Vol. 77 Monday, 

No. 161 August 20, 2012 

Part III 

Bureau of Consumer Financial Protection 

12 CFR Part 1005 

Electronic Fund Transfers (Regulation E); Final Rule 

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50244 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

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

1073 (2010). 

2The Bureau issued the February Final Rule and 

the February Proposal on January 20, 2012. 

Consequently, when referencing the final rule, the 

February Proposal used the term ‘‘January 2012 

Final Rule.’’ That term is being replaced in today’s 

rule with ‘‘February Final Rule’’ to reflect the date 

the rule was published in the Federal Register (i.e., 

February 7, 2012). Similarly, the term ‘‘February 

Proposal’’ is being used here in place of the term 

‘‘January 2012 Proposed Rule,’’ which was used in 

the February Final Rule. Additionally, a technical 

correction to the February Final Rule was published 

on July 10, 2012. 77 FR 40459. For simplicity, that 

technical correction is incorporated into the term 

‘‘February Final Rule.’’ 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1005 

[Docket No. CFPB–2011–0009] 

RIN 3170–AA15 

Electronic Fund Transfers (Regulation 

E) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection is amending 

Regulation E, which implements the 

Electronic Fund Transfer Act, and the 

official interpretation to the regulation, 

which interprets the requirements of 

Regulation E. The final rule modifies a 

final rule published in February 2012 

implementing section 1073 of the DoddFrank Wall Street Reform and Consumer 

Protection Act regarding remittance 

transfers. The final rule adopts a safe 

harbor with respect to the phrase 

‘‘normal course of business’’ in the 

definition of ‘‘remittance transfer 

provider,’’ which determines whether a 

person is covered by the rule. The final 

rule also revises several aspects of the 

February 2012 final rule regarding 

remittance transfers that are scheduled 

before the date of transfer, including 

preauthorized remittance transfers. 

DATES: This rule is effective February 7, 

2013. 

FOR FURTHER INFORMATION CONTACT: Eric 

Goldberg, Counsel, or Andrea Edmonds 

or Dana Miller, Senior Counsels, 

Division of Research, Markets, and 

Regulations, Bureau of Consumer 

Financial Protection, 1700 G Street NW., 

Washington, DC 20552, at (202) 435– 

7700. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

Section 1073 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act) 1 amended the 

Electronic Fund Transfer Act (EFTA) to 

create a new comprehensive consumer 

protection regime for remittance 

transfers sent by consumers in the 

United States to individuals and 

businesses in foreign countries. For 

covered transactions conducted by 

remittance transfer providers, the statute 

generally requires: (i) The provision of 

disclosures prior to and at the time of 

payment by the sender for the transfer; 

(ii) cancellation and refund rights; (iii) 

the investigation and remedy of errors 

by remittance transfer providers; and 

(iv) liability standards for remittance 

transfer providers for the acts of their 

agents. The Bureau of Consumer 

Financial Protection (Bureau) published 

a final rule on February 7, 2012, to 

implement section 1073 of the DoddFrank Act. 77 FR 6194, Feb. 7, 2012 

(February Final Rule). The February 

Final Rule takes effect February 7, 2013. 

The Bureau concurrently published a 

proposed rule with request for public 

comment seeking comment on whether 

to provide additional safe harbors and 

flexibility in applying the February 

Final Rule to certain transactions and 

persons. 77 FR 6310, Feb. 7, 2012 

(February Proposal).2

The February Proposal addressed two 

aspects of the February Final Rule. First, 

the Bureau proposed to adopt a safe 

harbor for determining whether a person 

is providing remittance transfers in the 

‘‘normal course of business,’’ and thus 

is a ‘‘remittance transfer provider.’’ 

Second, it sought comment on possible 

refinements to disclosure and 

cancellation requirements for certain 

remittance transfers that are scheduled 

before the date of transfer, including 

‘‘preauthorized remittance transfers,’’ 

which are authorized in advance to 

recur at substantially regular intervals. 

The Bureau noted that providing further 

clarification on these issues might 

reduce compliance burdens for 

remittance transfer providers and 

provide better disclosures and 

cancellation rights to consumers. The 

Bureau also stated that it expected to 

complete any further rulemaking on 

matters raised in the February Proposal 

on an expedited basis before the 

February 7, 2013 effective date for the 

February Final Rule. 

The final rule adopts a safe harbor 

with respect to the phrase ‘‘normal 

course of business’’ in the definition of 

‘‘remittance transfer provider,’’ which 

determines whether a person is covered 

by subpart B of Regulation E. The final 

rule states that if a person provided 100 

or fewer remittance transfers in the 

previous calendar year, and provides 

100 or fewer remittance transfers in the 

current calendar year, then the person is 

deemed not to be providing remittance 

transfers for a consumer in the normal 

course of its business. For a person that 

crosses the 100-transfer threshold, and 

is then providing remittance transfers 

for a consumer in the normal course of 

its business, the final rule permits a 

reasonable time period, not to exceed 

six months, to begin complying with 

subpart B of Regulation E. 

The final rule also modifies several 

aspects of the February Final Rule 

regarding remittance transfers that are 

scheduled before the date of transfer, 

including preauthorized remittance 

transfers. First, when a sender schedules 

a one-time transfer or the first in a series 

of preauthorized remittance transfers 

five or more business days before the 

date of transfer, the final rule permits 

remittance transfer providers to estimate 

certain information in the pre-payment 

disclosure and the receipt provided 

when payment is made. If estimates are 

provided under this exception, the 

provider generally must give the sender 

an additional receipt with accurate 

figures after the transfer is made. With 

respect to subsequent preauthorized 

remittance transfers, the final rule 

generally eliminates the requirement 

that a remittance transfer provider mail 

or deliver a pre-payment disclosure for 

each subsequent transfer, unless certain 

specified information has changed. 

However, the final rule generally 

requires a remittance transfer provider 

to provide accurate receipts after 

subsequent transfers are made. 

The final rule also modifies the 

February Final Rule in several respects 

with regard to the disclosure 

requirements for remittance transfers 

scheduled at least three business days 

before the date of transfer and for 

preauthorized remittance transfers. The 

final rule generally requires disclosure 

of the date of transfer on the initial 

receipt and on any subsequent receipts 

provided with respect to a particular 

transfer. For subsequent preauthorized 

remittance transfers, the final rule also 

requires the remittance transfer provider 

to disclose the future date or dates the 

remittance transfer provider will 

execute subsequent transfers in the 

series; in most cases, the final rule offers 

some flexibility in how such disclosures 

can be made. 

As noted in the February Final Rule, 

the Bureau intends to continue working 

with consumers, industry, and other 

regulators in the coming months 

regarding implementation issues. In the 

near future, the Bureau expects to 

release a small business compliance 

guide and a list of countries that 

providers may rely on for purposes of 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50245 

determining whether estimates may be 

provided under certain circumstances. 

The Bureau also expects to conduct a 

public awareness campaign to educate 

consumers about the new disclosures 

and their other rights under the DoddFrank Act with respect to remittance 

transfers. 

II. Background 

A. Summary of February Final Rule 

The February Final Rule imposes on 

remittance transfer providers new 

disclosure, error resolution, and other 

substantive requirements relating to 

remittance transfers. These 

requirements are set forth in subpart B 

of Regulation E. Consistent with the 

statute, the February Final Rule 

provides that the term remittance 

transfer provider means any person that 

provides remittance transfers for a 

consumer in the normal course of its 

business, regardless of whether the 

consumer holds an account with such 

person. 12 CFR 1005.30(f). The February 

Final Rule provides guidance in the 

commentary indicating that whether a 

person provides remittance transfers in 

the ‘‘normal course of business’’ will be 

evaluated based on the facts and 

circumstances, and does not set forth a 

numerical threshold. 

Among other requirements, the 

February Final Rule imposes several 

new disclosure requirements on 

remittance transfer providers. First, the 

rule generally requires a remittance 

transfer provider to provide a written 

pre-payment disclosure to a sender 

containing information about the 

specific transfer requested by the 

sender, such as the exchange rate, 

applicable fees and taxes, and the 

amount to be received by the designated 

recipient. Second, the provider also 

must provide a written receipt when 

payment is made for the transfer. The 

receipt must include the information 

provided on the pre-payment 

disclosure, as well as additional 

information such as the date of 

availability of the funds, the designated 

recipient’s contact information, and 

information regarding the sender’s error 

resolution and cancellation rights. 

Consistent with the statute, which 

permits remittance transfer providers to 

provide estimates only in two narrow 

circumstances, the February Final Rule 

generally requires that disclosures state 

the actual exchange rate that will apply 

to a remittance transfer and the actual 

amount that will be received by the 

designated recipient of a remittance 

transfer. 

The February Final Rule also sets 

forth special requirements for the timing 

and accuracy of disclosures with respect 

to ‘‘preauthorized remittance transfers,’’ 

which are defined as remittance 

transfers authorized in advance to recur 

at substantially regular intervals. As 

discussed in the February Final Rule, 77 

FR 6194, 6267, the Bureau recognizes 

that the market for preauthorized 

remittance transfers is still developing. 

The February Final Rule differentiates 

between the first and subsequent 

transfers in a series of preauthorized 

remittance transfers. The first transfer in 

a series is treated the same as other 

standalone remittance transfers. 

Accordingly, the February Final Rule 

requires, for the first transaction in a 

series of preauthorized remittance 

transfers, that the provider provide a 

pre-payment disclosure at the time the 

sender requests the transfer and a 

receipt at the time payment for the 

transfer is made, which the commentary 

explains means when payment is 

authorized. In addition, the disclosures 

must be accurate as of when the 

payment for the transfer is made, unless 

a statutory exception applies. 

However, recognizing the potential 

risks to providers associated with 

setting exchange rates and determining 

the amount to be provided to a 

designated recipient weeks or months 

before any subsequent transfer, and the 

potentially limited utility to consumers 

of information provided far in advance, 

the February Final Rule does not require 

that disclosures for the entire series of 

preauthorized remittance transfers be 

provided at the time of the sender’s 

initial request and payment 

authorization. Rather, the February 

Final Rule requires providers to issue 

pre-payment disclosures and receipts 

for each subsequent transfer near the 

date of the individual transfer. 

Specifically, the pre-payment disclosure 

for each subsequent transfer must be 

provided within a reasonable time prior 

to the scheduled date of the transfer. 

The receipt for each subsequent transfer 

generally must be provided no later than 

one business day after the date on 

which the transfer is made. 

Finally, the February Final Rule also 

provides senders specified cancellation 

and refund rights. Under the rule, a 

sender generally has 30 minutes after 

payment is made to cancel a remittance 

transfer. The February Final Rule, 

however, contains special cancellation 

procedures for any remittance transfer 

scheduled by the sender at least three 

business days before the date of the 

transfer, including preauthorized 

remittance transfers. In such case, the 

provider would be required to cancel 

the remittance transfer if it received a 

request to cancel the transfer from the 

sender at least three business days 

before the date of the transfer. 

B. Summary of the February Proposal 

Concurrent with the February Final 

Rule, the Bureau issued a proposed rule 

that sought comment on two aspects of 

the February Final Rule. First, the 

Bureau proposed to adopt in 

commentary a safe harbor clarifying 

when certain persons are excluded from 

the statutory scheme because they do 

not provide remittance transfers in the 

normal course of business. Second, the 

February Proposal sought comment on a 

possible safe harbor and other 

refinements to the disclosure and 

cancellation requirements for remittance 

transfers that are scheduled before the 

date of the transfer, including 

preauthorized remittance transfers. The 

Bureau indicated that these proposed 

amendments to the February Final Rule 

may reduce compliance burden for 

providers and allow for better disclosure 

and cancellation rights for senders. The 

Bureau stated its belief that these issues 

would benefit from further public 

comment. 

Regarding the first aspect of the 

February Proposal, the Bureau sought 

comment on a proposed safe harbor 

interpreting the phrase ‘‘normal course 

of business.’’ The Bureau proposed 

commentary stating that if a person 

made no more than 25 remittance 

transfers in the previous calendar year, 

the person does not provide remittance 

transfers in the normal course of 

business during the current calendar 

year if it provides no more than 25 

remittance transfers in that year. The 

Bureau also specifically solicited 

comment on whether, if such a safe 

harbor is appropriate, the threshold 

number should be higher or lower than 

25 remittance transfers, such as 10 or 50 

transfers, or some other number. 

Regarding the second aspect of the 

February Proposal, the Bureau sought 

comment on refinements to the 

disclosure and cancellation 

requirements for remittance transfers 

that are scheduled before the date of 

transfer, including preauthorized 

remittance transfers. Specifically, the 

February Proposal solicited comment on 

whether estimates should be permitted 

to be disclosed in the pre-payment 

disclosure and receipt given at the time 

the transfer is requested and authorized 

when: (i) A consumer schedules a onetime transfer or the first in a series of 

preauthorized remittance transfers more 

than ten days in advance; or (ii) a 

consumer enters into an agreement for 

preauthorized remittance transfers 

under which the amount of the transfers 

can vary and the provider does not 

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50246 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

know the exact amount of the first 

transfer at the time the disclosures for 

that transfer are given. The February 

Proposal further requested comment on 

whether a remittance transfer provider 

that uses estimates in the two situations 

described above should be required to 

provide a second receipt with accurate 

information within a reasonable time 

closer to the scheduled date of the 

transfer. In addition, the February 

Proposal sought comment on whether 

the second receipt should be provided 

to senders ten days before the date of 

the transfer or whether the period 

should be longer or shorter. 

The February Proposal also solicited 

comment on possible refinements to the 

disclosure provisions applicable to 

subsequent preauthorized remittance 

transfers. For example, the Bureau 

sought comment on two alternative 

approaches to the disclosure provisions 

for subsequent preauthorized remittance 

transfers: (i) Whether the Bureau should 

retain the requirement that a remittance 

transfer provider provide a pre-payment 

disclosure for each subsequent transfer 

and provide a safe harbor for what 

constitutes ‘‘a reasonable time’’ for 

providing this disclosure; or (ii) whether 

the Bureau should eliminate the 

requirement to provide a pre-payment 

disclosure for each subsequent transfer. 

The February Proposal also sought 

comment on possible changes to the 

cancellation requirements for remittance 

transfers that are scheduled before the 

date of the transfer, including 

preauthorized remittance transfers. The 

February Proposal solicited comment on 

whether the three-business-day period 

for canceling such remittances transfers 

adopted in the February Final Rule is 

appropriate, or whether the rule should 

require a deadline to cancel these 

transfer that is more or less than three 

business days. Further, the February 

Proposal solicited comment on three 

issues related to the disclosure of the 

deadline to cancel as set forth in the 

February Final Rule: first, whether the 

three-business-day deadline to cancel 

transfers scheduled before the date of 

transfer should be disclosed to senders, 

such as by requiring a remittance 

transfer provider to disclose in the 

receipt the specific date on which the 

right to cancel will expire; second, 

whether a remittance transfer provider 

should be allowed to describe both the 

three-business-day and 30-minute 

deadline-to-cancel time frames on a 

single receipt and either describe the 

transfers to which each deadline is 

applicable, or alternatively, use a 

checkbox or other method to designate 

which deadline is applicable to the 

transfer to which the receipt relates; 

third, whether the disclosure of the 

deadline to cancel should be disclosed 

in the pre-payment disclosure, rather 

than in the receipt, for each subsequent 

preauthorized remittance transfer. 

C. Overview of Comments and Outreach 

The Bureau received more than 50 

comments on the proposed rule. The 

majority of comments were submitted 

by industry commenters, including 

depository institutions, credit unions, a 

money transmitter, and industry trade 

associations. In addition, letters were 

submitted by individual consumers, 

consumer groups, and an association of 

state banking regulators. 

Commenters generally supported, or 

did not oppose, clarifying the meaning 

of ‘‘normal course of business’’ with a 

safe harbor. Consumer group 

commenters supported the proposed 

threshold of 25 transfers per year. The 

majority of industry commenters argued 

that the proposed safe harbor threshold 

was insufficient and suggested higher 

numerical thresholds, ranging from 50 

remittance transfers annually to 25 

transfers daily. Some industry 

commenters suggested alternative 

benchmarks for the safe harbor, 

including tests based on a percentage of 

an entity’s revenues or transactions 

processed. A number of industry 

commenters stated that they or others 

would cease to offer remittance transfers 

if they did not qualify for the safe 

harbor. Some commenters also 

suggested changes in how any safe 

harbor was implemented, such as that 

the Bureau should provide time for an 

entity to come into compliance if the 

entity becomes a remittance transfer 

provider once the safe harbor threshold 

is exceeded. 

Commenters also generally supported 

revisions to the February Final Rule 

regarding remittance transfers that are 

scheduled before the date of the 

transfer. Commenters generally 

supported providing additional 

flexibility in disclosure requirements 

and expanding the use of estimates in 

order to reduce risks and costs that 

might be passed through to senders. 

Industry commenters cited various 

operational and financial challenges, as 

well as legal risks, associated with 

disclosing an accurate exchange rate for 

a future transfer. (Although the February 

Proposal asked about estimates for onetime transfers or the first in a series of 

preauthorized remittance transfers, most 

commenters addressed the use of 

estimates generally for any transfer 

scheduled before the date of such 

transfer.) Some industry commenters 

argued that small remittance transfer 

providers in particular would not have 

the scale or expertise to create the risk 

management practices necessary to 

comply. Other industry commenters 

expressed concern about the potential 

for behavior by consumers that would 

increase providers’ exposure to foreign 

exchange risk in light of the February 

Final Rule’s three-business-day 

cancellation period for transfers 

scheduled before the date of the 

transfer. Thus, these commenters 

supported permitting estimates in prepayment disclosures and receipts 

provided for remittance transfers 

scheduled before the date of transfer. 

Separately, some commenters thought 

the Bureau should allow providers, in 

lieu of (or in addition to) providing an 

estimate of the exchange rate on a 

disclosure for a transfer scheduled 

before the date of the transfer, to 

disclose the formula the provider will 

use to calculate the exchange rate that 

will apply to a transfer. 

For similar reasons, industry 

commenters further stated that the 

proposed ten-day period after which 

estimates would not be permitted was 

too long, and should be shortened. 

Industry commenters suggested shorter 

time periods ranging from one to seven 

business days. Several industry 

commenters suggested that, even if 

estimates were permitted, remittance 

transfer providers might respond to the 

requirement to provide accurate 

disclosures for other one-time transfers 

scheduled before the date of the transfer 

or initial transfers in series of 

preauthorized remittance transfers 

scheduled in advance by only offering 

same-day remittance transfers, or 

remittance transfers scheduled ten or 

more days before the date of the 

transfer. 

Consumer group commenters agreed 

that the use of estimates in disclosures 

may be appropriate for the first 

remittance transfers in series of 

preauthorized remittance transfers, but 

stated that if remittance transfer 

providers were allowed to use estimates 

in disclosures for such transfers, senders 

should be informed they would not 

receive actual notice of the price of the 

transfer or of the amount to be received 

by the designated recipient during the 

periods when the senders can cancel the 

transfers. Alternatively, consumer group 

commenters suggested requiring 

providers to later give senders 

disclosures for such transfers that 

include accurate information about any 

amounts previously estimated. 

Industry commenters urged the 

Bureau to eliminate the requirement to 

provide pre-payment disclosures a 

reasonable time prior to each 

subsequent preauthorized remittance 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50247 

transfer. Commenters stated that such 

disclosures could cause consumer 

confusion in cases where senders 

receive pre-payment disclosures in close 

proximity to receipts for previous 

preauthorized remittance transfers. 

Further, industry commenters argued 

that many senders scheduling 

preauthorized remittance transfers are 

more concerned with the convenience 

allowed by the scheduling of transfers 

before the date of the transfer and 

having transfers made on time than with 

comparison shopping with pre-payment 

disclosures for each transfer. Thus, 

these commenters stated that the cost of 

providing pre-payment disclosures 

would outweigh any potential consumer 

benefit. Industry commenters also stated 

that if the requirement to provide 

updated pre-payment disclosures was 

not eliminated, the Bureau should 

permit estimates to be provided in those 

disclosures. Consumer group 

commenters stated that the Bureau 

should maintain the requirement to 

provide pre-payment disclosures before 

all subsequent preauthorized remittance 

transfers, but while allowing providers 

to provide estimates in those 

disclosures. These commenters also 

supported the Bureau’s proposal that 

ten days before the date of transfer 

constitute a ‘‘reasonable time.’’ 

Most industry commenters argued 

that three business days is an 

appropriate time period for a sender to 

cancel a remittance transfer that is 

scheduled at least three business days 

before the date of the transfer. Some 

industry commenters conditioned their 

support for the three-business-day 

cancellation period on whether a 

remittance transfer provider would be 

required to disclose to the sender the 

exchange rate that would apply to a 

transfer scheduled more than three 

business days before the date of such 

transfer. One commenter suggested that 

the Bureau adopt a five-business-day 

cancellation deadline in lieu of the 

three-business-day deadline adopted in 

the February Final Rule. 

With respect to the content and 

format of disclosures related to the 

cancellation period, most industry 

commenters argued against requiring 

that remittance transfer providers 

disclose the specific cancellation 

deadline in the receipt provided to a 

sender for a remittance transfer 

scheduled more than three business 

days before the date of the transfer. One 

commenter asserted that requiring 

disclosure of the specific cancellation 

deadline would create significant 

technical challenges for service 

providers. Commenters, however, 

generally supported the proposal to 

permit remittance transfer providers 

that provide both transfers scheduled at 

least three business days before and 

transfers less than three business days 

before the date of the transfer to include 

both the 30-minute and three-businessday cancellation periods in their 

receipts along with a checkbox or other 

method that allows the provider to 

designate which cancellation period is 

applicable to the transfer at issue. 

The Bureau received few comments in 

response to its inquiry regarding 

disclosure of cancellation requirements 

for subsequent preauthorized remittance 

transfers. Among those received, there 

was little consensus regarding how 

cancellation rights for subsequent 

transfers should be disclosed. Some 

commenters asserted that the 

cancellation provision should be 

included on the pre-payment disclosure 

and one industry commenter supported 

including it on the receipt. 

In addition to the comments received 

on the February Proposal, Bureau staff 

conducted outreach with various parties 

to gather more data regarding issues 

discussed in the proposal or raised in 

comments. Records of these outreach 

conversations are reflected in ex parte 

submissions included in the rulemaking 

record (accessible by searching by the 

docket number associated with this final 

rule at www.regulations.gov). 

III. Summary of the Final Rule 

A. Normal Course of Business 

The final rule provides a new safe 

harbor clarifying when a person 

provides remittance transfers in the 

normal course of business for purposes 

of determining whether a person falls 

under the definition of ‘‘remittance 

transfer provider.’’ The proposed safe 

harbor was located in the commentary; 

the final safe harbor is included in 

regulatory text, with further guidance in 

the commentary. As adopted, the final 

rule states that if a person provided 100 

or fewer remittance transfers in the 

previous calendar year, and provides 

100 or fewer remittance transfers in the 

current calendar year, then the person is 

deemed not to be providing remittance 

transfers for a consumer in the normal 

course of its business. For a person that 

crosses the 100-transfer threshold, and 

is then providing remittance transfers 

for a consumer in the normal course of 

its business, the final rule permits a 

reasonable time period, not to exceed 

six months, to begin complying with 

subpart B of Regulation E. 

B. Disclosure Rules for Remittance 

Transfers Scheduled Before the Date of 

Transfer 

The final rule modifies the February 

Final Rule with respect to remittance 

transfers that are scheduled before the 

date of transfer, including preauthorized 

remittance transfers. First, when a 

sender schedules a one-time transfer or 

the first in a series of preauthorized 

remittance transfers five or more 

business days before the date of transfer, 

the final rule permits remittance transfer 

providers to estimate certain 

information in the pre-payment 

disclosure and the receipt provided 

when payment is made. If a provider 

gives disclosures that include estimates 

under this exception, the final rule also 

requires that the provider give the 

sender an additional receipt with 

accurate figures (unless a statutory 

exception applies), which generally 

must be provided no later than one 

business day after the date on which the 

transfer is made. 

Second, with respect to subsequent 

preauthorized remittance transfers, the 

final rule eliminates the requirement 

that a remittance transfer provider mail 

or deliver a pre-payment disclosure for 

each subsequent transfer. A receipt must 

be sent, however, a reasonable time 

prior to the transfer if certain disclosed 

information is changed from what was 

disclosed regarding the first 

preauthorized remittance transfer. This 

receipt may also contain estimates. If 

estimates are provided or no update is 

necessary, the final rule also requires a 

remittance transfer provider to give an 

accurate receipt to a sender after a 

transfer is made. 

C. Cancellation Period and Disclosures 

The final rule modifies the February 

Final Rule in several respects with 

regard to the disclosure requirements for 

remittance transfers scheduled at least 

three business days before the date of 

transfer and for preauthorized 

remittance transfers. First, the final rule 

requires a remittance transfer provider 

to disclose the date of transfer in the 

receipt provided when payment is made 

with respect to remittance transfers 

scheduled at least three business days 

before the date of the transfer and the 

initial transfer in a series of 

preauthorized transfers. The transfer 

date for a given transfer is also required 

to be disclosed on any subsequent 

receipts provided with respect to that 

transfer. The transfer date will enable a 

sender to identify the transfer to which 

the receipt pertains, and, when received 

prior to the date of the transfer, 

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50248 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

3Throughout this SUPPLEMENTARY INFORMATION, 

the Bureau is citing its authority under both EFTA 

section 904(a) and EFTA section 904(c) for purposes 

of simplicity. The Bureau notes, however, that with 

respect to some of the provisions referenced in the 

text, use of only EFTA section 904(a) is needed. 

4The consultation and economic impact analysis 

requirement previously contained in EFTA sections 

904(a)(1)–(a)(4) were not amended to apply to the 

Bureau. Nevertheless, the Bureau consulted with 

the appropriate prudential regulators and other 

Federal agencies and considered the potential 

benefits, costs, and impacts of the rule to consumers 

and covered persons as required under section 1022 

of the Dodd-Frank Act, and through these processes 

would have satisfied the requirements of these 

EFTA provisions if they had been applicable. 

generally calculate the date on which 

the right to cancel will expire. 

Second, for subsequent preauthorized 

remittance transfers, the final rule 

requires the remittance transfer provider 

to disclose the date or dates on which 

the provider will make those subsequent 

transfers in the series, with certain other 

information. The final rule provides 

providers some flexibility in how they 

may make these disclosures to senders. 

However, for subsequent preauthorized 

remittance transfers for which the date 

of transfer is four or fewer business days 

after payment is made for the transfer, 

the final rule requires disclosure of 

future dates of transfer in the receipt 

provided for the first transfer in the 

series. 

Finally, the final rule also permits 

providers to describe on a receipt both 

the three-business-day and 30-minute 

cancellation periods and either describe 

the transfers to which each deadline 

applies, or alternatively, use a checkbox 

or other method to designate which 

cancellation period is applicable to the 

transfer. The final rule does not change 

the three-business-day cancellation 

period for these transfers. 

IV. Legal Authority 

Section 1073 of the Dodd-Frank Act 

creates a new section 919 of the EFTA 

and requires remittance transfer 

providers to provide disclosures to 

senders of remittance transfers, 

pursuant to rules prescribed by the 

Bureau. In particular, providers must 

give a sender a written pre-payment 

disclosure containing specified 

information applicable to the sender’s 

remittance transfer. The remittance 

transfer provider must also provide a 

written receipt that includes the 

information provided on the prepayment disclosure, as well as 

additional specified information. EFTA 

section 919(a). 

In addition, EFTA section 919(d) 

directs the Bureau to promulgate rules 

regarding appropriate cancellation and 

refund policies. Except as described 

below, the final rule is adopted under 

the authority provided to the Bureau in 

EFTA section 919, and as more 

specifically described in this 

SUPPLEMENTARY INFORMATION. 

In addition to the statutory mandates 

set forth in the Dodd-Frank Act, EFTA 

section 904(a) authorizes the Bureau to 

prescribe regulations necessary to carry 

out the purposes of the title. The 

express purposes of the EFTA, as 

amended by the Dodd-Frank Act, are to 

establish ‘‘the rights, liabilities, and 

responsibilities of participants in 

electronic fund and remittance transfer 

systems’’ and to provide ‘‘individual 

consumer rights.’’ EFTA section 902(b). 

EFTA section 904(c) further provides 

that regulations prescribed by the 

Bureau may contain any classifications, 

differentiations, or other provisions, and 

may provide for such adjustments or 

exceptions for any class of electronic 

fund transfers or remittance transfers 

that the Bureau deems necessary or 

proper to effectuate the purposes of the 

title, to prevent circumvention or 

evasion, or to facilitate compliance. 

As described in more detail below, 

the provisions adopted in the final rule 

in part or in whole pursuant to the 

Bureau’s authority in EFTA sections 

904(a) and 904(c) 3 include 

§§ 1005.30(f)(2)(ii), 1005.32(b)(2), 

1005.36(a), 1005.36(b) and 1005.36(d).4

The provisions adopted in whole or in 

part pursuant to the Bureau’s authority 

in EFTA section 919(a)(5)(A) include 

§ 1005.31(a)(3)(iv) and (a)(5)(iv). 

V. Section-by-Section Analysis 

Section 1005.30 Remittance Transfer 

Definitions 

30(f) Definition of Remittance Transfer 

Provider 

Overview 

Section 1005.30(f) of the February 

Final Rule and the accompanying 

commentary implement the definition 

of the term ‘‘remittance transfer 

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

Section 1005.30(f) states that a 

‘‘remittance transfer provider’’ means 

any person that provides remittance 

transfers for a consumer in the normal 

course of its business, regardless of 

whether the consumer holds an account 

with such person. A remittance transfer 

provider is required to comply with 

subpart B of Regulation E relating to 

remittance transfers. 

As adopted in the February Final 

Rule, comment 30(f)–2 provides 

guidance interpreting the phrase 

‘‘normal course of business’’ as used in 

the definition of remittance transfer 

provider. Specifically, comment 30(f)–2 

to the February Final Rule states that 

whether a person provides remittance 

transfers in the normal course of 

business depends on the facts and 

circumstances, including the total 

number and frequency of remittance 

transfers sent by the provider. Comment 

30(f)–2 also sets forth illustrative 

examples. 

To provide clearer guidance on 

whether a person provides remittance 

transfers in the normal course of 

business, the Bureau proposed to add to 

comment 30(f)–2 an express safe harbor 

further interpreting the phrase ‘‘normal 

course of business.’’ The proposed safe 

harbor was based on the number of 

remittance transfers that a person 

provides. Proposed comment 30(f)–2 

stated that if a person provided no more 

than 25 remittance transfers in the 

previous calendar year, the person does 

not provide remittance transfers in the 

normal course of business for the 

current calendar year if it provides no 

more than 25 remittance transfers in 

that year. The proposed comment 

clarified, however, that if that person 

makes a 26th remittance transfer in the 

current calendar year, the person would 

be evaluated under the facts and 

circumstances test to determine whether 

the person is a remittance transfer 

provider for that transfer and any other 

transfers provided through the rest of 

the year. 

The Bureau solicited comment on the 

proposal to adopt a safe harbor 

interpreting the term ‘‘normal course of 

business.’’ The Bureau also specifically 

solicited comment on whether, if such 

a safe harbor is appropriate, the 

threshold number should be higher or 

lower than 25 remittance transfers, such 

as 10 or 50 transfers, or some other 

number. 

Commenters generally supported or 

did not oppose clarifying the meaning of 

‘‘normal course of business’’ with a safe 

harbor. Consumer group commenters 

supported the proposed threshold of 25 

transfers per year. Some industry 

commenters proposed that any safe 

harbor be based on criteria other than or 

in addition to the number of transfers 

provided per year. Furthermore, most 

industry commenters argued that if the 

Bureau adopts a safe harbor based on 

the number of remittance transfers 

provided per year, that the Bureau 

should use a threshold number that is 

higher (and in some cases significantly 

higher) than 25 transfers per year. 

Finally, some commenters suggested 

changes in how any safe harbor would 

be implemented, such as that the 

Bureau should provide time for an 

entity to come into compliance if the 

person becomes a remittance transfer 

provider once the safe harbor threshold 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50249 

is exceeded. These comments are 

discussed in more detail below. 

Regulatory Text 

Consumer group commenters 

suggested that if the Bureau adopted a 

safe harbor related to the term ‘‘normal 

course of business,’’ that the safe harbor 

be included in the text of subpart B to 

Regulation E rather than in the 

commentary to the rule in order to help 

consumers understand when the 

protections in subpart B of Regulation E 

will apply to their transactions. Upon 

further consideration, the Bureau 

believes that, for clarity, it is 

appropriate to include the safe harbor 

regarding the phrase ‘‘normal course of 

business’’ in the text of subpart B of 

Regulation E. Consequently, the Bureau 

redesignates former § 1005.30(f) as 

§ 1005.30(f)(1), and adopts 

§ 1005.30(f)(2)(i), which creates the new 

safe harbor described below. New 

§ 1005.30(f)(2)(ii) also creates a new 

transition period, described below. 

Revised comment 30(f)–2 provides 

interpretive guidance and illustrative 

examples. 

Facts and Circumstances 

Comment 30(f)–2 to the February 

Final Rule states that whether a person 

provides remittance transfers in the 

normal course of business depends on 

the facts and circumstances, including 

the total number and frequency of 

remittance transfers sent by the 

provider. The Bureau did not propose 

any modification to this guidance. 

However, one consumer group 

commenter suggested a rewording of the 

proposed safe harbor that would mean 

that any person who does not qualify for 

the safe harbor should be subject to the 

requirements of subpart B of Regulation 

E, regardless of the facts and 

circumstances. Furthermore, some 

commenters appeared to misunderstand 

the relevance of the Bureau’s guidance 

in proposed comment 30(f)–2 regarding 

persons that do not qualify for the safe 

harbor. 

Comment 30(f)–2 to the February 

Final Rule is renumbered and adopted 

with several non-substantive edits for 

clarity, and one minor modification, as 

comment 30(f)–2.i to the final rule. The 

modification is necessary because as 

discussed below, the final rule adopts a 

safe harbor similar to the safe harbor in 

proposed comment 30(f)–2, but, among 

other things, increases the threshold for 

that safe harbor from 25 to 100 

remittance transfers per calendar year. 

