for the amounts 

required to be disclosed under 

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

remittance transfer provider cannot 

determine the exact amounts because 

(1) The laws of the recipient country 

do not permit, or 

(2) The method by which transactions 

are made in the recipient country does 

not permit, such determination. 

(c) Bases for estimates. Estimates 

provided pursuant to the exceptions in 

paragraph (a) or (b) of this section must 

be based on the below-listed approach 

or approaches applicable to the required 

disclosure. If a remittance transfer 

provider bases an estimate on an 

approach that is not listed in this 

paragraph (c), the provider complies 

with this paragraph (c) so long as the 

designated recipient receives the same, 

or a greater amount, of currency that it 

would have received had the estimate 

been based on a listed approach. 

(1) Exchange rate. In disclosing the 

exchange rate as required under 

§ 205.31(b)(1)(iv), an estimate must be 

based on one of the following: 

(i) For remittance transfers sent via 

international ACH that qualify for the 

exception in paragraph (b)(2) of this 

section, the most recent exchange rate 

set by the recipient country’s central 

bank and reported by a Federal Reserve 

Bank; 

(ii) The most recent publicly available 

wholesale exchange rate; or 

(iii) The most recent exchange rate 

offered by the person making funds 

available directly to the designated 

recipient. 

(2) Transfer amount in the currency 

made available to the designated 

recipient. In disclosing the transfer 

amount in the currency made available 

to the designated recipient, as required 

under § 205.31(b)(1)(v), an estimate 

must be based on the estimated 

exchange rate provided in accordance 

with paragraph (c)(1) of this section. 

(3) Other fees imposed by 

intermediaries. In disclosing fees 

imposed by institutions that act as 

intermediaries in connection with an 

international wire transfer as required 

under § 205.31(b)(1)(vi), an estimate 

must be based on one of the following: 

(i) The remittance transfer provider’s 

most recent remittance transfer to the 

designated recipient’s institution, or 

(ii) The representations of the 

intermediary institutions along a 

representative route identified by the 

remittance transfer provider that the 

requested transfer could travel. 

(4) Other taxes imposed in the 

recipient country. In disclosing taxes 

imposed in the recipient country as 

required under § 205.31(b)(1)(vi) that are 


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a percentage of the amount transferred 

to the designated recipient, an estimate 

must be based on the estimated 

exchange rate provided in accordance 

with paragraph (c)(1) of this section and 

the estimated fees imposed by 

institutions that act as intermediaries in 

connection with an international wire 

transfer provided in accordance with 

paragraph (c)(3) of this section. 

(5) Amount of currency that will be 

received by the designated recipient. In 

disclosing the amount of currency that 

will be received by the designated 

recipient as required under 

§ 205.31(b)(1)(vii), an estimate must be 

based on the estimates provided in 

accordance with paragraphs (c)(1), (3), 

and (4) of this section, as applicable. 

§ 205.33 Procedures for resolving errors. 

(a) Definition of error—(1) Types of 

transfers or inquiries covered. For 

purposes of this section, the term error 

means: 

(i) An incorrect amount paid by a 

sender in connection with a remittance 

transfer; 

(ii) A computational or bookkeeping 

error made by the remittance transfer 

provider relating to a remittance 

transfer; 

(iii) The failure to make available to 

a designated recipient the amount of 

currency stated in the disclosure 

provided to the sender under 

§ 205.31(b)(2) or (b)(3), unless the 

disclosure stated an estimate of the 

amount to be received in accordance 

with § 205.32; 

(iv) The failure to make funds in 

connection with a remittance transfer 

available to a designated recipient by 

the date of availability stated in the 

disclosure provided to the sender under 

§ 205.31(b)(2) or (b)(3), unless the failure 

to make the funds available resulted 

from: 

(A) Circumstances outside the 

remittance transfer provider’s control; or 

(B) The sender providing incorrect 

information in connection with a 

remittance transfer to the remittance 

transfer provider, so long as the 

provider gives the sender the 

opportunity to correct the information 

and send the transfer at no additional 

cost; or 

(v) The sender’s request for 

documentation required by § 205.31 or 

for additional information or 

clarification concerning a remittance 

transfer, including a request a sender 

makes to determine whether an error 

exists under paragraph (a)(1)(i) through 

(iv) of this section. 

(2) Types of transfers or inquiries not 

covered. The term error does not 

include: 

(i) An inquiry involving a transfer of 

$15 or less; 

(ii) An inquiry about the status of a 

remittance transfer, except where the 

funds from the transfer were not made 

available to a designated recipient by 

the stated date of availability as 

described in paragraph (a)(1)(iv) of this 

section; or 

(iii) A request for information for tax 

or other recordkeeping purposes. 

(b) Notice of error from sender— 

(1) Timing; contents. A remittance 

transfer provider shall comply with the 

requirements of this section with 

respect to any oral or written notice of 

error from a sender that: 

(i) Is received by the remittance 

transfer provider no later than 180 days 

after the stated date of availability of the 

remittance transfer; 

(ii) Enables the provider to identify: 

(A) The sender’s name and telephone 

number or address; 

(B) The recipient’s name, and if 

known, the telephone number or 

address of the recipient; and 

(C) The remittance transfer to which 

the notice of error applies; and 

(iii) Indicates why the sender believes 

an error exists and includes to the 

extent possible the type, date, and 

amount of the error, except for requests 

for documentation, additional 

information, or clarification described 

in paragraph (a)(1)(v) of this section. 

(2) Request for documentation or 

clarification. When a notice of error is 

based on documentation, additional 

information, or clarification that the 

sender requested under paragraph 

(a)(1)(v) of this section, the sender’s 

notice of error is timely if received by 

the remittance transfer provider no later 

than 60 days after the provider sent the 

documentation, information, or 

clarification requested. 

(c) Time limits and extent of 

investigation— 

(1) Time limits for investigation and 

report to consumer of error. A 

remittance transfer provider shall 

investigate promptly and determine 

whether an error occurred within 90 

days of receiving a notice of error. The 

remittance transfer provider shall report 

the results to the sender, including 

notice of any remedies available for 

correcting any error that the provider 

determines has occurred, within three 

business days after completing its 

investigation. 

(2) Remedies. If the remittance 

transfer provider determines an error 

occurred, the provider shall, within one 

business day of, or as soon as reasonably 

practicable after, receiving the sender’s 

instructions regarding the appropriate 

remedy, correct the error as designated 

by the sender by: 

(i) Refunding to the sender the 

amount of funds tendered by the sender 

in connection with a remittance transfer 

which was not properly transmitted, or 

the amount appropriate to resolve the 

error; or 

(ii) Making available to the designated 

recipient, without additional cost to the 

sender or to the designated recipient, 

the amount appropriate to resolve the 

error; and 

(iii) In the case of an error asserted 

under paragraph (a)(1)(iv) of this 

section, refunding to the sender any fees 

imposed for the remittance transfer. 

(d) Procedures if remittance transfer 

provider determines no error or different 

error occurred. In addition to following 

the procedures specified in paragraph 

(c) of this section, the remittance 

transfer provider shall follow the 

procedures set forth in this paragraph 

(d) if it determines that no error 

occurred or that an error occurred in a 

manner or amount different from that 

described by the sender. 

(1) Explanation of results of 

investigation. The remittance transfer 

provider’s report of the results of the 

investigation shall include a written 

explanation of the provider’s findings 

and shall note the sender’s right to 

request the documents on which the 

provider relied in making its 

determination. The explanation shall 

also respond to the specific complaint of 

the sender. 

(2) Copies of documentation. Upon 

the sender’s request, the remittance 

transfer provider shall promptly provide 

copies of the documents on which the 

provider relied in making its error 

determination. 

(e) Reassertion of error. A remittance 

transfer provider that has fully complied 

with the error resolution requirements 

of this section has no further 

responsibilities under this section 

should the sender later reassert the same 

error, except in the case of an error 

asserted by the sender following receipt 

of information provided under 

paragraph (a)(1)(v) of this section. 

(f) Relation to other laws—(1) Relation 

to Regulation E § 205.11 for incorrect 

EFTs from a sender’s account. If an 

alleged error involves an incorrect 

electronic fund transfer from a sender’s 

account in connection with a remittance 

transfer, and the sender provides a 

notice of error to the account-holding 

institution, the account-holding 

institution shall comply with the 

requirements of § 205.11 governing error 

resolution rather than the requirements 

of this section, provided that the 

account-holding institution is not also 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29942 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

the remittance transfer provider. If the 

remittance transfer provider is also the 

financial institution that holds the 

consumer’s account, then the errorresolution provisions of this section 

apply when the sender provides such 

notice of error. 

(2) Relation to Truth in Lending Act 

and Regulation Z. If an alleged error 

involves an incorrect extension of credit 

in connection with a remittance 

transfer, and the sender provides a 

notice of error to the creditor holding 

the credit card account, the provisions 

of Regulation Z, 12 CFR 226.13, 

governing error resolution apply to the 

creditor, rather than the requirements of 

this section, even if the creditor is the 

remittance transfer provider. If the 

sender instead provides a notice of error 

to the remittance transfer provider, then 

the error-resolution provisions of this 

section apply to the remittance transfer 

provider. 