For conformity, the Bureau has changed 

its guidance regarding a person that 

provides remittance transfers in the 

normal course of business. Final 

comment 30(f)–2.i interprets the phrase 

‘‘normal course of business’’ to include 

a financial institution that makes 

remittance transfers generally available 

to customers and makes such transfers 

‘‘many’’ times per month. Comment 

30(f)–2 in the February Final Rule uses 

the term ‘‘multiple’’ rather than 

‘‘many.’’ The Bureau believes that the 

term ‘‘many’’ is more consistent with 

the language and approach in the safe 

harbor as adopted. 

A Safe Harbor Based on the Number of 

Remittance Transfers Provided 

Though most commenters did not 

oppose a safe harbor based on the 

number of remittance transfers 

provided, several industry commenters 

urged the Bureau to create a safe harbor 

based on other criteria. Some industry 

commenters suggested that a safe harbor 

be based on qualitative criteria, such as 

whether or not persons hold themselves 

out to be remittance transfer providers. 

Alternatively, some industry 

commenters suggested that the safe 

harbor apply to some or all financial 

institutions with less than $10 billion in 

assets, and other industry commenters 

suggested that the Bureau look to 

measures of the relative size of a 

person’s remittance transfer business, 

such as the percent of a person’s total 

transactions that are remittance 

transfers, or the percent of a person’s 

revenue or net income that is earned 

from such transfers. Some industry 

commenters suggested the Bureau 

define a safe harbor based on these 

relative size measures alone, while 

others suggested that the relative size 

measures should apply only to certain 

entities or business models, or that 

entities should qualify for the safe 

harbor if they satisfy either of two 

alternative thresholds, such as the 

number of remittance transfers provided 

and a relative size measure. For 

example, one industry commenter 

suggested a safe harbor that would 

exclude from coverage of subpart B of 

Regulation E credit unions that (a) rely 

on unrelated third parties to send 

remittance transfers, and do not provide 

remittance transfers as their primary 

business, as long as (b) such transfers 

account for 30 percent or less of the 

credit unions’ total revenues. In general, 

commenters suggesting relative size 

thresholds supported such measures 

because they would take into account 

the size of a person’s overall business, 

or because the number of remittance 

transfers that a person provides may 

vary from year to year. 

The final rule adds a safe harbor, 

which is described in new 

§ 1005.30(f)(2)(i). The safe harbor in the 

final rule reflects several modifications 

to the proposed commentary included 

in the February Proposal, as well as 

several non-substantive edits for clarity. 

Similar to the proposed comment, the 

safe harbor in § 1005.30(f)(2)(i) is based 

on a single bright line threshold, the 

number of remittance transfers a person 

provides. It states that a person is 

deemed not to be providing remittance 

transfers for a consumer in the normal 

course of its business if the person 

provided 100 or fewer remittance 

transfers in the previous calendar year 

and provides 100 or fewer remittance 

transfers in the current calendar year. 

Comment 30(f)–2.ii provides additional 

clarification. It states that a person that 

qualifies for the safe harbor in 

§ 1005.30(f)(2)(i) is not a remittance 

transfer provider, and is thus not subject 

to the requirements of subpart B of 

Regulation E. The comment also 

clarifies that for the purposes of 

determining whether a person qualifies 

for the safe harbor, the number of 

remittance transfers provided includes 

any transfers that are excluded from the 

definition of ‘‘remittance transfer’’ due 

simply to this safe harbor. In contrast, 

the number of remittance transfers 

provided in a calendar year does not 

include any transfers that are excluded 

from the definition of ‘‘remittance 

transfer’’ for reasons other than the safe 

harbor, such as the small value 

transactions and securities and 

commodities transfers that are excluded 

from the definition of ‘‘remittance 

transfer’’ by § 1005.30(e)(2). 

As stated in the February Proposal, 77 

FR 6310, 6314–15, the Bureau believes 

that a safe harbor can reduce 

compliance burden by increasing legal 

certainty in the market. Without a safe 

harbor, some persons who currently 

provide remittance transfers, or are 

contemplating doing so, may face 

uncertainty and litigation risk as to 

whether they meet the definition of 

‘‘remittance transfer provider’’ when 

they provide a small number of transfers 

in a given year. Increased legal certainty 

may encourage some such persons to 

continue providing remittance transfers, 

when they might not otherwise be 

inclined to offer such products, due to 

concerns about legal uncertainty or the 

cost of compliance with subpart B of 

Regulation E. 

However, the Bureau also recognizes 

that a safe harbor interpreting the phrase 

‘‘normal course of business’’ can limit 

the protections afforded to some 

consumers. The adoption of a numerical 

safe harbor may result in consumers not 

receiving the disclosures, error 

resolution, and other protections 

required by this rule in some instances 

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50250 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

5As one industry commenter suggested, given the 

potential for seasonal variation in the demand for 

remittance transfers, the Bureau believes that an 

annual figure is the most appropriate for the safe 

harbor threshold. 

6Regulation Z in some cases provides additional 

protections for credit secured by a dwelling and 

certain high cost mortgages. For example, with 

respect to whether a person is a creditor, a person 

regularly extends consumer credit in the current 

calendar year if it either extended consumer credit 

for transactions secured by a dwelling more than 

five times in the previous calendar year or more 

than five times in the current calendar year. In 

addition, a person regularly extends consumer 

credit if it extends consumer credit for just one 

high-cost mortgage in a 12-month period. See 12 

CFR 1026.2(a)(17). 

7The Bureau notes that it has issued a separate 

notice of request for information on whether it 

should revise these threshold numbers in 

Regulation Z. See 76 FR 75825, Dec. 5, 2011. 

8 Depository institutions and credit unions have 

traditionally offered consumers remittance transfers 

by way of wire transfers, which are generally open 

network transactions. In an open network, no single 

provider has control over, or relationships with, all 

of the participants that may collect funds in the 

United States or disburse funds abroad. A number 

of principal providers may access the system. 

National laws, individual contracts, and the rules 

of various messaging, settlement, or payment 

in which they might otherwise, because 

these consumers may be customers of 

persons who qualify for the safe harbor 

and, therefore, will have certainty that 

they are not ‘‘remittance transfer 

providers’’ for purposes of subpart B of 

Regulation E. 

Based on these considerations, the 

Bureau believes that the safe harbor 

should be derived from the phrase 

‘‘normal course of business,’’ should 

provide substantial certainty to 

potential providers, and should be 

limited in scope so as to preserve the 

benefits of the statutory protections as 

intended by Congress. The Bureau 

believes that a safe harbor will provide 

the most certainty if it is based on a 

bright-line measure that permits persons 

to identify easily whether or not they 

qualify. 

In addition, the Bureau continues to 

believe that the provision of only a 

small number of remittance transfers per 

year is a reasonable basis for identifying 

persons that do not provide remittance 

transfers in the normal course of 

business. As explained in the February 

Proposal, 77 FR 6310, 6315, the Bureau 

believes that the inclusion of the phrase 

‘‘normal course of business’’ in the 

statutory definition of ‘‘remittance 

transfer provider’’ was meant to exclude 

persons that provide remittance 

transfers on a limited basis. As a result, 

the fact that a person provides only a 

small number of remittance transfers 

can strongly indicate that the person is 

not providing such transfers in the 

normal course of its business. 

Furthermore, the number of transfers 

provided is an objective standard that is 

easy to apply and should provide 

substantial certainty to persons 

regarding whether or not they qualify 

for the safe harbor.5

The Bureau does not believe that it is 

appropriate, based on the current 

administrative record, to define a safe 

harbor based on asset size or a relative 

size measure such as percentage of 

revenue. Commenters did not provide, 

and the Bureau does not have, data 

suggesting, across the remittance 

transfer industry, why any of the 

specific asset size or relative size 

thresholds suggested by the comments 

would be an appropriate basis for 

defining normal course of business. 

Moreover, the Bureau is concerned that 

there may not be a measure of entity 

size that is currently used by all 

segments of the remittance transfer 

industry. While some providers, such as 

banks and credit unions, tend to 

measure their size in assets, in other 

segments of the remittance transfer 

market, revenues or some other aspect 

of a business may be a more widely 

used measure. 

Additionally, the Bureau believes that 

due to the wide variety of business 

models for offering remittance transfers 

and lack of currently available data, it 

would be difficult to craft a single 

standalone measure of relative size for 

identifying persons who provide 

remittance transfers on only a limited 

basis. For example, a standalone 

revenue threshold might exclude from 

the rule’s coverage both a person who 

makes few transfers, but at a high price, 

and a person who offers many more 

transfers for free or at a very low price, 

as a value-added service to its 

customers. The Bureau is concerned 

that many persons who fall into the 

latter category may, in fact, make 

remittance transfers generally available 

to customers and make many transfers 

each month. 

The Bureau also believes that a safe 

harbor based on qualitative criteria 

could require fact-intensive 

determinations, and thus, unlike a 

bright-line threshold, would provide 

little additional clarity to the market. 

For instance, a safe harbor based on 

whether a person ‘‘holds itself out’’ as 

a remittance transfer provider would 

require context-specific evaluation 

similar to the evaluation of whether a 

person provides remittance transfers in 

the normal course of business based on 

the facts and circumstances, in 

accordance with the guidance in final 

comment 30(f)–2.i. Thus, such a safe 

harbor would not accomplish the goals 

of the February Proposal. 

Size of Numerical Threshold 

In proposing comment 30(f)–2, the 

Bureau suggested 25 transfers as a 

potential threshold, noting that the 

number would be consistent with the 

general threshold for coverage under the 

Bureau’s Regulation Z, 12 CFR part 

1026, which relates to credit 

transactions. Under Regulation Z, a 

creditor is defined as an entity that 

regularly extends consumer credit under 

specified circumstances. Generally, 

under Regulation Z, a person regularly 

extends consumer credit in the current 

calendar year when it either extended 

consumer credit more than 25 times in 

the preceding calendar year or more 

than 25 times in the current calendar 

year.6 See § 1026.2(a)(17) and comment 

2(a)(17)(i)–4.7

The Bureau received a number of 

comments regarding the appropriate 

threshold on which to base any safe 

harbor regarding the definition of 

‘‘normal course of business.’’ Consumer 

group commenters supported the 

proposed threshold of 25 remittance 

transfers provided per year. In contrast, 

most industry commenters suggested a 

range of higher thresholds. For example, 

some commenters suggested thresholds 

based on annual transfer volumes 

ranging from 50 to 5,000 remittance 

transfers, or 1,000 remittance transfers 

per method of transfer. Other 

commenters suggested thresholds of 75 

remittance transfers per month, 25 

remittance transfers per day, or other 

figures. State banking regulators did not 

suggest a specific threshold, but 

maintained that the Bureau should base 

the threshold on data received regarding 

the number of remittance transfers sent 

by depository institutions with under 

$10 billion in assets. These regulators 

also suggested that the Bureau adopt a 

threshold for depository institutions 

that is higher than the threshold for 

other entities. 

Many of the commenters that 

explained why they believed a higher 

threshold was appropriate focused on 

the cost of compliance with subpart B 

of Regulation E. Both in commenting on 

the proposed ‘‘normal course of 

business’’ safe harbor, and more 

generally, depository institutions, credit 

unions, and trade associations of 

depository institutions and credit 

unions described challenges associated 

with complying with the February Final 

Rule. These industry commenters stated 

that for open network transfers in 

particular,8 the requirements to estimate 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50251 

systems may constrain certain parts of transfers sent 

through an open network system. However, any 

participant may use the network to send transfers 

to unaffiliated institutions abroad with which it has 

no contractual relationship, and over which it has 

limited authority or ability to monitor or control. 

See 77 FR 6194, 6195–97. 

9See, e.g., Bendixen & Amandi, Survey of Latin 

American Immigrants in the United States 22 (Apr. 

30, 2008), available at: http:// 

bendixenandamandi.com/wp-content/uploads/ 

2010/08/ 

IDB_2008_National_Survey_Presentation.pdf. 

or disclose third-party fees and 

exchange rates, to disclose a transfer’s 

date of availability, and to refund 

transfers in certain circumstances would 

be impossible, challenging, risky, or 

costly to implement. Based on these and 

related concerns, industry commenters 

who were focused on the concerns of 

depository institutions and credit 

unions generally argued that a threshold 

higher than 25 was necessary in order 

to relieve more persons from 

compliance, to encourage greater 

continued market participation after 

subpart B of Regulation E takes effect, or 

to promote the ability of smaller 

depository institutions to compete with 

other providers. A number of industry 

commenters stated that they expected 

that some (or many) individual 

depository institutions and credit 

unions would limit the number of 

remittance transfers provided in order to 

qualify for any safe harbor, or would 

exit the market for remittance transfers, 

in order to avoid compliance with 

subpart B of Regulation E. 

Alternatively, some industry 

commenters urged the Bureau to 

increase the size of the threshold based 

on what they described as typical 

practice among banks. For example, one 

commenter stated that a typical bank 

could reach 25 remittance transfers 

within the first few weeks of a year. It 

suggested a threshold of 300 remittance 

transfers per year because, it contended, 

that figure better represents the number 

of such transfers that a small institution 

provides, is still small enough that the 

excepted transactions would not 

generate a material source of income for 

a financial institution, and amounts to, 

on average, less than one transfer for 

every 25 accountholders for small 

banks. That commenter and other 

industry commenters stated that many 

or most depository institutions or credit 

unions are not ‘‘in the business’’ of 

providing remittance transfers, do not 

advertise the service, or generally offer 

remittance transfers only upon request. 

Several industry commenters offered 

other rationales to support thresholds 

higher than 25 remittance transfers per 

year. Some industry commenters stated 

that a threshold of 25 would not be 

useful because of the complexity of 

preparing for compliance if the 

threshold is crossed. One industry 

commenter advocated for a threshold of 

50 remittance transfers, because that 

figure would constitute approximately 

one remittance transfer per week. 

Suggesting a threshold of 75 remittance 

transfers per year, another industry 

commenter argued that Regulation Z 

was an inappropriate reference point for 

subpart B of Regulation E because 

financial institutions tend to provide far 

more fund transfers per year than they 

do loans. Another industry commenter 

contended that a threshold of 600 

remittance transfers per year was better 

to exclude institutions that provide 

remittance transfers infrequently and in 

response to specific consumer requests. 

Industry commenters also suggested 

that the Bureau commit to reevaluating 

the threshold on which the safe harbor 

is based. One industry commenter 

suggested that the Bureau revisit the 

safe harbor threshold nine months after 

the effective date of subpart B of 

Regulation E to determine whether 

further adjustment is appropriate. 

Similarly, another industry commenter 

suggested that the Bureau annually 

adjust the safe harbor threshold. 

The safe harbor described in 

§ 1005.30(f)(2)(i) of the final rule 

establishes a threshold of 100 

remittance transfers per calendar year. 

The Bureau believes that it is reasonable 

to set a higher transaction threshold for 

determining when remittance transfers 

are provided ‘‘in the normal course of 

business’’ than for determining when a 

person ‘‘regularly extends’’ consumer 

credit under Regulation Z. There are 

several reasons why remittance transfers 

are different from extensions of credit. 

A single extension of credit typically 

involves an ongoing relationship 

between a consumer and creditor that 

may extend over weeks, months, or 

years. Credit is often provided as a 

standalone financial product in its own 

right, and can generate significant pertransaction revenues over time. A 

remittance transfer, on the other hand, 

is a one-time transaction, for which the 

provider generally collects a one-time 

set of fees. Revenues per transaction are 

often relatively low; additionally, 

remittance transfers are sometimes 

provided as an adjunct to other financial 

products (such as a long-term account 

relationship). As a result, a single 

extension of credit may be more 

significant to a business than a single 

remittance transfer would be to the 

business of a person that provides such 

transfers. Furthermore, a single 

extension of credit may meet the 

demand of a consumer with ongoing 

credit needs; on the other hand, 

multiple remittance transfers may be 

needed to satisfy the annual demand of 

a consumer with ongoing transaction 

needs. Similarly, the Bureau believes 

that because it is not uncommon for 

consumers who send money abroad to 

do so 12 or more times per year,9 a 

change in the demand of just one or two 

customers might result in significant 

variance in the number of remittance 

transfers provided by a person who 

sends only a small number of transfers. 

The Bureau believes the same is less 

likely to be true of extensions of credit. 

The Bureau believes that a figure of 

100 or fewer transfers per year 

appropriately accounts for the 

differences between remittance transfers 

and extensions of credit. It is high 

enough that persons will not risk 

exceeding the safe harbor based on the 

needs of just two or three customers 

seeking monthly transfers. At the same 

time, the Bureau believes that a 

threshold of 100 is low enough to serve 

as a reasonable basis for identifying 

persons who occasionally provide 

remittance transfers, but not in the 

normal course of their business. One 

hundred transfers per year is equivalent 

to an average of approximately two 

remittance transfers per week, or the 

number of remittance transfers needed 

to satisfy the needs of a handful of 

customers sending money abroad 

monthly. 

Though industry commenters 

suggested a number of thresholds higher 

than 100 remittance transfers per year, 

the Bureau is concerned that a person 

who provides more than 100 transfers in 

a calendar year is more likely than other 

persons to be providing remittance 

transfers in the normal course of its 

business, such as by making transfers 

generally available to its customers, and 

by providing them more frequently. 

Furthermore, the Bureau does not have 

industry-wide information linking 

commenters’ suggested higher 

thresholds either to the definition of 

‘‘normal course of business,’’ or to other 

factors that commenters suggested were 

relevant, such as the cost of compliance 

with subpart B of Regulation E. 

Industry commenters provided little 

data to support their contentions that 

any particular threshold was the most 

appropriate. Two trade associations 

provided high-level summaries of 

limited surveys of member banks 

regarding the number of international 

funds transfers sent. Otherwise, the 

comments received in response to the 

February Proposal generally did not 

provide data on the overall distribution 

and frequency of remittance transfers 

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50252 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

10For transmitters licensed in California, the 

Bureau does not know whether the number of 

transactions reported for a company in California is 

the same as or less than the number of transactions 

that a company sent nationwide. Because each of 

the states’ data sets combines remittance transfers 

with domestic transfers, business-initiated transfers, 

and/or sales of certain payment instruments 

(depending on the state), the Bureau cannot be 

certain as to the number of remittance transfers 

provided by each listed entity. However, the 

Bureau’s review of entity Web sites suggests that 

many of the licensees that provide international 

money transfers to consumers focus on that line of 

business, and thus, that for many of the licensees 

that provide any remittance transfers, most of the 

reported transactions are, in fact, remittance 

transfers. 

across providers to support treating any 

particular number of transactions as 

outside the normal course of business. 

Through additional outreach, the 

Bureau obtained limited data from 

several sources regarding the number of 

remittances transfers and similar 

transactions provided by individual 

depository institutions and credit 

unions, money transmitters, and other 

small businesses that may also send 

money abroad. The Bureau hoped that 

such information might enable the 

Bureau to better evaluate the comments 

received, and reveal patterns in the 

numbers of transfers sent by different 

types of providers. 

The data received include results 

from several limited surveys of 

depository institutions and/or credit 

unions regarding the number of 

remittance transfers that they send; 

estimates of the number of consumerinitiated outbound international wire 

transfers conducted by individual banks 

and/or credit unions provided through 

one correspondent bank or a corporate 

credit union; the number of remittances 

and other transactions conducted by 

state-licensed money transmitters in 

California, New York, and Ohio; and 

estimates of the number of outbound 

international transfers provided by 

individual credit unions using a 

specialized service. The Bureau also 

discussed with an industry expert the 

characteristics of several types of small 

businesses other than depository 

institutions and credit unions that may 

send money abroad, including start-up 

enterprises and small businesses that 

send money abroad that are not 

registered or licensed as money 

transmitters. 

The Bureau does not believe that it 

can extrapolate from any of the data sets 

received to the remittance transfer 

market as a whole or any segment of it, 

due to factors including the small 

sample sizes and the Bureau’s inability 

to determine whether the institutions 

covered in any data set are 

representative of the market as a whole 

or any segment of it. Also, regarding 

some segments of the market, the 

Bureau did not receive any data. 

Furthermore, in some cases, the data 

received may overestimate or 

underestimate the number of remittance 

transfers provided. For example, the 

data sets from a correspondent bank and 

a corporate credit union may 

underestimate the number of 

transactions provided by individual 

institutions, as these data sets reflect 

only wire transfers sent through either 

that correspondent bank or corporate 

credit union, and the institutions 

covered by the data sets may use other 

such intermediary institutions, or send 

remittance transfers by means other 

than wire. By contrast, the three states’ 

transaction data both underestimate and 

overestimate the number of remittance 

transfers sent. On the one hand, one 

state provided data regarding 

transactions only from that state to 

foreign countries, rather than all 

international transfers that the statelicensed entities may have sent from the 

United States. On the other hand, all 

three states’ data mix consumerinitiated outbound international 

transactions with transactions that are 

not remittance transfers, as defined in 

subpart B of Regulation E, including 

transfers initiated by businesses, 

domestic transfers, and/or sales of 

certain payment devices or other stateregulated transactions, depending on 

the state. 

As a result of these limitations, the 

Bureau does not believe it can rely on 

the data received to describe the number 

of remittance transfers provided by 

‘‘typical’’ entities or to identify a clear 

pattern in the distribution of providers 

by the number of transfers provided. 

Nor does the data received allow the 

Bureau to distinguish meaningfully 

among a number of the more modest 

thresholds suggested by commenters, in 

terms of the challenge of compliance for 

such institutions, or other factors 

suggested by commenters. 

Nevertheless, the Bureau believes the 

data collected provide some additional 

support for a safe harbor based on a 

threshold of 100 remittance transfers per 

year. Though the data sets regarding 

state-licensed money transmitters did 

not show that any of the licensees that 

recorded some transaction volume also 

recorded 100 or fewer transactions per 

year nationally,10 each of the data sets 

regarding depository institutions and 

credit unions suggested that a 

meaningful portion of the institutions 

covered by the data set were sending 

100 or fewer remittance transfers 

annually. In other words, the threshold 

is not so low as to be meaningless. In 

the data sets for which the Bureau 

received detailed information, between 

roughly 40 percent and roughly 90 

percent of those responding to or 

covered by the data who reported any 

transactions in the most recent year also 

stated that they provided 100 or fewer 

such transactions in that year. 

As commenters suggested, the Bureau 

intends to monitor the 100-transfer 

threshold over time. The Bureau is 

working to develop better sources of 

information on the frequency of 

remittance transfers provided not only 

by depository institutions, credit 

unions, and state-licensed money 

transmitters, but also by other types of 

entities, particularly broker-dealers and 

others that may send money abroad but 

that are not state- or federally-licensed 

or chartered. The Bureau believes based 

on available information that many 

nonbank companies that send money 

abroad fewer than 100 times per year 

may be agents for remittance transfer 

providers that are required to comply 

with subpart B of Regulation E. 

However, data about the market for 

international money transfers remains 

limited, especially with regard to 

providers that are not State- or 

Federally-licensed or chartered. Thus, 

the Bureau intends to continue seeking 

better data about the business structures 

and consumer protection concerns in all 

segments of the market. 

Application of the Safe Harbor 

Commenters raised several questions 

and suggestions regarding the 

application of the safe harbor described 

in proposed comment 30(f)–2. For 

example, some industry commenters 

sought clarification that a newly formed 

entity or a new entrant to the market 

would be considered to have provided 

zero remittance transfers in the previous 

calendar year. 

New § 1005.30(f)(2)(i) does not 

generally distinguish between entities 

that provided zero remittance transfers 

in the previous calendar year and those 

that provided from one to 100. For 

entities formed during a particular 

calendar year, the Bureau recognizes 

that the number of transfers provided 

during the previous calendar year (i.e., 

none), sheds little light on those 

entities’ current or future business 

practices. However, the Bureau is 

concerned that an exception to the safe 

harbor for newly formed entities or new 

entrants would mean that none of those 

entities would be able to take advantage 

of the increased legal certainty that the 

safe harbor provides to other persons. 

Furthermore, the Bureau expects that 

any newly formed entity (or new 

entrant) that plans to offer remittance 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50253 

transfers in the normal course of its 

business will develop systems to 

comply with subpart B of Regulation E 

from the start, rather than wait until its 

101st transfer. The Bureau notes that 

newly formed entities or new entrants 

conducting 100 or fewer remittance 

transfers in their first year in operation 

likely account for a very small portion 

of the total volume of remittance 

transfers sent each year. 

Some industry commenters suggested 

that persons who exceed the safe harbor 

threshold not be required to come into 

compliance immediately with subpart B 

of Regulation E. One industry 

commenter suggested that providers be 

given six months to come into 

compliance with subpart B of 

Regulation E after exceeding any safe 

harbor threshold. Another industry 

commenter suggested that compliance 

be required only after a person exceeds 

the threshold for two consecutive years. 

In response to the comments received, 

the Bureau adopts new 

§ 1005.30(f)(2)(ii), which provides a 

transition period for any person that 

provided 100 or fewer remittance 

transfers in the previous calendar year 

but provides more than 100 remittance 

transfers in the current calendar year. 

Upon exceeding the 100-transaction 

threshold, that person would be subject 

to greater uncertainty as to whether it is 

providing remittance transfers in the 

normal course of business. Section 

1005.30(f)(2)(ii) states that if such 

person is then providing remittance 

transfers for a consumer in the normal 

course of its business, then the person 

may have a reasonable period of time, 

not to exceed six months, to begin 

complying with subpart B of Regulation 

E. Compliance with subpart B will not 

be required for any remittance transfers 

for which payment is made during that 

reasonable period of time. 

Comment 30(f)–2.iii offers further 

explanation and clarification. It states 

that if a person that provided 100 or 

fewer remittance transfers in the 

previous calendar year provides more 

than 100 such transfers in the current 

calendar year, the safe harbor described 

in § 1005.30(f)(2)(i) applies to the first 

100 remittance transfers that the person 

provides in the current calendar year. 

But similar to proposed comment 30(f)– 

2, final comment 30(f)–2.iii clarifies that 

for any additional remittance transfers 

provided in the current calendar year 

and for any remittance transfers 

provided in the subsequent calendar 

year, whether the person provides 

remittance transfers for a consumer in 

the normal course of business, and is 

thus a remittance transfer provider for 

those additional transfers, depends on 

the facts and circumstances. The 

comment further explains that for such 

a person, compliance with subpart B of 

Regulation E will be required at the end 

of the ‘‘reasonable period of time’’ 

permitted by § 1005.30(f)(2)(ii) unless, 

based on the facts and circumstances, 

such a person is not a remittance 

transfer provider. Comment 30(f)–2.iv 

provides an example with specific dates 

to illustrate application of the safe 

harbor and transition period. 

The Bureau believes it necessary and 

proper to use its EFTA section 904(a) 

and (c) authority to adopt the transition 

period described in new 

§ 1005.30(f)(2)(ii) because the transition 

period will effectuate the purposes of 

the EFTA and facilitate compliance. The 

Bureau expects that a person initiating 

compliance with subpart B of 

Regulation E may need some time to 

adjust business processes and computer 

systems and train its staff. The Bureau 

is concerned that absent a transition 

period, persons who intend to become 

remittance transfer providers may 

temporarily suspend service in order to 

change their systems, and that such 

temporary suspension could be 

disruptive to consumers, as well as to 

the providers. However, the Bureau 

believes that any transition period 

should be limited because it will permit 

some persons to provide remittance 

transfers in the normal course of 

business without providing the 

disclosure, error resolution, and other 

protections generally required by 

subpart B of Regulation E. The Bureau 

believes that six months is an adequate 

period of time for entities to come into 

compliance, particularly because the 

Bureau expects that service providers 

will emerge or evolve to permit new 

remittance transfer providers to 

accelerate compliance. The Bureau 

expects that persons who are remittance 

transfer providers will use the transition 

period permitted by § 1005.30(f)(2)(ii) to 

take all reasonable steps toward 

compliance with subpart B of 

Regulation E. 

One industry commenter stated that it 

does not have a system in place to count 

remittance transfers during the year. 

The Bureau recognizes that prior to the 

implementation of this rule, many 

persons likely had no reason to identify 

remittance transfers. In the future, the 

Bureau expects that many small 

providers will accurately track their 

remittance transfers to know whether 

they qualify for the safe harbor 

described in § 1005.30(f)(2). With regard 

to transfers provided prior to this rule’s 

effective date, the Bureau expects that 

providers who did not distinguish 

remittance transfers from other 

electronic transfers of funds sent to 

recipients in other countries can use 

reasonable means to identify what 

subset of these transfers were remittance 

transfers, based on available 

information. For example, a bank might 

conclude that every outbound 

international wire transfer initiated by a 

consumer is a remittance transfer for 

purposes of determining whether the 

safe harbor applies in the first year after 

the effective date. 

Other Comments 

Consumer group commenters 

requested that the Bureau clarify that 

transfers provided by persons that 

qualify for the ‘‘normal course of 

business’’ safe harbor are governed by 

Article 4A of the Uniform Commercial 

Code (UCC). Article 4A applies to 

international funds transfers, but 

generally provides that it does not apply 

to a funds transfer any part of which is 

governed by the EFTA. In the February 

Final Rule, 77 FR 6194, 6212, the 

Bureau recognized that one 

consequence of covering remittance 

transfers under the EFTA could be legal 

uncertainty under the UCC for certain 

remittance transfer providers. The 

Bureau stated its belief that the best 

mechanisms for resolving that 

uncertainty rests with the states that 

have adopted the UCC, with the 

purveyors of rules applicable to specific 

wire systems, which can bind direct 

participants in the system, and with 

participants in wire transfers who can 

incorporate UCC Article 4A into their 

contracts. Similarly, the Bureau does 

not believe that the requested 

clarification is proper, as the Bureau 

does not implement or administer 

Article 4A. Furthermore, the Bureau 

believes that subpart B of Regulation E 

already makes clear what transactions it 

governs. 

Consumer group commenters also 

suggested that the Bureau require that 

either just insured institutions or all 

persons that qualify for the safe harbor 

described in § 1005.30(f)(2)(i) disclose to 

consumers that consumer protections 

applicable to remittance transfers 

provided by remittance transfer 

providers will not apply to transactions 

provided by those persons. The Bureau 

does not believe it is appropriate to 

impose such a requirement without 

seeking notice and comment on it. 

Furthermore, such a requirement would 

be in tension with EFTA Section 919, 

which subpart B implements, and 

which does not impose any express 

obligation on persons that are not 

remittance transfer providers. 

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50254 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

Section 1005.31 Disclosures 

Overview 

In the February Proposal, the Bureau 

solicited comment on issues relating to 

disclosure of the cancellation 

requirements in § 1005.36(c) for 

remittance transfers scheduled by the 

sender at least three business days 

before the date of the transfer. To 

address these issues, the Bureau is 

amending the disclosure requirements 

in §§ 1005.31(a)(3), (a)(5), and (b)(2) to 

improve consumers’ ability to determine 

the cancellation deadlines for particular 

transfers. In addition, the Bureau is 

amending § 1005.31(b)(3), regarding 

combined disclosures, to allow 

providers to give a confirmation that the 

transfer has been scheduled in lieu of 

the proof of payment required for 

transfers scheduled before payment is 

processed for the transfer. These 

amendments are discussed in detail in 

their respective sections below. 

Disclosure of Deadline To Cancel 

Transfers Scheduled Before the Date of 

Transfer 

As discussed in more detail below 

regarding § 1005.36(c), the February 

Final Rule adopts a cancellation policy 

for remittance transfers. Under 

§ 1005.34(a) of the February Final Rule, 

a sender generally has 30 minutes after 

payment is made to cancel a remittance 

transfer. The February Final Rule, 

however, contains special cancellation 

procedures for any remittance transfer 

that is scheduled at least three business 

days before the date of the transfer, 

including a series of preauthorized 

remittance transfers. For these transfers, 

the provider is required to cancel the 

remittance transfer if it receives a 

request to cancel from the sender at 

least three business days before the date 

of the transfer. 

The February Proposal solicited 

comment on possible changes to the 

cancellation requirements for remittance 

transfers that are scheduled at least 

three business days before the date of 

the transfer, including preauthorized 

remittance transfers. Specifically, the 

February Proposal solicited comment on 

whether the three-business-day period 

for cancelling such remittance transfers 

adopted in the February Final Rule is 

appropriate, or whether the rule should 

require a deadline to cancel these 

transfer that is more or less than three 

business days. The February Proposal 

also solicited comment on three issues 

related to the disclosure of the deadline 

to cancel as set forth in the February 

Final Rule. The first issue was whether 

the three-business-day deadline to 

cancel transfers scheduled before the 

date of the transfer should be disclosed 

differently to senders, such as by 

requiring a remittance transfer provider 

to disclose in the receipt the specific 

date on which the right to cancel will 

expire. The second issue was whether a 

provider should be allowed to describe 

both the three-business-day and 30- 

minute cancellation provisions on a 

single receipt and either describe the 

transfers to which each cancellation 

period is applicable, or alternatively, 

use a checkbox or other method to 

designate which cancellation period is 

applicable to the transfer to which the 

receipt relates. The third issue was 

whether the cancellation requirements 

should be disclosed in the pre-payment 

disclosure, rather than in the receipt, for 

each subsequent preauthorized 

remittance transfer. 

The approaches taken in the final rule 

for the three-business-day cancellation 

period and the disclosures required to 

be provided in connection with 

subsequent remittance transfers within a 

series of preauthorized remittance 

transfers are described in greater detail 

below in the discussion regarding 

§ 1005.36(c) and (d). Consistent with 

these provisions, the Bureau is also 

revising § 1005.31 to add new 

paragraphs (a)(3)(iv), (a)(5)(iv), and 

(b)(2)(vii), and associated commentary, 

regarding the content and format of the 

disclosures that must be provided to 

senders of transfers scheduled at least 

three business days before the date of 

the transfer and of certain preauthorized 

remittance transfers. 

Taken together, the final rule requires 

remittance transfer providers to disclose 

the date of transfer, and in certain 

instances, the future date or dates of 

transfer and related information in 

receipts that may be provided at the 

time payment is made or after the date 

of transfer. For any remittance transfer 

scheduled at least three business days 

before the date of the transfer, the 

receipt provided when payment is made 

must disclose the date of transfer for 

that transfer. Where a consumer 

schedules a series of preauthorized 

remittance transfers, the receipt 

provided for the first transfer must also 

provide the date of transfer for that first 

transfer. In each case, if a second receipt 

is required after the date of transfer, that 

receipt must also disclose the date the 

transfer was made. The final rule also 

addresses, among other things, a 

requirement to disclose future dates of 

transfer for subsequent preauthorized 

transfers. In addition to the information 

described above, the receipt provided 

for the initial transfer in a series of 

preauthorized remittance transfers must 

also disclose the future date or dates of 

transfer for any subsequent 

preauthorized remittance transfer in that 

series for which the date of transfer is 

scheduled four or fewer business days 

after the date on which payment for the 

initial transfer is made. For other 

subsequent preauthorized transfers, the 

rule provides flexibility as to whether 

the information regarding transfer dates 

and cancellation requirements for 

subsequent transfers is included in one 

or more receipts or standalone 

disclosures, so long as it is provided 

sufficiently in advance to allow the 

consumer to exercise his or her 

cancellation rights. 

Finally, as is the case with one-time 

transfers scheduled at least three 

business days before the date of the 

transfer, the final rule also requires that 

receipts for subsequent preauthorized 

remittance transfers include the date of 

transfer for the transfer that is the 

subject of the receipt and, if the 

provider chooses, the future dates of 

transfer for the next scheduled 

subsequent transfer or transfers. 

31(a) General Form of Disclosures 

31(a)(3)(iv) 

As discussed below, the Bureau adds 

new § 1005.31(b)(2)(vii) to require that 

in certain circumstances, a receipt for a 

remittance transfer include the date of 

the transfer for that specific transfer in 

order to provide consumers with a 

clearer explanation of their cancellation 

rights. Further, the Bureau adds new 

§ 1005.36(d) to require that in certain 

instances, such receipts disclose the 

dates of upcoming transfers and related 

information. The Bureau is making 

corresponding changes to the disclosure 

requirements for transfers conducted 

entirely by telephone to require oral 

disclosure of transfer date information 

in certain circumstances. As stated in 

the February Final Rule, the Bureau 

believes that for oral telephone 

transactions, senders should be 

informed of their cancellation rights 

before the cancellation period has 

passed. 77 FR 6194, 6217. Because a 

receipt would generally be mailed to a 

sender for telephone transactions as 

permitted by § 1005.31(e)(2), the sender 

may not receive the cancellation 

disclosure included in that receipt until 

after the standard 30-minute 

cancellation period had passed unless 

the Bureau required the disclosure to be 

made orally before the 30-minute 

cancellation period expires. 

Consequently, § 1005.31(a)(3)(iii), as 

adopted in the February Final Rule, 

requires oral disclosure of cancellation 

rights when the sender requests the 

remittance transfer and prior to payment 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50255 

11Regarding the Bureau’s inquiry about 

disclosure of the provider’s business days, the 

Bureau did not receive comment on this issue 

specifically, although one industry commenter 

stated that providers should not be required to 

disclose the specific deadline to cancel or other 

additional items that are not required to be 

disclosed by the February Final Rule. 

for the transfer, if the provider takes 

advantage of the option to provide prepayment disclosures orally for 

transactions conducted entirely by 

telephone. 

For similar reasons, among others, the 

Bureau believes that for a remittance 

transfer scheduled at least three 

business days before the date of the 

transfer, and for any preauthorized 

remittance transfer scheduled to occur 

four or fewer business days after the 

date payment is made for the transfer, 

an oral pre-payment disclosure 

regarding cancellation rights should be 

accompanied by an oral disclosure 

regarding the date of that transfer. 

Although the time period for 

cancellation of transfers scheduled in 

advance may be calculated in days 

rather than minutes, the period may still 

expire before the consumer receives any 

written material, particularly if the 

consumer is scheduling the transfer 

three or four days in advance. For 

preauthorized remittance transfers, 

several transfers in the series may be 

sent before a written receipt is received. 

Accordingly, pursuant to its authority 

under EFTA section 919(a)(5)(A), the 

Bureau is amending § 1005.31(a)(3) to 

add § 1005.31(a)(3)(iv) as a further 

condition for the provision of oral 

disclosures for remittance transfers 

conducted entirely by telephone. This 

provision permits oral disclosures if 

(among other requirements) the provider 

discloses orally, to the extent 

applicable, (A) the information required 

by § 1005.31(b)(2)(vii) and (B) the 

information required by 

§ 1005.36(d)(1)(i)(A) with respect to 

transfers subject to § 1005.36(d)(2)(ii), 

pursuant to the timing requirements in 

§ 1005.31(e)(1). 

31(a)(5)(iv) 

As discussed in the section-by-section 

analysis to the February Final Rule, 

since remittance transfers sent via 

mobile application or text message on a 

telephone are conducted entirely by 

telephone, EFTA section 919(a)(5)(A) 

permits the Bureau to allow oral prepayment disclosures in connection with 

transfers sent via mobile application or 

text message if the transfer is conducted 

entirely by telephone. 77 FR 6194, 6217. 

Because oral disclosures are not 

retainable, the Bureau further observed 

that for such transactions, senders 

would not be less protected, and might 

be better informed, by receiving prepayment disclosures via mobile 

application or a text message even 

though these disclosures may also not 

be retainable. Id. Accordingly, to 

effectuate the purposes of the EFTA and 

facilitate compliance, the Bureau used 

its authority under EFTA sections 904(a) 

and (c) to include in the February Final 

Rule § 1005.31(a)(5), which states that 

the pre-payment disclosure may be 

provided orally or via mobile 

application or text message if: (i) The 

transaction is conducted entirely by 

telephone via mobile application or text 

message; (ii) the remittance transfer 

provider complies with the foreign 

language requirements of 

§ 1005.31(g)(2); and (iii) the provider 

discloses orally or via mobile 

application or text message a statement 

about the rights of the sender regarding 

cancellation required by 

§ 1005.31(b)(2)(iv) pursuant to the 

timing requirements in § 1005.31(e)(1). 

Pursuant to the same authority, and 

for the same reasons as those discussed 

above regarding with § 1005.31(a)(3)(iv), 

the Bureau adopts new 

§ 1005.31(a)(5)(iv), which adds as an 

additional condition for the provision of 

the pre-payment disclosures orally or 

via mobile application or text message 

a requirement that the provider disclose, 

to the extent applicable, (A) the 

information required by 

§ 1005.31(b)(2)(vii) and (B) the 

information required by 

§ 1005.36(d)(1)(i)(A) with respect to 

transfers subject to § 1005.36(d)(2)(ii), 

pursuant to the timing requirements in 

§ 1005.31(e)(1). 

31(b)(2) Receipt 

31(b)(2)(vii) Date of Transfer 

The February Final Rule requires the 

receipt provided to a sender to include 

an abbreviated statement about the 

sender’s cancellation rights. 

§ 1005.31(b)(2)(iv). In the February 

Proposal, the Bureau noted that senders 

may have difficulty determining the 

specific date on which the right to 

cancel expires for a particular transfer. 

77 FR 6310, 6321. Accordingly, the 

Bureau sought comment on whether, as 

applicable, the three-business-day 

deadline to cancel transfers should be 

disclosed differently to consumers, such 

as by requiring a remittance transfer 

provider to disclose in the receipt the 

specific date on which the right to 

cancel will expire or to state its business 

days in receipts provided to senders. 

The Bureau also solicited comment on 

alternative means of disclosing the 

deadline for cancelling transfers 

scheduled at least three business days 

before the date of the transfer. 

The Bureau received a number of 

comments on the cancellation 

disclosure from various industry 

members and one consumer group. Most 

comments focused on whether 

providers should be required to include 

the specific cancellation deadline in the 

receipts provided to senders. 

Commenters did not address any of the 

other questions raised on this issue in 

the February Proposal nor did they 

suggest alternatives.11

With respect to disclosure of the 

specific cancellation date, the majority 

of industry commenters opposed such a 

requirement. Some industry 

commenters asserted that requiring 

disclosure of the specific cancellation 

deadline for a particular transaction 

would make it more difficult and 

expensive to produce receipts by adding 

a new element specific to each transfer. 

One industry commenter stated that 

requiring a remittance transfer provider 

to specify the exact date for cancellation 

would create significant technical 

challenges because at that point, the 

disclosure becomes dynamic, rather 

than static. This commenter stated that 

producing such a dynamic disclosure 

may require updating based on the time 

of day of the transfer request and the 

provider’s processing deadline, whereas 

a static disclosure without such a 

requirement can be reliably produced at 

any time of day. Further, the commenter 

stated that a sender uncertain of the 

cancellation deadline will contact a 

remittance transfer provider directly for 

clarification and then cancel the 

transaction in the course of the same 

contact. 

In contrast, the consumer group 

commenter argued that the period for 

cancellation rights should be disclosed 

as a specific date. One industry 

commenter did not oppose requiring 

remittance transfer providers to disclose 

the specific cancellation date for each 

transaction, but argued that providers 

should be allowed to disclose a cut-off 

time for exercising the cancellation right 

because the lack of clarity regarding the 

time of day the cancellation period 

expires could result in a transfer being 

delayed until the next business day. 

Pursuant to the Bureau’s authority 

under EFTA section 919(d)(3), the 

February Final Rule is revised to add a 

new § 1005.31(b)(2)(vii), which requires 

that a receipt for any remittance transfer 

scheduled by the sender at least three 

business days before the date of the 

transfer, or the first transfer in a series 

of preauthorized remittance transfers, 

disclose the date the remittance transfer 

provider will make or made the 

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50256 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

remittance transfer, using the term 

‘‘Transfer Date,’’ or a substantially 

similar term. 

The Bureau is also adopting 

commentary to provide further guidance 

on the application of 

§ 1005.31(b)(2)(vii). As explained in 

more detail below in the discussion of 

§ 1005.36, for certain transactions, a 

receipt meeting the requirements of 

§ 1005.31(b)(2), including the transfer 

date required under § 1005.31(b)(2)(vii), 

may need to be provided at different 

times. For example, for the first in a 

series of preauthorized remittance 

transfers, an initial receipt will need to 

be provided at the time payment is 

made for the transfer; and then in some 

cases, a receipt will need to be provided 

shortly after that particular transfer has 

been made. Thus, comment 31(b)(2)–4 

clarifies that, where applicable, 

§ 1005.31(b)(2)(vii) requires disclosure 

of the date of transfer for the remittance 

transfer that is the subject of a receipt 

required by § 1005.31(b)(2), including a 

receipt that is provided in accordance 

with the timing requirements in 

§ 1005.36(a). 

Comment 31(b)(2)–4 further clarifies 

that, for any subsequent preauthorized 

remittance transfer subject to 

§ 1005.36(d)(2)(ii), the future date of 

transfer and related information must be 

provided on any receipt provided for 

the initial transfer in that series of 

preauthorized remittance transfers, or 

where permitted, or disclosed as 

permitted by § 1005.31(a)(3) and (a)(5), 

in accordance with § 1005.36(a)(1)(i). 

Comment 31(b)(2)–5 provides an 

example of how disclosure of the dates 

of transfer required by 

§ 1005.31(b)(2)(vii) and § 1005.36(d)(1) 

should be provided in receipts required 

by § 1005.31(b)(2) pursuant to the 

timing requirements in § 1005.36(a)(1)(i) 

or (a)(1)(ii). Comment 31(b)(2)–5 also 

explains that if the provider discloses 

on either receipt the cancellation period 

applicable to and dates of subsequent 

preauthorized remittance transfers in 

accordance with 1005.36(d)(2)(i), the 

disclosure must be phrased and 

formatted in such a way that it is clear 

to the sender which cancellation period 

is applicable each date of transfer on the 

receipt. 

Upon further review and analysis, the 

Bureau concludes that because the 

cancellation requirements in 

§ 1005.36(c) are based on and calculated 

from the date of transfer, the actual 

transfer date is the most logical piece of 

information to require since the 

remittance transfer provider is already 

required to obtain this information in 

order to comply with § 1005.36(c), 

although it is not required to be 

disclosed to the sender under the 

February Final Rule. 

Further, the Bureau also believes that 

requiring a remittance transfer provider 

to disclose the date of a remittance 

transfer, along with a disclosure that the 

sender’s cancellation rights will expire 

three business days before the date of 

the transfer, provides a reasonable 

balance between consumer and industry 

interests. This approach significantly 

improves the information provided to 

senders because, under the February 

Final Rule, a provider is generally only 

required to disclose the cancellation 

policy, with a statement such as ‘‘you 

can cancel for a full refund no later than 

three business days prior to the 

scheduled date of the transfer.’’ 77 FR 

6310, 6321. This required disclosure, 

however, does not elaborate on what 

constitutes the date of transfer or how 

the sender may determine the 

cancellation deadline from the date of 

transfer. Without a clear starting point 

from which to count the three-businessday deadline, the Bureau believes 

senders may be confused about the 

dates by which they are required to 

cancel transfers, which may make 

cancellation disclosures less effective. 

In situations such as when transferred 

funds will be drawn from an account at 

a later date rather than paid up front, 

the transfer date may also help the 

sender understand when the funds for 

the transfer must be available for the 

provider to conduct the transfer. The 

transfer date may also help senders 

differentiate and keep track of 

completed transfers, especially where 

the sender receives a number of receipts 

in the mail or on an account statement 

in close proximity to one another. 

The Bureau also believes that 

requiring disclosure of the date of 

transfer is the most technically feasible 

solution relative to the alternatives 

raised in the February Proposal. The 

dates of transfer should be readily 

available to remittance transfer 

providers since they are likely primarily 

responsible for executing remittance 

transfer requests, and as part of their 

business processes should already know 

when they must execute transfers to 

satisfy the terms of their contracts with 

senders (if the contracts are based on the 

date of the transfer) or to meet any 

delivery deadlines (if those deadlines 

are the bases of the contracts). The 

Bureau also believes that disclosure of 

the date of transfer is an added benefit 

for senders who may choose to schedule 

a transaction based on when the funds 

must be available. Finally, the Bureau 

notes that the requirement to disclose 

the date of transfer is consistent with 

the existing requirement for certain 

preauthorized electronic fund transfers. 

In particular, § 1005.10(d)(1) (in subpart 

A of Regulation E) requires an electronic 

fund transfer provider to send the 

consumer the date of transfer (and other 

information) at least ten days before the 

scheduled date of the transfer when a 

preauthorized electronic fund transfer 

from the consumer’s account will vary 

in amount from the previous transfer 

under the same authorization. 

Consequently, certain remittance 

transfer providers that also provide 

preauthorized electronic fund transfers 

may already have the capability to 

produce disclosures with the date of 

transfer. 

Moreover, the Bureau believes that 

keeping disclosure forms short, simple, 

and succinct is helpful to senders. As 

noted in the February Final Rule, 

participants in consumer testing 

understood and responded positively to 

concise, abbreviated disclosures. 77 FR 

6194, 6228. Of the options considered, 

the Bureau believes that disclosure of 

only the date of transfer best 

accomplishes this goal because that date 

may be provided independently of other 

information. While disclosure of the 

specific dates of cancellation deadlines 

would inform senders of the actual 

dates on which their rights to cancel 

expire, the Bureau believes that 

consumers would still benefit from 

disclosure of the date of transfer. The 

Bureau is concerned that requiring 

providers to include multiple dates on 

receipts may be more confusing to 

senders and possibly dilute the 

usefulness of the disclosures regarding 

cancellation rights. 

Likewise, the Bureau is concerned 

that requiring providers to state their 

business days on receipts may result in 

a longer, more unwieldy form. The 

Bureau believes that providers will 

generally make available to the public 

upon request the days that constitute 

‘‘business days’’ under subpart B of 

Regulation E, and that, therefore, 

senders can obtain this information as 

necessary. Absent further data regarding 

the usefulness of this information, the 

Bureau does not believe that it is 

appropriate at this time to make the 

forms significantly longer and more 

complicated to include information that 

is likely to be used by only a small 

subset of consumers who may contact 

their remittance transfer providers in 

any event to effectuate the cancellation. 

Accordingly, the Bureau believes that 

requiring the date of transfer and 

cancellation rights in receipts strikes the 

appropriate balance between providing 

senders with information about their 

transfers and minimizing the burden to 

providers. However, the Bureau will 

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continue to gather data on consumers’ 

exercise of cancellation rights, the 

effectiveness of related disclosures, and 

programming burdens on providers over 

time and, if warranted, will reexamine 

this issue at a later date to determine if 

a better solution exists. 

The Bureau has further determined 

that it is appropriate to require 

disclosure of the date of transfer at the 

time payment is made, but also in 

subsequent receipts required to be 

provided with respect to a given transfer 

in accordance with § 1005.36(a)(1)(ii) or 

§ 1005.36(a)(2)(ii). The Bureau believes 

that a single consistent rule will be 

simpler as a matter of programming for 

providers and will frequently provide 

additional benefits to consumers in light 

of the fact that the final rule eliminates 

the requirement to provide the prepayment disclosure and receipt in 

advance of the transfer for subsequent 

preauthorized transfers in a series. (See 

discussion below regarding 

§ 1005.36(a).) 

In particular, although stating the date 

of transfer in a post-transfer receipt will 

not facilitate senders’ understanding of 

cancellation deadlines that have already 

passed, the Bureau believes the 

information will frequently be useful to 

senders in other ways. For example, as 

noted above, if a sender schedules a 

number of standalone transfers before 

the date of transfer, or a series of 

closely-spaced preauthorized remittance 

transfers, senders may receive a number 

of receipts in close proximity to each 

other and may use the date of transfer 

to identify and track which transfer has 

occurred. Having the date of transfer on 

receipts with respect to each transfer 

would likewise be helpful in situations 

where the receipt is provided with a 

periodic statement on which there are 

several transactions. 

In addition, because senders may not 

receive additional disclosures prior to 

the subsequent preauthorized transfer in 

a series, the receipt provided after the 

transfer is completed in accordance 

with § 1005.36(a)(2)(ii) will contain 

information regarding cancellation 

rights (as well as the exchange rate, fees 

and taxes) that could help inform the 

sender about the upcoming subsequent 

remittance transfer. Furthermore, as 

most preauthorized remittance transfers 

are likely to be scheduled some time in 

advance, senders will generally receive 

receipts after the transfer is completed. 

This receipt would provide 

confirmation that the transfer occurred 

as scheduled. Finally, where remittance 

transfer providers choose to satisfy their 

obligations under § 1005.36(d)(1) by 

disclosing the future transfer dates for 

preauthorized transfers on a receipt 

relating to a prior transaction, providing 

the date of transfer for the prior 

transaction will help differentiate to 

which transfer the disclosures in the 

receipt apply. 

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

Deadline in Same Receipt 

Under § 1005.31(b)(2)(iv) of the 

February Final Rule, notice of the 

period to cancel a remittance transfer 

must be disclosed in the receipt 

provided pursuant to § 1005.31(b)(2). 

For any transfer scheduled at least three 

business days before the date of the 

transfer, the receipt provided by the 

remittance transfer provider to the 

sender may describe only the 

cancellation rights and three-businessday deadline set forth in § 1005.36(c). 

For all other remittance transfers, the 

provider is required to describe the 

cancellation rights and 30-minute 

cancellation period set forth in 

§ 1005.34(a). In the February Proposal, 

the Bureau solicited comment on 

whether remittance transfer providers 

that offer both types of transfers should 

be given flexibility to include the two 

different cancellation periods permitted 

by this rule on the same receipt with 

some statement or method such as a 

checkbox to designate which 

cancellation period applies to a given 

transaction. 

The Bureau received only a few 

comments on this issue. Of those 

received, two industry commenters 

urged the Bureau to permit providers 

flexibility in disclosing the cancellation 

requirement. One industry commenter 

argued that allowing providers to 

include both cancellation period 

options on the same receipt would 

enable providers to rely on one standard 

receipt form, which, compared to the 

alternative, may result in lower costs for 

providers (and, presumably, lower 

prices for senders). The other industry 

commenter stated that it supported any 

disclosure modification that would 

allow smaller providers to generate and 

deliver one disclosure and that the 

proposed option would eliminate the 

need to produce multiple disclosures to 

reflect the different cancellation 

periods. A consumer group commenter, 

however, stated that, to ensure that 

senders receive accurate and precise 

information to avoid potential 

confusion, only the cancellation 

provision that corresponds to the type of 

remittance transfer requested should be 

disclosed. 

After consideration of these 

comments, the Bureau is adding new 

comment 31(b)(2)–6 to clarify that 

providers that offer remittance transfers 

scheduled at least three business days 

before the date of the transfer, as well 

as remittance transfers scheduled fewer 

than three business days before the date 

of the transfer, may meet the 

cancellation disclosure requirements in 

§ 1005.31(b)(2)(iv) by describing the 

three-business-day and 30-minute 

cancellation periods on the same 

disclosure and using a checkbox or 

other method to clearly designate the 

applicable cancellation period. In other 

words, remittance transfer providers 

that provide both transfers scheduled at 

least three business days before the date 

of the transfer and transfers scheduled 

closer to the date of the transfer may 

disclose the cancellation period 

applicable to a particular transfer in one 

of two ways: (i) describe in the receipt 

either the 30-minute cancellation period 

or the three-business-day cancellation 

period, as applicable to the particular 

transaction; or (ii) provide a description 

of both the 30-minute and threebusiness-day cancellation periods along 

with a clear indication of which 

cancellation period applies to the 

sender’s transaction. With respect to the 

latter option, the comment does not 

mandate a particular method for 

identifying the applicable time period 

for cancellation. The comment, 

however, clarifies that the provider may 

use a number of ways to indicate which 

cancellation period applies to the 

transaction including, but not limited 

to, a statement to that effect, use of a 

checkbox, highlighting, circling, and the 

like. Finally, comment 31(b)(2)–6 states 

that for transfers scheduled three or 

more business days before the date of 

transfer, the cancellation disclosures 

provided pursuant to § 1005.31(b)(2)(iv) 

should be phrased and formatted in 

such a way that it is clear to the sender 

which cancellation period is applicable 

to the date of transfer disclosed on the 

receipt. 

The Bureau believes senders are 

unlikely to be confused by having a 

description of both cancellation 

deadlines in the same disclosure. To the 

contrary, including a description of both 

the 30-minute and three-business-day 

cancellation period with a checkbox or 

other method that clearly designates the 

cancellation time period applicable to 

the sender’s transaction may improve 

senders’ understanding of the 

cancellation provisions generally. 

Moreover, the ability for remittance 

transfer providers to use pre-printed 

receipt forms that describe both 

cancellation options with some method 

to identify the applicable cancellation 

time period may reduce the need to 

create multiple standard receipts, 

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potentially reducing costs for some 

providers. The Bureau also notes that 

nothing in the final rule prohibits a 

provider from including only the 

applicable cancellation policy on a 

receipt. 

31(b)(3) Combined Disclosure 

The Bureau is revising the 

requirements in the February Final Rule 

for combined disclosures that 

remittance transfer providers may 

choose to give to senders. Under 

§ 1005.31(b)(3) in the February Final 

Rule, a remittance transfer provider may 

combine the pre-payment disclosure 

required by § 1005.31(b)(1) and the 

receipt required by § 1005.31(b)(2) into 

a single, combined disclosure, if such a 

disclosure is provided pursuant to the 

timing requirements applicable to prepayment disclosures. See 

§ 1005.31(e)(1). Section 1005.31(b)(3) 

provides that if the provider chooses to 

provide a combined disclosure, the 

provider must also provide the sender a 

proof of payment for the transfer when 

payment is made for the remittance 

transfer. As described in the February 

Final Rule, the Bureau issued 

§ 1005.31(b)(3) pursuant to its authority 

under EFTA sections 919(a)(5)(C), and 

904(a) and (c). 

Pursuant to the same authority, the 

Bureau is revising § 1005.31(b)(3) to 

allow a remittance transfer provider to 

provide a confirmation of scheduling in 

lieu of the proof of payment with 

combined disclosures for transfers 

scheduled before the date of transfer in 

order to facilitate compliance and 

enhance consumer protection. The 

Bureau is redesignating § 1005.31(b)(3) 

from the February Final Rule as 

§ 1005.31(b)(3)(i) and is adopting a new 

§ 1005.31(b)(3)(ii). Section 

1005.31(b)(3)(ii) states that if the 

disclosure described in 

§ 1005.31(b)(3)(i) is provided in 

accordance with § 1005.36(a)(1)(i) 

(which concerns one-time transfers 

scheduled five or more business days 

before the date of transfer or the first in 

a series of preauthorized remittance 

transfers) and payment is not processed 

by the remittance transfer provider at 

the time the remittance transfer is 

scheduled, a remittance transfer 

provider may provide confirmation that 

the transaction has been scheduled in 

lieu of the proof of payment otherwise 

required by § 1005.31(b)(3)(i). The 

confirmation of scheduling must be 

clear and conspicuous, provided in 

writing or electronically, and provided 

in a retainable form. 

Although the February Proposal did 

not propose changes to § 1005.31(b)(3), 

it sought comment generally on the form 

of disclosures for transfers scheduled 

before the date of transfer. 77 FR 6310, 

6317. The Bureau believes that 

adjustments are necessary to 

§ 1005.31(b)(3) because while comment 

31(e)–2 in the final rule states that 

payment is made for purposes of 

subpart B of Regulation E when 

payment is authorized, this does not 

necessarily mean that providing ‘‘proof 

of payment’’ at the time of authorization 

will make sense for either the provider 

or the sender for a one-time remittance 

transfer that is scheduled before the date 

of transfer or the first in a series of 

preauthorized remittance transfers when 

payment may not be processed until 

closer to the date of such transfer. 

For many remittance transfers, 

senders tender payment for immediate 

processing once they authorize the 

remittance transfer provider to complete 

the transfer (e.g., by paying cash or by 

providing a payment device). In those 

situations, the Bureau does not believe 

there would be any downside for the 

sender or the remittance transfer 

provider if the provider provided proof 

of payment at the time that payment is 

made, i.e., authorized. These situations 

are distinct from the case in which a 

sender arranges with the provider to 

have funds deducted from the sender’s 

account with the provider or to process 

a payment with a payment device at 

some later time, closer to the date of a 

transfer. In such an instance, the Bureau 

is concerned that providing a sender 

with ‘‘proof of payment’’ could confuse 

the sender. Furthermore, the Bureau is 

concerned that providers may not wish 

to provide ‘‘proof of payment’’ in such 

instances. 

New comment 31(b)(3)–2 provides 

additional guidance regarding the 

confirmation of scheduling. This 

comment explains that, as discussed in 

comment 31(e)–2, payment is 

considered to be made when payment is 

authorized for purposes of various 

timing requirements in subpart B, 

including with regard to the timing 

requirement for provision of the proof of 

payment described in § 1005.31(b)(3)(i). 

However, where a transfer (whether a 

one-time remittance transfer or the first 

in a series of preauthorized remittance 

transfers) is scheduled before the date of 

transfer and the provider does not 

intend to process payment until at or 

near the date of transfer, the provider 

may provide a confirmation of 

scheduling in lieu of the proof of 

payment required by § 1005.31(b)(3)(i). 

No further proof of payment is required 

when payment is later processed. 

Section 1005.32 Estimates 

32(b)(1) Permanent Exception for 

Transfers to Certain Countries 

In the February Proposal, the Bureau 

proposed renumbering § 1005.32(b) to 

§ 1005.32(b)(1) to allow for the proposed 

exception for the disclosure of estimates 

for transfers scheduled before the date 

of transfer (i.e., proposed 

§ 1005.32(b)(2)). The February Proposal 

also proposed conforming changes to 

provisions that reference this exception. 

No comments were received on this 

renumbering. As discussed below, the 

Bureau is adopting a new exception for 

estimates and thus is adopting as 

proposed conforming revisions to 

§ 1005.32(b)(1) and is renumbering the 

official interpretations thereto. See 

comments 32(b)(1)–1 through –7. 

32(b)(2) Permanent Exception for 

Transfers Scheduled Before the Date of 

Transfer 

In the February Proposal, the Bureau 

proposed to use its EFTA section 904(a) 

and (c) authority to add a new 

exception, in proposed § 1005.32(b)(2), 

that would provide additional flexibility 

for remittance transfer providers to 

disclose estimates in pre-payment 

disclosures and receipts for one-time 

transfers or the first in a series of 

preauthorized remittance transfers 

scheduled to occur more than ten days 

after the transfer is authorized. 

In the February Proposal, the Bureau 

noted that the market for remittance 

transfers scheduled in advance of the 

date of transfer, including preauthorized 

remittance transfers, is still in its 

nascent stages. The Bureau also noted 

its concern that requiring a remittance 

transfer provider to set exchange rates 

before the date of transfer might cause 

a provider that is already permitting 

consumers to schedule remittance 

transfers in advance of the date of 

transfer to stop offering a potentially 

useful product to consumers rather than 

bear or manage the increased exchange 

rate risk that might be associated with 

such a product. While remittance 

transfer providers (or their business 

partners) may be able to develop tools 

to manage such risk, the Bureau stated 

that it was concerned that providers 

might not do so, or that they would pass 

on any new risk management costs to 

consumers. Based on these concerns, 

the Bureau sought comment on whether 

providers should be permitted to 

disclose estimates of exchange rates, 

and related figures, in two 

circumstances: (i) A sender schedules a 

one-time transfer or the first in a series 

of preauthorized remittance transfers to 

occur more than ten days after the 

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12A futures contract for foreign currency is a 

contract between two parties to purchase a 

specified amount of foreign currency at a date in the 

future for a price agreed upon at the time of 

contracting. Such contracts would allow a provider 

to ‘‘lock-in’’ a rate in order for it to give customers 

an accurate rate when scheduling the transfer. 

transfer is authorized; or (ii) a sender 

enters into an agreement for 

preauthorized remittance transfers 

where the amount of the transfers can 

vary and the provider does not know the 

exact amount of the first transfer at the 

time the disclosures for that transfer are 

given. The Bureau received comments 

about the use of estimates generally and 

conducted additional outreach to better 

understand some of the issues raised by 

commenters. 

The Bureau is adopting new 

§ 1005.32(b)(2), which permits 

disclosures to contain estimates in 

certain cases for remittance transfers 

scheduled before the date of transfer. 

The new provision allows for certain 

estimates for all remittance transfers 

scheduled five or more business days 

before the date of transfer, rather than 

only for one-time transfers or the first in 

a series of preauthorized remittance 

transfers scheduled more than ten 

business days before the date of the 

transfer (as was proposed). The 

allowance for estimates in disclosures 

for subsequent preauthorized remittance 

transfers will have limited application, 

insofar as the Bureau is eliminating the 

requirement that pre-payment 

disclosures be sent prior to subsequent 

preauthorized remittance transfers and 

is only requiring pre-transfer receipts for 

such transfers when certain previously 

disclosed figures change. However, to 

the extent that a remittance transfer 

provider must send a pre-transfer 

receipt, the final rule permits the 

provider to disclose estimates in 

accordance with § 1005.32(b)(2). See 

§ 1005.36(a)(2)(i) (discussing pretransfer disclosure requirements for 

subsequent preauthorized remittance 

transfers). In addition, the new 

exception permitting estimates is 

expanded from the February Proposal to 

allow estimates in certain cases when 

the provider agrees to a sender’s request 

to fix the amount to be transferred in the 

currency in which the remittance 

transfer will be received and not the 

currency in which it is funded. The new 

provisions and comments received are 

discussed in more detail below. 

Provision of Estimates for Transfers 

Scheduled Before the Date of Transfer 

Industry commenters generally 

supported the first option for estimates 

suggested by the February Proposal: an 

exception from the general rule 

requiring accurate disclosures 

(§ 1005.31(f)) that would permit 

remittance transfer providers to disclose 

estimates of the amount of currency to 

be received, as well as other information 

such as exchange rates, for certain 

remittance transfers scheduled before 

the date of transfer. Although the 

February Proposal only sought comment 

regarding disclosure of estimates in onetime transfers and the first in a series of 

preauthorized remittance transfers 

scheduled more than ten business days 

before the date of transfer, most 

commenters addressed the use of 

estimates for all transfers scheduled 

before the date of transfer (i.e., one-time 

transfers scheduled before the date of 

transfer, the first in a series of 

preauthorized remittance transfers, and 

subsequent preauthorized remittance 

transfers). 

Industry commenters stated that 

absent an exception allowing for the 

disclosure of estimates, remittance 

transfer providers would face 

difficulties adjusting their risk 

management systems to provide 

accurate exchange rates before the date 

of transfer, particularly when providers 

are required to allow senders to cancel 

remittance transfers up to three business 

days before the scheduled date of 

transfer. See § 1005.36(c). Commenters 

also favored the disclosure of estimates 

due to the potential legal consequences 

associated with creating risk 

management strategies required in order 

to provide accurate (rather than 

estimated) disclosures far before a 

scheduled remittance transfer. 

First, multiple industry commenters 

argued that if remittance transfer 

providers were required to give accurate 

disclosures of the exchange rates that 

would apply to remittance transfers 

scheduled before the date of transfer, 

any providers offering such transfers 

would likely need to change their 

current methods of managing foreign 

exchange risk. One commenter stated 

that remittance transfer providers often 

assume the risk from fluctuations in the 

wholesale rates at which they buy 

foreign currency during the course of a 

day, by setting one retail exchange rate 

to apply to remittance transfers (or other 

transactions) conducted throughout that 

day. However, industry commenters 

stated that setting retail exchange rates 

farther before the date of transfer would 

cause a remittance transfer provider to 

incur more exchange rate risk due to the 

extended time period during which 

wholesale foreign currency markets 

might fluctuate. Commenters contended 

that in order to disclose the exchange 

rate that would apply to a remittance 

transfer far before the date of such 

transfer, a provider would either have to 

(1) bear the risk of the wholesale 

exchange rate changing before the date 

of transfer or (2) use some method to 

purchase currency before the date of 

transfer and bear the risk of the sender 

cancelling the transfer, leaving the 

provider (or its business partner) with 

unneeded currency. 

During outreach conversations, the 

Bureau spoke to industry participants to 

learn more about how remittance 

transfer providers can or do manage 

foreign exchange risk. In these 

conversations, foreign currency 

providers and other market participants 

stated that if they were required to 

disclose accurate exchange rates several 

days in advance of the date of transfer, 

remittance transfer providers (or their 

business partners) might have to 

develop new procedures to manage 

fluctuations in the wholesale foreign 

exchange rates, i.e., the rates at which 

remittance transfer providers (or their 

business partners) generally buy foreign 

currency. 