(3) Unauthorized remittance transfers. 

If an alleged error involves an 

unauthorized electronic fund transfer 

for payment in connection with a 

remittance transfer, §§ 205.6 and 205.11 

apply with respect to the accountholding institution. If an alleged error 

involves an unauthorized use of a credit 

card for payment in connection with a 

remittance transfer, the provisions of 

Regulation Z, 12 CFR 226.12(b) and 

226.13, apply with respect to the 

creditor. 

(g) Error resolution standards and 

recordkeeping requirements—(1) 

Compliance program. A remittance 

transfer provider shall develop and 

maintain written policies and 

procedures that are designed to ensure 

compliance with respect to the error 

resolution requirements applicable to 

remittance transfers under this section. 

The provider must also take steps 

designed to ensure that an agent of the 

provider that performs any error 

resolution obligations on behalf of the 

provider, conducts such activity in 

accordance with the remittance transfer 

provider’s policies and procedures. 

(2) Retention of error-related 

documentation. The remittance transfer 

provider’s policies and procedures 

required under paragraph (g)(1) of this 

section shall include policies and 

procedures regarding the retention of 

documentation related to error 

investigations. Such policies and 

procedures must ensure, at a minimum, 

the retention of any notices of error 

submitted by a sender, documentation 

provided by the sender to the provider 

with respect to the alleged error, and the 

findings of the remittance transfer 

provider regarding the investigation of 

the alleged error. 

§ 205.34 Procedures for cancellation and 

refund of remittance transfers. 

(a) Sender right of cancellation and 

refund. A remittance transfer provider 

shall comply with the requirements of 

this section with respect to any oral or 

written request to cancel a remittance 

transfer from the sender that is received 

by the provider no later than one 

business day from when the sender 

makes payment in connection with the 

remittance transfer if: 

(1) The request to cancel enables the 

provider to identify the sender’s name 

and address or telephone number and 

the particular transfer to be cancelled; 

and 

(2) The transferred funds have not 

been picked up by the designated 

recipient or deposited into an account of 

the designated recipient. 

(b) Time limits and refund 

requirements. A remittance transfer 

provider shall refund, at no additional 

cost to the sender, the total amount of 

funds tendered by the sender in 

connection with a remittance transfer, 

including any fees imposed in 

connection with the remittance transfer, 

within three business days of receiving 

a sender’s request to cancel the 

remittance transfer. 

§ 205.35 Acts of agents. 

Alternative A 

A remittance transfer provider is 

liable for any violation of this subpart 

by an agent when such agent acts for the 

provider. 

Alternative B 

A remittance transfer provider is 

liable for any violation of this subpart 

by an agent when such agent acts for the 

provider, unless: 

(a) The remittance transfer provider 

establishes and maintains written 

policies and procedures designed to 

assure compliance with this subpart by 

its agents, including appropriate 

oversight practices; and 

(b) The remittance transfer provider 

corrects the violation to the extent 

appropriate, including complying with 

the error resolution procedures set forth 

in § 205.33 and providing the sender the 

remedies set forth in § 205.33(c)(2).fi 

5. Amend Appendix A to Part 205 as 

follows: 

a. Add Titles A–6 through A–8, and 

A–30 through A–41, and reserve A–10 

through A–29 to the Table of Contents 

b. Add Model Forms A–30 through 

A–41 

The additions and revisions read as 

follows: 

Appendix A to Part 205—Model 

Disclosure Clauses and Forms 

Table of Contents 

* * * * * 

flA–6—Model Clauses for Authorizing 

One-Time Electronic Fund 

Transfers Using Information From a 

Check (§ 205.3(b)(2)) 

A–7—Model Clauses for Financial 

Institutions Offering Payroll Card 

Accounts (§ 205.18(c)) 

A–8—MODEL CLAUSE FOR 

ELECTRONIC COLLECTION OF 

RETURNED ITEM FEES 

(§ 205.3(b)(3)) 

* * * * * 

A–10 through A–29—(Reserved) 

A–30—Model form for pre-payment 

disclosures for remittance transfers 

exchanged into local currency 

(§ 205.31(b)(1)) 

A–31—Model form for receipts for 

remittance transfers exchanged into 

local currency (§ 205.31(b)(2)) 

A–32—Model form for combined 

disclosures for remittance transfers 

exchanged into local currency 

(§ 205.31(b)(3)) 

A–33—Model form for pre-payment 

disclosures for dollar-to-dollar 

remittance transfers (§ 205.31(b)(1)) 

A–34—Model form for receipts for 

dollar-to-dollar remittance transfers 

(§ 205.31(b)(2)) 

A–35—Model form for combined 

disclosures for dollar-to-dollar 

remittance transfers (§ 205.31(b)(3)) 

A–36—Model form for error resolution 

and cancellation disclosures (long) 

(§ 205.31(b)(4)) 

A–37—Model form for error resolution 

and cancellation disclosures (short) 

(§ 205.31(b)(2)(vi)) 

A–38—Model form for pre-payment 

disclosures—Spanish 

(§ 205.31(b)(1)) 

A–39—Model form for receipts— 

Spanish (§ 205.31(b)(2)) 

A–40—Model form for combined 

disclosures—Spanish 

(§ 205.31(b)(3)) 

A–41—Model form for error resolution 

and cancellation disclosures 

(long)—Spanish (§ 205.31(b)(4))fi 

* * * * * 

BILLING CODE 6210–01–P 


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BILLING CODE 6210–01–C 

6. In Supplement I to part 205: 

a. Add new Commentary for Sections 

205.30, 205.31, 205.32, 205.33, 205.34, 

and 205.35. 

b. Under subheading Appendix A, 

paragraph (2) Use of forms is revised 

and paragraph (4) is added. 

The revision and additions read as 

follows: 

Supplement I to Part 205—Official Staff 

Interpretations 

* * * * * 

flSection 205.30—Remittance 

Definitions 

30(b) Business Day 

1. General. With respect to Subpart B, 

a business day includes the entire 24- 

hour period ending at midnight, and a 

notice required by any section of 

Subpart B is effective even if given 

outside of normal business hours. No 

section of Subpart B requires that a 

remittance transfer provider make 

telephone lines available on a 24-hour 

basis. 


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30(c) Designated Recipient 

1. Person. A designated recipient can 

be either a natural person or a business. 

See § 205.2(j) (definition of person). 

2. Located in a foreign country. A 

remittance transfer is received at a 

location in a foreign country if funds are 

to be received at a location physically 

outside of any state, as defined in 

§ 205.2(l). 

30(d) Remittance Transfer 

1. Electronic transfer of funds. The 

definition of remittance transfer requires 

an electronic transfer of funds. The term 

electronic has the meaning given in 

Section 106(2) of the Electronic 

Signatures in Global and National 

Commerce Act. There may be an 

electronic transfer of funds if a provider 

makes an electronic book entry between 

different settlement accounts to 

effectuate the transfer. However, where 

a sender mails funds directly to a 

recipient, or provides funds to a courier 

for delivery to a foreign country, there 

has not been an electronic transfer of 

funds. Therefore, non-electronic 

remittance methods are not remittance 

transfers. 

2. Request by a sender. The definition 

of remittance transfer requires a specific 

sender request that a remittance transfer 

provider send a remittance transfer. A 

deposit by a consumer into a checking 

or savings account does not itself 

constitute such a request, even if a 

person in a foreign country is an 

authorized user on that account, where 

the consumer retains the ability to 

withdraw funds in the account. 

3. To a designated recipient. The 

definition of remittance transfer requires 

that the transfer be sent to a designated 

recipient. See comment 30(c)–1. There 

is no designated recipient unless the 

sender specifically identifies the 

recipient of a transfer. A transfer is sent 

to a designated recipient if, for example, 

the sender instructs a remittance 

transfer provider to send a prepaid card 

to a specified recipient in a foreign 

country, and the sender does not retain 

the ability to draw down funds on the 

prepaid card. In contrast, there is no 

designated recipient where the sender 

retains the ability to withdraw funds, 

such as when a person in a foreign 

country is made an authorized user on 

the sender’s checking account, because 

the remittance transfer provider cannot 

identify the ultimate recipient of the 

funds. 

4. Sent by a remittance transfer 

provider. i. The definition of remittance 

transfer requires that a transfer must be 

‘‘sent by a remittance transfer provider.’’ 