Second, several industry commenters 

stated that remittance transfer providers 

would face difficulties implementing 

any of the methods that would allow 

them to manage the risk associated with 

disclosing exchange rates before the 

date of a transfer, and that these 

methods could result in increased prices 

for senders. Industry commenters 

indicated, and participants in outreach 

conducted by the Bureau further 

explained, that the primary method for 

remittance transfer providers (or their 

business partners) to manage any 

additional risk created due to the 

disclosure of actual exchange rates for 

remittance transfers scheduled before 

the date of transfer would likely be 

through employing foreign exchange 

futures or forward contracts, through 

which a buyer commits to buying a 

specified amount of foreign currency, at 

a specified foreign exchange rate, at a 

later date.12 Industry commenters stated 

that a remittance transfer provider could 

itself, or through a third party, purchase 

a futures or a forward contract for the 

amount of the remittance transfer, and/ 

or sell such a contract to the sender. 

One industry commenter explained, 

however, that such methods can be 

risky if foreign currency markets 

fluctuate and if a sender cancels a 

remittance transfer after the provider 

secures the currency needed for the 

transfer. In such a case, a remittance 

transfer provider (or its business 

partner) may experience a loss due to 

changes in the foreign exchange 

markets. 

Third, industry commenters stated 

that setting exchange rates before the 

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date of transfer could implicate other 

laws and regulations. For example, one 

trade association commenter expressed 

concern that for some types of entities, 

simply setting an exchange rate before 

the date of transfer might be considered 

a forward contract, and that therefore 

these entities might become subject to 

U.S. Commodity Futures Trading 

Commission regulations that contain 

registration, capital, reporting, and 

recordkeeping requirements. Separately, 

in an outreach conversation, one bank 

expressed concern that restrictions on 

depository institutions’ investments 

created by the Dodd-Frank Act may 

similarly limit depository institutions’ 

ability to purchase the necessary 

contracts needed to manage the risk 

associated with setting far in advance 

the exchange rates that will apply to 

remittance transfers. Finally, one credit 

union commenter expressed concern 

that Federal credit union regulations 

might restrict credit unions’ ability to 

manage foreign currency risk. 

Fourth, apart from regulatory 

concerns, some industry commenters 

and participants in outreach suggested 

that requiring accurate disclosures of 

exchange rates far before the date of 

transfer would significantly increase 

costs. Several commenters stated that 

any additional efforts to provide exact 

exchange rates in advance would result 

in increased prices charged to senders 

(though none estimated by how much). 

These commenters indicated that costs 

could be so high that senders would not 

choose these products. 

Fifth, an industry commenter 

expressed concern that any requirement 

to disclose an accurate exchange rate 

before the date of a remittance transfer 

would pose a significant risk to 

remittance transfer providers if senders 

decide to take advantage of the threebusiness-day cancellation period to seek 

better exchange rates. The requirements 

in the February Final Rule in 

§§ 1005.31(b)(1)(iv), 1005.33(a)(1)(iii), 

and 1005.36(b) that remittance transfer 

providers disclose the exchange rate 

that applies to a remittance transfer in 

pre-payment disclosures and receipts 

and that the provider must make 

available to the designated recipient the 

amount of currency stated in the 

disclosure means, in effect, that a 

remittance transfer provider must 

commit to a specific exchange rate at the 

time the sender authorizes the transfer, 

even if disclosed days or weeks before 

the date of the transfer. As a result, the 

commenter stated some senders might 

use the three-day cancellation period 

applicable to transfers scheduled before 

the date of transfer strategically in order 

to seek better exchange rates. Thus, if 

prior to expiration of the cancellation 

period, the remittance transfer provider 

offered an exchange rate that was more 

favorable to the sender than the 

exchange rate set for the transfer, the 

commenter felt that a sender might 

decide to cancel the remittance transfer 

and immediately rebook it at the more 

favorable exchange rate available that 

day. Conversely, if the provider offered 

an exchange rate that was less favorable 

than the earlier rate, the sender would 

benefit from having locked in a better 

rate that the remittance transfer provider 

was contractually bound to apply to the 

transfer. The commenter stated that this 

phenomenon would increase providers’ 

exchange rate risk and the cost of 

managing such risk. Some industry 

commenters indicated that, at least in 

some instances, providers would refuse 

to offer consumers the ability to 

schedule remittance transfers before the 

date of transfer if the Bureau required 

providers to disclose, before the 

cancellation deadline passes, the 

exchange rate that will apply to any 

such remittance transfer. 

Consumer group commenters agreed 

that the use of estimates in disclosures 

may be appropriate for initial transfers 

in series of preauthorized remittance 

transfers, but stated that, if remittance 

transfer providers were allowed to use 

estimates in disclosures for such 

transfers, senders should be informed 

they would not receive actual notice of 

the price of the transfer or of the amount 

to be received by the designated 

recipient during the periods when the 

senders can cancel the transfers. Some 

of these commenters also stated that if 

remittance transfer providers were 

permitted to use estimates for transfers 

scheduled before the date of transfer, 

then providers should also be required 

to ensure that senders eventually 

receive disclosures that state the actual 

exchange rates that will apply to the 

remittance transfers prior to the 

expiration of the cancellation periods 

for those transfers, or the providers 

should be required to commit to the 

method they will use to set the 

exchange rate on the date of transfer. 

Finally, an individual commenter and 

several industry commenters stated that 

disallowing estimates would 

disproportionately harm smaller 

remittance transfer providers. The 

individual commenter suggested that 

small providers would not have the 

scale or expertise to manage exchange 

rate risk in a manner necessary to 

comply with any requirement that 

providers disclose accurate exchange 

rates before the date of transfer. 

Relatedly, industry commenters stated 

that not allowing estimates for 

disclosures provided prior to the date of 

a remittance transfer would 

disproportionately affect small 

providers relative to large providers. 

Similarly, several industry commenters 

urged the Bureau to allow estimates 

because without estimates they would 

not be able to manage risk and thus 

would have no reliable way of providing 

accurate disclosures before the date of 

transfer of the exchange rate and related 

figures. If the February Final Rule 

remained unchanged, these providers 

stated they would not permit consumers 

to schedule transfers before the date of 

transfer. 

Based on comments received and the 

Bureau’s outreach and further analysis, 

and in order to effectuate the purposes 

of the EFTA and facilitate compliance, 

the Bureau believes it necessary and 

proper to use its EFTA section 904(a) 

and (c) authority to adopt proposed 

§ 1005.32(b)(2) with the changes 

discussed in more detail below 

concerning (i) when estimates will be 

allowed under this provision and (ii) 

situations where the amount to be 

transferred may vary. 

The Bureau continues to believe that 

the market for remittance transfers 

scheduled significantly before of the 

date of transfer, including preauthorized 

remittance transfers, is currently 

limited. Nevertheless, the Bureau 

believes that if it did not adopt this 

provision to allow estimates, the subset 

of remittance transfers providers that 

currently offer senders the ability to 

schedule remittance transfers before the 

date of transfer—or are considering 

doing so—may limit such offerings 

because the providers (or their business 

partners) would not want to absorb or 

manage the risk associated with fixing 

the exchange rates that would apply to 

transfers far in advance of the date of 

transfer. As described above, many 

retail exchange rates are set through 

reference to wholesale currency markets 

in which rates can fluctuate frequently. 

As a result, whenever there are time lags 

between when the retail rate applied to 

a transfer is set, when the relevant 

foreign currency is purchased, and 

when funds are delivered, a remittance 

transfer provider (and/or its business 

partner) may face losses due to 

unexpected changes in the value of the 

relevant foreign currency. Generally, 

this risk may increase the more time 

that elapses between these events. 

The Bureau is concerned that in many 

cases, remittance transfer providers (or 

their business partners) will find it more 

difficult or costly to manage the risks 

related to disclosing accurate exchange 

rates before the date of transfer and that 

such risks may be exacerbated because 

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the final rule allows senders to cancel 

transfers up to three business days 

before the date of transfer. The Bureau 

is also concerned that, because 

remittance transfers scheduled before 

the date of transfer are a relatively small 

portion of the remittance transfer 

market, providers may decide not to 

develop necessary risk management 

tools and may not offer transfers 

scheduled before the date of transfer. 

The Bureau further believes that for 

such transactions, allowing estimates 

may be beneficial to senders in many 

instances even though senders may 

receive less information before the date 

of transfer than they would under the 

February Final Rule. If senders received 

exchange rates set long before the dates 

of remittance transfers, in some cases, 

senders would receive a more favorable 

exchange rate than they would 

otherwise, while other senders would 

receive less favorable rates, depending 

on the fluctuation of the exchange rate 

between the date of disclosure and the 

date of transfer. However, allowing 

estimates may result in lower costs for 

remittance transfer providers (and thus 

lower prices for all senders of transfers 

scheduled before the date of transfer), as 

well as wider access for senders to the 

convenience of one-time transfers 

scheduled before the date of transfer 

and preauthorized remittance transfers. 

Furthermore, while under 

§ 1005.32(b)(2) senders will not always 

receive disclosures of a fixed exchange 

rate and amount of currency to be 

received, the Bureau believes that even 

estimates of these amounts will still 

permit consumers to learn some 

information that could assist in 

comparing remittance transfer 

providers’ price models. As is discussed 

below (see § 1005.32(d)) estimates 

provided pursuant to § 1005.32(b)(2) 

must be based on the exchange rate or, 

where applicable, the estimated 

exchange rate based on an estimation 

methodology permitted under 

§ 1005.32(c) that the provider would 

have used or did use that day in 

providing disclosures to a sender 

requesting such a remittance transfer to 

be made on the same day. 

Time Period for Estimates for Transfers 

Scheduled Before the Date of Transfer 

Proposed § 1005.32(b)(2)(i) stated that 

estimates could be provided for certain 

items required in the pre-payment 

disclosure, receipt, or combined 

disclosure if a remittance transfer was 

requested or authorized by the sender 

more than ten days before the date of 

transfer. The Bureau sought comment 

on whether ten days is an appropriate 

period after which estimates should no 

longer be permitted or whether the 

period should be longer or shorter. 

The Bureau received a number of 

comments on the appropriate period for 

use of estimates in disclosures provided 

for all remittance transfers scheduled 

before the date of transfer (rather than 

just one-time transfers scheduled before 

the date of transfer and first in a series 

of preauthorized remittance transfers as 

covered by the February Proposal). 

Industry commenters supported 

estimates in disclosures for all 

remittance transfers scheduled more 

than ten days before the date of transfer, 

but many also urged the Bureau to allow 

estimates for remittance transfers 

scheduled ten or less days before for 

many of the reasons discussed above— 

namely the risk management and other 

challenges that they believed that 

remittance transfer providers would face 

if they were required to disclose 

exchange rates far in advance of 

remittance transfers. These commenters 

urged a shorter period within which 

they would not be permitted to provide 

estimated disclosures. Commenters also 

expressed concern that providers would 

refuse to offer consumers the ability to 

schedule transfers ten or fewer days 

before the date of transfer because 

providers would not want to disclose 

exact exchange rates between one and 

ten days before the date of transfer. 

Industry commenters suggested a 

range of alternatives less than ten days. 

One industry commenter proposed 

allowing estimates for all transfers 

scheduled more than one day before the 

date of transfer because it was unable to 

manage the risks associated with 

providing accurate exchange rates more 

than one day in advance. Other industry 

commenters provided similar rationales 

for proposed periods of less than two 

days, two or three days, five days, and 

seven days. One trade group commenter 

urged the Bureau to allow estimates for 

all remittance transfers scheduled two 

or more days before the date of transfer 

and to require only a two-day 

cancellation period because a shorter 

cancellation period would still allow 

senders to cancel transfers and would 

exacerbate providers’ foreign currency 

risks. 

Consumer group commenters favored 

the ten-day rule expressed in the 

February Proposal. One of these 

commenters explained that although it 

understood the difficulty of disclosing 

the actual exchange rate before the date 

of transfer, its research showed that 

consumers are better informed when 

they receive accurate and precise 

disclosures, and thus this commenter 

preferred to expand the period during 

which estimates would not permitted. 

The Bureau is adopting a revised 

§ 1005.32(b)(2)(i), which permits 

remittance transfer providers to estimate 

exchange rates and, in some instances 

fees and taxes, for all remittance 

transfers scheduled five or more 

business days before the date of transfer, 

rather than for one-time transfers or the 

first in a series of preauthorized 

remittance transfers scheduled more 

than ten days before the date of transfer 

as proposed. As is explained above 

regarding the use of estimates generally, 

compared to the proposal permitting 

estimates in some cases more than ten 

days before the date of transfer, the 

Bureau believes this provision will 

allow providers increased flexibility to 

continue to offer transfers scheduled 

five or more business days before the 

date of transfer while still requiring 

accurate disclosures for transfers 

scheduled less than five days before the 

date of transfer (except when estimates 

are permitted by § 1005.32(a) or (b)(1)). 

The Bureau recognizes that for 

transfers scheduled three or four 

business days before the date of transfer, 

providers will have to disclose an 

accurate exchange rate (rather than an 

estimate) while maintaining the sender’s 

right to cancel the transfer. See 

§ 1005.36(c). The Bureau believes, 

however, that as compared to transfers 

scheduled five or more business days 

before the date of transfer, risk 

management needs are reduced for 

transfers scheduled less than five 

business days before the date of transfer. 

The Bureau believes that providers 

should not be permitted to use provide 

estimates, other than as permitted under 

§ 1005.32(a) and (b)(1), for transfers 

scheduled less than five business days 

before the date of transfer. Because risk 

is generally more manageable closer to 

the date of transfer, the Bureau believes 

consumers should receive accurate 

disclosures during that period. To the 

extent that any remittance transfer 

providers that currently offer, or plan to 

offer, remittance transfers scheduled in 

advance may be inclined to limit 

senders’ ability to schedule transfers 

three or four business days before the 

date of transfer (because they are 

unwilling or unable to provide an 

accurate exchange rate while 

cancellation remains possible), the 

Bureau believes there is a limited loss 

of convenience to consumers as 

compared to a scenario where estimates 

are disallowed for a longer period. The 

Bureau presumes that any consumer has 

the option of a same-day transfer with 

a remittance transfer provider who does 

not offer two, three, or four days 

advance scheduling. 

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50262 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

13Section 1005.10(d)(1) states: ‘‘Notice. When a 

preauthorized electronic fund transfer from the 

consumer’s account will vary in amount from the 

previous transfer under the same authorization or 

from the preauthorized amount, the designated 

payee or the financial institution shall send the 

consumer written notice of the amount and date of 

the transfer at least 10 days before the scheduled 

date of the transfer.’’ 

14For the same reasons, the Bureau is not 

adopting the proposed change to comment 32(c)(1)– 

1, concerning potential transmittal routes or 

proposed comment 32(b)(2)–1 concerned fees 

Thus, in the final rule, 

§ 1005.32(b)(2)(i) provides that estimates 

may be provided in certain cases for the 

amounts to be disclosed under 

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

remittance transfer is scheduled by a 

sender five or more business days before 

the date of transfer. 

The Bureau proposed revisions to 

comment 32–1 to explained when the 

proposed § 1005.32(b)(2) exception 

would apply. The Bureau is revising 

proposed comment 32–1 to clarify that 

§ 1005.32(b)(2) permits estimates to be 

used for certain information if the 

remittance transfer is scheduled by a 

sender five or more business days before 

the date of the transfer, for disclosures 

described in § 1005.36(a)(1)(i) and 

(a)(2)(i). Section 1005.36(a)(1)(i) and 

(a)(2)(i) concern pre-payment 

disclosures and receipts for one-time 

transfers scheduled five or more 

business days before the date of transfer 

and preauthorized remittance transfers 

and are discussed in detail below. 

Estimates of the Amount To Be 

Transferred 

The Bureau also sought comment on 

whether remittance transfer providers 

should be allowed flexibility to estimate 

certain information in disclosures for 

the first scheduled transfer in a series of 

preauthorized remittance transfers 

where the exact amount of the transfer 

can vary. The few commenters on this 

issue suggested that the need to estimate 

the amount to be transferred could 

occur in two scenarios. For example, an 

industry commenter suggested that 

senders may want to transfer a variable 

amount (such as a paycheck or 

government benefits payment in an 

amount that varies), or may want to 

prearrange the delivery of a fixed 

amount of one currency from an account 

denominated in another currency, e.g., 

U.S. dollars (which would result in the 

transfer amount depending on the 

exchange rate). The Bureau believes it 

unnecessary to adjust the rule expressly 

to address the first potential scenario. 

No industry commenter stated that it 

currently allows customers to schedule 

transfers of a variable amount, and the 

Bureau is not aware of business models 

permitting such remittance transfers. 

Under the final rule, § 1005.36(a)(2)(i) 

requires a receipt to be provided a 

reasonable time prior to a subsequent 

preauthorized transfer if the amount to 

be transferred changes from the first 

transfer in series a of preauthorized 

remittance transfers. 

As to the latter scenario, outreach 

confirmed that the marketplace 

currently permits some consumers to 

schedule series of recurring remittance 

transfers in which the transfer amount 

is fixed in a currency other than that in 

which the transfer is funded. To address 

this latter scenario, the Bureau believes 

it necessary and proper to effectuate the 

purposes of the EFTA and to facilitate 

compliance to exercise its EFTA section 

904(a) and (c) authority to adopt an 

additional revision to § 1005.32(b)(2). 

Specifically, the final rule states in 

§ 1005.32(b)(2)(i) that if, at the time the 

sender schedules a transfer, the 

remittance transfer provider agrees to a 

sender’s request to fix the amount to be 

transferred in the currency in which the 

remittance transfer will be received and 

not the currency in which it is funded, 

estimates may also be provided for the 

amounts to be disclosed under 

§ 1005.31(b)(1)(i) through (iii), except as 

provided in § 1005.32(b)(2)(iii) (i.e., in 

certain cases the provider can disclose 

estimates of the fees and taxes imposed 

on the transaction and the total amount 

of the transaction, as well as the amount 

that will be transferred in the currency 

in which the remittance transfer is 

funded). 

New comment 32(b)(2)–1 provides an 

example regarding the exception for 

remittance transfers scheduled before 

the date of transfer in which the amount 

to be transferred is fixed in a currency 

other than that in which the transfer is 

funded. 

New comment 32(b)(2)–2 clarifies the 

interaction between the final rule and 

§ 1005.10(d) of subpart A of Regulation 

E.13 It states that to the extent 

§ 1005.10(d) requires, for an electronic 

fund transfer that is also a remittance 

transfer, notice when a preauthorized 

electronic fund transfer from the 

consumer’s account will vary in amount 

from the previous transfer under the 

same authorization or from the 

preauthorized amount, that provision 

applies even if subpart B would not 

otherwise require notice before the date 

of transfer. However, insofar as 

§ 1005.10(d) does not specify the form of 

such notice, a notice sent pursuant to 

§ 1005.36(a)(2)(i) will satisfy 

§ 1005.10(d) as long as the timing 

requirements of § 1005.10(d) are 

satisfied. 

Relatedly, the Bureau solicited 

comment as to whether a remittance 

transfer provider should be permitted to 

estimate the date in the foreign country 

on which the funds will be available, if 

the amount of the transfers under the 

preauthorized remittance transfer 

arrangement varies from one transfer to 

the next, and the remittance transfer 

provider does not know the exact date 

on which the remittance transfer must 

be sent at the time that disclosures are 

given for the first transfer. 77 FR 6310, 

6318 (suggesting that this situation 

could arise, for example, if remittance 

transfers are being used to pay bills with 

due dates that are not known in 

advance). No comments were received 

on this issue. The Bureau is not 

adopting any changes to the February 

Final Rule regarding estimates of the 

date on which funds will be available. 

32(b)(2)(ii) and (b)(2)(iii) 

To accommodate the allowance for 

estimates of exchange rates in certain 

disclosures for remittance transfers 

scheduled five or more business days 

before the date of transfer, several 

additional provisions are included in 

§ 1005.32(b)(2) regarding other 

information disclosed in pre-payment 

disclosures and receipts. 

Proposed § 1005.32(b)(2)(ii) permitted 

a remittance transfer provider to 

estimate taxes imposed on the 

remittance transfer by a person other 

than the provider for transfers 

scheduled more than ten days before the 

date of transfer only if those taxes were 

a percentage of the amount transferred 

to the designated recipient and are to be 

disclosed in the currency in which the 

funds will be received. Proposed 

§ 1005.32(b)(2)(iii)(A) similarly 

permitted a remittance transfer provider 

to estimate fees imposed on the 

remittance transfer by a person other 

than the provider for transfers 

scheduled more than ten days before the 

date of transfer only if those fees were 

a percentage of the amount transferred 

to the designated recipient and are to be 

disclosed in the currency in which the 

funds will be received. Unlike proposed 

§ 1005.32(b)(2)(ii), proposed 

§ 1005.32(b)(2)(iii) contained an 

additional provision— 

§ 1005.32(b)(2)(iii)(B)—that, in effect, 

reasserted the temporary exception (in 

§ 1005.32(a)) for ‘‘insured institutions’’ 

to estimate fees. Because § 1005.32(a) 

remains unchanged in the final rule and 

continues to apply regardless of the 

application of § 1005.32(b)(2), the 

Bureau believes it unnecessary to 

include a provision incorporating that 

exception.14

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50263 

imposed on the remittance transfer provider by a 

person other than the remittance transfer provider. 

The Bureau received no comments regarding 

comment 32(b)(2)–1. Nevertheless, the Bureau is 

not adopting the proposed comment because it is 

duplicative. See § 1005.32(a) and (b)(2)(ii). The final 

rule continues, in effect, to allow estimates for the 

fees described in § 1005.31(b)(1)(vi) in two 

circumstances: (i) Where the fees are calculated as 

a percentage of the amount transferred to the 

designated recipient pursuant to § 1005.32(b)(2)(ii); 

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

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

the temporary exception in § 1005.32(a). 

15 In the February Proposal, the Bureau did 

propose conforming changes to comment 32(c)(3)– 

1 that referenced the renumbered provisions 

relating to the permanent exception for transfers to 

certain countries (what is § 1005.32(b)(1) in the 

final rule). The Bureau received no comments on 

the proposed changes to this comment, and the 

Bureau is adopting it as proposed. 

As a result, there is no longer a need 

for separate provisions for estimation of 

the fees and taxes in the disclosure 

required under § 1005.31(b)(1)(vi). In 

place of proposed § 1005.32(b)(2)(ii) and 

(b)(2)(iii)(A), as well as proposed 

comment 32(b)(2)–7, the Bureau adopts 

§ 1005.32(b)(2)(ii), which provides that 

fees and taxes described in 

§ 1005.31(b)(1)(vi) may be estimated 

under § 1005.32(b)(2)(i) only if the 

exchange rate is also estimated under 

§ 1005.32(b)(2)(i) and the estimated 

exchange rate affects the amount of fees 

and taxes under § 1005.31(b)(1)(vi). The 

revised provision expands the ability to 

estimate fees and taxes to cover not just 

situations in which the tax or fee is a 

percentage of the amount of the funds 

transferred, but also to cover situations 

in which a tax or fee may otherwise vary 

depending on the exchange rate (i.e. a 

tax is only charged on transfers that 

exceed a certain threshold denominated 

in the currency in which the funds will 

be received, and that amount depends 

on the exchange rate). 

The final rule also includes 

§ 1005.32(b)(2)(iii). This provision 

allows remittance transfer providers to 

estimate fees and taxes in certain 

disclosures provided for remittance 

transfers scheduled five or more 

business days before the date of transfer, 

when a remittance transfer provider 

agrees to a sender’s request to fix the 

amount to be transferred in the currency 

in which the remittance transfer will be 

received and not the currency in which 

it is funded. But § 1005.32(b)(2)(iii) 

explains that fees and taxes described in 

§ 1005.31(b)(1)(ii) may be estimated 

under § 1005.32(b)(2)(i) only if the 

amount that will be transferred in the 

currency in which it is funded is also 

estimated under § 1005.32(b)(2)(i), and 

the estimated amount affects the amount 

of such fees and taxes. 

Disclosure of Formulas Used To 

Calculate the Exchange Rate 

In the February Proposal, the Bureau 

sought comment on whether, in lieu of 

providing an estimate of the exchange 

rate for a remittance transfer scheduled 

before the date of transfer, the Bureau 

should allow providers to disclose a 

formula that will be used to calculate 

the exchange rate that will apply to such 

a transfer, and that is based on 

information that is publicly available 

prior to the time of transfer. The sender 

could then use that formula to calculate 

the exchange rate that will apply to the 

transfer. 

Several industry and consumer group 

commenters supported the use of such 

a formula although they disagreed on 

whether its use should be optional. One 

industry commenter stated that the 

disclosure of a formula could eliminate 

the need for remittance transfer 

providers to manage exchange rate risk 

and would reduce the burden on 

providers as compared to a rule that 

required providers to disclose actual 

exchange rates for transfers scheduled 

before the date of transfer. Another 

industry commenter favored disclosure 

of formulas rather than estimates for 

remittance transfers scheduled before 

the date of transfer because the volatility 

of currency markets makes disclosure of 

estimates of limited utility to senders 

trying to gauge the pricing of a 

particular provider’s services. Other 

industry commenters stated that either a 

formula or use of estimates could reduce 

compliance burden on providers. One 

consumer group favored the use of 

formulas whenever the Bureau would 

also permit estimates on disclosures 

provided more than ten days before the 

date of transfer because formulas may 

make comparison shopping easier for 

consumers. 

In contrast, one industry commenter 

preferred disclosure of estimates to 

formulas because, the commenter stated, 

for remittance transfers scheduled 

before the date of transfer, it would be 

easier to provide an estimate of an 

exchange rate to senders and such an 

estimate would be easier for a sender to 

understand. 

The Bureau believes that, in some 

cases, compared to either an estimated 

or an actual exchange rate, a welldesigned formula could better serve 

consumers and potentially reduce 

burden on remittance transfer providers. 

The Bureau believes that, given the 

nature of foreign currency markets, in 

many cases, any estimate of the 

exchange rate for a remittance transfer 

scheduled days or weeks in the future 

may not provide a highly precise 

indication to the sender of the exchange 

rate that would actually be applied to 

the sender’s transfer. By contrast, a 

formula that will be used to calculate 

the exchange rate applicable to a 

transfer could provide more certainty to 

a sender as to relative prices or the 

pricing mechanism used and allow the 

sender to calculate the actual exchange 

rate that will apply to a transfer, before 

the date of the transfer. In addition, 

disclosing a formula would reduce the 

need for a remittance transfer provider 

to manage the currency risk associated 

with providing an accurate exchange 

rate for a transfer scheduled before the 

date of transfer. 

Nevertheless, the Bureau does not 

believe it is appropriate to allow for the 

use of formulas in disclosures at this 

time. First, the Bureau is concerned that 

the disclosure of formulas themselves 

could be confusing to senders if not 

designed in a way that consumers can 

understand. Second, if a formula was 

not required to be disclosed by all 

remittance transfer providers, the 

Bureau is concerned that consumer 

confusion could be a problem if some 

providers disclose formulas while 

others disclose estimates. However, the 

Bureau expects to continue evaluating 

how disclosures can most effectively 

inform senders without imposing undue 

burden on remittance transfer providers. 

32(c) and (d) Bases for Estimates 

The February Proposal sought 

comment on the appropriate method to 

calculate estimates of exchange rates, 

and related figures, under the proposed 

exception for remittance transfers 

scheduled before the date of transfer. 

However, the Bureau did not propose 

specific changes to § 1005.32(c), which 

concerns the allowable bases for 

estimates of required disclosures.15 The 

Bureau received a few comments on this 

issue but none that suggested revisions 

to § 1005.32(c). However, in order to 

allow remittance transfer providers to 

give estimates for transfers scheduled 

five or more business days before the 

date of transfer and to make those 

estimates more useful for consumers, 

the Bureau believes revisions to the 

allowable bases for such estimates are 

necessary for disclosures that contain 

estimates pursuant to § 1005.32(b)(2). 

These changes are adopted in a new 

§ 1005.32(d). 

The February Final Rule contains, in 

§ 1005.32(c)(1), three specific 

approaches by which a remittance 

transfer provider may estimate an 

exchange rate when using the 

exceptions for estimates in § 1005.32(a) 

and (b) (now renumbered as (b)(1)). 

Section 1005.32(c) further allows a 

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50264 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

16Section 1005.32(c)(1) contains three 

methodologies for providing estimates. If a provider 

chooses to use a non-listed method, § 1005.32(c) 

explains that the amount received by the designated 

recipient must be the same, or greater then, the 

estimated amount disclosed to the sender. 

provider to use an estimation approach 

not listed in § 1005.32(c)(1) so long as 

the designated recipient receives the 

same, or greater, amount of funds than 

the remittance transfer provider 

disclosed, as required by 

§ 1005.31(b)(1)(vii). Under, the February 

Proposal, the bases for determining 

estimates under proposed 

§ 1005.32(b)(2) would have been the 

same as the bases for determining 

estimates under the existing provisions 

permitting estimates in the February 

Final Rule (i.e., § 1005.32(c)). 

In commenting on proposed 

§ 1005.32(b)(2), industry commenters 

noted that if allowed, the most likely 

way that they would ‘‘estimate’’ the 

future exchange rate would be by 

providing the actual rate available on 

the day of scheduling to customers 

sending same-day transfers. One 

commenter explained that while they 

could always disclose the actual rate 

available on the date the transfer is 

scheduled, the commenter cautioned 

that many variables could alter 

exchange rates over time. Furthermore, 

industry commenters stated that they 

believed that senders typically do little 

comparison shopping when scheduling 

transfers before the date of transfer and 

instead are more interested in reliable 

and timely transfers from a remittance 

transfer provider that the senders trust. 

To clarify the proper bases for 

disclosing estimates, the Bureau adds 

§ 1005.32(d), which states that estimates 

provided pursuant to § 1005.32(b)(2) 

must be based on the exchange rate or, 

where applicable, the estimated 

exchange rate based on an estimation 

methodology permitted under 

§ 1005.32(c) that the provider would 

have used or did use that day in 

providing disclosures to a sender 

requesting such a remittance transfer to 

be made on the same day. If, in 

accordance with § 1005.32(d), a 

remittance transfer provider uses a basis 

described in § 1005.32(c) but not listed 

in § 1005.32(c)(1), the provider is 

deemed to be in compliance with 

§ 1005.32(d) regardless of the amount 

received by the designated recipient, so 

long as the estimation methodology is 

the same as that the provider would 

have used or did use in providing 

disclosures to a sender requesting such 

a remittance transfer to be made on the 

same day.16

The Bureau is making two changes to 

the bases for estimates applicable to the 

exception for estimates for remittance 

transfers scheduled five or more 

business days before the date of transfer. 

The first requires providers to base 

estimates on the exchange rate (or 

estimated exchange rate) that the 

provider would have used or did use 

that day in providing disclosures to a 

sender requesting such a remittance 

transfer to be made on the same day. In 

order to allow for easier comparison 

shopping and for estimates to be of use 

to senders, the Bureau believes that 

remittance transfer providers should 

base their estimates on similar 

methodologies. The Bureau believes that 

if providers uniformly disclose the 

actual rate available that day as the 

estimated rate for transfers scheduled 

before the date of transfer, senders will 

more easily be able to compare the 

offerings of various remittance transfer 

providers by comparing rates and fees. 

Moreover, commenters did not suggest 

any other reliable method to estimate 

future exchange rates. 

The second change concerns 

estimates pursuant to § 1005.32(b)(2) by 

remittance transfer providers that can 

otherwise use the two statutory 

exceptions in § 1005.32(a) or (b)(1). As 

explained above, providers of transfers 

scheduled before the date of transfer 

who cannot use one of the enumerated 

methods for estimating in 

§ 1005.32(c)(1) will have difficulties 

guaranteeing that the designated 

recipient receives the same, or greater, 

amount of funds than the remittance 

transfer provider disclosed. The Bureau 

is concerned about remittance transfer 

providers that use estimates pursuant to 

§ 1005.32(a) or (b)(1), and that, as 

permitted by § 1005.32(c), have chosen 

to use an estimation methodology other 

than those specified in § 1005.32(c)(1). 

With regard to such methodologies, 

§ 1005.32(c) requires that if a provider 

bases an estimate on an approach that 

is not listed in that paragraph, the 

provider is deemed to be in compliance 

with the paragraph so long as the 

designated recipient receive the same, 

or greater, amount of funds than the 

provider disclosed under 

§ 1005.31(b)(1)(vii). The Bureau is 

concerned that due to the fluctuations 

in wholesale foreign exchange markets 

discussed above, in many cases, 

remittance transfer providers that have 

developed estimation methodologies 

that reliably satisfy the requirements of 

§ 1005.32(c) for same-day transfers, may 

not be able to do the same for estimates 

of exchange rates provided for transfers 

scheduled five or more business days 

before the date of a remittance transfer. 

The Bureau also recognizes that the 

elimination of this guarantee will 

reduce burden on providers. 

The Bureau expects that most 

remittance transfer providers, if 

allowed, will set the retail exchange rate 

that applies to a remittance transfer 

scheduled before the date of transfer on 

the date of that transfer, in rough 

reference to one of several measures of 

the wholesale or market exchange rates. 

Insofar as there are a large number of 

factors that may alter exchange rates, the 

Bureau believes that in most scenarios, 

there is no method to predict with 

precision what those market or 

wholesale rates will be far before the 

date on which a remittance transfer 

provider sets a retail exchange rate. 

Thus, the requirement in § 1005.32(c) 

that providers who cannot use a listed 

methodology guarantee that the amount 

received by the designated recipient 

must be the same, or greater than, the 

estimated amounts disclosed to the 

sender, is not feasible for disclosures 

provided five or more business days 

before the date of transfer. Nevertheless, 

because providers must use the same 

method for transfers scheduled before 

the date of transfers as they use for 

same-day transfers, the Bureau believes 

there will still be consistency in the 

estimation methodology. 

New comment 32(d)–1 explains that 

when providing an estimate pursuant to 

§ 1005.32(b)(2), § 1005.32(d) requires 

that a remittance transfer provider’s 

estimated exchange rate must be the 

exchange rate (or estimated exchange 

rate) that the remittance transfer 

provider would have used or did use 

that day in providing disclosures to a 

sender requesting such a remittance 

transfer to be made on the same day. If, 

for the same-day remittance transfer, the 

provider could utilize either of the other 

two exceptions permitting the provision 

of estimates in § 1005.32(a) or (b)(1), the 

provider may provide estimates based 

on a methodology permitted under 

§ 1005.32(c). For example, if, on 

February 1, the sender schedules a 

remittance transfer to occur on February 

10, the provider should disclose the 

exchange rate as if the sender was 

requesting the transfer be sent on 

February 1. However, if at the time 

payment is made for the requested 

transfer, the remittance transfer provider 

could not send any remittance transfer 

until the next day (for reasons such as 

the provider’s deadline for the batching 

of transfers), the remittance transfer 

provider can use the rate (or estimated 

exchange rate) that the remittance 

transfer provider would have used or 

did use in providing disclosures that 

day with respect to a remittance transfer 

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requested that day that could not be sent 

until the following day. 