This means that there must be an 

intermediary actively involved in 

sending the transfer of funds. Examples 

include: 

A. A person (other than the sender) 

sending an instruction to a receiving 

agent in a foreign country to make funds 

available to a recipient; 

B. Executing a payment order 

pursuant to a consumer’s instructions; 

C. Executing a consumer’s online bill 

payment request; or 

D. Otherwise engaging in the business 

of accepting or debiting funds for 

transmission to a recipient and 

transmitting those funds. 

ii. However, a payment card network 

or other third party payment service that 

is functionally similar to a payment card 

network does not send a remittance 

transfer when a consumer designates a 

debit or credit card as the payment 

method to purchase goods or services 

from a foreign merchant. In such a case, 

the payment card network or third party 

payment service is not directly engaged 

with the sender to send a transfer of 

funds to a person in a foreign country; 

rather, the network or third party 

payment service is merely providing 

contemporaneous third-party payment 

processing and settlement services on 

behalf of the merchant or the remittance 

transfer provider, rather than on behalf 

of the sender. Similarly, where a 

consumer provides a checking or other 

account number directly to a merchant 

as payment for goods or services, the 

merchant is not acting as a remittance 

transfer provider when it submits the 

payment information for processing. 

5. Examples of remittance transfers. 

i. Examples of remittance transfers 

include: 

A. Transfers where the sender 

provides cash or another method of 

payment to a money transmitter or 

financial institution that directs funds to 

be sent to a specified payout location or 

account in a foreign country. 

B. Consumer wire transfers, where a 

financial institution executes a payment 

order upon a sender’s request to wire 

money from the sender’s account to a 

designated recipient. 

C. A sender’s addition of funds to a 

prepaid card, which the prepaid card 

issuer sends or has previously sent to a 

designated recipient, if the sender does 

not retain the ability to withdraw such 

funds. 

D. International ACH transactions 

sent by the sender’s financial institution 

at the sender’s request. 

E. Online bill payments to foreign 

merchants made by the sender’s 

financial institution at the sender’s 

request. 

ii. The term remittance transfer does 

not include: 

A. A consumer’s purchase of goods or 

services from a merchant in a foreign 

country with a credit or debit card. 

B. A consumer’s deposit of funds to 

his or her checking or savings account 

that can be withdrawn by an authorized 

user located in a foreign country, but 

where the consumer retains the ability 

to withdraw funds in the account. 

C. Online bill payments made through 

the Web site of a merchant located in a 

foreign country. 

30(e) Remittance Transfer Provider 

1. Agents. An agent is not deemed to 

be a remittance transfer provider by 

merely providing remittance transfer 

services on behalf of the remittance 

transfer provider. 

Section 205.31—Disclosures 

31(a) General Form of Disclosures 

Paragraph 31(a)(1)—Clear and 

Conspicuous 

1. Clear and conspicuous standard. 

Disclosures are clear and conspicuous 

for purposes of Subpart B if they are 

readily understandable and, in the case 

of written and electronic disclosures, 

the location and type size are readily 

noticeable to senders. To the extent 

permitted by §§ 205.31(a)(3) and (4), 

oral disclosures are clear and 

conspicuous when they are given at a 

volume and speed sufficient for a sender 

to hear and comprehend them. 

2. Abbreviations and symbols. 

Disclosures may contain commonly 

accepted or readily understandable 

abbreviations or symbols, such as ‘‘USD’’ 

to indicate currency in U.S. dollars or 

‘‘MXN’’ to indicate currency in Mexican 

pesos. 

Paragraph 31(a)(2)—Written and 

Electronic Disclosures 

1. E-Sign Act requirements. If a sender 

electronically requests the remittance 

transfer provider to send a remittance 

transfer, pre-payment disclosures 

required by § 205.31(b)(1) may be 

provided to the sender in electronic 

form without regard to the consumer 

consent and other applicable provisions 

of the Electronic Signatures in Global 

and National Commerce Act (E-Sign 

Act) (15 U.S.C. 7001 et seq.). If a sender 

electronically requests the provider to 

send a remittance transfer, receipts 

required by § 205.31(b)(2) may be 

provided to the consumer in electronic 

form, subject to compliance with the 

consumer consent and other applicable 

provisions of the E-Sign Act. See 

§ 205.4(a)(1). 

2. Paper size. Written disclosures may 

be provided on any size paper, as long 

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conspicuous. For example, disclosures 

may be provided on a register receipt or 

on an 8.5 inch by 11 inch sheet of paper. 

3. Retainable electronic disclosures. A 

remittance transfer provider may satisfy 

the requirement to provide electronic 

disclosures in a retainable form if it 

provides an on-line disclosure in a 

format that is capable of being printed. 

Electronic disclosures may not be 

provided through a hyperlink or in 

another manner by which the sender 

can bypass the disclosure. A provider is 

not required to confirm that the sender 

has read the electronic disclosures. 

Paragraph 31(a)(3)—Oral Disclosures for 

Telephone Transactions 

1. Transactions conducted partially 

by telephone. For transactions 

conducted partially by telephone, 

disclosures may not be provided orally. 

For example, a sender may begin a 

remittance transfer at a remittance 

transfer provider’s dedicated telephone 

in a retail store, and then provide 

payment in person to a store clerk to 

complete the transaction. In such cases, 

all disclosures must be provided in 

writing. A provider complies with this 

requirement, for example, by providing 

the written pre-payment disclosure in 

person prior to the sender’s payment for 

the transaction, and the written receipt 

when the sender pays for the 

transaction. 

31(b) Disclosure Requirements 

1. Disclosures provided as applicable. 

Disclosures required by § 205.31(b) need 

only be provided to the extent 

applicable. A remittance transfer 

provider may choose to omit an item of 

information required by § 205.31(b) if it 

is inapplicable to a particular 

transaction. Alternatively, a provider 

may disclose a term and state that an 

amount or item is ‘‘not applicable,’’ 

‘‘N/A,’’ or ‘‘None.’’ For example, if fees or 

taxes are not imposed in connection 

with a particular transaction, the 

provider need not provide the 

disclosures required by § 205.31(b)(1)(ii) 

or (b)(1)(vi). Similarly, a Web site need 

not be disclosed under § 205.31(b)(2)(v) 

if the provider does not maintain a Web 

site. A provider need not provide the 

exchange rate disclosure required by 

§ 205.31(b)(1)(iv) if a recipient receives 

currency in U.S. dollars or currency is 

delivered into an account in U.S. 

dollars, rather than in another currency. 

2. Substantially similar terms, 

language, and notices. Some disclosures 

required by § 205.31(b) must be 

described using the terms set forth in 

§ 205.31(b) or substantially similar 

terms. Terms may be more specific than 

those provided. For example, a 

remittance transfer provider sending 

funds to Colombia may describe a tax 

under § 205.31(b)(1)(vi) as a ‘‘Colombian 

Tax’’ in lieu of describing it as ‘‘Other 

Taxes.’’ Foreign language disclosures 

required under § 205.31(g) must contain 

accurate translations of the terms, 

language, and notices required by 

§ 205.31(b). 

Paragraph 31(b)(1)—Pre-Payment 

Disclosures 

1. Fees and taxes. i. Taxes imposed by 

the remittance transfer provider include 

taxes imposed on the remittance transfer 

by a state or other governmental body. 

A provider need only disclose fees or 

taxes required by § 205.31(b)(1)(ii) and 

(vi), as applicable. For example, if no 

transfer taxes are imposed on a 

remittance transfer, a provider would 

only disclose applicable transfer fees. 

See comment 31(b)–1. If both fees and 

taxes are imposed, the fees and taxes 

may be disclosed as one disclosure or as 

separate, itemized disclosures. 

ii. The fees and taxes required to be 

disclosed by § 205.31(b)(1)(ii) include 

all fees and taxes imposed on the 

remittance transfer by the provider. For 

example, a provider must disclose a 

service fee and any state taxes imposed 

on the remittance transfer. In contrast, 

the fees and taxes required to be 

disclosed by § 205.31(b)(1)(vi) include 

fees and taxes imposed on the 

remittance transfer by a person other 

than the provider. For example, a 

provider must disclose fees imposed by 

the receiving institution or agent at 

pick-up, fees imposed by intermediary 

institutions in connection with an 

international wire transfer, and taxes 

imposed by a foreign government. The 

terms used to describe the fees and taxes 

in § 205.31(b)(1)(ii) and (b)(1)(vi) must 

differentiate between such fees and 

taxes. For example, the terms used to 

describe fees disclosed under 

§ 205.31(b)(1)(ii) and (b)(1)(vi) may not 

both be described as ‘‘Fees.’’ 

2. Transfer amount. Sections 

205.31(b)(1)(i) and (b)(1)(v) require two 

transfer amount disclosures. First, under 

§ 205.31(b)(1)(i), a provider must 

disclose the transfer amount in the 

currency in which the funds will be 

transferred to show the calculation of 

the total amount of the transaction. 

Typically, funds will be transferred in 

U.S. dollars, so the transfer amount 

would be expressed in U.S. dollars. 

However, if funds will be transferred, 

for example, from a Euro-denominated 

account, the transfer amount would be 

expressed in Euros. Second, under 

§ 205.31(b)(1)(v), a provider must 

disclose the transfer amount in the 

currency in which the funds will be 

made available to the designated 

recipient. For example, if the funds will 

be picked up by the designated recipient 

in Japanese yen, the transfer amount 

would be expressed in Japanese yen. 

However, this second transfer amount 

need not be disclosed if fees and taxes 

are not imposed on the remittance 

transfer under § 205.31(b)(1)(vi). The 

terms used to describe each transfer 

amount should be the same. 

Paragraph 31(b)(1)(iv)—Exchange Rate 

1. Applicable exchange rate for 

estimates. If the designated recipient 

will receive funds in a currency other 

than the currency in which it will be 

transferred, a remittance transfer 

provider must disclose an exchange 

rate. An exchange rate that is estimated 

must be disclosed pursuant to the 

requirements of § 205.32. A remittance 

transfer provider may not disclose, for 

example, that an estimated exchange 

rate is ‘‘unknown,’’ ‘‘floating,’’ or ‘‘to be 

determined.’’ 

2. Rounding. The exchange rate used 

by the provider for the remittance 

transfer is required to be rounded to the 

nearest 1/100th of a decimal point. 

However, an exchange rate need not be 

expressed to the nearest 1/100th of a 

decimal point if the amount need not be 

rounded. For example, if one U.S. dollar 

exchanges for 11.9483 Mexican pesos, a 

provider must disclose that the U.S. 

dollar exchanges for 11.95 Mexican 

pesos. However, if one U.S. dollar 

exchanges for 11.9 Mexican pesos, the 

provider may disclose that ‘‘US$1 = 11.9 

MXN’’ in lieu of ‘‘US$1 = 11.90 MXN.’’ 

Paragraph 31(b)(1)(vi)—Fees and Taxes 

Imposed by a Person Other than the 

Provider 

1. Fees and taxes disclosed in the 

currency in which the funds will be 

received. Section 205.31(b)(1)(vi) 

requires the disclosure of fees and taxes 

in the currency in which the funds will 

be received by the designated recipient. 

A fee or tax required by 

§ 205.31(b)(1)(vi) may be imposed in 

one currency, but the funds may be 

received by the designated recipient in 

another currency. In such cases, the 

remittance transfer provider should 

calculate the fee or tax to be disclosed 

using the exchange rate required by 

§ 205.31(b)(1)(iv). For example, an 

intermediary institution in an 

international wire transfer may impose 

a fee in U.S. dollars, but funds are 

ultimately deposited in the recipient’s 

account in Euros. Here, the provider 

would disclose the fee to the sender 

expressed in Euros, calculated using the 

exchange rate used by the provider for 

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Paragraph 31(b)(1)(vii)—Amount 

Received 

1. Amount received. The remittance 

transfer provider is required to disclose 

the amount that will be received by the 

designated recipient in the currency in 

which the funds will be received. The 

amount received must reflect all charges 

that affect the amount received, 

including the exchange rate and all fees 

and taxes imposed by the remittance 

transfer provider, the receiving 

institution, and any other party in the 

transmittal route of a remittance 

transfer. The disclosed amount received 

must be reduced by the amount of any 

fee or tax that is imposed by a person 

other than the provider, even if that 

amount is imposed or itemized 

separately from the transaction amount. 

Paragraph 31(b)(2)—Receipt 

1. Date of availability. The date of 

availability of funds to the designated 

recipient is the date in the foreign 

country on which the funds will be 

available to the designated recipient. A 

remittance transfer provider does not 

comply with the requirements of 

§ 205.31(b)(2)(ii) if it provides a range of 

dates that the remittance transfer may be 

available or an estimate of the date on 

which funds will be available. If a 

provider does not know the exact date 

on which funds will be available, the 

provider may disclose the latest date on 

which the funds will be available. For 

example, if funds may be available on 

January 3, but are not certain to be 

available until January 10, then January 

10 should be disclosed as the date of 

availability. However, a remittance 

transfer provider may also disclose that 

funds ‘‘may be available sooner’’ or use 

a substantially similar term to inform 

senders that funds may be available to 

the designated recipient on a date 

earlier than the date disclosed. For 

example, a provider may disclose 

‘‘January 10 (may be available sooner).’’ 

31(c) Specific Format Requirements 

Paragraph 31(c)(1)—Grouping 

1. Grouping. Information is grouped 

together for purposes of Subpart B if 

multiple disclosures are in close 

proximity to one another and a sender 

can reasonably determine how to 

calculate the total amount of the 

transaction, and the amount that will be 

received by the designated recipient. 

Model Forms A–30 through A–35 in 

Appendix A illustrate how information 

may be grouped to comply with the 

rule, but a remittance transfer provider 

may group the information in another 

manner. For example, a provider could 

provide the grouped information as a 

horizontal, rather than a vertical, 

calculation. 

Paragraph 31(c)(4)—Segregation 

1. Segregation. Disclosures may be 

segregated from other information in a 

variety of ways. For example, the 

disclosures may appear on a separate 

sheet of paper or may be set off from 

other information on a notice by 

outlining them in a box or series of 

boxes, bold print dividing lines, or a 

different color background. 

2. Directly related. For purposes of 

§ 205.31(c)(4), the following is directly 

related information: 

i. The date and/or time of the 

transaction; 

ii. The sender’s name and contact 

information; 

iii. The location at which the 

designated recipient may pick up the 

funds; 

iv. The confirmation or other 

identification code; 

v. A company name or logo; 

vi. An indication that a disclosure is 

or is not a receipt or other indicia of 

proof of payment; 

vii. A designated area for signatures or 

initials; and 

viii. A statement that funds may be 

available sooner, as permitted by 

§ 205.31(b)(2)(ii). 

31(d) Estimates 

1. Terms. A remittance transfer 

provider may provide estimates of the 

amounts required by § 205.31(b), to the 

extent permitted by § 205.32. An 

estimate must be described using the 

term ‘‘Estimated’’ or a substantially 

similar term and in close proximity to 

the term or terms described. For 

example, a remittance transfer provider 

could describe an estimated disclosure 

as ‘‘Estimated Transfer Amount,’’ ‘‘Other 

Estimated Fees and Taxes,’’ or ‘‘Total to 

Recipient (Est.).’’ 

31(e) Timing 

1. Request to send a remittance 

transfer. Pre-payment and combined 

disclosures are required to be provided 

to the sender when the sender requests 

the remittance transfer, but prior to 

payment for the remittance transfer. 

Whether a sender has requested a 

remittance transfer depends on the facts 

and circumstances. A sender that asks a 

provider to send a remittance transfer, 

and provides transaction-specific 

information to the provider in order to 

send funds to a designated recipient, 

has requested a remittance transfer. For 

example, a sender who asks the 

provider to send money to a recipient in 

Mexico and provides the sender and 

recipient information to the provider 

has requested a remittance transfer. A 

sender who solely inquires about that 

day’s rates and fees, however, has not 

requested the provider to send a 

remittance transfer. 

2. When payment is made. A receipt 

required by § 205.31(b)(2) is required to 

be provided to the sender when 

payment is made for the remittance 

transfer. For example, a remittance 

transfer provider could give the sender 

a receipt after the consumer pays for the 

remittance transfer, but before the 

sender leaves the counter. A provider 

could also give the sender a receipt 

immediately before the sender pays for 

the transaction. 

3. Telephone transfer from an 

account. A sender may transfer funds 

from his or her account, as defined by 

§ 205.2(b), that is held by the remittance 

transfer provider. For example, a 

financial institution may send an 

international wire transfer for a sender 

using funds from the sender’s account 

with the institution. If the sender 

conducts such a transfer entirely by 

telephone, the institution may provide a 

written receipt on or with the sender’s 

next regularly scheduled periodic 

statement or within 30 days after 

payment is made for the remittance 

transfer if a periodic statement is not 

required. 

31(f) Accurate When Payment Is Made 

1. No guarantee of disclosures 

provided before payment. Disclosures 

required by § 205.31(b) are required to 

be accurate when a sender pays for the 

remittance transfer. A remittance 

transfer provider is not required to 

guarantee the terms of the remittance 

transfer in the disclosures required by 

§ 205.31(b) for any specific period of 

time. However, if any of the disclosures 

required by § 205.31(b) are not accurate 

when a sender pays for the remittance 

transfer, a provider must give new 

disclosures before receiving payment for 

the remittance transfer. 

31(g) Foreign Language Disclosures 

1. Number of foreign languages used 

in written disclosure. Section 

205.31(g)(1) does not limit the number 

of languages that may be used on a 

single document, but a single written 

document containing more than three 

languages is not likely to be helpful to 

a consumer. Section 205.31(g)(3), 

however, does limit the languages that 

may be used on the written receipts 

provided to the sender to English and, 

if applicable, the foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction. See comment 31(g)–2 

for guidance on the language a sender 


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primarily uses with the remittance 

transfer provider to conduct the 

transaction. Under § 205.31(g)(1), a 

remittance transfer provider may, but 

need not, provide the consumer with a 

written or electronic disclosure that is 

in English and in each foreign language 

that the remittance transfer provider 

principally uses to advertise, solicit, or 

market either orally, in writing, or 

electronically, at that office. 