Section 1005.33 Procedures for 

Resolving Errors 

As noted above, consumers may be 

permitted to schedule a series of 

preauthorized remittance transfers in 

which the transfer amount is fixed in a 

currency other than that in which the 

transfer is funded. Thus, 

§ 1005.32(b)(2)(i) permits estimates to be 

provided for, among other things, the 

total amount of the transfer. In light of 

this new provision, a revision to 

§ 1005.33(a)(1)(i) is necessary to clarify 

that disclosing an estimate of the total 

amount of the transfer in this case 

would not result in an error. 

Under the February Final Rule, 

§ 1005.33(a)(1)(i) states than ‘‘error’’ 

means an incorrect amount paid by a 

sender in connection with a remittance 

transfer. Comment 33(a)–1 explains that 

§ 1005.33(a)(1)(i) covers circumstances 

in which a sender pays an amount that 

differs from the total amount of the 

transaction, including fees imposed in 

connection with the transfer, stated in 

the receipt or combined disclosure 

provided under § 1005.31(b)(2) or (3). 

The Bureau is revising this provision 

to exempt from the definition of error 

estimates of the total amount of the 

transfer provided in accordance with 

the new exception in § 1005.32(b)(2). 

This exception allows for, among other 

things, an estimate of the amount to be 

transferred if, at the time the sender 

schedules the transfer, the remittance 

transfer provider agrees to a sender’s 

request to fix the amount to be 

transferred in the currency in which the 

remittance transfer will be received and 

not the currency in which it is funded. 

When the amount to be transferred is 

estimated under this section, the 

provider is also permitted to estimate 

the total amount of the transaction (i.e., 

the amount to be paid by the sender). 

Thus, as revised, § 1005.33(a)(1)(i) 

states that the term error means an 

incorrect amount paid by a sender in 

connection with a remittance transfer, 

unless the disclosure stated an estimate 

of the amount paid by a sender in 

accordance with § 1005.32(b)(2) and the 

difference results from application of 

the actual exchange rate, fees, and taxes, 

rather than any estimated amount. As 

discussed in detail below, when a 

remittance transfer provider estimates of 

the total amount of the transfer in a 

receipt provided at least five or more 

business days before the date of transfer 

(see § 1005.36(a)(1)(i) and (a)(2)(i)), the 

provider must also send a receipt 

without the estimate after the transfer 

(see § 1005.36(a)(1)(ii) and (a)(2)(ii)). 

Thus, the sender will still receive a 

receipt with the actual amount the 

sender paid for the transfer and can still 

assert an error based on the disclosure 

of the amount paid in that receipt. 

Section 1005.36 Transfers Scheduled 

Before the Date of Transfer 

Overview 

The February Final Rule sets forth 

several procedures for the timing, 

content, and accuracy of pre-payment 

disclosures and receipts for 

preauthorized remittance transfers. At 

the same time, the February Proposal 

sought comment on whether further 

adjustments were necessary to address 

one-time transfers scheduled before the 

date of transfer and preauthorized 

remittance transfers. 

Specifically, the February Final Rule 

treats the first in a series of 

preauthorized remittance transfers the 

same as most other remittance transfers 

by requiring that accurate (not 

estimated) figures be disclosed in the 

pre-payment disclosure and receipt. But 

in recognition of the potential risks 

associated with setting exchange rates 

and the potential difficulty of 

determining the amount to be provided 

to a designated recipient weeks or 

months before subsequent transfers, the 

February Final Rule does not require 

that disclosures for an entire series of 

preauthorized remittance transfers be 

provided when the sender initially 

requests the transfer and authorizes 

payment. Instead, the February Final 

Rule requires remittance transfer 

providers to issue pre-payment 

disclosures and receipts for each 

subsequent transfer closer to the dates of 

the individual transfers. In particular, 

under the February Final Rule, the prepayment disclosure for each subsequent 

transfer must be provided within a 

reasonable time prior to the scheduled 

date of the transfer, and the receipt for 

each subsequent transfer generally must 

be provided no later than one business 

day after the date on which the transfer 

is made. The pre-payment disclosure 

and receipt for each subsequent transfer 

must be accurate when the respective 

transfer is made, unless a statutory 

exception applies. See § 1005.36(b). 

Senders must also be permitted to 

cancel these transfers up to three 

business days before the date of transfer. 

See § 1005.36(c). 

Because the Bureau was concerned 

that even with the modifications 

permitted by the February Final Rule, 

the disclosure requirements could pose 

difficulty for certain remittance transfers 

scheduled significantly before the date 

of transfer, the February Proposal asked 

a number of questions regarding 

whether to make further adjustments to 

the disclosure and cancellation regime 

for these transfers. The Bureau sought 

input on how to manage the importance 

to senders of accurate and timely 

disclosures, permit growth of this 

portion of the remittance transfer 

market, and limit industry compliance 

burdens in light of the potential risks 

associated with providing accurate 

exchange rates and the difficulty of 

determining the amount to be received 

by designated recipients for a particular 

transfer. 

Specifically, the February Proposal 

sought comments on a number of 

potential changes to the February Final 

Rule concerning the type, timing, and 

accuracy of pre-payment disclosures 

and receipts a sender should receive in 

connection with one-time transfers and 

the first in a series of preauthorized 

remittance transfers scheduled to occur 

more than ten days before the date of 

transfer. The February Proposal also 

sought comment on whether senders 

should receive disclosures for 

subsequent preauthorized remittance 

transfers and, if so, what form those 

disclosures should take. Finally, the 

February Proposal sought comment on 

what cancellation rules should apply to 

these transactions and how and when 

those rules should be disclosed to 

senders. 

Based on comments received, the 

Bureau is amending the February Final 

Rule to allow providers increased 

flexibility, while maintaining 

requirements that senders receive 

sufficient and timely information to 

help inform their selection of remittance 

transfer providers and help them 

understand the terms of their remittance 

transfers. With respect to timing, the 

final rule requires pre-payment 

disclosures and receipts for one-time 

transfers scheduled five or more 

business days before the date of transfer 

and the first in a series of preauthorized 

remittance transfers to be provided in 

the same manner as they are provided 

for all other transfers (i.e., at request and 

at payment authorization). The final 

rule also requires providers to give 

senders additional, accurate receipts 

after the transfer is sent if prior 

disclosures contained estimates 

pursuant to § 1005.32(b)(2). The Bureau 

is also maintaining the three-businessday cancellation period in § 1005.36(c). 

Finally, although the Bureau is 

generally eliminating the requirement to 

provide pre-payment disclosures for 

subsequent remittance transfers in a 

preauthorized series, the Bureau is 

adopting a new § 1005.36(d) to require 

disclosure of upcoming dates of transfer 

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50266 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

and cancellation provisions a reasonable 

time before the dates of such transfers. 

36(a) Timing 

Section 1005.36(a) of the February 

Final Rule addresses the timing of 

disclosures for the first in a series of 

preauthorized remittance transfers. In 

the February Proposal, the Bureau 

sought comment on a number of 

questions relating to the timing of 

disclosures for all remittance transfers 

that are scheduled more than ten days 

before the date of transfer, including 

preauthorized remittance transfers, as 

described below. 

As is discussed further below, to 

further the purposes of the EFTA and 

facilitate compliance, the Bureau finds 

it necessary and proper to use its EFTA 

section 904(a) and (c) authority to adopt 

§ 1005.36(a)(1)(i), (a)(1)(ii), and (a)(2)(i) 

through (iii) and to eliminate the 

requirement to provide pre-payment 

disclosures for subsequent 

preauthorized remittance transfers. 

Sections 1005.36(a)(1)(i), (a)(1)(ii), 

(a)(2)(i), and (a)(2)(ii) are revised from 

the February Final Rule. Section 

1005.36(a)(2)(iii) is a new provision in 

the final rule. 

36(a)(1) Timing of Disclosures for OneTime Transfers Scheduled Before the 

Date of Transfer and the First in a Series 

of Preauthorized Remittance Transfers 

Section 1005.36(a) of the February 

Final Rule addresses the timing of 

required disclosures for preauthorized 

remittance transfers. Section 

1005.36(a)(1) of the February Final Rule 

requires that, for the first in a series of 

preauthorized remittance transfers, the 

pre-payment disclosure and receipt be 

provided in the same manner as 

required for all other transfers. In the 

February Proposal, the Bureau sought 

comment on whether to make further 

adjustments in the disclosure rules for 

preauthorized remittance transfers and 

certain other transfers scheduled before 

the date of transfer. 

With respect to the timing of prepayment disclosures and receipts given 

to senders upon request of and payment 

for a transfer, the Bureau received few 

comments, apart from those raising the 

concerns discussed earlier regarding the 

disclosure of exact exchange rates far 

before the date of a remittance transfer. 

Largely, industry commenters did not 

raise other concerns about the 

requirement that remittance transfer 

providers give pre-payment disclosures 

(or combined disclosures) when 

transfers are requested and prior to 

payment and receipts (if no combined 

disclosures were provided) when 

payment is authorized for either onetime transfers scheduled before the date 

of transfer or the first in a series of 

preauthorized remittance transfers. In 

the final rule, the Bureau maintains the 

requirement from the February Final 

Rule that for any one-time remittance 

transfer scheduled five or more business 

days before the date of transfer, and for 

the first transfer in a series of 

preauthorized remittance transfers, a 

remittance transfer provider must 

provide a pre-payment disclosure and a 

receipt to the sender subject to the same 

timing rules that apply to any one-time 

transfer. 

For clarity and consistency, the 

Bureau is revising § 1005.36(a)(1) from 

the February Final Rule as a new 

§ 1005.36(a)(1)(i) by adjusting the 

provision to apply both to a one-time 

advance transfer scheduled five or more 

business days before the date of transfer 

and the first in a series of preauthorized 

remittance transfers, rather than just the 

latter. The Bureau is also clarifying that 

remittance transfer providers may use 

combined disclosures, pursuant to 

§ 1005.31(b)(3), for transfers covered by 

this provision. 

The Bureau also requested comment 

on what follow-up disclosures, if any, 

should be provided to senders after 

authorization of a remittance transfer 

scheduled before the date of transfer. 

Specifically the Bureau asked whether a 

second receipt with accurate 

information should be provided to a 

sender within a reasonable time period 

prior to such a transfer, if the remittance 

transfer provider previously disclosed 

estimates pursuant to proposed 

§ 1005.32(b)(2). 

Most industry commenters argued 

against requiring a second receipt with 

accurate figures to be given prior to a 

remittance transfer when the original 

pre-payment disclosure and receipt 

contained estimates. These commenters 

argued that to the extent such a 

provision required disclosure of 

accurate figures ten days before the date 

of transfer, it would render the 

exception allowing providers to disclose 

estimates meaningless. 

To the extent the Bureau would 

instead allow a second receipt to 

contain estimates, industry commenters 

argued that giving senders three 

documents (a pre-payment disclosure 

when requesting the remittance transfer, 

a receipt when payment is authorized 

for the transfer, and a second receipt a 

reasonable time before the transfer) 

would be confusing and unhelpful to 

senders. One industry commenter 

suggested there would be limited value 

added by a second receipt that could 

contain information that, other than 

updated estimated exchange rates and 

associated figures, would be identical to 

the information included in the initial 

receipt. Another commenter expressed 

concern that a sender could be confused 

into thinking that a remittance transfer 

provider has made a single transfer 

multiple times or that an error had 

occurred, necessitating the additional 

disclosure. Industry commenters also 

stated that they thought senders would 

benefit little from additional disclosures 

before a transfer, particularly when any 

such benefit is balanced against the 

increased upfront and ongoing costs to 

the remittance transfer providers of 

giving senders the additional receipt. 

These commenters argued that 

providers would pass these costs on to 

senders. Finally, as an alternative to a 

second pre-transfer receipt, one industry 

commenter suggested that providers 

give senders receipts reflecting actual 

figures (and not estimates) after the 

providers send the transfers to the 

designated recipient. Consumer group 

commenters argued that receipts with 

actual figures (and not estimates) be 

provided to senders a reasonable time 

prior to the date of each transfer. 

In light of the Bureau’s decision to 

allow the use of estimates in certain 

disclosures for remittance transfers 

scheduled five or more business days 

before the date of a remittance transfer 

rather than ten days as originally 

proposed, the Bureau believes that a 

follow-up receipt provided closer to the 

date of the transfer is not likely to 

provide significant benefit to senders in 

many cases. For example, if a remittance 

transfer provider schedules a remittance 

transfer one month before the date of 

transfer, and discloses an estimated 

exchange rate at that time, and then 

provides a sender a receipt with an 

accurate exchange rate only four 

business days before the date of transfer 

(because unless a statutory exception 

applies, § 1005.32(b)(2) of the final rule 

permits estimates only for disclosures 

five or more business days before the 

date of transfer) the receipt might not 

reach the sender before the expiration of 

the three-business-day cancellation 

period in § 1005.36(c). Conversely, if 

this follow-up receipt were sent five or 

more business days before the date of 

transfer, estimates of certain amounts 

would be permitted under 

§ 1005.32(b)(2). The Bureau believes 

that such a disclosure generally would 

be of little additional value as compared 

to the initial estimate provided in the 

pre-payment disclosure and receipt 

required by § 1005.36(a)(1)(i) if the 

wholesale rate, and thus the retail rate, 

had not moved significantly since the 

initial estimate was provided. 

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17The timing requirement in § 1005.36(a)(1)(ii) 

does not prevent a remittance transfer provider 

from providing this receipt before the date of the 

transfer. The same is true for disclosures required 

by § 1005.36(a)(2)(ii), which are discussed below. 

Although the Bureau is not requiring 

a second receipt closer to the time of 

transfer, the Bureau believes that for 

every remittance transfer, where a 

sender receives a disclosure that 

contains estimates pursuant to 

§ 1005.32, the sender should also 

receive an accurate post-transfer 

disclosure that informs the sender of the 

actual exchange rate (as well as fees, 

taxes, and other figures) applied to the 

transfer. Thus, to further consumer 

protections, the Bureau is adopting a 

revised § 1005.36(a)(1)(ii), which 

requires that if the disclosures provided 

pursuant to § 1005.36(a)(1)(i) contain 

estimates as permitted by 

§ 1005.32(b)(2) (for transfers scheduled 

five or more business days before the 

date of transfer), the provider must mail 

or deliver to the sender an additional 

receipt meeting the requirements 

described in § 1005.31(b)(2) no later 

than one business day after the date of 

transfer.17 If the transfer involves the 

transfer of funds from the sender’s 

account held by the provider, the 

receipt required by § 1005.36(a)(1)(ii) 

may be provided on or with the next 

periodic statement for that account, or 

within 30 days after the date of the 

transfer if a periodic statement is not 

provided. As required by 

§ 1005.36(b)(3), which is discussed 

below, this receipt must contain 

accurate figures unless estimates are 

allowed by § 1005.32(a) or (b)(1). 

As many remittance transfers 

scheduled before the date of transfer are 

conducted by senders who have 

accounts with remittance transfer 

providers, the Bureau believes the final 

rule may relieve many providers of 

having to provide receipts immediately 

after each preauthorized remittance 

transfer or after one-time transfer 

scheduled five or more business days 

before the date of the transfer. In 

addition, the Bureau believes that an 

accurate receipt will ensure that senders 

receive accurate accountings of their 

transfers. Furthermore, to the extent that 

senders of preauthorized remittance 

transfers want to comparison shop 

based on price for future transfers, these 

receipts may be a mechanism that 

allows senders to better understand 

providers’ pricing mechanisms (by 

allowing a sender to know the exchange 

rate applied to each transfer) and the 

amount received by the designated 

recipient. 

36(a)(2) Timing of Disclosures for 

Subsequent Preauthorized Remittance 

Transfers 

The February Final Rule contains 

disclosure provisions specific to 

subsequent preauthorized remittance 

transfers (i.e., all preauthorized 

remittance transfers after the first in the 

series of transfers). Section 

1005.36(a)(2)(i) of the February Final 

Rule requires that a remittance transfer 

provider also mail or deliver a prepayment disclosure to the sender for 

each subsequent transfer and requires 

the disclosure to be mailed or delivered 

within a reasonable time prior to the 

scheduled date of each subsequent 

transfer. This provision is in lieu of the 

general timing rule, which would have 

required that a pre-payment disclosure 

for each transfer in a series of 

preauthorized remittance transfers be 

given at the time of the initial request 

(and thus a sender would receive a 

disclosure for every preauthorized 

transfer when requesting the entire 

series). See § 1005.31(e)(1). Section 

1005.36(a)(2)(ii) in the February Final 

Rule requires a receipt to be mailed or 

delivered no later than one business day 

after the transfer or, for account-based 

transactions, on or with the next 

regularly scheduled periodic statement 

or within 30 days after payment is made 

for the remittance transfer if a periodic 

statement is not provided. 

In the February Proposal, the Bureau 

sought comment on an alternative to the 

requirement in the February Final Rule 

that a pre-payment disclosure for each 

subsequent transfer in a series of 

preauthorized remittance transfer be 

provided within a reasonable time prior 

to the scheduled date of transfer: 

Whether the pre-payment disclosure 

requirement for subsequent 

preauthorized remittance transfers 

should be eliminated. 

Industry commenters generally 

favored eliminating the requirement for 

providing pre-payment disclosures for 

subsequent preauthorized remittance 

transfers for many of the same reasons 

these commenters disfavored a rule 

requiring accurate pre-payment 

disclosures for other transfers scheduled 

before the date of transfer. These 

commenters argued that a pre-payment 

disclosure for each subsequent transfer 

would be unnecessary, potentially 

confusing to senders, and burdensome 

to providers. For example, one 

commenter argued that senders 

schedule preauthorized remittance 

transfers for purposes of convenience 

and that senders typically do not 

comparison shop to complete each 

recurring transfer. The same commenter 

expressed concern that the requirement 

of an additional pre-payment disclosure 

might cause some providers to no longer 

allow consumers to schedule transfers 

before the date of transfer. 

In contrast, one consumer group 

commenter supported requiring prepayment disclosures to be provided to 

senders ten days before each subsequent 

transfer in a series of preauthorized 

remittance transfers (and stated that if 

estimates were permitted for disclosures 

related to such transfers, that those 

disclosures contain current estimates). 

This commenter urged that the Bureau 

maintain the requirement in the 

February Final Rule for pre-payment 

disclosures so that senders have 

additional information regarding the 

details of each preauthorized remittance 

transfer prior to such transfer. 

Upon consideration of these 

comments and to facilitate compliance, 

the Bureau is eliminating the 

requirement to provide a pre-payment 

disclosure within a reasonable time 

prior to the scheduled date of each 

subsequent preauthorized remittance 

transfer. Thus, the Bureau is eliminating 

what was § 1005.36(a)(2)(i) in the 

February Final Rule. The Bureau is 

doing so for several reasons. The Bureau 

is concerned that the requirement in the 

February Final Rule—a pre-payment 

disclosure sent a reasonable time prior 

to each subsequent remittance transfer— 

might provide senders only a limited 

amount of information because prepayment disclosures for subsequent 

preauthorized remittance transfers sent 

five or more business days before the 

date of transfer could contain estimates, 

pursuant to § 1005.32(b)(2). In addition, 

in some scenarios, this could create a 

potential for confusing and overlapping 

disclosures and receipts. 

Conversely, the Bureau believes that if 

it mandated that pre-payment 

disclosures be sent less than five 

business days before a subsequent 

transfer such that the disclosures could 

not contain estimates under 

§ 1005.32(b)(2), the disclosure would be 

of little use to the sender for the 

upcoming transfer as it could be 

received too close to (or after) the 

cancellation deadline. Separately, 

confusion for senders could exist in 

some circumstances where 

preauthorized remittance transfers are 

scheduled relatively close together or 

receipts are provided with periodic 

statements. In these cases, a sender 

might receive a post-transfer receipt 

from a prior preauthorized remittance 

transfer close in time to a pre-payment 

disclosure for the next transfer. These 

documents, with potentially differing 

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50268 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

18Although changes in terms trigger notice 

requirements in some instances under Regulation E 

(see 12 CFR 1005.10), that provision does not apply 

to remittance transfers that are not electronic fund 

transfers. 

exchange rates and other figures, might 

confuse senders unnecessarily. 

The Bureau also believes that 

eliminating the requirement for prepayment disclosures for subsequent 

preauthorized remittance transfers is 

appropriate in part because senders will 

receive some relevant information in 

receipts for prior preauthorized 

remittance transfers. The final rule 

requires that for any preauthorized 

remittance transfer, the remittance 

transfer provider must provide a sender 

a receipt with accurate information 

(except to the extent estimates are 

permitted by § 1005.32(a) or (b)(1)). A 

receipt from the prior transfer with 

accurate amounts may provide the 

sender with information that could 

educate the sender not only about the 

prior transfer but also about the 

provider’s practices generally, which 

may help the sender judge whether to 

continue with the provider for future 

preauthorized remittance transfers. The 

Bureau believes a sender can learn 

about a remittance transfer provider’s 

exchange rate practices from what the 

designated recipient actually received 

from the prior transfers in the series. In 

addition, the receipt provided for the 

initial transfer in a series provides 

information about the fees and taxes 

that will apply to all subsequent 

preauthorized remittance transfers, 

unless a change necessitates a new 

disclosure, as discussed below. 

Although the Bureau is eliminating 

the requirement that a remittance 

transfer provider provide a pre-payment 

disclosure for each subsequent transfer 

in a series of preauthorized remittance 

transfers, the Bureau remains concerned 

that previously disclosed figures (other 

than the estimates themselves) could 

change, rendering the figures disclosed 

in the pre-payment disclosure provided 

for the initial transfer inaccurate as 

applied to the subsequent transfers.18

Comment 31(f)–1 to the February Final 

Rule explains that under the general 

timing and accuracy rules in subpart B 

of Regulation E, providers must give 

senders new pre-payment disclosures 

before accepting payment if previously 

provided pre-payment disclosures are 

inaccurate. However, since a receipt 

provided pursuant to § 1005.36(a)(1)(i) 

or, as discussed below, .36(a)(2)(i), may 

serve as a disclosure with respect to 

multiple subsequent preauthorized 

transfers, the temporal elements 

disclosed on those receipts would only 

be accurate with respect to the transfer 

to occur after the receipt is provided. 

Thus, the Bureau is adopting a new 

§ 1005.36(a)(2)(i) to specifically address 

certain changes in terms related to 

subsequent preauthorized remittance 

transfers. Section 1005.36(a)(2)(i) states 

that if any of the information on the 

most recent receipt provided pursuant 

to § 1005.36(a)(1)(i) or § 1005.36(a)(2)(i), 

other than the temporal disclosures 

required by § 1005.31(b)(2)(ii) (Date 

Available) and (b)(2)(vii) (Transfer 

Date), is no longer accurate with respect 

to a subsequent preauthorized 

remittance transfer for reasons other 

than as permitted by § 1005.32, then the 

remittance transfer provider must 

provide an updated receipt meeting the 

requirements described in 

§ 1005.31(b)(2) to the sender. The 

provider must mail or deliver this 

receipt to the sender within a reasonable 

time prior to the scheduled date of the 

next subsequent preauthorized 

remittance transfer. Such receipt must 

clearly and conspicuously indicate that 

it contains updated disclosures. 

New comment 36(a)(2)–1 clarifies 

when the disclosure required by 

§ 1005.36(a)(2)(i) must be provided. 

Specifically, it states that when a sender 

schedules a series of preauthorized 

remittance transfers, the provider is 

generally not required to provide a prepayment disclosure prior to the date of 

each subsequent transfer. However, 

§ 1005.36(a)(1)(i) requires the provider 

to provide a pre-payment disclosure and 

receipt for the first in the series of 

preauthorized remittance transfers in 

accordance with the timing 

requirements set forth in § 1005.31(e). 

See § 1005.36(a)(1)(i). While certain 

information in those disclosures is 

expressly permitted to be estimated (see 

§ 1005.32(b)(2)(i) through (iii)), other 

information is not permitted to be 

estimated, or is limited in how it may 

be estimated. When any of the 

information on the most recent receipt 

provided pursuant to § 1005.36(a)(1)(i) 

or (a)(2)(i), other than the temporal 

disclosures required by 

§ 1005.31(b)(2)(ii) (the Date Available) 

and (b)(2)(vii) (the Transfer Date), is no 

longer accurate with respect to a 

subsequent preauthorized remittance 

transfer for reasons other than as 

permitted by § 1005.32, the provider 

must provide, within a reasonable time 

prior to the scheduled date of the next 

preauthorized remittance transfer, a 

receipt that complies with 

§ 1005.31(b)(2) and which discloses, 

among the other disclosures required by 

§ 1005.31(b)(2), the changed terms. 

For example, if the provider discloses 

in the pre-payment disclosure for the 

first in the series of preauthorized 

remittance transfers that its fee for each 

remittance transfer is $20 and, after six 

preauthorized remittance transfers, the 

provider increases its fee to $30 (to the 

extent permitted by contract law), the 

provider must provide the sender a 

receipt that complies with 

§§ 1005.31(b)(2) and 1005.36(b)(2) 

within a reasonable time prior to the 

seventh transfer. Barring a further 

change, this receipt will apply to 

transfers after the seventh transfer. Or, 

if, after the sixth transfer, a tax increases 

from 1.5% of the amount that will be 

transferred to the designated recipient to 

2.0% of the amount that will be 

transferred to the designated recipient, 

the provider must provide the sender a 

receipt that complies with 

§§ 1005.31(b)(2) and 1005.36(b)(2) 

within a reasonable time prior to the 

seventh transfer. In contrast, 

§ 1005.36(a)(2)(i) does not require an 

updated receipt where an exchange rate, 

estimated as permitted in § 1005.32, 

changes. 

New comment 36(a)(2)–2 explains 

that in order to clearly and 

conspicuously indicate that the 

provider’s fee has changed as required 

by § 1005.36(a)(2)(i), the provider could, 

for example, state on the receipt: 

‘‘Transfer Fees (UPDATED) * * * $30.’’ 

To the extent that other figures on the 

receipt must be revised because of the 

new fee, the receipt should similarly 

indicate that those figures are updated. 

In the February Proposal, the Bureau 

also solicited comment on whether it 

should provide a safe harbor 

interpreting the ‘‘within a reasonable 

time’’ standard for providing a prepayment disclosure for subsequent 

preauthorized remittance transfers. 

Although such a disclosure is no longer 

required, the same ‘‘within a reasonable 

time’’ requirement now applies to 

receipts required by § 1005.36(a)(2)(i). 

The bulk of the comments received on 

how to interpret ‘‘within a reasonable 

time’’ concerned industry commenters’ 

concerns regarding the requirement in 

the February Final Rule that any 

required pre-payment disclosures reflect 

the actual exchange rates that will apply 

to preauthorized remittance transfers. 

Industry commenters stated that it 

would be difficult to disclose accurate 

exchange rates ten days before the date 

of a remittance transfer. Insofar as 

§ 1005.32(b)(2) allows estimates in 

disclosures provided for remittance 

transfers scheduled five or more 

business days before the date of transfer, 

this concern should be alleviated. 

Industry commenters generally stated 

that if estimates were permitted, ten 

days was a reasonable period of time. 

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New comment 36(a)(2)–3 explains if a 

receipt required by § 1005.36(a)(2)(i) (or, 

as discussed below, required by 

§ 1005.36(d)(1)) is mailed, the receipt 

would be considered to be received by 

the sender five business days after it is 

posted in the mail. If hand delivered or 

provided electronically, the receipt 

would be considered to be received by 

the sender at the time of delivery. Thus, 

if the provider mails the receipt not later 

than ten business days before the 

scheduled date of the transfer, or hand 

or electronically delivers the receipt not 

later than five business days before the 

scheduled date of the transfer, the 

provider would be deemed to have 

mailed or delivered the receipt within a 

reasonable time prior to the scheduled 

date of the subsequent preauthorized 

remittance transfer. 

In addition, the Bureau is modifying 

§ 1005.36(a)(2)(ii) from the February 

Final Rule, which requires receipts for 

all subsequent preauthorized remittance 

transfers. As adopted, § 1005.36(a)(2)(ii) 

explains when receipts must be sent. It 

states that unless a receipt was provided 

in accordance with § 1005.36(a)(2)(i) 

that contained no estimates pursuant to 

§ 1005.32, the remittance transfer 

provider must mail or deliver to the 

sender a receipt described in 

§ 1005.31(b)(2) no later than one 

business day after the date of the 

transfer. If the remittance transfer 

involves the transfer of funds from the 

sender’s account held by the provider, 

the receipt required by this paragraph 

may be provided on or with the next 

periodic statement for that account, or 

within 30 days after the date of the 

transfer if a periodic statement is not 

provided. 

Finally, the Bureau is adopting an 

additional disclosure requirement for 

subsequent preauthorized remittance 

transfers as § 1005.36(a)(2)(iii), which 

requires providers to provide the 

disclosures required by § 1005.36(d) in 

accordance with the timing 

requirements of that section. Section 

1005.36(d) is discussed in more detail 

below. 

36(b) Accuracy 

The February Final Rule contains, in 

§ 1005.36(b), requirements for the 

accuracy of disclosures for 

preauthorized remittance transfers. 

Under that provision in the February 

Final Rule, the pre-payment disclosures 

and receipt for the first scheduled 

transfers in a series of preauthorized 

remittance transfers are required to be 

accurate at the time of payment (i.e., 

they must comply with § 1005.31(f), 

which states that disclosures must be 

accurate when a sender makes payment 

for the remittance transfer, except to the 

extent estimates are permitted by 

§ 1005.32). For subsequent 

preauthorized remittance transfers, as 

discussed above, the February Final 

Rule requires providers to give accurate 

pre-payment disclosures as of when the 

transfer is made within a reasonable 

time prior to each transfer and then to 

provide an accurate receipt after each 

transfer. 

To further compliance and to enhance 

consumer protections, the Bureau finds 

it necessary and proper to use its EFTA 

section 904(a) and (c) authority to adopt 

a revised § 1005.36(b). The Bureau is 

revising § 1005.36(b) to address the 

accuracy of receipts provided for 

remittance transfers that are scheduled 

five or more business days before the 

date of transfer, as well as preauthorized 

remittance transfers. The Bureau is 

adopting § 1005.36(b)(1), which states 

that for a one-time transfer scheduled 

five or more business days before the 

date of transfer or the first in a series of 

preauthorized remittance transfers, 

disclosures provided in accordance with 

§ 1005.36(a)(1)(i) must comply with 

§ 1005.31(f) by being accurate when the 

sender makes payment, except to the 

extent estimates are permitted by 

§ 1005.32. 

For subsequent preauthorized 

remittance transfers, the Bureau is 

adopting § 1005.36(b)(2), which states 

that for each subsequent preauthorized 

remittance transfer, the most recent 

receipt provided pursuant to 

§ 1005.36(a)(1)(i) or (a)(2)(i) must be 

accurate as of when such transfer is 

made, except: (i) The temporal elements 

required by § 1005.31(b)(2)(ii) (Date 

Available) and (b)(2)(vii) (Transfer Date) 

must be accurate only if the transfer is 

the first transfer to occur after the 

disclosure was provided, and (ii) to the 

extent estimates are permitted by 

§ 1005.32. As noted above, since a 

receipt provided pursuant to 

§ 1005.36(a)(1)(i) or (a)(2)(i) may serve 

as a disclosure with respect to multiple 

subsequent preauthorized transfers, the 

temporal elements disclosed on those 

receipts need only be accurate with 

respect to the transfer to occur after the 

receipt is provided. 

To address situations in which 

receipts may be provided after the date 

of a remittance transfer, the Bureau is 

adopting a new § 1005.36(b)(3). That 

provision states that such receipts 

(provided pursuant to either 

§ 1005.36(a)(1)(ii) or (a)(2)(ii)) must be 

accurate as of when the remittance 

transfer to which it pertains is made, 

except to the extent estimates are 

permitted by § 1005.32(a) or (b)(1). 

Proposed comment 36(b)–1 addressed 

estimates and, in particular, stated that 

providers may use any of the exceptions 

set forth in § 1005.32, to the extent 

applicable. This comment is adopted 

largely as proposed, with changes to 

reflect the newly adopted 

§ 1005.32(b)(2), which allows for 

estimates in certain disclosures for 

transfers scheduled five or more 

business days before the date of transfer, 

and the revised § 1005.36(a)(1)(i) and 

(a)(2)(i), which permit use of estimates 

under § 1005.32(b)(2). The comment 

also notes that when estimates are 

permitted, they must be disclosed in 

accordance with § 1005.31(d). 

New comment 36(b)–2 explains that, 

for a subsequent transfer in a series of 

preauthorized remittance transfers, the 

receipt provided pursuant to 

§ 1005.36(a)(1)(i), except for the 

temporal disclosures in that receipt 

required by § 1005.31(b)(2)(ii) (Date 

Available) and (b)(2)(vii) (Transfer 

Date), applies to each subsequent 

preauthorized remittance transfer unless 

and until it is superseded by a receipt 

provided pursuant to § 1005.36(a)(2)(i). 

For each subsequent preauthorized 

remittance transfer, only the most recent 

receipt provided pursuant to 

§ 1005.36(a)(1)(i) or (a)(2)(i) must be 

accurate as of the date each subsequent 

transfer is made. As a receipt may apply 

to multiple transfers in a series of 

preauthorized remittance transfers, the 

disclosure required by § 1005.31(b)(2)(ii) 

(i.e. disclosure of the date in the foreign 

country on which funds will be 

available to the designated recipient) 

need not be accurate for subsequent 

preauthorized remittance transfers that 

occur after the first transfer to which the 

receipt pertains. 

Finally, new comment 36(b)–3 

clarifies that a receipt required by 

§ 1005.36(a)(1)(ii) must accurately 

reflect the details of the transfer to 

which it pertains and may not contain 

estimates pursuant to § 1005.32(b)(2). 