Alternatively, the remittance transfer 

provider may provide the disclosure 

solely in English and, if applicable, the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to conduct the transaction or 

assert an error, provided such language 

is principally used by the remittance 

transfer provider to advertise, solicit, or 

market either orally, in writing, or 

electronically, at that office. If the 

remittance transfer provider chooses the 

alternative method, it may provide 

disclosures in a single document with 

both languages or in two separate 

documents with one document in 

English and the other document in the 

applicable foreign language. The 

following examples illustrate this 

concept. 

i. A remittance transfer provider 

principally uses only Spanish and 

Vietnamese to advertise, solicit, or 

market remittance transfer services at a 

particular office. The remittance transfer 

provider may provide all of its 

consumers with disclosures in English, 

Spanish, and Vietnamese, regardless of 

the language the sender uses with the 

remittance transfer provider to conduct 

the transaction or assert an error. 

ii. Same facts as i. If a sender 

primarily uses Spanish with the 

remittance transfer provider to conduct 

a transaction or assert an error, the 

remittance transfer provider may 

provide a written or electronic 

disclosure in English and Spanish, 

whether in a single document or two 

separate documents. If the sender 

primarily uses English with the 

remittance transfer provider to conduct 

the transaction or assert an error, the 

remittance transfer provider may 

provide a written or electronic 

disclosure solely in English. If the 

sender primarily uses a foreign language 

with the remittance transfer provider to 

conduct the transaction or assert an 

error that the remittance transfer 

provider does not use to advertise, 

solicit, or market either orally, in 

writing, or electronically, at that office, 

the remittance transfer provider may 

provide a written or electronic 

disclosure solely in English. 

2. Primarily used. The language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction is the primary language 

used by the sender with the remittance 

transfer provider to convey the 

information necessary to complete the 

transaction. Similarly, the language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error is the primary language used by 

the sender with the remittance transfer 

provider to provide the information 

required by § 205.33(b) to assert an 

error. For example: 

i. A sender initiates a conversation 

with a remittance transfer provider with 

a word of greeting in English and 

expresses interest in sending a 

remittance transfer to Mexico in 

English. If, based on that knowledge, the 

remittance transfer provider offers to 

communicate with the sender in 

Spanish and the sender conveys the 

other information needed to complete 

the transaction, including the 

designated recipient’s information and 

the amount and funding source of the 

transfer, in Spanish, then Spanish is the 

language primarily used by the sender 

with the remittance transfer provider to 

conduct the transaction. 

ii. A sender initiates a conversation 

with the remittance transfer provider 

with a word of greeting in English and 

states in English that there was a 

problem with a prior remittance transfer 

to Vietnam. If, based on that knowledge, 

the remittance transfer provider offers to 

communicate with the sender in 

Vietnamese and the sender uses 

Vietnamese to convey the information 

required by § 205.33(b) to assert an 

error, then Vietnamese is the language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error. 

Paragraph 31(g)(1)—General 

1. Principally used. i. All relevant 

facts and circumstances determine 

whether a foreign language is 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market under § 205.31(g)(1). Generally, 

whether a foreign language is 

considered to be principally used by the 

remittance transfer provider to 

advertise, solicit, or market is based on: 

A. The frequency with which the 

foreign language is used in advertising, 

soliciting, or marketing of remittance 

transfer services at that office; 

B. The prominence of the advertising, 

soliciting, or marketing of remittance 

transfer services in that foreign language 

at that office; and 

C. The specific foreign language terms 

used in the advertising soliciting, or 

marketing of remittance transfer service 

at that office. 

ii. For example, an advertisement for 

remittance transfer services, including 

rate and fee information, that is featured 

prominently at an office and is entirely 

in English, except for a sentence 

advising consumers to ‘‘Ask us about 

our foreign remittance services’’ in a 

foreign language, may create an 

expectation that a consumer could 

receive information on remittance 

transfer services in the foreign language 

used in the advertisement. The foreign 

language used in such an advertisement 

would be considered to be principally 

used at that office based on the 

prominence of the advertising and the 

specific foreign language terms inviting 

consumers to inquire about remittance 

transfer services. In contrast, an 

advertisement for remittance transfer 

services, including rate and fee 

information, that is featured 

prominently at an office and is entirely 

in English, except for one word of 

greeting in a foreign language, may not 

create an expectation that a consumer 

could receive information on remittance 

transfer services in the foreign language 

used for such greeting. The foreign 

language used in such an advertisement 

is not considered to be principally used 

at that office based on the incidental 

specific foreign language term used. 

2. Advertise, solicit, or market. i. Any 

commercial message in a foreign 

language, appearing in any medium, 

that promotes directly or indirectly the 

availability of remittance transfer 

services constitutes advertising, 

soliciting, or marketing in such foreign 

language for purposes of § 205.31(g)(1). 

Examples illustrating when a foreign 

language is used to advertise, solicit, or 

market include: 

A. Messages in a foreign language in 

a leaflet or promotional flyer at an 

office. 

B. Announcements in a foreign 

language on a public address system at 

an office. 

C. On-line messages in a foreign 

language, such as on the Internet. 

D. Printed material in a foreign 

language on any exterior or interior sign 

at an office. 

E. Point-of-sale displays in a foreign 

language at an office. 

F. Telephone solicitations in a foreign 

language. 

ii. Examples illustrating when a 

foreign language is not principally used 

to advertise, solicit, or market include: 

A. Communicating in a foreign 

language (whether by telephone, 

electronically, or otherwise) about 

remittance transfer services in response 

to a consumer-initiated inquiry. 


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B. Making disclosures in a foreign 

language that are required by Federal or 

other applicable law. 

3. Office. An office includes any 

physical location, telephone number, or 

Web site of a remittance transfer 

provider where remittance transfer 

services are offered to consumers. The 

location need not exclusively offer 

remittance transfer services. For 

example, if an agent of a remittance 

transfer provider is located in a grocery 

store, the grocery store is considered an 

office for purposes of § 205.31(g)(1). 

4. At that office. Any advertisement, 

solicitation, or marketing is considered 

to be made at that office if such 

advertisement, solicitation, or marketing 

is posted, provided, or made: at a 

physical office of a remittance transfer 

provider; on a Web site of a remittance 

transfer provider; or during a telephone 

call with the remittance transfer 

provider. For disclosures provided 

pursuant to § 205.33 for error resolution 

purposes, the relevant office is the office 

in which the sender first asserts the 

error, not the office where the 

transaction was conducted. 

Section 205.32—Estimates 

32(a) Temporary Exception for Insured 

Institutions 

Paragraph 32(a)(1)—General 

1. For reasons beyond its control. An 

insured institution cannot determine 

exact amounts ‘‘for reasons beyond its 

control’’ when: 

i. The exchange rate required to be 

disclosed under § 205.31(b)(1)(iv) is set 

by a person with which the insured 

institution has no correspondent 

relationship after the insured institution 

sends the remittance transfer; or 

ii. Fees required to be disclosed under 

§ 205.31(b)(1)(vi) are imposed by 

intermediary institutions along the 

transmittal route and the insured 

institution has no correspondent 

relationship with those institutions. 

2. Examples of scenarios that qualify 

for the temporary exception. The 

following examples illustrate when an 

insured institution cannot determine an 

exact amount ‘‘for reasons beyond its 

control’’ and, thus, would qualify for the 

temporary exception. 

i. Exchange rate. An insured 

institution cannot determine the exact 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) for an 

international wire transfer if the insured 

institution does not set the exchange 

rate, and the rate is instead later set by 

the designated recipient’s institution 

with which the insured institution does 

not have a correspondent relationship. 

The insured institution will not know 

the date on which funds will be 

deposited into the recipient’s account, 

and will not know the exchange rate 

that will be applied on that date. 

ii. Other fees. An insured institution 

cannot determine the exact fees required 

to be disclosed under § 205.31(b)(1)(vi) 

if an intermediary institution or the 

designated recipient’s institution, with 

which the insured institution does not 

have a correspondent relationship, 

imposes a transfer or conversion fee. 

iii. Other taxes. An insured institution 

cannot determine the exact taxes 

required to be disclosed under 

§ 205.31(b)(1)(vi) if the insured 

institution cannot determine the 

applicable exchange rate or fees as 

described in i. and ii. above, and the 

recipient country imposes a tax that is 

a percentage of the amount transferred 

to the designated recipient, less any 

other fees. 

3. Examples of scenarios that do not 

qualify for the temporary exception. The 

following examples illustrate when an 

insured institution can determine exact 

amounts and, thus, would not qualify 

for the temporary exception. 

i. Exchange rate. An insured 

institution can determine the exact 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) if it converts the 

funds into the local currency to be 

received by the designated recipient 

using an exchange rate that it sets. 

ii. Other fees. An insured institution 

can determine the exact fees required to 

be disclosed under § 205.31(b)(1)(vi) if it 

has negotiated specific fees with a 

correspondent institution, and this 

correspondent institution is the only 

institution in the transmittal route to the 

designated recipient’s institution. 

iii. Other taxes. An insured institution 

can determine the exact taxes required 

to be disclosed under § 205.31(b)(1)(vi) 

if: 

A. The recipient country imposes a 

tax that is a percentage of the amount 

transferred to the designated recipient, 

less any other fees, and the insured 

institution can determine the exact 

amount of the applicable exchange rate 

and other fees; or 

B. The recipient country imposes a 

tax that is a flat amount that is not tied 

to the amount transferred. 

32(b) Permanent Exception for Transfers 

to Certain Countries 

Paragraph 32(b)(1) 

1. Laws of the recipient country. The 

‘‘laws of the recipient country’’ do not 

permit a remittance transfer provider to 

determine exact amounts required to be 

disclosed when a law or regulation of 

the recipient country requires the 

person making funds directly available 

to the designated recipient to apply an 

exchange rate that is: 

i. Set by the government of the 

recipient country after the remittance 

transfer provider sends the remittance 

transfer, or 

ii. Set when the designated recipient 

claims the funds. 

2. Examples illustrating application of 

the ‘‘laws of the recipient country’’ 

exception. 

i. The ‘‘laws of the recipient country’’ 

do not permit a remittance transfer 

provider to determine the exact 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) when, for 

example, the government of the 

recipient country sets the exchange rate 

daily and the funds are made available 

to the designated recipient in the local 

currency the day after the remittance 

transfer provider sends the remittance 

transfer. 

ii. In contrast, the ‘‘laws of the 

recipient country’’ permit a remittance 

transfer provider to determine the exact 

exchange rate required to be disclosed 

under § 205.31(b)(1)(iv) when, for 

example, the government of the 

recipient country pegs the value of its 

currency to the U.S. dollar. 

Paragraph 32(b)(2) 

1. Method by which transactions are 

made in the recipient country. The 

‘‘method by which transactions are 

made in the recipient country’’ does not 

permit a remittance transfer provider to 

determine exact amounts required to be 

disclosed when transactions are sent via 

international ACH on terms negotiated 

between the United States government 

and the recipient country’s government, 

under which the exchange rate is set by 

the recipient country’s central bank after 

the provider sends the remittance 

transfer. 

2. Examples of illustrating application 

of the ‘‘methods’’ exception. 

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 § 205.31(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 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 

§ 205.32(b)(2) ‘‘methods’’ exception if it 

sends a remittance transfer via 

international ACH on terms negotiated 


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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 § 205.32(a) temporary 

exception. 

iii. A remittance transfer provider 

would not qualify for the § 205.32(b)(2) 

‘‘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. 

32(c) Bases for Estimates 

Paragraph 32(c)(1)(i) 

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 § 205.32(b)(2) exception 

is set the following business day, the 

most recent exchange rate available for 

a transfer will be the exchange rate set 

for the day that the disclosure is 

provided, i.e. the current business day’s 

exchange rate. 

Paragraph 32(c)(1)(ii) 

1. Publicly available. Examples of 

publicly available sources of 

information containing the most recent 

wholesale exchange rate for a currency 

include U.S. news services, such as 

Bloomberg, the Wall Street Journal, and 

the New York Times, a recipient 

country’s national news services, and a 

recipient country’s central bank or other 

government agency. 

Paragraph 32(c)(3)(ii) 

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 § 205.31(b)(1)(vi) 

pursuant to the § 205.32(a) temporary 

exception, an insured institution may 

rely upon the representations of the 

institutions that act as intermediaries in 

any one of the potential transmittal 

routes that it reasonably believes a 

requested remittance transfer may 

travel. 

Paragraph 32(c)(4) 

1. Other taxes imposed in a recipient 

country that are a percentage. Section 

205.32(c)(4) sets forth the basis for 

providing an estimate of only those 

taxes imposed in a recipient country 

that are a percentage of the amount 

transferred to the designated recipient 

because a remittance transfer provider 

can determine the exact amount of other 

taxes, such as a flat tax. 

Section 205.33—Procedures for 

Resolving Errors 

33(a) Definition of Error 

1. Incorrect amount of currency sent. 

Section 205.33(a)(1)(i) covers 

circumstances in which a sender pays 

an amount that differs from the total 

transaction amount, including fees 

imposed in connection with the 

transfer, stated in the receipt or 

combined disclosure provided under 

§ 205.31(b)(2) or (b)(3). Such error may 

be asserted by a sender regardless of the 

form or method of payment tendered, 

including when a debit, credit, or 

prepaid card is used to fund the transfer 

and an excess amount is paid. For 

example, if a remittance transfer 

provider incorrectly charged a sender’s 

credit card account for $150 to send 

$120 to the sender’s relative in a foreign 

country, plus a transfer fee of $10, and 

the provider sent only $120, the sender 

could assert an error with the remittance 

transfer provider for the incorrect charge 

under § 205.33(a)(1)(i). 

2. Incorrect amount of currency 

received—coverage. Section 

205.33(a)(1)(iii) covers circumstances in 

which the designated recipient receives 

an amount of currency that differs from 

the amount of currency identified on the 

disclosures provided to the sender, 

except where the disclosure stated an 

estimate of the amount of currency to be 

received in accordance with § 205.32. A 

designated recipient may receive an 

amount of currency that differs from the 

amount of currency disclosed, for 

example, if an exchange rate other than 

the disclosed rate is applied to the 

remittance transfer or if the provider 

fails to account for fees or taxes that 

may be imposed by the provider or a 

third party before the transfer is picked 

up by the designated recipient or 

deposited into the recipient’s account in 

the foreign country. Section 

205.33(a)(1)(iii) also covers 

circumstances in which the remittance 

transfer provider transmits an amount 

that differs from the amount requested 

by the sender. 

3. Incorrect amount of currency 

received—examples. For purposes of the 

following examples illustrating the error 

for an incorrect amount of currency 

received under § 205.33(a)(1)(iii), 

assume that none of the circumstances 

permitting an estimate under § 205.32 

apply (unless otherwise stated). 

i. A consumer requests to send funds 

to a relative in Mexico to be received in 

local currency. Upon receiving the 

sender’s payment, the remittance 

transfer provider provides a receipt 

indicating that the amount of currency 

that will be received by the designated 

recipient will be 1180 Mexican pesos, 

after fees and taxes are applied. 

However, when the relative picks up the 

transfer in Mexico a day later, he only 

receives 1150 Mexican pesos because 

the exchange rate applied by the 

recipient agent in Mexico was lower 

than the exchange rate disclosed on the 

receipt. Because the designated 

recipient has received less than the 

amount of currency disclosed on the 

receipt, an error has occurred. 

ii. A consumer requests to send funds 

to a relative in Colombia to be received 

in local currency. The remittance 

transfer provider provides the sender a 

receipt stating an amount of currency 

that will be received by the designated 

recipient, which does not reflect 

additional foreign taxes that will be 

imposed in Colombia on the transfer. 

Because the designated recipient will 

receive less than the amount of currency 

disclosed on the receipt, an error has 

occurred. 

iii. Same facts as in ii., except that the 

receipt provided by the remittance 

transfer provider does not reflect 

additional fees that are imposed by the 

receiving agent in Colombia on the 

transfer. Because the designated 

recipient will receive less than the 

amount of currency disclosed on the 

receipt, an error has occurred. 

iv. A consumer requests to send 

US$250 to a relative in India to an U.S. 

dollar-denominated account held by the 

relative at an Indian bank. Instead of the 

US$250 disclosed on the receipt as the 

amount to be sent, the remittance 

transfer provider sends US$200, 

resulting in a smaller deposit to the 

designated recipient’s account than was 

disclosed as the amount to be received 

after fees and taxes. Because the 

designated recipient received less than 

the amount of currency that was 

disclosed, an error has occurred. 

v. A consumer requests to send 

US$100 to a relative in Brazil to be 

received in local currency. The 

remittance transfer provider provides 

the sender a receipt that discloses an 

estimated exchange rate, other taxes, 

and amount of currency that will be 

received due to Brazilian law requiring 

that the exchange rate be set by the 


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29960 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

Brazilian central bank. When the 

relative picks up the remittance transfer, 

the relative receives less currency than 

the estimated amount disclosed to the 

sender on the receipt. Because 

§ 205.32(b) permits the remittance 

transfer provider to disclose an estimate 

of the amount of currency to be 

received, no error has occurred unless 

the estimate was not based on an 

approach set forth under § 205.32(c). 

4. Failure to make funds available by 

stated date of availability—coverage. 

Section 205.33(a)(1)(iv) generally covers 

disputes about the failure to make funds 

available in connection with a 

remittance transfer to a designated 

recipient by the stated date of 

availability. The following are examples 

of errors for failure to make funds 

available by the stated date of 

availability (assuming that neither of the 

exceptions in § 205.33(a)(1)(iv)(A) or (B) 

apply). 

i. Late or non-delivery of a remittance 

transfer; 

ii. Delivery of funds to the wrong 

account; 

iii. The fraudulent pick-up of a 

remittance transfer in a foreign country 

by a person other than the designated 

recipient; 

iv. The recipient agent or institution’s 

retention of funds in connection with a 

remittance transfer, instead of making 

the funds available to the designated 

recipient. 