However, the remittance transfer 

provider may continue to disclose 

estimates to the extent permitted by 

§ 1005.32(a) or (b)(1). In providing 

receipts pursuant to § 1005.36(a)(1)(ii) 

or (a)(2)(ii), § 1005.36(b)(2) and (b)(3) do 

not allow a remittance transfer provider 

to change figures previously disclosed 

on a receipt provided pursuant to 

§ 1005.36(a)(1)(i) or (a)(2)(i), unless a 

figure was an estimate or based on an 

estimate disclosed pursuant to 

§ 1005.32. Thus, for example, if a 

provider disclosed its fee as $10 in a 

receipt provided pursuant to 

§ 1005.36(a)(1)(i) and that receipt 

contained an estimate of the exchange 

rate pursuant to § 1005.32(b)(2), the 

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second receipt provided pursuant to 

§ 1005.36(a)(1)(ii) must also disclose the 

fee as $10. The Bureau is adopting this 

comment to clarify that the purpose of 

receipts required by § 1005.36(a)(1)(ii) 

and (a)(2)(ii) is to provide a sender with 

the actual exchange rate applied to the 

transfer (unless the statutory exceptions 

for estimates apply) rather than the 

estimate previously disclosed for the 

transfer pursuant to § 1005.32(b)(2). 

Thus, the final rule does not permit a 

provider to change other items, such as 

non-estimated fees and taxes, from a 

prior disclosure applicable to that 

transfer on the post-transfer receipt. 

36(c) Cancellation 

The February Final Rule contains 

cancellation requirements for remittance 

transfers. For most remittance transfers, 

§ 1005.34(a) requires the remittance 

transfer provider to comply with a 

cancellation request received no later 

than 30 minutes after the sender makes 

payment for the remittance transfer if: 

(i) The sender’s request allows the 

provider to identify the sender’s name 

and address or telephone number and 

the specific transaction to be cancelled; 

and (ii) the transferred funds have not 

been picked up by the designated 

recipient or deposited into the 

recipient’s account. For remittance 

transfers scheduled at least three 

business days before the date of the 

transfer, including preauthorized 

remittance transfers, § 1005.36(c) of the 

February Final Rule requires the 

remittance transfer provider to comply 

with a sender’s request for cancellation 

if the request: (i) Enables the provider to 

identify the sender’s name and address 

or telephone number and the particular 

transfer to be cancelled; and (ii) is 

received at least three business days 

before the scheduled date of the 

remittance transfer. Section 

1005.31(b)(2)(iv) requires the provider 

to include a statement about the 

sender’s cancellation rights, using the 

language set forth in Model Form A–37 

of Appendix A to subpart B or 

substantially similar language. 

The Bureau is amending Regulation E 

in this final rule to, among other things, 

clarify the obligations of the remittance 

transfer provider for remittance transfers 

scheduled before the date of transfer 

and to provide senders with information 

to calculate the cancellation deadline 

for remittance transfers scheduled at 

least three business days before the date 

of the transfer. As discussed above, the 

Bureau is making certain adjustments to 

the disclosure and timing requirements 

in other sections of the final rule in 

order to enhance senders’ ability to 

properly determine the cancellation 

deadline for remittance transfers, to 

enable senders to more easily identify 

and track preauthorized remittance 

transfers that occur in close proximity to 

one another, and to facilitate industry 

compliance with the cancellation 

disclosure requirements. 

As discussed above, the final rule 

adds § 1005.31(b)(2)(vii), which requires 

remittance transfer providers to disclose 

the date of transfer in certain receipts 

provided to senders pursuant to 

§ 1005.31(b)(2). These requirements 

apply only to remittance transfers 

scheduled by the sender at least three 

business days before the date of the 

transfer, as well as the initial transfer in 

a series of preauthorized remittance 

transfers. As discussed below, 

§ 1005.36(d)(2)(ii) also requires future 

transfer dates to be disclosed for 

subsequent transfers in a series of 

preauthorized remittance transfers, for 

which payment is made by the sender 

four or fewer business days before the 

date of the transfer. 

However, as discussed below, the 

Bureau is retaining in § 1005.36(c) the 

requirement that a remittance transfer 

provider must comply with any oral or 

written request to cancel a remittance 

transfer if the request to cancel is 

received at least three business days 

before the scheduled date of the 

remittance transfer. The Bureau is also 

adopting a new § 1005.36(d) to require 

providers to disclose the future dates of 

transfer, cancellation requirements, and 

provider’s contact information for 

subsequent preauthorized remittance 

transfers no more than 12 months and 

no less than five business days before 

the date of the transfer. This timing 

requirement for these disclosures does 

not apply to subsequent transfers in a 

series of preauthorized remittance 

transfers for which payment is made by 

the sender four or fewer business days 

before the date of the transfer. For this 

subset of transfers, the information 

required by § 1005.36(d)(1), including 

future dates of transfer, must instead be 

included in the receipt for the first 

transfer in the series of preauthorized 

remittance transfers provided in 

accordance with § 1005.36(a)(1)(i). For 

subsequent preauthorized remittance 

transfers and transfers scheduled at least 

three business days before the date of 

transfer, any receipt provided after the 

transfer is made in accordance with 

§ 1005.36(a)(1)(ii) or (a)(2)(ii) must 

include the date of transfer (and 

cancellation requirements) for the 

transfer that is the subject of the receipt. 

The Three-Business-Day Deadline To 

Cancel 

As noted above, section 919(d)(3) of 

the EFTA provides the Bureau broad 

discretion to fashion cancellation 

requirements for remittance transfers. In 

the February Final Rule, the Bureau 

adopted in § 1005.36(c) specific 

cancellation requirements for remittance 

transfers scheduled at least three 

business days before the date of the 

transfer. In adopting the three-businessday cancellation rule for such transfers, 

the Bureau explained that the general 

30-minute cancellation period would 

not be appropriate for remittance 

transfers scheduled far in advance 

because it would permit only a short 

time for cancellation even though the 

remittance transfer might not occur for 

many days or even months. 77 FR 6194, 

6268. Thus, the Bureau concluded that 

a three-business-day time period is more 

beneficial because it provides senders 

with more time to decide whether to go 

through with the transaction while 

giving remittance transfer providers 

sufficient time to process a cancellation 

request before the transaction is 

executed. Id. 

In the February Proposal, the Bureau 

explained that further consideration of 

the three-business-day cancellation rule 

and its application to remittance 

transfers scheduled before the date of 

transfer was necessary to ensure that the 

rule provided appropriate protection to 

senders without imposing an undue 

burden on providers. 77 FR 6310, 6321. 

Accordingly, the Bureau solicited 

comment on whether the threebusiness-day deadline to cancel advance 

transfers accomplishes these goals, or 

whether the deadline to cancel should 

be more or less than the three days 

adopted in the February Final Rule. The 

Bureau also solicited comment on 

whether it is important to maintain 

consistency between the cancellation 

deadline adopted for preauthorized 

remittances transfers in § 1005.36(c) and 

the cancellation deadline for 

preauthorized electronic fund transfers 

in § 1005.10(c)(1). 77 FR 6310, 6321. 

Finally, the Bureau solicited comment 

on whether the deadline to cancel 

would be easier to calculate if the 

cancellation period was based on 

calendar days instead of business days. 

Several commenters addressed the 

cancellation deadline for remittance 

transfers scheduled three or more 

business days in advance. Both industry 

and consumer group commenters 

generally agreed that the three-businessday time period for cancellation in the 

February Final Rule appropriately 

balances the interests of both parties to 

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the transfer. One industry commenter 

opposed the three-business-day time 

period for cancellation; this commenter 

proposed as an alternative a five-day 

cancellation period, arguing that the 

Bureau should take into consideration 

providers’ existing compliance 

obligations under other laws as well. 

Another industry commenter posited 

that, if the Bureau does not amend the 

definition of ‘‘remittance transfer 

provider’’ to exclude depository 

institutions executing certain types of 

international wire transfers, cancellation 

should be allowed only until a transfer 

has been executed by a depository 

institution. One industry commenter 

agreed that the Bureau should continue 

to require the deadline to cancel to be 

expressed in business days as opposed 

to calendar days. 

Although most commenters expressed 

support for the three-business-day 

cancellation period, a few industry 

commenters conditioned their support 

on whether and to what extent 

remittance transfer providers may be 

required to disclose to senders the 

exchange rates that apply to transfers 

scheduled before the date of transfer. 

One industry commenter stated that the 

three-business-day cancellation period 

would be appropriate only if a 

remittance transfer provider were not 

required to disclose the actual exchange 

rates that would apply to preauthorized 

remittance transfers ten days before the 

dates of such transfers. The industry 

commenter, however, also agreed that 

senders should be able to cancel 

preauthorized remittance transfers or 

other remittance transfers scheduled to 

take place in the future, but that the 

cancellation requirements should be 

balanced with a shorter time period for 

exchange rate disclosure. Another 

industry commenter argued that the 

three-business-day cancellation 

requirement would present a substantial 

risk of loss to a remittance transfer 

provider if the provider were required to 

disclose the exchange rate that would 

apply to a remittance transfer more than 

one day before the scheduled date of 

transfer. This commenter suggested that 

the Bureau establish a bifurcated 

cancellation structure for transfers 

scheduled before the date of transfer 

under which: (i) the 30-minute 

cancellation period in § 1005.34(a) 

would apply for any transfer for which 

the provider discloses the actual 

exchange rate; and (ii) the threebusiness-day cancellation period 

established in § 1005.36(c) would apply 

for any transfer in which the provider 

discloses an estimated exchange rate. 

The Bureau recognizes the concern 

expressed by a few industry 

commenters that remittance transfer 

providers may incur additional risk if 

the time period to cancel a transfer 

extends beyond the date upon which a 

remittance transfer provider must 

disclose the actual exchange rate that 

will apply to a remittance transfer. As 

the Bureau noted in the discussion 

regarding § 1005.32(b)(2)(i), whenever 

there are time lags between when the 

retail exchange rate that applies to a 

remittance transfer is set, when the 

relevant foreign currency is purchased, 

and when funds are delivered, a 

remittance transfer provider (and/or its 

business partner) may face losses due to 

unexpected changes in the value of the 

relevant foreign currency. The Bureau’s 

decision in § 1005.32(b)(2) of the final 

rule to allow remittance transfer 

providers to provide an estimated 

exchange rate in certain disclosures for 

remittance transfers scheduled five or 

more business days before the date of 

transfer should help alleviate these 

concerns. (See discussion above 

regarding § 1005.32(b)(2) for additional 

analysis of foreign exchange risks.) As a 

result, under the final rule, a remittance 

transfer provider will not be required to 

disclose, prior to the date of the transfer, 

an actual, as opposed to an estimated, 

exchange rate if the transfer is 

scheduled five or more business days 

before the date of transfer. This fivebusiness-day period is shorter than the 

more than ten day period proposed in 

the February Proposal and reduces the 

period during which a remittance 

transfer provider that permits transfers 

to be scheduled before the date of 

transfer may face additional foreign 

exchange risks due to the gap between 

the time the provider sets an exchange 

rate and the date of the transfer. And, 

while there is a short period outside the 

cancellation window in which the 

remittance transfer provider is required 

to disclose actual rather than estimated 

exchange rates, the Bureau believes that 

providers may be able to manage the 

foreign currency risks or may choose not 

to offer consumers the ability to 

schedule remittance transfers in this 

period. The Bureau does not believe the 

latter option presents a substantial risk 

of harm to senders, because it believes 

that any provider that generally permits 

consumers to schedule remittance 

transfers in advance will at least retain 

the option for consumers to schedule 

their transfers the day of or five or more 

business days before the date of the 

transfer. 

Accordingly, the Bureau concludes 

that the three-day-business cancellation 

period for remittance transfers 

scheduled at least three business days 

before the date of the transfer as adopted 

in the February Final Rule is 

appropriate. The Bureau believes that 

cancellation rights are important 

because they allow senders time to 

review the disclosure for accuracy and 

cancel the transaction when warranted 

by a change in circumstances. In 

addition, the Bureau believes the threebusiness-day cancellation period strikes 

an appropriate balance between sender 

and remittance transfer provider 

interests. This time period is close 

enough to the transfer date so that 

senders will know if there are 

circumstances warranting a 

cancellation, while it gives providers an 

adequate amount of time to process a 

cancellation request. Finally, as the 

Bureau noted in the February Final 

Rule, the three-business-day 

cancellation period is consistent with 

the cancellation requirement for 

electronic fund transfers. 77 FR 6194, 

6268. Since many remittance transfer 

providers also provide electronic fund 

transfers, maintaining similar regulatory 

regimes should minimize burden and 

facilitate compliance. 

Disclosure of Cancellation Period in PrePayment Disclosures for Subsequent 

Preauthorized Remittance Transfers 

In the February Proposal, the Bureau 

solicited comment on whether a 

remittance transfer provider should be 

required to disclose the cancellation 

period in the pre-payment disclosure for 

each subsequent remittance transfer in a 

series of preauthorized remittance 

transfers, rather than in the receipt for 

each subsequent transfer. As the Bureau 

recognized in the February Proposal, 

this issue would be relevant only if the 

pre-payment disclosure requirement in 

§ 1005.36(a)(2)(i) of the February Final 

Rule is retained in this rulemaking. 77 

FR 6310, 6323. 

As discussed above, the Bureau is 

revising the disclosure requirements for 

preauthorized remittance transfers to 

eliminate the requirement that 

remittance transfer providers provide a 

pre-payment disclosure for each 

subsequent transfer in series of 

preauthorized remittance transfers. 

Instead, the final rule requires that, in 

most circumstances, a receipt for each 

subsequent transfer be provided to the 

sender. Consequently, the Bureau’s 

inquiry of whether the cancellation 

disclosure should be provided in the 

pre-payment disclosure or the receipt 

for each subsequent transfer is now 

generally moot. Since there generally is 

no longer a requirement to provide a 

pre-payment disclosure for subsequent 

transfers, the sender’s cancellation 

rights must be disclosed on any receipt 

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50272 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

provided in accordance with 

§ 1005.36(a)(2) and (d)(2) (see 

discussion below), as applicable. 

36(d) Additional Requirements for 

Subsequent Preauthorized Remittance 

Transfers 

Under the February Final Rule, 

remittance transfer providers are 

required to provide senders with both a 

pre-payment disclosure and a receipt for 

each subsequent preauthorized 

remittance transfer in a series. 

Specifically, the pre-payment disclosure 

for each subsequent transfer must be 

provided within a reasonable time prior 

to the scheduled date of the transfer, 

and the receipt for each subsequent 

transfer generally must be provided no 

later than one business day after the 

date on which the transfer is made. As 

discussed above, however, the Bureau is 

concerned with balancing the interest of 

consumers in receiving timely 

disclosures for subsequent transfers 

with the interests of industry in 

reducing risks and developing this 

market segment. Thus, in the February 

Proposal, the Bureau sought comment 

on a number of issues related to 

subsequent preauthorized remittance 

transfers, including whether senders 

should receive disclosures for 

subsequent preauthorized remittance 

transfers and, if so, what form those 

disclosures should take. 77 FR 6310, 

6223. The February Proposal also sought 

comment on what cancellation rules 

should apply to these transfers and 

when those rules should be disclosed to 

senders. 

The Bureau received few comments in 

response to its inquiry regarding 

disclosure of cancellation requirements 

for subsequent preauthorized remittance 

transfers. Among those received, there 

was little consensus regarding how 

cancellation rights for subsequent 

preauthorized transfers should be 

disclosed. One industry commenter 

advocated for flexibility on the 

disclosure requirements to minimize 

costs. Another industry commenter 

asserted that the cancellation rights 

should be included only in the first prepayment disclosure for each subsequent 

transfer, while a consumer group 

commenter posited that a subsequent 

pre-payment disclosure disclosing 

cancellation rights should be sent before 

each subsequent transfer. Only one 

industry commenter supported 

including the statement regarding 

cancellation rights for the next 

scheduled transfer on the current 

receipt, arguing that it would give 

senders more time to cancel the transfer 

than if the cancellation rights were 

included in a pre-payment disclosure 

provided before the subsequent transfer. 

Having eliminated the pre-payment 

disclosure requirement for subsequent 

transfers and altered the requirements 

for when a receipt would have to be 

provided for a subsequent transfer in the 

final rule, the Bureau is concerned that 

senders may not receive adequate and 

timely information regarding the dates 

of upcoming transfers and, thus, may 

not know when their right to cancel 

those transfers expires. Further, as 

discussed above regarding 

§ 1005.31(b)(2)(vii), even when senders 

receive disclosures regarding their 

cancellation rights, they may not have 

the type of information needed to 

determine the date on which the right 

to cancel a subsequent transfer expires. 

The Bureau is also concerned that, 

where senders receive a number of 

receipts in close proximity to one 

another as part of a series of 

preauthorized remittance transfers, 

senders may not have information that 

would be helpful in distinguishing to 

which transfer a particular receipt 

applies. 

Accordingly, to further the purposes 

of the EFTA, the Bureau believes it is 

necessary and proper to use its authority 

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

adopt a new § 1005.36(d), which 

amends the disclosure requirements for 

subsequent preauthorized remittance 

transfers. Section 1005.36(d)(1)(i) states 

that, for any subsequent transfer in a 

series of preauthorized remittance 

transfers, the remittance transfer 

provider must disclose to the sender: 

(A) the date the provider will make the 

subsequent transfer, using the term 

‘‘Future Transfer Date,’’ or a 

substantially similar term; (B) a 

statement about the rights of the sender 

regarding cancellation as described in 

§ 1005.31(b)(2)(iv); and (C) the name, 

telephone number(s), and Web site of 

the remittance transfer provider. Section 

1005.36(d)(1)(ii) states that if the future 

date or dates of transfer required to be 

disclosed by this paragraph are 

described as occurring in regular 

periodic intervals, e.g., the 15th of every 

month, rather than as a specific calendar 

date or dates, the remittance transfer 

provider must disclose any future date 

or dates of transfer that do not conform 

to the described interval. 

Section 1005.36(d)(2)(i) establishes 

the general timing requirements for 

disclosures required by § 1005.36(d)(1), 

stating that, except as described in 

§ 1005.36(d)(2)(ii), the disclosures 

required by § 1005.36(d)(1) must be 

received by the sender no more than 12 

months, and no less than five business 

days prior to the date of any subsequent 

preauthorized remittance transfer to 

which it pertains. Section 

1005.36(d)(2)(i) also states that the 

disclosures required by § 1005.36(d)(1) 

may be provided in a separate 

disclosure or on one or more disclosures 

required by subpart B related to the 

same series of preauthorized remittance 

transfers, so long as the consumer 

receives the required information for 

each subsequent preauthorized 

remittance transfer in accordance with 

the timing requirements of 

§ 1005.36(d)(2)(i). 

The Bureau believes that information 

regarding cancellation rights is as 

important to subsequent preauthorized 

remittance transfers as it is to other 

transfers. Accordingly, as noted in the 

discussion regarding 

§ 1005.31(b)(2)(vii), senders need the 

date of transfer to determine, among 

other things, when the cancellation 

period for a certain preauthorized 

transfer expires. At the same time, the 

Bureau recognizes that when 

authorizing a preauthorized remittance 

transfer, the sender establishes a 

recurring schedule. The Bureau believes 

the repetitive and cyclical nature of 

preauthorized remittance transfers 

reduces the need for senders to receive 

notice of the cancellation period in 

individual notices sent immediately 

before each subsequent transfer, and 

warrants additional flexibility to 

remittance transfer providers to 

determine the timing and type of 

disclosure to be used to advise senders 

of their cancellation rights for 

subsequent preauthorized remittance 

transfers. The Bureau notes, however, 

that such notices must be provided 

within a timeframe that would be useful 

to senders and is concerned that a 

notice provided more than 12 months 

before the date of such transfers would 

likely be unhelpful to senders. Likewise, 

a notice received fewer than five 

business days before the date of transfer 

may not provide the sender with enough 

time to determine whether cancellation 

is warranted and, thus, would also not 

be helpful to senders. 

The Bureau also recognizes that for 

subsequent preauthorized remittance 

transfers scheduled four or fewer 

business days before the date of the 

transfer, remittance transfer providers 

will be unable to provide the 

disclosures regarding the future date of 

transfer and cancellation rights five or 

more business days before the date of 

transfer. Accordingly, § 1005.36(d)(2)(ii) 

states that for any preauthorized 

remittance transfer for which the date of 

transfer is four or fewer business days 

after the date payment is made for that 

transfer, the information required by 

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19Specifically, section 1022(b)(2)(A) of the DoddFrank Act calls for the Bureau to consider the 

potential benefits and costs of a regulation to 

consumers and covered persons, including the 

potential reduction of access by consumers to 

consumer financial products or services; the impact 

on depository institutions and credit unions with 

$10 billion or less in total assets as described in 

section 1026 of the Dodd-Frank Act; and the impact 

on consumers in rural areas. 

§ 1005.36(d)(1) must be provided on or 

with the receipt described in 

§ 1005.31(b)(2), or disclosed as 

permitted by § 1005.31(a)(3) and (a)(5), 

for the initial transfer in that series in 

accordance with § 1005.36(a)(1)(i). For 

example, if, on Monday, a sender 

authorizes a series of preauthorized 

remittance transfers in which the initial 

transfer occurs that day and the first 

subsequent transfer is scheduled to 

occur on Wednesday, the 30-minute 

cancellation period under § 1005.34(a) 

would apply to both transfers. If, 

however, in the same series of 

preauthorized remittance transfers the 

second subsequent remittance transfer is 

scheduled to occur on Friday, the threebusiness-day cancellation period would 

apply to that transfer. For either 

subsequent transfer, the provider would 

be unable to provide the required 

information at least five business days 

before the date of the transfer. In that 

instance, the provider would be 

required to disclose the cancellation 

period and future date of transfer for the 

subsequent remittance transfer on or 

with the receipt provided for the initial 

preauthorized remittance transfer. 

As a result, preauthorized remittance 

transfers scheduled fewer than three 

business days from the date of the 

transfer are now subject to different 

disclosure requirements than standalone 

remittance transfers scheduled fewer 

than three business days from the date 

of the transfer. With respect to the latter, 

there is no requirement to disclose the 

date of transfer or future date of transfer 

on receipts. The Bureau, however, 

believes these two sets of transfers 

present different concerns warranting 

different treatment. Preauthorized 

remittance transfers by definition are 

authorized to recur at substantially 

regular intervals. As a result, as 

discussed above, preauthorized 

remittance transfer present a higher risk 

of confusion since, depending on the 

frequency of the subsequent transfers in 

the series, senders may receive multiple 

receipts at or around the same time and, 

absent identifying information such as 

the date of transfer, may be unable to 

identify the transfer to which a 

particular receipt applies. One-time 

transfers scheduled in advance do not 

generally present the same risks because 

in most instances the sender would 

schedule a single transfer at any given 

time as opposed to a series of transfers 

and should not have difficulty 

identifying the transfer to which the 

receipt applies. Further, if disclosures 

were only required for subsequent 

preauthorized transfers occurring at 

least three business days in the future, 

consumers may mistakenly believe that 

no transfers were scheduled on any days 

prior to that time. 

Thus, while the Bureau believes the 

date of transfer would be helpful to 

senders of preauthorized remittance 

transfers, it does not believe such 

information is necessary for standalone 

transfers scheduled fewer than three 

business days from the date of the 

transfer. As stated above, the Bureau 

believes that it will be simpler for 

remittance transfer providers to program 

their receipts to include the transfer 

date information consistently for 

preauthorized transfers than to create 

separate receipt forms for one-time and 

preauthorized remittance transfers. 

New § 1005.36(d)(3) and (d)(4) 

address formatting and accuracy 

requirements for disclosures required 

under § 1005.36(d)(3). Section 

1005.36(d)(3) states that the information 

required by § 1005.36(d)(1)(i)(A) 

generally must be disclosed in close 

proximity to the other information 

required by § 1005.36(d)(1)(i)(B). 

Section 1005.36(d)(4) states that any 

disclosure required by § 1005.36(d)(1) 

must be accurate as of the date the 

subsequent preauthorized remittance 

transfer to which it pertains is made. 

The Bureau is also adopting 

commentary to provide further guidance 

on the application of § 1005.36(d). 

Comment 36(d)–1 clarifies that 

§ 1005.36(d)(2) permits remittance 

transfer providers some flexibility in 

determining how and when the 

disclosures required by § 1005.36(d)(1) 

may be provided to senders. Comment 

36(d)–1 states that the disclosure may be 

provided as a separate disclosure, or on 

or with any other disclosures required 

by subpart B of Regulation E related to 

the same series of preauthorized 

remittance transfers, provided that the 

disclosure and timing requirements in 

§ 1005.36(d)(2) and other applicable 

provisions in subpart B are satisfied. For 

example, the required disclosures may 

be made on or with a receipt provided 

pursuant to § 1005.36(a)(1)(i); a receipt 

provided pursuant to § 1005.36(a)(2)(ii); 

or in a separate disclosure created by 

the provider. The comment also 

provides a fact pattern describing how 

a remittance transfer provider would 

comply with § 1005.36(d)(1). 

Comment 36(d)–2 clarifies that 

§ 1005.36(d)(2)(i) requires that the 

sender receive disclosure of the date of 

transfer, applicable cancellation 

requirements, and the provider’s contact 

information no more than 12 months 

and no less than 5 business days prior 

to the date of the subsequent 

preauthorized remittance transfer. 

Comment 36(d)–2 also cross-references 

comment 36(a)(2)–3 for purposes of 

determining when a disclosure required 

by § 1005.36(d)(1) is received by the 

sender. 

Comment 36(d)–3 provides guidance 

on how the remittance transfer provider 

should disclose the date of transfer. 

Specifically, comment 36(d)–3 clarifies 

that the date of transfer of a subsequent 

preauthorized remittance transfer may 

be disclosed either as a specific date 

(e.g., July 19, 2013), or by using a 

method that clearly permits 

identification of the date of transfer, 

such as periodic intervals (e.g., the third 

Monday of every month, or the 15th of 

every month). Comment 36(d)–3 further 

clarifies that if the future dates of 

transfer are disclosed as occurring 

periodically and there is a break in the 

sequence, or the date of transfer does 

not conform to the described period, 

e.g., if a weekend or holiday causes the 

provider to deviate from the normal 

schedule, the provider should disclose 

the specific date of transfer for the 

affected transfer. Finally, comment 

36(d)–4 clarifies the accuracy 

requirements for disclosures required by 

§ 1005.36(d)(1). Comment 36(d)–4 

explains that if any of the information 

required by § 1005.36(d)(1) changes, the 

provider must provide an updated 

disclosure with the revised information 

that is accurate as of when the transfer 

is made, pursuant to § 1005.36(d)(2). 

VI. Section 1022(b)(2) Analysis 

In developing the proposed rule, the 

Bureau has considered potential 

benefits, costs, and impacts, and has 

consulted or offered to consult with the 

prudential regulators and the Federal 

Trade Commission, including regarding 

consistency with any prudential, 

market, or systemic objectives 

administered by such agencies.19

In this rulemaking, the Bureau is 

amending subpart B of Regulation E, 

which implements EFTA section 919, 

and the accompanying commentary. 

This rule modifies the February Final 

Rule and the accompanying 

commentary. The final rule provides a 

new safe harbor clarifying when a 

person does not provide remittance 

transfers in the normal course of 

business for purposes of determining 

whether a person is a ‘‘remittance 

transfer provider.’’ In the final rule, the 

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Bureau is also refining the disclosure 

requirements for certain remittance 

transfers scheduled before the date of 

the transfer, including preauthorized 

remittance transfers, and the 

accompanying interpretations of those 

requirements. The analysis below 

considers the benefits, costs, and 

impacts of this rule relative to the 

baseline provided by the February Final 

Rule. 

In the February Proposal, the Bureau 

sought information regarding various 

aspects of the market for remittance 

transfers. Among other things, the 

Bureau sought information describing 

the number of consumers who send 

remittance transfers through persons 

who would qualify for the proposed safe 

harbor or who schedule remittance 

transfers before the date of the transfer. 

Similarly, the Bureau sought data 

describing the number and 

characteristics of persons who would 

qualify for the proposed safe harbor. 

Additionally, the Bureau requested that 

interested parties provide data 

describing the number of firms that 

schedule remittance transfers before the 

date of the transfer, the number of 

remittance transfers provided, and the 

revenues earned from those transfers. 

The Bureau received limited 

information in response to these 

requests. In their comments in response 

to the February Proposal, two trade 

associations provided high-level 

summaries of limited surveys of 

member depository institutions. 

Through additional outreach, the 

Bureau obtained more detailed data 

from these associations, as well as data 

from several other sources regarding the 

number of remittance transfers or 

similar transactions provided by 

individual depository institutions, 

credit unions, and state-licensed money 

transmitters. However, as discussed 

above, the data received through this 

process were neither comprehensive nor 

necessarily representative of the entire 

population of remittance transfer 

providers or of the populations covered 

by the data. Furthermore, the Bureau 

did not receive any data pertaining to 

certain types of persons who may be 

remittance transfer providers, such as 

non-depository institutions that are not 

state-licensed money transmitters. 

The Bureau also did not receive any 

industry-wide data regarding the 

number of remittance transfer providers 

that send preauthorized remittance 

transfers or standalone remittance 

transfers scheduled before the date of 

the transfer, or the number of consumers 

using these services. Nor did the Bureau 

receive specific figures regarding the 

costs of the options discussed in the 

February Proposal. 

Due to the limited quantitative 

information received, this analysis 

generally provides a qualitative 

discussion of the benefits, costs, and 

impacts of the final rule. Considered 

with the limited data that are available, 

general economic principles provide 

insight into these benefits, costs, and 

impacts but do not support a 

quantitative analysis. 

A. Benefits and Costs to Consumers and 

Covered Persons 

Normal Course of Business 

Section 1005.30(f) of the February 

Final Rule defines the term ‘‘remittance 

transfer provider’’ to mean any person 

that provides remittance transfers for a 

consumer in the normal course of its 

business. Such persons are required to 

comply with subpart B of Regulation E 

relating to remittance transfers. 

Comment 30(f)–2 to the February Final 

Rule states that whether a person 

provides remittance transfers in the 

normal course of business depends on 

the facts and circumstances, including 

the total number and frequency of 

remittance transfers sent by the 

provider. Though it includes two 

examples, comment 30(f)–2 to the 

February Final Rule does not state a 

specific numerical threshold for 

determining when a person is not 

providing remittance transfers in the 

normal course of its business. 

The final rule provides, in 

§ 1005.30(f)(2)(i), a safe harbor clarifying 

when a person does not provide 

remittance transfers in the normal 

course of business for purposes of 

determining whether a person is a 

‘‘remittance transfer provider.’’ The 

final rule states that if a person provided 

100 or fewer remittance transfers in the 

previous calendar year, and provides 

100 or fewer remittance transfers in the 

current calendar year, then the person is 

deemed not to be providing remittance 

transfers for a consumer in the normal 

course of its business. 

For a person that crosses the 100- 

transfer threshold, and is then providing 

remittance transfers in the normal 

course of its business, the final rule also 

permits a reasonable period of time, not 

to exceed six months, to begin 

complying with subpart B of Regulation 

E. For such a person, compliance with 

subpart B of Regulation E will be 

required at the end of the ‘‘reasonable 

period of time’’ unless, based on the 

facts and circumstances, such a person 

is not a remittance transfer provider. 

The safe harbor will benefit persons 

who qualify by reducing the legal 

uncertainty they likely would have had 

under the February Final Rule regarding 

whether they provided remittance 

transfers in the normal course of 

business and their compliance costs to 

the extent they decide not to comply 

voluntarily with subpart B of Regulation 

E. Furthermore, the safe harbor does not 

impose any burden on the persons who 

qualify. The safe harbor is based on a 

bright-line numerical threshold that 

persons may use to determine easily 

whether they do not meet the definition 

of remittance transfer provider. The 

bright-line threshold should reduce 

uncertainty and legal risk for persons 

who provide a small number of 

remittance transfers each year as to 

whether they do not provide remittance 

transfers in the normal course of 

business and thus are not required to 

comply with subpart B of Regulation E. 

For those persons who do not qualify for 

the safe harbor, whether or not they are 

providing remittance transfers in the 

normal course of business will continue 

to depend on the facts and 

circumstances. 

As a result, the Bureau expects that 

the safe harbor could enable persons 

who qualify to continue providing 

remittance transfers to consumers, as 

opposed to exiting the market or 

increasing prices in response to the 

February Final Rule. The Bureau 

expects that some persons who qualify 

for the safe harbor would have exited 

the market for remittance transfers, 

absent the safe harbor, rather than 

incurred the cost associated with 

implementing the requirements of 

subpart B of Regulation E under the 

February Final Rule or risking noncompliance (due to legal risk 

surrounding the interpretation of the 

term ‘‘normal course of business’’). 

Alternatively, some persons may have 

chosen to implement subpart B of 

Regulation E if it resulted in higher 

expected net benefits than either risking 

non-compliance or ceasing to offer 

remittance transfers (and foregoing any 

revenues earned from them). Such 

persons may have increased their prices 

to recover some, or all, of the cost of 

complying with subpart B of Regulation 

E. 

Under the final rule, by contrast, the 

Bureau expects that most persons who 

qualify for the safe harbor will not 

voluntarily choose to implement the 

requirements of subpart B of Regulation 

E given the expense associated with 

implementing the requirements. The 

Bureau expects that, for these persons, 

the cost associated with counting 

remittance transfers (to ensure the 

conditions of the safe harbor are met) is 

lower than the cost of unnecessarily 

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20Caveats associated with these data sources are 

described above. 

implementing the requirements of 

subpart B of Regulation E. Furthermore, 

the Bureau expects that the clarity 

provided by the safe harbor will 

encourage more persons to continue to 

offer remittance transfers rather than 

exiting the market—thus retaining a 

revenue stream they may otherwise 

have foregone. 

For certain persons who are newly 

entering the market or who plan to 

expand their business such that they 

may no longer qualify for the safe 

harbor, the Bureau expects that the 

transition period in the final rule may 

also reduce the cost of compliance, by 

permitting such providers a reasonable 

period of time during which to come 

into compliance with subpart B of 

Regulation E. Under the February Final 

Rule, those persons considered to be 

remittance transfer providers would 

have been required to implement the 

requirements of subpart B of Regulation 

E for each remittance transfer. 

Consumers may experience both 

benefits and costs from the additional 

clarity offered by both the safe harbor 

and the transition period permitted by 

the final rule. Some consumers may 

benefit from additional access to 

remittance transfers and increased 

competition among providers, including 

potentially lower prices, if, absent the 

safe harbor, some persons who qualify 

for the safe harbor would have exited 

the market. However, some consumers 

may incur costs associated with not 

receiving disclosures, error resolution 

rights, and other protections generally 

required by subpart B of Regulation E. 

Some consumers might incur such costs 

due to the transition period. Other 

consumers may incur such costs 

because some of the persons who 

qualify for the safe harbor might have 

complied with subpart B of Regulation 

E absent the safe harbor. If persons who 

would have provided more than 100 

remittance transfers absent the safe 

harbor choose to limit the number of 

remittance transfers provided so that 

they may qualify for the safe harbor, 

some consumers could also experience 

decreased access. However, the Bureau 

expects any cost arising from not 

receiving disclosures, error resolution 

rights, and other protections will be 

incurred by a small number of 

consumers, as the Bureau estimates that 

depository institutions, credit unions, 

and others that will qualify for the safe 

harbor are responsible for only a very 

small fraction of all remittance transfers 

provided each year. 

The Bureau cannot quantify the 

number of persons who will qualify for 

the safe harbor or the transition period 

implemented in the final rule. As 

discussed above, the Bureau received 

limited survey results and data from 

several sources regarding the number of 

remittance transfers or similar 

transactions provided by individual 

depository institutions, credit unions, 

and state-licensed money transmitters. 

The Bureau does not believe that it can 

extrapolate from any of these data 

sources to determine precisely the 

number of persons who will qualify for 

the safe harbor, or the fraction of those 

persons who might cross the 100- 

transfer threshold in any year, and thus 

be eligible for the transition period. 

However, as discussed above, the data 

suggest that a meaningful number of 

insured institutions and credit unions 

will likely qualify for the safe harbor 

while few state-licensed money 

transmitters will qualify. Data sources of 

varying quality and comprehensiveness 

show that between roughly 40 and 

roughly 90 percent of depository 

institutions or credit unions that 

responded to a survey or were otherwise 

covered by the data, and that reported 

any transactions, sent 100 or fewer 

covered transactions in the prior year.20

As noted above, the Bureau estimates 

that the depository institutions, credit 

unions, and others that qualify for the 

safe harbor are responsible for only a 

very small fraction of the remittance 

transfers provided each year. 

In addition, the Bureau cannot 

determine the number of persons who 

will no longer implement subpart B of 

Regulation E as a result of the final rule. 

It is likely that some persons who 

qualify for the safe harbor would not 

have implemented subpart B of 

Regulation E, in any event, either 

because they would have relied on the 

facts and circumstances to conclude that 

they were not providing remittance 

transfers in the normal course of 

business under the February Final Rule, 

or because they would have exited the 

market absent the safe harbor. It is also 

possible that some of the persons who 

qualify for the safe harbor or are eligible 

for the transition period will choose to 

implement some portions of the 

requirements in subpart B of Regulation 

E due to market demands. Therefore, 

whether there is a change, and the 

extent of such a change, in the number 

of institutions that will implement 

subpart B of Regulation E relative to the 

February Final Rule is not known. 

However, all persons who qualify for 

the safe harbor now have an additional 

option available to them for determining 

whether they are required to comply 

with subpart B of Regulation E and 

therefore may potentially benefit from 

this provision of the final rule. 

Furthermore, all persons who qualify for 

the safe harbor but then cross the 100- 

transfer threshold will be eligible for the 

transition period. 

Estimates and Disclosure Requirements 

The February Final Rule requires, for 

the first transfer in a series of 

preauthorized remittance transfers, that 

the provider provide a pre-payment 

disclosure at the time the sender 

requests the transfer and a receipt at the 

time payment for the transfer is made, 

which the commentary explains means 

when payment is authorized. The 

February Final Rule also generally 

requires that both the pre-payment 

disclosure and the receipt be accurate 

when payment is made. In the case of 

subsequent preauthorized remittance 

transfers, the February Final Rule 

requires that a pre-payment disclosure 

be provided a reasonable time prior to 

each subsequent preauthorized 

remittance transfer and that a receipt be 

provided following the transfer. These 

pre-payment disclosures and receipts 

are required to include accurate figures, 

unless a statutory exception permitting 

the use of estimates applies. 

In the final rule, a new exception, 

§ 1005.32(b)(2), permits disclosures 

required to be provided prior to or when 

payment is made to contain estimates of 

exchange rates and certain related 

figures in certain cases for remittance 

transfers scheduled five or more 

business days before the date of the 

transfer, including preauthorized 

remittance transfers. If a remittance 

transfer provider discloses estimates 

under this provision, the final rule 

requires that the provider later give 

senders receipts with accurate figures 

unless a statutory exception permitting 

the use of estimates applies. 

As discussed above, industry 

commenters stated that disclosing an 

exchange rate that would apply to a 

remittance transfer long before the date 

of that transfer poses particular 

difficulties. Commenters stated that 

such a disclosure would potentially 

subject the remittance transfer provider 

(or its business partners) to additional 

exchange rate risk since a wholesale 

exchange rate may vary between the 

date that a remittance transfer is 

scheduled (and disclosures are 

provided) and the date of the transfer. 

Although some of this risk may be 

reduced through the use of financial 

instruments, risk mitigation strategies 

may increase costs to providers, and 

some providers may not want to absorb 

or manage the associated risks. In 

addition, an industry commenter 

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50276 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

21 It may contain estimates as permitted by 

§ 1005.32(b)(2). 

22One trade association reported that it believes 

that less than three percent of remittance transfers 

at credit unions are preauthorized remittance 

transfers. Another trade association noted that 

‘‘preauthorized international transfers’’ make up 

only a small percentage of the ‘‘total international 

transfers initiated by consumers.’’ One money 

transmitter stated that, although the product is 

relatively new and growing, scheduled payments 

currently represent only a small percentage of its 

overall business. 

indicated that, at least in some 

instances, providers would refuse to 

offer remittance transfers scheduled 

three or more business days before the 

date of the transfer if the Bureau 

required providers to disclose an 

accurate exchange rate prior to the 

expiration of the consumer’s 

cancellation right. 

Under the final rule, remittance 

transfer providers choosing to provide 

estimates in certain circumstances will 

avoid the cost associated with providing 

accurate figures before the date of 

transfer but will incur the cost 

associated with providing accurate 

receipts after the date of transfer. Since 

remittance transfer providers retain the 

option of giving accurate pre-payment 

disclosures and receipts as required 

under the February Final Rule, net costs 

incurred by remittance transfer 

providers choosing to use the new 

exception for estimates should not 

increase relative to the February Final 

Rule. Permitting estimates of certain 

amounts on the pre-payment disclosure 

and receipt given in connection with 

remittance transfers scheduled five or 

more business days before the date of 

the transfer reduces the cost of 

compliance. Specifically, the exception 

eliminates the need for remittance 

transfer providers (or their business 

partners) to manage any exchange rate 

or other risk associated with committing 

to an exchange rate on disclosures 

provided five or more business days 

before the date of the transfer. 

If a remittance transfer provider 

chooses to estimate certain information 

under this new exception, it is also 

required to provide an additional 

receipt with figures that are accurate as 

of the date the transfer is made (unless 

estimates are permitted under either of 

the two statutory exceptions). For onetime remittance transfers or the first in 

a series of preauthorized remittance 

transfers scheduled five or more 

business days before the date of the 

transfer, this requirement could require 

three disclosure forms, rather than the 

two disclosures required by the 

February Final Rule. To provide this 

additional disclosure in these cases, 

remittance transfer providers may incur 

additional costs, e.g. for programming, 

printing or distribution, if it is not 

already the providers’ standard business 

practice to provide this disclosure. 

Consumers scheduling remittance 

transfers five or more business days 

before the date of the transfer may 

receive benefits or incur costs as a result 

of the changes made by the final rule to 

provisions concerning these transfers. 

Industry commenters indicated that, at 

least in some instances, remittance 

transfer providers would cease offering 

transfers scheduled before the date of 

the transfer if they were required to 

disclose accurate exchange rates at the 

time of scheduling. In addition, to 

address any risk associated with setting 

exchange rates before the date of the 

transfer, providers might have disclosed 

less favorable exchange rates to 

consumers, thus effectively increasing 

the prices of their services. Permitting 

the use of estimates may result in more 

providers offering remittance transfers 

scheduled before the date of the 

transfer, and doing so at a lower cost. 

Therefore, consumers may benefit from 

expanded access to remittance transfers 

scheduled five or more business days 

before the date of the transfer, increased 

competition, and potentially lower 

prices. If providers who otherwise 

would have provided accurate figures 

choose to disclose estimates under the 

final rule, some consumers may incur 

costs if they receive less reliable 

information regarding the exchange rate, 

the amount transferred, and the amount 

received before the date of the transfer. 

The magnitude of these costs would 

depend on the size of any discrepancy 

between estimated and accurate 

disclosures and the extent to which the 

consumer relies on the disclosure to 

choose among providers or to make 

spending, budgeting, or other financial 

decisions. However, consumers valuing 

accurate information retain the option of 

not pre-scheduling remittance transfers. 

Furthermore, this change will have no 

impact on consumers who send 

remittance transfers that require no 

foreign exchange because they are 

funded and received in the same 

currency and thus no exchange rate 

needs to be disclosed. 

Disclosure Rules for Subsequent 

Preauthorized Remittance Transfers 

The final rule eliminates the 

requirement that remittance transfer 

providers mail or deliver a pre-payment 

disclosure a reasonable time prior to 

each subsequent preauthorized 

remittance transfer. Instead, the final 

rule requires that a provider send a 

receipt a reasonable time prior to the 

scheduled date of the next 

preauthorized remittance transfer if 

certain disclosed information is changed 

from what was disclosed regarding the 

first preauthorized remittance transfer 

(or what was disclosed in a prior 

updated receipt, if such a receipt was 

provided previously). This receipt must 

disclose the changed terms, in addition 

to the other disclosures required by 

§ 1005.31(b)(2).21 If no updated receipt 

is necessary (or if the updated receipt 

contains estimates), providers generally 

must give an accurate receipt to 

consumers for each subsequent 

preauthorized remittance transfer 

shortly after the date of transfer. 

The Bureau does not know the 

number of remittance transfer providers 

offering preauthorized remittance 

transfers, but comments and 

information received through outreach 

suggest that they comprise a small 

percentage of all remittance transfers.22

Furthermore, based on the Bureau’s 

understanding of the remittance transfer 

market, the Bureau believes that, 

although some depository institutions 

and credit unions that are remittance 

transfer providers offer preauthorized 

remittance transfers, a very small 

number of state-licensed money 

transmitters do so. 

For the remittance transfer providers 

that offer preauthorized remittance 

transfers, the elimination of the prepayment disclosure for subsequent 

preauthorized remittance transfers 

reduces the costs associated with 

providing preauthorized remittance 

transfers. These costs may include 

distribution cost as well as compliance 

risk arising from uncertainty 

surrounding the interpretation of 

‘‘reasonable time.’’ 

For consumers, the changes in the 

requirements regarding subsequent 

preauthorized remittance transfers 

could result in some benefits and some 

costs. Since the risk and burden 

associated with providing accurate prepayment disclosures for subsequent 

preauthorized remittance transfers 

might have discouraged some providers 

from offering preauthorized remittance 

transfers or caused them to increase 

prices, consumers potentially will have 

increased access to this product and the 

convenience associated with it. 

Furthermore, in some cases, the 

elimination of the pre-payment 

disclosure requirement may provide 

some benefit to consumers who might 

otherwise have been confused when 

receiving, in close proximity, both 

receipts from completed preauthorized 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50277 

23 In some limited circumstances described in 

§ 1005.36(d)(2)(ii), disclosure regarding future dates 

of transfer may also be accompanied by additional 

information regarding cancellation periods. 

24Timing requirements for this additional 

requirement are addressed in § 1005.36(d)(2)(i). 

payment disclosures for future 

preauthorized remittance transfers. 

With the elimination of the 

requirement for pre-payment 

disclosures for subsequent 

preauthorized remittance transfers, 

consumers could also be harmed by 

generally not receiving additional 

reminders of upcoming remittance 

transfers and their cost close to the date 

of the transfer. However, the Bureau 

expects that any such effect will be 

small. As discussed below, the final rule 

generally requires that providers 

disclose the date of the transfer, 

cancellation requirements, and the 

provider’s contact information to 

senders of subsequent preauthorized 

remittance transfers no fewer than five 

business days and no more than 12 

months before the date of the transfer. 

This should serve as a reminder to 

consumers of future preauthorized 

remittance transfers and the method of 

cancellation. With respect to cost, the 

accurate figures provided in receipts 

may serve as a basis for the consumer 

to project the likely cost associated with 

future preauthorized remittance 

transfers. 

Cancellation Period and Other 

Disclosures 

The final rule modifies the February 

Final Rule in several respects with 

regard to the cancellation disclosure 

requirements for transfers scheduled at 

least three business days before the date 

of the transfer, as well as preauthorized 

remittance transfers. First, the final rule 

requires a remittance transfer provider 

to disclose the specific date of the 

transfer in receipts given in association 

with certain transfers, so that a sender 

may calculate the date on which the 

sender’s right to cancel will expire. This 

requirement applies to one-time 

remittance transfers scheduled at least 

three business days before the date of 

the transfer, as well as the first transfer 

in a series of preauthorized remittance 

transfers. Also, the final rule requires, in 

conjunction with certain disclosures 

related to initial transfers in series of 

preauthorized transfers, disclosures of 

the date of transfer regarding any 

subsequent preauthorized transfer in 

that series for which the date of the 

transfer is four or fewer business days 

after the date payment is made for that 

transfer. Second, for other preauthorized 

remittance transfers (i.e., those 

scheduled five or more business days 

before the date of the transfer), the final 

rule requires the remittance transfer 

provider to disclose the date or dates on 

which the remittance transfer provider 

will execute such subsequent transfers 

in the series of preauthorized remittance 

transfers, the applicable cancellation 

requirements, and contact information 

for the provider. The final rule permits 

providers some flexibility in 

determining how these disclosures may 

be provided, although there are specific 

timing requirements. In addition, 

disclosures regarding the dates of 

transfer for all preauthorized remittance 

transfers must be accurate as of the date 

the preauthorized remittance transfer to 

which the disclosure pertains is made. 

Finally, the final rule also permits 

providers to describe on the same 

receipt both the three-business-day and 

30-minute cancellation periods (the 

latter applying to remittance transfers 

scheduled fewer than three business 

days before the date of the transfer) and 

either describe the transfers to which 

each period applies or, alternatively, use 

a checkbox or other method to designate 

which cancellation period is applicable 

to the transfer. 

Remittance transfer providers could 

incur costs from the requirement in the 

final rule that they disclose certain dates 

of transfer on receipts given in 

connection with one-time remittance 

transfers scheduled at least three 

business days before the date of the 

transfer and certain preauthorized 

remittance transfers. To comply with 

this new requirement, remittance 

transfer providers will need to revise 

receipts for these transfers to include 

the date or dates of the transfers.23 The 

additional disclosures on certain 

receipts may constitute an additional 

cost to remittance transfer providers if 

they do not already include this 

information on their receipts. The 

Bureau lacks specific information 

regarding the additional burden 

imposed on remittance transfer 

providers by this change but believes 

that it involves a slight modification of 

a disclosure required by the February 

Final Rule to include information 

maintained by providers. For those 

providers producing receipts 

electronically, this customization will 

likely involve a one-time change to 

information technology systems. 

For transfers scheduled at least three 

business days before the date of the 

transfer, the date of the transfer gives 

consumers a basis from which to 

determine when their cancellation 

rights expire, thus providing consumers 

with additional clarity regarding their 

cancellation rights that could benefit 

those consumers who may want to 

cancel. This requirement also provides 

consumers with additional information 

about when the transfer will take place 

and, thus, the date by which a 

consumer’s funds must be available in 

order for the remittance transfer 

provider to make the transfer. 

As discussed above, the final rule also 

requires that the provider disclose to the 

sender the upcoming date of the 

transfer, cancellation requirements, and 

the provider’s contact information for 

any subsequent preauthorized 

remittance transfer scheduled five or 

more business days before the date of 

the transfer.24 This additional 

requirement in the final rule represents 

an additional cost to providers who are 

not already required to, or do not 

otherwise voluntarily, provide this 

information to consumers. The Bureau 

does not have information regarding the 

cost associated with disclosing the dates 

of transfer, cancellation requirements, 

and the provider’s contact information 

for subsequent preauthorized remittance 

transfers. For remittance transfer 

providers who choose to include this 

information on an electronicallygenerated periodic statement or receipt, 

this likely represents a modest, one-time 

programming cost. The final rule does 

not require that this information be 

provided on an additional, separate 

disclosure, but rather permits providers 

to modify existing statements, receipts, 

or disclosures to include this 

information, which is already 

maintained by the remittance transfer 

provider. If the provider elects to do so, 

however, it may disclose this 

information in a separate disclosure that 

may be provided annually. 

As described above, the date of the 

transfer gives consumers a basis from 

which to determine when their 

cancellation rights expire. This 

requirement provides consumers with 

additional clarity regarding their 

cancellation rights that could benefit 

those consumers that may want to 

cancel. It also provides consumers with 

additional information about when the 

transfer will take place and, thus, the 

date by which the consumer’s funds 

must be available in order for the 

remittance transfer provider to make the 

transfer. 

The final rule also states that 

remittance transfer providers that offer 

both remittance transfers scheduled at 

least three business days before the date 

of the transfer and remittance transfers 

scheduled fewer than three business 

days before the date of the transfer may 

describe both the three-business-day 

and 30-minute cancellation periods 

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50278 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

25These potential confusion costs, which the 

Bureau is unable to monetize, are likely only 

incurred by consumers using remittance transfer 

providers that offer remittance transfers scheduled 

more than three business days before, as well as 

remittance transfers scheduled closer to, the date of 

the transfer. It is possible, however, that a consumer 

using a provider that does not offer remittance 

transfers scheduled three or more business days 

before the date of the transfer could be exposed to 

both cancellation periods if, for example, the 

provider utilizes a third-party software solution that 

prints both periods on the same receipt. 

26A few commenters suggested that rural banks 

would benefit from the safe harbor. The Bureau did 

not receive comment regarding whether rural 

consumers were more or less likely to use nondepository institutions than other consumers. 

27Exceptions include additional requirements in 

certain cases to disclose the date of the transfer and 

other cancellation information as described above. 

28For purposes of assessing the impacts of the 

proposed rule on small entities, ‘‘small entities’’ is 

defined in the RFA to include small businesses, 

small not-for-profit organizations, and small 

government jurisdictions. 5 U.S.C. 601(6). A ‘‘small 

business’’ is determined by application of Small 

Business Administration regulations and reference 

to the North American Industry Classification 

System (NAICS) classifications and size standards. 

5 U.S.C. 601(3). A ‘‘small organization’’ is any ‘‘notfor-profit enterprise which is independently owned 

and operated and is not dominant in its field.’’ 5 

U.S.C. 601(4). A ‘‘small governmental jurisdiction’’ 

is the government of a city, county, town, township, 

village, school district, or special district with a 

population of less than 50,000. 5 U.S.C. 601(5). 

applicable to such transfers on one 

receipt, provided they either describe 

the applicable deadline, or alternatively, 

use a checkbox or some other method to 

designate which cancellation period is 

applicable. This allows providers to use 

one standardized form, though each 

receipt needs to be modified for that 

particular remittance transfer. Providers 

who offer remittance transfers 

scheduled three or more business days 

before the date of the transfer, in 

addition to remittance transfers 

scheduled closer to or on the date of the 

transfer, may be relieved of costs since 

they are otherwise required by the 

February Final Rule to produce two 

distinct types of receipts. This 

additional flexibility benefits providers 

without imposing any additional costs 

because providers retain the option of 

complying with the requirements of the 

February Final Rule. 

Disclosing both cancellation 

provisions on the same receipt could 

result in a receipt that is potentially 

more confusing to consumers.25

However, the Bureau believes that 

consumers are unlikely to be confused 

by having a description of both 

cancellation deadlines in the same 

disclosure. To the contrary, including a 

description of both the 30-minute and 

three-business-day cancellation periods 

with a checkbox or other method that 

clearly designates the cancellation time 

period applicable to a consumer’s 

transaction may improve consumers’ 

understanding of the cancellation 

provisions generally. 

B. Potential Specific Impacts of the 

Final Rule 

Depository Institutions and Credit 

Unions With $10 Billion or Less in Total 

Assets, as Described in Section 1026 

The Bureau does not believe that the 

costs and benefits arising from the final 

rule for depository institutions and 

credit unions with $10 billion or less in 

total assets are substantively different 

from those discussed in the general 

analysis. However, the Bureau does 

believe that those depository 

institutions and credit unions with $10 

billion or less in total assets are more 

likely to benefit from the additional 

clarity and burden reduction provided 

by the safe harbor than larger 

institutions or non-depository 

institutions. Although the Bureau lacks 

comprehensive data describing the 

number of remittance transfers provided 

by each entity, information that the 

Bureau obtained through comments and 

outreach suggests that, among 

depository institutions and credit 

unions that provide any remittance 

transfers, an institution’s asset size and 

the number of remittance transfers sent 

by the institution is positively, though 

imperfectly, related. As a result, the 

Bureau expects that a greater share of 

depository institutions and credit 

unions with $10 billion or less in total 

assets that provide any remittance 

transfers will qualify for the safe harbor 

compared with those with more than 

$10 billion in total assets. The Bureau 

does not have any data with which to 

predict the percentage of those 

institutions that may, at some point, 

stop qualifying for the safe harbor, and 

thus be eligible for the transition period 

included in the final rule. 

With respect to the elements of the 

final rule addressing remittance 

transfers scheduled before the date of 

the transfer, the Bureau does not believe 

that the costs and benefits arising from 

the final rule for depository institutions 

and credit unions with $10 billion or 

less in total assets are substantively 

different from those discussed in the 

general analysis. 

Consumers in Rural Areas 

Consumers in rural areas may 

experience different impacts from the 

final rule than consumers in general. In 

the February Proposal, the Bureau 

solicited additional information 

regarding the characteristics of rural 

consumers who send remittance 

transfers, the types of businesses 

through which they send remittance 

transfers, and the quantitative and 

qualitative characteristics of the services 

provided to them. The Bureau did not 

receive information regarding the types 

of institutions that rural consumers use 

to send remittance transfers and 

whether those institutions are more or 

less likely to benefit from the additional 

clarity provided by the safe harbor 

provision.26 Furthermore, the Bureau 

did not receive information regarding 

whether rural consumers are more or 

less likely than other consumers either 

to schedule remittance transfers three or 

more business days before the date of 

the transfer or to send preauthorized 

remittance transfers. 

As discussed above, the final rule 

generally lowers costs for persons 

providing remittance transfers relative 

to the February Final Rule.27 If 

consumers in rural areas are more likely 

to send remittance transfers through 

persons who qualify for the safe harbor 

and, absent the safe harbor, would have 

exited the market, they likely will 

experience greater benefits from the 

final rule—in terms of increased access 

or more competitive pricing—than 

consumers generally. If persons 

providing remittance transfers to rural 

consumers are more likely to qualify for 

the safe harbor and, absent the safe 

harbor, would have chosen to 

implement subpart B of Regulation E, 

rural consumers may be more likely to 

lose potential benefits arising from the 

disclosure, cancellation, and error 

resolution rights. 

It is likely that depository institutions 

and credit unions serving rural 

consumers are smaller in terms of asset 

size, on average, suggesting that they 

might be more likely to benefit from the 

safe harbor. This benefit may be muted, 

however, if rural consumers are more 

likely than other consumers to use 

remittance transfer providers that are 

not depository institutions or credit 

unions. 

VII. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to conduct 

an initial regulatory flexibility analysis 

(IRFA) and a final regulatory flexibility 

analysis (FRFA) of any rule subject to 

notice-and-comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities.28 The Bureau 

also is subject to certain additional 

procedures under the RFA involving the 

convening of a panel to consult with 

small business representatives prior to 

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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50279 

29 5 U.S.C. 609. 

30This commenter appeared to be confusing the 

February Proposal with the February Final Rule. 

The letter states: ‘‘As noted in the final rule, the 

agency concluded that the proposed rule could 

have a significant economic impact on small 

entities regarding international wire transfers.’’ This 

is not true of the February Proposal in which the 

Bureau certified that the February Proposal, if 

promulgated, would not have a significant 

economic impact on a substantial number of small 

entities. 

31Small Business Administration, Table of Small 

Business Size Standards Matched to North 

American Industry Classification System Codes, 

http://www.sba.gov/sites/default/files/files/ 

Size_Standards_Table.pdf. Effective March 26, 

2012. 

32For the purpose of this analysis, the Bureau 

assumes that providers, and not their agents, will 

assume any costs associated with implementing the 

final rule. A remittance transfer provider is liable 

for any violation of subpart B by an agent when the 

agent acts for the provider (See § 1005.35). There 

may be other entities that serve as remittance 

transfer providers that are not depository 

institutions, credit unions, or money transmitters, 

as traditionally defined. These entities could 

include broker-dealers that send remittance 

transfers. The Bureau does not have information 

regarding the number of broker-dealers that send 

remittance transfers. 

33Federal Deposit Insurance Corporation, http:// 

www2.fdic.gov/idasp/main.asp, downloaded July 

12, 2012. Count includes active institutions as of 

March 31, 2012. 

34One survey of 146 banks reported that 10.3 

percent of respondent banks did not ‘‘initiate 

electronic funds transfers (wires or IAT) for 

consumers in the U.S. to persons or entities outside 

the U.S.’’ Another survey of 277 banks found that 

6.9 percent of bank respondents did not send 

international fund transfers on behalf of consumers. 

In its comment letter, the same trade association 

stated that 68 percent of community banks offer 

international funds transfers to consumers and cited 

to a survey with 713 respondents (implying that 32 

percent of banks do not offer international funds 

transfers). 

35Regulatory data received from New York shows 

that 55 percent of money transmitters licensed in 

that state had $7 million or less in revenue in 2011. 

Applying that percentage to the figure of 500 statelicensed money transmitters would result in an 

estimate of 275 small entity money transmitters. 

However, absent further information, the Bureau 

does not believe that it can extrapolate from the 

New York data to the entire money transmitter 

market. 

proposing a rule for which an IRFA is 

required.29

The Bureau is certifying the final rule. 

Therefore, a FRFA is not required for 

this rule because it will not have a 

significant economic impact on a 

substantial number of small entities. 

In this rulemaking, the Bureau is 

amending subpart B of Regulation E, 

which implements the EFTA, and the 

official interpretation to the Regulation. 

This rule modifies the February Final 

Rule as well as the accompanying 

commentary. The final rule provides a 

new safe harbor clarifying when a 

person does not provide remittance 

transfers in the normal course of 

business for purposes of determining 

whether a person is a ‘‘remittance 

transfer provider.’’ In the final rule, the 

Bureau is also refining the disclosure 

requirements for certain remittance 

transfers scheduled before the date of 

the transfer, including preauthorized 

remittance transfers, and the 

accompanying interpretations of those 

requirements. 

This rule facilitates compliance with 

the February Final Rule and eases 

possible compliance burden while 

generally preserving potential benefits 

to consumers arising from the 

disclosure, cancellation, and error 

resolution requirements of the February 

Final Rule. The Bureau concluded that 

the February Proposal would not have a 

significant economic impact on a 

substantial number of small entities, 

and to the extent that it has such 

impacts, they would largely be positive. 

The Bureau received a number of 

comments in response to the February 

Proposal addressing the burden 

imposed by the February Proposal and 

potential alternatives as well as the 

burden imposed by the February Final 

Rule. These comments are summarized 

above. The Bureau also invited 

comment from members of the public 

regarding whether the rule, as proposed, 

would have a significant impact on a 

substantial number of small entities. 

One commenter urged the Bureau to 

employ the Small Business Regulatory 

Enforcement Fairness Act (SBREFA) 

panel process. This commenter also 

suggested that the Bureau engage in 

outreach to credit unions and 

community banks prior to finalizing the 

rule.30

As discussed below, the Bureau 

considered these comments, data, and 

other information obtained through 

further outreach in concluding that a 

factual basis exists for certifying the 

final rule. The analysis examines the 

regulatory impact of the final rule 

against the baseline of the February 

Final Rule. 

A. Affected Small Entities 

Potentially affected small entities 

include depository institutions and 

credit unions that have $175 million or 

less in assets that offer remittance 

transfers as well as non-depository 

institutions that have average annual 

receipts that do not exceed $7 million.31

These affected small entities may 

include state-licensed money 

transmitters, among others.32 Of the 

7,319 insured depository institutions, 

3,845 are small entities.33 As explained 

in the February Final Rule, these 

institutions generally offer remittance 

transfers through wire transfers, though 

they may also offer remittance transfers 

through other means. 

Regulatory filings by insured 

depository institutions do not contain 

information about the number of 

institutions that offer consumer 

international wire transfers (or other 

types of remittance transfers). Two trade 

association surveys of a small number of 

depository institutions found that seven 

percent of respondents (in one survey) 

and ten percent (in the other survey) 

stated that they do not offer 

international funds transfers on behalf 

of consumers.34 The Bureau does not 

believe it can extrapolate from either 

survey to the entire population of 

depository institutions. However, for the 

purposes of this analysis, the Bureau 

assumes that all but seven percent of 

small depository institutions, i.e., 3,576, 

send remittance transfers. The Bureau 

believes that this figure likely 

overestimates the number of small 

entity depository institutions offering 

remittance transfers. Data from the 

National Credit Union Administration 

suggest that, as of March 2012, 3,382 of 

the 7,019 federally insured credit 

unions offer international wire transfers. 

Of the insured credit unions that offer 

international wire transfers, 2,548 are 

small entities. Though the Bureau does 

not have exact data on the number of 

credit unions that offer remittance 

transfers, the Bureau assumes that the 

figure is similar. 

Apart from insured depository 

institutions and credit unions, the 

Bureau believes that most of the other 

small entities affected by this rule are 

state-licensed money transmitters. In 

comment to the February Final Rule, 

one trade association estimated that 

there are about 500 state-licensed 

money transmitters. In an analysis 

performed in connection with the 

February Final Rule, the Bureau 

estimated that 350 of these 500 statelicensed money transmitters had $7 

million or less in total revenues and 

therefore would be considered small 

entities under the Small Business 

Administration’s small business size 

standards.35

As discussed below, the Bureau 

expects that many small entities will 

likely benefit from the additional clarity 

provided by the safe harbor. The small 

entities directly affected by other 

aspects of the final rule are those 

entities that are required to comply with 

subpart B of Regulation E and either (i) 

Provide remittance transfers scheduled 

at least five business days before the 

date of the transfer; (ii) provide 

preauthorized remittance transfers; or 

(iii) provide remittance transfers 

scheduled three or more business days 

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36Although the Bureau does not have access to 

data regarding other types of entities that 

potentially provide remittance transfers, those 

entities could only benefit from the clarity provided 

by the safe harbor and the reduction in compliance 

costs associated with the transition period. 

37 It may contain estimates as permitted by 

§ 1005.32(b)(2). 

before the date of the transfer as well as 

remittance transfers scheduled fewer 

than three business days before the date 

of the transfer. 

B. Normal Course of Business 

Comment 30(f)–2 to the February 

Final Rule states that whether a person 

provides remittance transfers in the 

normal course of business depends on 

the facts and circumstances, including 

the total number and frequency of 

remittance transfers sent by the 

provider. The final rule provides a new 

safe harbor clarifying when a person 

does not provide remittance transfers in 

the normal course of business for 

purposes of determining whether a 

person is a ‘‘remittance transfer 

provider.’’ The final rule states that if a 

person provided 100 or fewer 

remittance transfers in the previous 

calendar year, and provides 100 or 

fewer remittance transfers in the current 

calendar year, then the person is 

deemed not to be providing remittance 

transfers for a consumer in the normal 

course of its business. For a person that 

crosses the 100-transaction threshold, 

and is providing remittance transfers for 

consumers in the normal course of its 

business, the final rule permits a 

reasonable period of time, not to exceed 

six months, to begin complying with 

subpart B of Regulation E. For such a 

person, compliance with subpart B of 

Regulation E will be required at the end 

of the ‘‘reasonable period of time’’ 

unless, based on the facts and 

circumstances, such a person is not a 

remittance transfer provider. 

The Bureau expects that persons who 

believe they qualify for the safe harbor 

will endeavor to track the number of 

remittance transfers that they send each 

year. Though there may be a cost 

associated with tracking the number of 

remittance transfers provided, persons 

elect to incur it at their option. Persons 

qualifying for the safe harbor will be 

relieved of uncertainty and legal risk 

regarding whether they provide 

remittance transfers in the normal 

course of business. Furthermore, 

persons who formerly qualified for the 

safe harbor, but then provide more than 

100 remittance transfers in a year, will 

benefit from the final rule’s transition 

period. Therefore, the final rule may 

only decrease compliance costs relative 

to the baseline established by the 

February Final Rule. 

As discussed above, the Bureau is 

unable to state definitively the number 

of small entities that would benefit from 

the additional certainty provided by the 

safe harbor and the benefits of the 

transition period. The Bureau received 

limited survey results and data from 

several sources describing the number 

of remittance transfers or similar 

transactions (which may include 

remittance transfers) provided by 

individual depository institutions, 

credit unions, and state-licensed money 

transmitters. This information suggests 

that a meaningful number of depository 

institutions and credit unions will likely 

qualify for the safe harbor. Furthermore, 

for depository institutions and credit 

unions that provide remittance 

transfers, these sources also suggest a 

generally positive relationship between 

asset size and remittance transfer 

counts, suggesting that small entity 

institutions are more likely to qualify for 

the safe harbor than larger institutions. 

In addition to data regarding 

depository institutions and credit 

unions, the Bureau obtained some 

information from state regulators in 

California, New York, and Ohio 

regarding entities licensed as money 

transmitters in those states. These data 

generally tracked transactions that are 

money transmissions under each state’s 

law, which generally include remittance 

transfers, as defined in subpart B of 

Regulation E, but may not include all 

such remittance transfers, and may 

include a number of other types of 

transactions that are not remittance 

transfers under subpart B of Regulation 

E. Nevertheless, these data, combined 

with the Bureau’s research regarding the 

business models of covered companies, 

suggest that few state-licensed money 

transmitters would qualify for the safe 

harbor. Therefore, the additional clarity 

provided by the safe harbor would 

likely represent little, if any, change 

relative to the February Final Rule for 

small entity state-licensed money 

transmitters.36

C. Estimates and Disclosure 

Requirements 

In the final rule, § 1005.32(b)(2) 

permits providers to estimate certain 

information in pre-payment disclosures 

and certain receipts provided for 

remittance transfers scheduled by a 

sender five or more business days before 

the date of the transfer, including 

preauthorized remittance transfers. If a 

remittance transfer provider chooses to 

give estimated disclosures pursuant to 

§ 1005.32(b)(2), the final rule also 

requires that it provide a receipt with 

accurate figures (unless a statutory 

exception permitting the use of 

estimates applies). 