5. Extenuating circumstances. Under 

§ 205.33(a)(1)(iv)(A), a remittance 

transfer provider’s failure to deliver or 

transmit a remittance transfer by the 

stated date of availability is not an error 

if such failure was caused by 

circumstances beyond the provider’s 

control. Examples of circumstances 

beyond a remittance transfer provider’s 

control under § 205.33(a)(1)(iv)(A) 

include circumstances such as war or 

civil unrest, natural disaster, and 

government actions or restrictions that 

could not have been reasonably 

anticipated by the remittance transfer 

provider, such as the imposition of 

foreign currency controls or 

garnishment or attachment of funds 

after the transfer is sent. 

6. Incorrect information provided for 

transfer. Under § 205.33(a)(1)(iv)(B), a 

remittance transfer provider’s failure to 

make funds in connection with a 

remittance transfer available to a 

designated recipient by the stated date 

of availability is not an error if such 

failure occurred because the sender 

provided incorrect information in 

connection with the transfer, such as by 

erroneously identifying the designated 

recipient or the recipient’s account 

number, provided that the remittance 

transfer provider also gives the sender 

the opportunity to correct the 

information and send the transfer at no 

additional cost. However, an error may 

be asserted under § 205.33(a)(1)(iv) if 

the failure to make funds available was 

caused by the provider’s 

miscommunication of information 

necessary for the designated recipient to 

pick up the transfer. For example, an 

error under § 205.33(a)(1)(iv) could 

occur if the provider discloses the 

incorrect location where the transfer 

may be picked up or gives the wrong 

confirmation number/code for the 

transfer. 

33(b) Notice of Error From Sender 

1. Person asserting or discovering 

error. The error resolution procedures of 

this section apply only when a notice of 

error is received from the sender, and 

not when a notice of error is received 

from the designated recipient or when 

the remittance transfer provider itself 

discovers and corrects an error. 

2. Content of error notice. The notice 

of error is effective so long as the 

remittance transfer provider is able to 

identify the remittance transfer in 

question. For example, the sender could 

provide the confirmation number or 

code that would be used by the 

designated recipient to pick up the 

transfer, or other identification number 

or code supplied by the remittance 

transfer provider in connection with the 

transfer, if such number or code is 

sufficient for the remittance transfer 

provider to identify the transfer. 

3. Address on notice of error. A 

remittance transfer provider may 

request, or a sender may provide, the 

sender’s or designated recipient’s e-mail 

address, as applicable, instead of a 

physical address, on a notice of error if 

such e-mail address would be sufficient 

to enable the provider to identify the 

remittance transfer to which the notice 

applies. 

4. Effect of late notice. A remittance 

transfer provider is not required to 

comply with the requirements of this 

section for any notice of error from a 

sender that is received by the provider 

more than 180 days from the stated date 

of availability of the remittance transfer 

to which the notice of error applies. 

5. Notice of error provided to agent. A 

notice of error provided by a sender to 

an agent of the remittance transfer 

provider is deemed to be received by the 

provider under § 205.33(b)(1)(i) when 

received by the agent. 

6. Consumer notice of error resolution 

rights. Section 205.31 requires a 

remittance transfer provider to include 

an abbreviated notice of the consumer’s 

error resolution rights on the receipt or 

combined notice given under 

§ 205.31(b)(2) or (b)(3). In addition, the 

remittance transfer provider must make 

available to a sender upon request, a 

notice providing a full description of the 

sender’s error resolution rights that is 

substantially similar to the model error 

resolution and cancellation notice set 

forth in Appendix A of this part (Model 

Form A–36). 

33(c) Time Limits and Extent of 

Investigation 

1. Notice to sender of finding of error. 

If the remittance transfer provider 

determines during its investigation that 

an error occurred as described by the 

sender, the remittance provider may 

inform the sender of its findings either 

orally or in writing. However, if the 

provider determines that no error or a 

different error occurred, the provider 

must provide a written explanation of 

its findings under § 205.33(d)(1). 

2. Designation of requested remedy. 

Under § 205.33(c)(2), the sender may 

choose to obtain a refund of the amount 

of funds that was not properly 

transmitted or delivered to the 

designated recipient or request 

redelivery of the amount appropriate to 

correct the error at no additional cost. 

Upon receiving the sender’s request, the 

remittance transfer provider shall 

correct the error within one business 

day or as soon as reasonably practicable, 

applying the same currency rate and 

fees stated in the disclosure provided 

under § 205.31(b)(2) or (b)(3), if the 

sender requests delivery of the amount 

appropriate to correct the error. The 

remittance transfer provider may also 

request that the sender indicate the 

preferred remedy at the time the sender 

provides notice of the error. However, if 

the sender does not indicate the desired 

remedy at the time of providing notice 

of error, the remittance transfer provider 

must notify the sender of any available 

remedies in the report provided under 

§ 205.33(c)(1) if the provider determines 

an error occurred. 

3. Remedies for incorrect amount 

paid. If an error asserted under 

§ 205.33(a)(1)(i) occurred as alleged by 

the sender, the sender may request a 

refund of the amount necessary to 

resolve the error from the remittance 

provider under § 205.33(c)(2)(i) or that 

the remittance transfer provider make 

that amount available to the designated 

recipient at no additional cost under 

§ 205.33(c)(2)(ii). 

4. Correction of an error if funds not 

available by stated date. If the 

remittance transfer provider determines 

an error occurred as asserted under 

§ 205.33(a)(1)(iv), it must correct the 

error including refunding any fees 


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imposed for the transfer, whether the fee 

was imposed by the provider or a third 

party involved in sending the transfer, 

such as an intermediary bank involved 

in sending a wire transfer or the 

institution from which the funds are 

picked up. 

5. Charges for error resolution. If an 

error occurred, whether as alleged or in 

a different amount or manner, the 

remittance transfer provider may not 

impose a charge related to any aspect of 

the error resolution process (including 

charges for documentation or 

investigation). 

6. Correction without investigation. A 

remittance transfer provider may correct 

an error, without investigation, in the 

amount or manner alleged by the 

sender, or otherwise determined, to be 

in error, but must comply with all other 

applicable requirements of § 205.33. 

33(d) Procedures if Remittance Transfer 

Provider Determines no Error or 

Different Error Occurred 

1. Error different from that alleged. 

When a remittance transfer provider 

determines that an error occurred in a 

manner or amount different from that 

described by the sender, it must comply 

with the requirements of both 

§§ 205.33(c) and (d), as applicable. The 

provider may give the notice of 

correction and the explanation 

separately or in a combined form. 

33(e) Reassertion of Error 

1. Withdrawal of error; right to 

reassert. The remittance transfer 

provider has no further error-resolution 

responsibilities if the sender voluntarily 

withdraws the notice alleging an error. 

A sender who has withdrawn an 

allegation of error has the right to 

reassert the allegation unless the 

remittance transfer provider had already 

complied with all of the error resolution 

requirements before the allegation was 

withdrawn. The sender must do so, 

however, within the original 180-day 

period from the stated date of 

availability. 

33(f) Relation to Other Laws 

1. Concurrent error obligations. 

Section 205.33(f)(1) applies only when 

an error may be asserted under both 

§§ 205.11 and 205.33 with a financial 

institution that is also the remittance 

transfer provider. For example, if a 

sender asserts an error under § 205.11 

with a remittance transfer provider that 

holds the sender’s account, and the 

error is not also an error under § 205.33 

(such as in the case of the omission of 

an EFT on a periodic statement), then 

the error-resolution provisions of 

§ 205.11 exclusively apply to the error. 

2. Assertion of same error with 

multiple parties. If a sender receives 

credit to correct an error of an incorrect 

amount paid in connection with a 

remittance transfer from either the 

remittance transfer provider or accountholding institution (or creditor), and 

subsequently asserts the same error with 

another party, that party has no further 

responsibilities to investigate the error 

because the sender has received 

sufficient credit to correct the error. For 

example, assume that a sender initially 

asserts an error with a remittance 

transfer provider with respect to a 

remittance transfer alleging that $130 

was debited from his checking account, 

but the sender only requested a 

remittance transfer for $100, plus a $10 

transfer fee. If the remittance transfer 

provider refunds $20 to the sender to 

correct the error, and the sender 

subsequently asserts the same error with 

his account-holding institution, the 

account-holding institution has no error 

resolution responsibilities under 

Regulation E because the consumer 

sender has already received sufficient 

credit to correct the error. In addition, 

nothing in this section prevents an 

account-holding institution or creditor 

from reversing amounts it has 

previously credited to correct an error if 

a consumer receives more than one 

credit to correct the same error. For 

example, assume that a sender 

concurrently files notice of error with 

his or her account-holding institution 

and remittance transfer provider for the 

same error, and the sender receives 

credit from the account-holding 

institution for the error within 45 days 

of the notice of error. If the remittance 

transfer provider subsequently provides 

a credit to the sender for the same error, 

the account-holding institution may 

reverse the amounts it had previously 

credited to the consumer’s account even 

after the 45-day error resolution period 

under § 205.11. 

33(g) Error Resolution Standards and 

Recordkeeping Requirements 

1. Record retention requirements. 

Remittance transfer providers are 

subject to the record retention 

requirements under § 205.13, and must 

retain documentation, including 

documentation related to error 

investigations, for a period of not less 

than two years from the date a notice of 

error was submitted to the provider or 

action was required to be taken by the 

provider. A remittance transfer provider 

need not maintain records of individual 

disclosures that it has provided to each 

sender; it need only retain records that 

ensure that it can comply with a 

sender’s request for documentation or 

other information relating to a particular 

remittance transfer, including a request 

for supporting documentation to enable 

the sender to determine whether an 

error exists with respect to that transfer. 

Section 205.34—Procedures for 

Cancellation and Refund of Remittance 

Transfers 34(a) Sender Right of 

Cancellation and Refund 

1. Content of cancellation request. A 

request to cancel a remittance transfer is 

valid so long as the remittance transfer 

provider is able to identify the 

remittance transfer in question. For 

example, the sender could provide the 

confirmation number or code that 

would be used by the designated 

recipient to pick up the transfer or other 

identification number or code supplied 

by the remittance transfer provider in 

connection with the transfer, if such 

number or code is sufficient for the 

remittance transfer provider to identify 

the transfer. A remittance transfer 

provider may also request, or the sender 

may provide, the sender’s e-mail 

address instead of a physical address, so 

long as the remittance transfer provider 

is able to identify the transfer to which 

the request to cancel applies. 

2. Consumer notice of cancellation 

right. Section 205.31 requires a 

remittance transfer provider to include 

an abbreviated notice of the consumer’s 

right to cancel a remittance transfer on 

the receipt or combined disclosure 

given under § 205.31(b)(2) or (b)(3). In 

addition, the remittance transfer 

provider must make available to a 

sender upon request, a notice providing 

a full description of the right to cancel 

a remittance transfer that is 

substantially similar to the model error 

resolution and cancellation notice set 

forth in Appendix A of this part (Model 

Form A–36). 

34(b) Time Limits and Refund 

Requirements 

1. Form of refund. At its discretion, a 

remittance transfer provider may issue a 

refund in cash or in the same form of 

payment that was initially tendered by 

the sender for the remittance transfer. 

For example, if the sender originally 

provided a credit card as payment for 

the transfer, the remittance transfer 

provider may issue a credit to the 

sender’s credit card account in the 

amount of the payment. 

2. Fees refunded. If a sender provides 

a timely request to cancel a remittance 

transfer, a remittance transfer provider 

must refund all funds tendered by the 

sender in connection with the 

remittance transfer, including any fees 

that have been imposed for the transfer, 

whether the fee was assessed by the 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
29962 Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules 

provider or a third party, such as an 

intermediary institution or the receiving 

agent or bank. 

Section 205.35—Acts of Agents 

Alternative A 

1. General. Remittance transfer 

providers must comply with the 

requirements of this subpart, including, 

but not limited to, providing the 

disclosures set forth in § 205.31 and 

providing any remedies as set forth in 

§ 205.33, even if a remittance transfer 

provider performs its functions through 

an agent, and regardless of whether the 

provider has an agreement with a third 

party that transfers or otherwise makes 

funds available to a designated 

recipient. 

Alternative B 

1. General. Remittance transfer 

providers generally must comply with 

the requirements of this subpart, 

including, but not limited to, providing 

the disclosures set forth in § 205.31 and 

remedying any errors as set forth in 

§ 205.33, even if a remittance transfer 

provider performs its functions through 

an agent, and regardless of whether the 

provider has an agreement with a third 

party that transfers or otherwise makes 

funds available to a designated 

recipient. 

2. Policies and procedures. Under 

§ 205.35(a), a remittance transfer 

provider that performs its functions 

through an agent must establish and 

maintain written policies and 

procedures for compliance with this 

subpart applicable to its agents. 

Maintenance of policies and procedures 

includes periodic review of and, as 

needed, updates to such policies and 

procedures. Appropriate oversight 

practices include, for example, regular 

audits, training, and other measures 

designed to ensure an agent’s 

compliance with this subpart. Under 

these circumstances, a provider has not 

violated its obligations under Subpart B 

if its agent fails to follow the policies 

and procedures in an individual case, so 

long as the remittance transfer provider 

makes the consumer whole for any error 

resulting from an agent’s acts, including 

as set forth under the error resolution 

provisions in § 205.33.fi 

Appendix A—Model Disclosure Clauses 

and Forms 

* * * * * 

2. Use of forms. The appendix 

contains model disclosure clauses for 

optional use by financial institutions 

fland remittance transfer providersfi 

to facilitate compliance with the 

disclosure requirements of sections 

205.5(b)(2) and (b)(3), 205.6(a), 205.7, 

205.8(b), 205.14(b)(1)(ii), 205.15(d)(1) 

and (d)(2), [and] 205.18(c)(1) and 

(c)(2)fl, and § 205.31(b)fi. The use of 

appropriate clauses in making 

disclosures will protect a financial 

institution fland a remittance transfer 

providerfi from liability under sections 

[915 and] 916 fland 917fi of the act 

provided the clauses accurately reflect 

the institution’s EFT services fland the 

provider’s remittance transfer services, 

respectivelyfi. 

* * * * * 

fl4. Altering the model forms for 

remittance transfers. This appendix 

contains twelve model forms for use in 

connection with remittance transfers. 

These model forms are intended to 

demonstrate several formats a 

remittance transfer provider may use to 

comply with the requirements of 

§ 205.31(b). Model Forms A–30 through 

A–32 demonstrate how a provider could 

provide the required disclosures for a 

remittance transfer exchanged into local 

currency. Model Forms A–33 through 

A–35 demonstrate how a provider could 

provide the required disclosures for 

dollar-to-dollar remittance transfers. 

These forms also demonstrate disclosure 

of the required content, in accordance 

with the grouping and proximity 

requirements of §§ 205.31(c)(1) and (2), 

in both a register receipt format and an 

8.5 inch by 11 inch format. Model Form 

A–36 provides long-form model error 

resolution and cancellation disclosures 

required by § 205.31(d), and Model 

Form A–37 provides short-form model 

error resolution and cancellation 

disclosures required by 

§ 205.31(b)(2)(iv). Model Forms A–38 

through A–41 provide language for 

Spanish language disclosures. 

i. The model forms contain 

information that is not required by 

Subpart B, such as a confirmation code 

and the sender’s name and contact 

information. Additional information not 

required by Subpart B may be presented 

on the model forms as permitted by 

§ 205.31(c)(4). Any additional 

information must be presented 

consistent with a remittance transfer 

provider’s obligation to provide 

required disclosures in a clear and 

conspicuous manner. 

ii. Use of the model forms is optional. 

A remittance transfer provider may 

change the forms by rearranging the 

format or by making modifications to 

the language of the forms, in each case 

without modifying the substance of the 

disclosures. Any rearrangement or 

modification of the format of the model 

forms must be consistent with the form, 

grouping, proximity, and other 

requirements of §§ 205.31(a) and (c). 

Providers making revisions that do not 

comply with this section will lose the 

benefit of the safe harbor for appropriate 

use of Model Forms A–30 to A–41. 

iii. Permissible changes to the 

language and format of the model forms 

include, for example: 

A. Substituting the information 

entered into the model forms intended 

to demonstrate how to complete the 

information in the model forms—such 

as names, addresses, and Web sites; 

dates; numbers; and state-specific 

contact information—with information 

applicable to the remittance transfer. 

B. Eliminating disclosures that are not 

applicable to the transfer, as permitted 

under § 205.31(b). 

C. Correcting or updating telephone 

numbers, mailing addresses, or Web site 

addresses that may change over time. 

D. Providing the disclosures on a 

paper size that is different from a 

register receipt and 8.5 inch by 11 inch 

formats. 

E. Adding a term substantially similar 

to ‘‘estimated’’ in close proximity to the 

specified terms in §§ 205.31(b)(1) and 

(b)(2), as permitted under § 205.31(d). 

F. Providing the disclosures in a 

foreign language, or multiple foreign 

languages, subject to the requirements of 

§ 205.31(g). 

iv. Changes to the model forms that 

are not permissible include, for 

example, adding information that is not 

segregated from the required 

disclosures, other than as permitted by 

§ 205.31(c)(4).fi 

By order of the Board of Governors of the 

Federal Reserve System, May 11, 2011. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. 2011–12019 Filed 5–20–11; 8:45 am] 

BILLING CODE 6210–01–P 


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