This provision for estimates only 

affects remittance transfer providers that 

offer consumers the option to schedule 

remittance transfers five or more 

business days before the date of the 

transfer. As discussed above in the 

Section 1022 Analysis, these providers 

are relieved of the potential burden 

associated with disclosing accurate 

exchange rates five or more business 

days before the date of the transfer. 

Remittance transfer providers 

choosing to employ this exception for 

estimates will potentially incur 

additional costs associated with 

providing an additional receipt with 

accurate figures to consumers in 

connection with one-time transfers and 

the first in a series of preauthorized 

remittance transfers. However, 

remittance transfer providers retain the 

option of complying with the February 

Final Rule and providing accurate prepayment disclosures and receipts (and 

thus not providing a second receipt) for 

every transfer. Therefore, remittance 

transfer providers, including small 

entity providers, should only benefit 

and not incur any additional costs from 

this change. 

D. Disclosure Rules for Subsequent 

Preauthorized Remittance Transfers 

The final rule eliminates the 

requirement that remittance transfer 

providers mail or deliver pre-payment 

disclosures within a reasonable time 

prior to the date of each subsequent 

preauthorized remittance transfer. 

Instead, the final rule requires a receipt 

be provided to the consumer within a 

reasonable time prior to the date of the 

next preauthorized remittance transfer 

only if certain figures (generally those 

that are not estimates or based on 

estimates) on the receipt provided with 

respect to the first in that series of 

preauthorized remittance transfers 

change (or the figures disclosed from a 

prior updated receipt change, if one was 

previously provided). This receipt must 

disclose the changed terms, among the 

other disclosures required by 

§ 1005.31(b)(2).37 This additional 

flexibility will benefit providers, 

including small entity providers. With 

respect to these pre-payment 

disclosures, providers will no longer 

incur the costs associated with 

providing these disclosures or 

compliance risk arising from 

uncertainty surrounding the 

interpretation of ‘‘reasonable time.’’ 

When certain figures change, providers 

will still incur some cost associated 

with providing a receipt displaying 

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38This flexibility does not extend to subsequent 

preauthorized remittance transfers scheduled four 

or fewer business days after the date payment is 

made for that transfer. 

39Consumers scheduling remittance transfers at 

least three business days before the date of the 

transfer may cancel the remittance transfer up to 

three business days prior to the date of the transfer. 

Otherwise, consumers have 30 minutes from when 

they make payment to cancel. 

these figures a reasonable time prior to 

the subsequent transfer. However, it is 

expected that an obligation to provide 

updated receipts will occur less 

frequently than the requirement in the 

February Final Rule to provide prepayment disclosures before every 

subsequent preauthorized transfer. 

E. Cancellation Period and Disclosures 

The final rule requires that remittance 

transfer providers disclose the date of 

the transfer on receipts given in 

association with any transfer scheduled 

at least three business days before the 

date of the transfer, as well as the first 

transfer in a series of preauthorized 

remittance transfers. Also, the final rule 

requires, in conjunction with certain 

disclosures related to initial transfers in 

series of preauthorized transfers, 

disclosures of the date of transfer 

regarding any subsequent preauthorized 

transfer in that series for which the date 

of the transfer is four or fewer business 

days after the date payment is made for 

that transfer. To comply with this new 

requirement, remittance transfer 

providers must program systems to 

disclose the date of the transfer on 

receipts for certain transfers. This may 

constitute an additional cost to 

remittance transfer providers if they do 

not already include this information on 

their receipts. The Bureau lacks specific 

information regarding the additional 

burden imposed on remittance transfer 

providers by this provision, but believes 

it to be modest given that it involves a 

slight modification of a disclosure 

already required by the February Final 

Rule to include information already 

maintained by the provider. For those 

remittance transfer providers producing 

receipts electronically, this will likely 

involve a one-time programming change 

to information technology systems. 

The additional requirement in the 

final rule that providers disclose the 

date of the transfer, as well as 

cancellation requirements and the 

provider’s contact information, within a 

certain period before each subsequent 

preauthorized remittance transfer 

scheduled five or more business days 

before the date of the transfer represents 

an additional cost to remittance transfer 

providers that do not already disclose 

this information. Among other options, 

providers may include this information 

in an existing statement or disclosure, or 

in a single notice covering multiple 

transfers that is provided up to a year 

before the date of the transfer.38 The 

Bureau believes that modifying existing 

statements or disclosures to include 

information already maintained by the 

remittance transfer provider likely 

represents a modest, one-time 

programming cost for those remittance 

transfer providers generating statements 

or disclosures electronically. 

Furthermore, the rule permits providers 

flexibility to disclose the required 

information in any number of ways. 

Thus, providers may be able to choose 

the least expensive among several 

disclosure options. 

The final rule also states that 

remittance transfer providers may 

describe both the three-business-day 

and 30-minute cancellation periods on 

one receipt, provided they either 

describe the remittance transfers to 

which each period applies, or 

alternatively, use a checkbox or some 

other method to designate which 

cancellation period is applicable to the 

transfer.39 This permits the use of one 

standardized form, though each receipt 

would need to be modified for the 

particular remittance transfer. This may 

result in reduced costs for those 

providers that offer both remittance 

transfers scheduled either three or more 

business days before the date of the 

transfer and closer to or on the date of 

the transfer, since providers otherwise 

are required by the February Final Rule 

to produce two types of receipts. This 

additional flexibility may benefit 

providers while not imposing any 

additional costs on them since they 

retain the option of complying with the 

requirements of the February Final Rule. 

The Bureau did not receive specific 

information regarding the number of 

small entities that would be affected by 

these changes. As discussed above, the 

Bureau believes that a meaningful 

number of small insured depository 

institutions and credit unions will 

qualify for the safe harbor in the final 

rule, and thus are not remittance 

transfer providers and are not required 

to comply with subpart B of Regulation 

E. The Bureau additionally believes 

that, though few state-licensed money 

transmitters are likely to qualify for the 

safe harbor in the final rule, very few 

small state-licensed money transmitters 

offer consumers preauthorized 

remittance transfers or the ability to 

schedule remittance transfers to be sent 

at some later date. Therefore, the Bureau 

believes that provisions relating to 

preauthorized or prescheduled transfers 

are not likely to have a significant 

economic impact on a substantial 

number of small entities. 

F. Cost of Credit for Small Entities 

The final rule does not apply to credit 

transactions or to commercial 

remittances. Therefore, the Bureau does 

not expect the final rule to increase the 

cost of credit for small businesses. With 

a few exceptions, the final rule generally 

does not change or lowers the cost of 

compliance for depositories and credit 

unions, many of which offer small 

business credit. Any effect of this rule 

on small business credit, however, 

would be highly attenuated. The final 

rule also generally does not change or 

lowers the cost of compliance for money 

transmitters. Money transmitters 

typically do not extend credit to any 

entity, including small businesses. 

G. Certification 

Accordingly, the undersigned certifies 

that this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

VIII. Paperwork Reduction Act 

The Bureau’s information collection 

requirements contained in this final rule 

have been submitted to and approved by 

the Office of Management and Budget 

(OMB) in accordance with the 

requirements of the Paperwork 

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

3507(d)). This collection of information 

was submitted to OMB as an 

amendment to the previously approved 

collection for the Electronic Fund 

Transfer Act (Regulation E) 12 CFR part 

1005 under OMB control number 3170– 

0014. Under the Paperwork Reduction 

Act (PRA), an agency may not conduct 

or sponsor, and a person is not required 

to respond to, an information collection 

unless the information collection 

displays a valid OMB control number. 

The information collection 

requirements in this final rule are in 12 

CFR part 1005. This information 

collection is required to provide benefits 

for consumers and is mandatory. See 15 

U.S.C. 1693, et seq. The likely 

respondents are remittance transfer 

providers, including small businesses. 

This information collection is required 

to provide disclosures and receipts to 

consumers in the United States who, 

primarily for personal, family, or 

household purposes, request remittance 

transfer providers to send remittance 

transfers to designated recipients, to be 

received in a foreign country. The 

disclosures provide pricing information 

and information regarding cancellation 

and error resolution rights. This 

information may be used by consumers 

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40The decrease in respondents relative to the 

PRA analysis for the February Final Rule reflects a 

revision by the Bureau of the estimate of the 

number of non-Bureau depository institutions and 

credit unions offering remittance transfers relative 

to the number reported in the February Final Rule. 

The Bureau previously estimated that 

approximately 11,000 insured depositories and 

credit unions not supervised by the Bureau provide 

remittance transfers. The Bureau now believes that 

that number may be closer to 10,000. The decrease 

in burden relative to what was previously reported 

from this revision is not included in the change in 

burden reported here. However, the revised entity 

counts are used for the purpose of calculating other 

changes in burden arising from the final rule. This 

number also assumes that 500 money transmitters, 

and not their agents, are respondents. 

41The Bureau previously made the conservative 

assumption in the PRA analysis for the February 

Final Rule that no respondent would choose not to 

comply with subpart B of Regulation E. By 

increasing certainty as to whether a remittance 

transfer provider does not provide remittance 

transfers in the normal course of business, the 

Bureau anticipates that the final rule’s safe harbor 

will increase the number of respondents that take 

advantage of the normal course of business 

exclusion and therefore decide to not comply with 

subpart B. 

42The Bureau’s estimates of burden and 

respondents have changed from the February 

Proposal due to modifications to the Bureau’s 

estimation methodology. Specifically, this PRA 

analysis reduces certain burdens in instances where 

disclosures are no longer required. The Bureau also 

assumes that no ongoing burden is associated with 

the modification of an existing disclosure. 

Additionally, burden attributed to reading the final 

rule is included. With respect to Bureau 

respondents, the Bureau further assumes that 

money transmitters, and not their agents, incur the 

burden associated with the provisions in this 

rulemaking, which generally involve the 

modification of existing disclosures. 

43The Bureau and the Federal Trade Commission 

generally both have enforcement authority over 

non-depository institutions subject to Regulation E. 

Accordingly, the Bureau has allocated to itself half 

of the total estimated 2,626 burden hours incurred 

by non-depository money transmitters subject to the 

final rule. 

for budgeting and shopping purposes 

and by consumers and Federal agencies 

to determine when violations of the 

underlying rules and statute have 

occurred. 

The Bureau estimates that the 

frequency of response to the collection 

of information in the final rule will be 

on-occasion. The Bureau estimates that 

the total one-time burden for all 10,689 

respondents potentially affected by the 

final rule to comply with Regulation E 

decreases by 914,311 hours as a result 

of the final rule, and the total ongoing 

annual burden decreases by 532,784 

hours.40 This decrease in total burden is 

largely, but not exclusively, attributable 

to respondents who will decide not to 

comply with subpart B of Regulation E 

due to the safe harbor provided for in 

the final rule.41 Although the Bureau 

does not have precise information 

regarding the number of entities 

qualifying for the safe harbor, the 

information obtained in this rulemaking 

suggests that a meaningful number of 

insured depositories and credit unions 

may qualify. For purposes of this PRA 

analysis, the Bureau has assumed that 

all respondents availing themselves of 

the safe harbor are non-Bureau 

respondents, since the Bureau estimates 

that larger depository institutions and 

credit unions (in terms of asset size) are 

less likely to qualify for the safe harbor. 

Other Federal agencies, including the 

Federal Trade Commission, are 

responsible for estimating and reporting 

to OMB the paperwork burden for the 

institutions for which they have 

administrative enforcement authority. 

They may, but are not required to, use 

the Bureau’s burden estimation 

methodology. 

Despite this overall reduction, the 

Bureau estimates that one-time burden 

for Bureau respondents increases 

slightly.42 For the 154 large depository 

institutions and credit unions 

(including their depository affiliates) 

considered to be Bureau respondents for 

the purposes of this PRA analysis, the 

Bureau estimates that the final rule 

increases one-time burden by 809 hours 

and has no impact on ongoing burden. 

For the 500 non-depository money 

transmitters for which the Bureau has 

administrative enforcement authority 

for the purposes of the PRA, the rule 

increases one-time burden by 1,313 

hours and has no impact on ongoing 

burden.43

In conjunction with the February 

Proposal, the Bureau received 

comments on the merits of various 

aspects of the final rule, including the 

burden of compliance generally, the 

relative burden of providing actual 

exchange rates and estimates, whether 

or how information regarding 

cancellation periods should be 

disclosed, estimates of the number of 

institutions affected by the safe harbor, 

and whether particular disclosure forms 

should be required. These comments 

relate to core issues in the February 

Proposal and the Bureau’s consideration 

of these comments is discussed above. 

The Bureau received no comments 

specifically addressing the Bureau’s 

proposed PRA burden estimates or 

numbers of Bureau respondents. 

List of Subjects in 12 CFR Part 1005 

Banking, Banks, Consumer protection, 

Credit unions, Electronic fund transfers, 

National banks, Remittance transfers, 

Reporting and recordkeeping 

requirements, Savings associations. 

Authority and Issuance 

For the reasons stated in the 

preamble, the Bureau of Consumer 

Financial Protection amends 12 CFR 

part 1005 as set forth below: 

PART 1005—ELECTRONIC FUND 

TRANSFERS (REGULATION E) 

■ 1. The authority citation for part 1005 

is revised to read as follows: 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1693b. 

Subpart B is also issued under 12 U.S.C. 

5601. 

Subpart B—Requirements for 

Remittance Transfers 

■ 2. Amend § 1005.30 to revise 

paragraph (f) to read as follows: 

§ 1005.30 Remittance transfer definitions. 

* * * * * 

(f) Remittance transfer provider—(1) 

General definition. ‘‘Remittance transfer 

provider’’ or ‘‘provider’’ means any 

person that provides remittance 

transfers for a consumer in the normal 

course of its business, regardless of 

whether the consumer holds an account 

with such person. 

(2) Normal course of business—(i) 

Safe harbor. For purposes of paragraph 

(f)(1) of this section, a person is deemed 

not to be providing remittance transfers 

for a consumer in the normal course of 

its business if the person: 

(A) Provided 100 or fewer remittance 

transfers in the previous calendar year; 

and 

(B) Provides 100 or fewer remittance 

transfers in the current calendar year. 

(ii) Transition period. If a person that 

provided 100 or fewer remittance 

transfers in the previous calendar year 

provides more than 100 remittance 

transfers in the current calendar year, 

and if that person is then providing 

remittance transfers for a consumer in 

the normal course of its business 

pursuant to paragraph (f)(1) of this 

section, the person has a reasonable 

period of time, not to exceed six 

months, to begin complying with this 

subpart. Compliance with this subpart 

will not be required for any remittance 

transfers for which payment is made 

during that reasonable period of time. 

* * * * * 

■ 3. Amend § 1005.31 to revise 

paragraphs (a)(3)(ii), (a)(3)(iii), (a)(5)(ii), 

(a)(5)(iii), (b)(2)(v), (b)(2)(vi), and (b)(3); 

and add paragraphs (a)(3)(iv), (a)(5)(iv), 

and (b)(2)(vii) to read as follows: 

§ 1005.31 Disclosures. 

(a) * * * 

(3) * * * 

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(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section; 

(iii) The provider discloses orally a 

statement about the rights of the sender 

regarding cancellation required by 

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

pursuant to the timing requirements in 

paragraph (e)(1) of this section; and 

(iv) The provider discloses orally, as 

each is applicable, the information 

required by paragraph (b)(2)(vii) of this 

section and the information required by 

§ 1005.36(d)(1)(i)(A), with respect to 

transfers subject to § 1005.36(d)(2)(ii), 

pursuant to the timing requirements in 

paragraph (e)(1) of this section. 

* * * * * 

(5) * * * 

(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section; 

(iii) The provider discloses orally or 

via mobile application or text message 

a statement about the rights of the 

sender regarding cancellation required 

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

pursuant to the timing requirements in 

paragraph (e)(1) of this section; and 

(iv) The provider discloses orally or 

via mobile application or text message, 

as each is applicable, the information 

required by paragraph (b)(2)(vii) of this 

section and the information required by 

§ 1005.36(d)(1)(i)(A), with respect to 

transfers subject to § 1005.36(d)(2)(ii), 

pursuant to the timing requirements in 

paragraph (e)(1) of this section. 

* * * * * 

(b) * * * 

(2) * * * 

(v) The name, telephone number(s), 

and Web site of the remittance transfer 

provider; 

(vi) A statement that the sender can 

contact the State agency that licenses or 

charters the remittance transfer provider 

with respect to the remittance transfer 

and the Consumer Financial Protection 

Bureau for questions or complaints 

about the remittance transfer provider, 

using language set forth in Model Form 

A–37 of Appendix A to this part or 

substantially similar language. The 

disclosure must provide the name, 

telephone number(s), and Web site of 

the State agency that licenses or charters 

the remittance transfer provider with 

respect to the remittance transfer and 

the name, toll-free telephone number(s), 

and Web site of the Consumer Financial 

Protection Bureau; and 

(vii) For any remittance transfer 

scheduled by the sender at least three 

business days before the date of the 

transfer, or the first transfer in a series 

of preauthorized remittance transfers, 

the date the remittance transfer provider 

will make or made the remittance 

transfer, using the term ‘‘Transfer Date,’’ 

or a substantially similar term. 

(3) Combined disclosure—(i) In 

general. As an alternative to providing 

the disclosures described in paragraph 

(b)(1) and (2) of this section, a 

remittance transfer provider may 

provide the disclosures described in 

paragraph (b)(2) of this section, as 

applicable, in a single disclosure 

pursuant to the timing requirements in 

paragraph (e)(1) of this section. Except 

as provided in paragraph (b)(3)(ii) of 

this section, if the remittance transfer 

provider provides the combined 

disclosure and the sender completes the 

transfer, the remittance transfer provider 

must provide the sender with proof of 

payment when payment is made for the 

remittance transfer. The proof of 

payment must be clear and 

conspicuous, provided in writing or 

electronically, and provided in a 

retainable form. 

(ii) Transfers scheduled before the 

date of transfer. If the disclosure 

described in paragraph (b)(3)(i) of this 

section is provided in accordance with 

§ 1005.36(a)(1)(i) and payment is not 

processed by the remittance transfer 

provider at the time the remittance 

transfer is scheduled, a remittance 

transfer provider may provide 

confirmation that the transaction has 

been scheduled in lieu of the proof of 

payment otherwise required by 

paragraph (b)(3)(i) of this section. The 

confirmation of scheduling must be 

clear and conspicuous, provided in 

writing or electronically, and provided 

in a retainable form. 

* * * * * 

■ 4. Amend § 1005.32 to revise 

paragraph (b) and the introductory text 

of paragraph (c), and to add paragraph 

(d) to read as follows: 

§ 1005.32 Estimates. 

* * * * * 

(b) Permanent exceptions—(1) 

Permanent exception for transfers to 

certain countries. 

(i) General. For disclosures described 

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

1005.36(a)(1) and (a)(2), estimates may 

be provided for transfers to certain 

countries in accordance with paragraph 

(c) of this section for the amounts 

required to be disclosed under 

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

a remittance transfer provider cannot 

determine the exact amounts when the 

disclosure is required because: 

(A) The laws of the recipient country 

do not permit such a determination, or 

(B) The method by which transactions 

are made in the recipient country does 

not permit such determination. 

(ii) Safe harbor. A remittance transfer 

provider may rely on the list of 

countries published by the Bureau to 

determine whether estimates may be 

provided under paragraph (b)(1) of this 

section, unless the provider has 

information that a country’s laws or the 

method by which transactions are 

conducted in that country permits a 

determination of the exact disclosure 

amount. 

(2) Permanent exception for transfers 

scheduled before the date of transfer. (i) 

Except as provided in paragraph 

(b)(2)(ii) of this section, for disclosures 

described in §§ 1005.36(a)(1)(i) and 

(a)(2)(i), estimates may be provided in 

accordance with paragraph (d) of this 

section for the amounts to be disclosed 

under §§ 1005.31(b)(1)(iv) through (vii) 

if the remittance transfer is scheduled 

by a sender five or more business days 

before the date of the transfer. In 

addition, if, at the time the sender 

schedules such a transfer, the provider 

agrees to a sender’s request to fix the 

amount to be transferred in the currency 

in which the remittance transfer will be 

received and not the currency in which 

it is funded, estimates may also be 

provided for the amounts to be 

disclosed under §§ 1005.31(b)(1)(i) 

through (iii), except as provided in 

paragraph (b)(2)(iii) of this section. 

(ii) Fees and taxes described in 

§ 1005.31(b)(1)(vi) may be estimated 

under paragraph (b)(2)(i) of this section 

only if the exchange rate is also 

estimated under paragraph (b)(2)(i) and 

the estimated exchange rate affects the 

amount of such fees and taxes. 

(iii) Fees and taxes described in 

§ 1005.31(b)(1)(ii) may be estimated 

under paragraph (b)(2)(i) of this section 

only if the amount that will be 

transferred in the currency in which it 

is funded is also estimated under 

paragraph (b)(2)(i) of this section, and 

the estimated amount affects the amount 

of such fees and taxes. 

(c) Bases for estimates generally. 

Estimates provided pursuant to the 

exceptions in paragraph (a) or (b)(1) of 

this section must be based on the belowlisted approach or approaches, except as 

otherwise permitted by this paragraph. 

If a remittance transfer provider bases 

an estimate on an approach that is not 

listed in this paragraph, the provider is 

deemed to be in compliance with this 

paragraph so long as the designated 

recipient receives the same, or greater, 

amount of funds than the remittance 

transfer provider disclosed under 

§ 1005.31(b)(1)(vii). 

* * * * * 

(d) Bases for estimates for transfers 

scheduled before the date of transfer. 

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50284 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

Estimates provided pursuant to 

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

based on the exchange rate or, where 

applicable, the estimated exchange rate 

based on an estimation methodology 

permitted under paragraph (c) of this 

section that the provider would have 

used or did use that day in providing 

disclosures to a sender requesting such 

a remittance transfer to be made on the 

same day. If, in accordance with this 

paragraph, a remittance transfer 

provider uses a basis described in 

paragraph (c) of this section but not 

listed in paragraph (c)(1) of this section, 

the provider is deemed to be in 

compliance with this paragraph 

regardless of the amount received by the 

designated recipient, so long as the 

estimation methodology is the same that 

the provider would have used or did use 

in providing disclosures to a sender 

requesting such a remittance transfer to 

be made on the same day. 

■ 5. Amend § 1005.33 to revise 

paragraph (a)(1)(i) to read as follows: 

§ 1005.33 Procedures for resolving errors. 

(a) * * * 

(1) * * * 

(i) An incorrect amount paid by a 

sender in connection with a remittance 

transfer unless the disclosure stated an 

estimate of the amount paid by a sender 

in accordance with § 1005.32(b)(2) and 

the difference results from application 

of the actual exchange rate, fees, and 

taxes, rather than any estimated amount; 

* * * * * 

■ 6. Amend § 1005.36 to revise the 

section heading and paragraphs (a) and 

(b), and to add paragraph (d) to read as 

follows: 

§ 1005.36 Transfers scheduled before the 

date of transfer. 

(a) Timing. (1) For a one-time transfer 

scheduled five or more business days 

before the date of transfer or for the first 

in a series of preauthorized remittance 

transfers, the remittance transfer 

provider must: 

(i) Provide either the pre-payment 

disclosure described in § 1005.31(b)(1) 

and the receipt described in 

§ 1005.31(b)(2) or the combined 

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

in accordance with the timing 

requirements set forth in § 1005.31(e); 

and 

(ii) If any of the disclosures provided 

pursuant to paragraph (a)(1)(i) of this 

section contain estimates as permitted 

by § 1005.32(b)(2), mail or deliver to the 

sender an additional receipt meeting the 

requirements described in 

§ 1005.31(b)(2) no later than one 

business day after the date of the 

transfer. If the transfer involves the 

transfer of funds from the sender’s 

account held by the provider, the 

receipt required by this paragraph may 

be provided on or with the next periodic 

statement for that account, or within 30 

days after the date of the transfer if a 

periodic statement is not provided. 

(2) For each subsequent preauthorized 

remittance transfer: 

(i) If any of the information on the 

most recent receipt provided pursuant 

to paragraph (a)(1)(i) of this section, or 

by this paragraph (a)(2)(i), other than the 

temporal disclosures required by 

§ 1005.31(b)(2)(ii) and (b)(2)(vii), is no 

longer accurate with respect to a 

subsequent preauthorized remittance 

transfer for reasons other than as 

permitted by § 1005.32, then the 

remittance transfer provider must 

provide an updated receipt meeting the 

requirements described in 

§ 1005.31(b)(2) to the sender. The 

provider must mail or deliver this 

receipt to the sender within a reasonable 

time prior to the scheduled date of the 

next subsequent preauthorized 

remittance transfer. Such receipt must 

clearly and conspicuously indicate that 

it contains updated disclosures. 

(ii) Unless a receipt was provided in 

accordance with paragraph (a)(2)(i) of 

this section that contained no estimates 

pursuant to § 1005.32, the remittance 

transfer provider must mail or deliver to 

the sender a receipt meeting the 

requirements described in 

§ 1005.31(b)(2) no later than one 

business day after the date of the 

transfer. If the remittance transfer 

involves the transfer of funds from the 

sender’s account held by the provider, 

the receipt required by this paragraph 

may be provided on or with the next 

periodic statement for that account, or 

within 30 days after the date of the 

transfer if a periodic statement is not 

provided. 

(iii) A remittance transfer provider 

must provide the disclosures required 

by paragraph (d) of this section in 

accordance with the timing 

requirements of that section. 

(b) Accuracy. (1) For a one-time 

transfer scheduled five or more business 

days in advance or for the first in a 

series of preauthorized remittance 

transfers, disclosures provided pursuant 

to paragraph (a)(1)(i) of this section 

must comply with § 1005.31(f) by being 

accurate when a sender makes payment 

except to the extent estimates are 

permitted by § 1005.32. 

(2) For each subsequent preauthorized 

remittance transfer, the most recent 

receipt provided pursuant to paragraph 

(a)(1)(i) or (a)(2)(i) of this section must 

be accurate as of when such transfer is 

made, except: 

(i) The temporal elements required by 

§ 1005.31(b)(2)(ii) and (b)(2)(vii) must be 

accurate only if the transfer is the first 

transfer to occur after the disclosure was 

provided; and 

(ii) To the extent estimates are 

permitted by § 1005.32. 

(3) Disclosures provided pursuant to 

paragraph (a)(1)(ii) or (a)(2)(ii) of this 

section must be accurate as of when the 

remittance transfer to which it pertains 

is made, except to the extent estimates 

are permitted by § 1005.32(a) or (b)(1). 

* * * * * 

(d) Additional requirements for 

subsequent preauthorized remittance 

transfers—(1) Disclosure requirement. 

(i) For any subsequent transfer in a 

series of preauthorized remittance 

transfers, the remittance transfer 

provider must disclose to the sender: 

(A) The date the provider will make 

the subsequent transfer, using the term 

‘‘Future Transfer Date,’’ or a 

substantially similar term; 

(B) A statement about the rights of the 

sender regarding cancellation as 

described in § 1005.31(b)(2)(iv); and 

(C) The name, telephone number(s), 

and Web site of the remittance transfer 

provider. 

(ii) If the future date or dates of 

transfer are described as occurring in 

regular periodic intervals, e.g., the 15th 

of every month, rather than as a specific 

calendar date or dates, the remittance 

transfer provider must disclose any 

future date or dates of transfer that do 

not conform to the described interval. 

(2) Notice requirements. (i) Except as 

described in paragraph (d)(2)(ii) of this 

section, the disclosures required by 

paragraph (d)(1) of this section must be 

received by the sender no more than 12 

months, and no less than five business 

days prior to the date of any subsequent 

transfer to which it pertains. The 

disclosures required by paragraph (d)(1) 

of this section may be provided in a 

separate disclosure or may be provided 

on one or more disclosures required by 

this subpart related to the same series of 

preauthorized transfers, so long as the 

consumer receives the required 

information for each subsequent 

preauthorized remittance transfer in 

accordance with the timing 

requirements of this paragraph (d)(2)(i). 

(ii) For any subsequent preauthorized 

remittance transfer for which the date of 

transfer is four or fewer business days 

after the date payment is made for that 

transfer, the information required by 

paragraph (d)(1) of this section must be 

provided on or with the receipt 

described in § 1005.31(b)(2), or 

disclosed as permitted by 

§ 1005.31(a)(3) or (a)(5), for the initial 

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transfer in that series in accordance 

with paragraph (a)(1)(i) of this section. 

(3) Specific format requirement. The 

information required by paragraph 

(d)(1)(i)(A) of this section generally 

must be disclosed in close proximity to 

the other information required by 

paragraph (d)(1)(i)(B) of this section. 

(4) Accuracy. Any disclosure required 

by paragraph (d)(1) of this section must 

be accurate as of the date the 

preauthorized remittance transfer to 

which it pertains is made. 

■ 7. In Supplement I to part 1005: 

■ a. Under Section 1005.30, amend 

comment 30(f) by revising paragraph 2; 

■ b. Under Section 1005.31, comment 

31(b), amend paragraph 31(b)(2) by 

adding paragraphs 4 through 6; 

■ c. Under Section 1005.31, comment 

31(b), amend paragraph 31(b)(3) by 

adding paragraph 2; 

■ d. Under Section 1005.32, revise 

paragraph 1; 

■ e. Under Section 1005.32, revise 

comment 32(b); 

■ f. Under Section 1005.32, comment 

32(c), amend paragraph (c)(1) by 

revising paragraph 1; 

■ g. Under Section 1005.32, add new 

comment 32(d); and 

■ h. Under Section 1005.36, add 

comments 36(a), 36(b) and 36(d). 

The additions and revisions read as 

follows: 

Supplement I to Part 1005—Official 

Interpretations 

* * * * * 

Section 1005.30—Remittance Transfer 

Definitions 

* * * * * 

30(f) Remittance Transfer Provider 

* * * * * 

2. Normal course of business. i. General. 

Whether a person provides remittance 

transfers in the normal course of business 

depends on the facts and circumstances, 

including the total number and frequency of 

remittance transfers sent by the provider. For 

example, if a financial institution generally 

does not make remittance transfers available 

to customers, but sends a couple of such 

transfers in a given year as an 

accommodation for a customer, the 

institution does not provide remittance 

transfers in the normal course of business. In 

contrast, if a financial institution makes 

remittance transfers generally available to 

customers (whether described in the 

institution’s deposit account agreement, or in 

practice) and makes transfers many times per 

month, the institution provides remittance 

transfers in the normal course of business. 

ii. Safe harbor. Under § 1005.30(f)(2)(i), a 

person that provided 100 or fewer remittance 

transfers in the previous calendar year and 

provides 100 or fewer remittance transfers in 

the current calendar year is deemed not to be 

providing remittance transfers in the normal 

course of its business. Accordingly, a person 

that qualifies for the safe harbor in 

§ 1005.30(f)(2)(i) is not a ‘‘remittance transfer 

provider’’ and is not subject to the 

requirements of subpart B. For purposes of 

determining whether a person qualifies for 

the safe harbor under § 1005.30(f)(2)(i), the 

number of remittance transfers provided 

includes any transfers excluded from the 

definition of ‘‘remittance transfer’’ due 

simply to the safe harbor. In contrast, the 

number of remittance transfers provided does 

not include any transfers that are excluded 

from the definition of ‘‘remittance transfer’’ 

for reasons other than the safe harbor, such 

as small value transactions or securities and 

commodities transfers that are excluded from 

the definition of ‘‘remittance transfer’’ by 

§ 1005.30(e)(2). 

iii. Transition period. A person may cease 

to satisfy the requirements of the safe harbor 

described in § 1005.30(f)(2)(i) if the person 

provides in excess of 100 remittance transfers 

in a calendar year. For example, if a person 

that provided 100 or fewer remittance 

transfers in the previous calendar year 

provides more than 100 remittance transfers 

in the current calendar year, the safe harbor 

applies to the first 100 remittance transfers 

that the person provides in the current 

calendar year. For any additional remittance 

transfers provided in the current calendar 

year and for any remittance transfers 

provided in the subsequent calendar year, 

whether the person provides remittance 

transfers for a consumer in the normal course 

of its business, as defined in § 1005.30(f)(1), 

and is thus a remittance transfer provider for 

those additional transfers, depends on the 

facts and circumstances. Section 

1005.30(f)(2)(ii) provides a reasonable period 

of time, not to exceed six months, for such 

a person to begin complying with subpart B, 

if that person is then providing remittance 

transfers in the normal course of its business. 

At the end of that reasonable period of time, 

such person would be required to comply 

with subpart B unless, based on the facts and 

circumstances, the person is not a remittance 

transfer provider. 

iv. Example of safe harbor and transition 

period. Assume that a person provided 90 

remittance transfers in 2012 and 90 such 

transfers in 2013. The safe harbor will apply 

to the person’s transfers in 2013, as well as 

the person’s first 100 remittance transfers in 

2014. However, if the person provides a 101st 

transfer on September 5, the facts and 

circumstances determine whether the person 

provides remittance transfers in the normal 

course of business and is thus a remittance 

transfer provider for the 101st and any 

subsequent remittance transfers that it 

provides in 2014. Furthermore, the person 

would not qualify for the safe harbor 

described in § 1005.30(f)(2)(i) in 2015 

because the person did not provide 100 or 

fewer remittance transfers in 2014. However, 

for the 101st remittance transfer provided in 

2014, as well as additional remittance 

transfers provided thereafter in 2014 and 

2015, if that person is then providing 

remittance transfers for a consumer in the 

normal course of business, the person will 

have a reasonable period of time, not to 

exceed six months, to come into compliance 

with subpart B. Assume that in this case, a 

reasonable period of time is six months. 

Thus, compliance with subpart B is not 

required for remittance transfers made on or 

before March 5, 2015 (i.e., six months after 

September 5, 2014). After March 5, 2015, the 

person is required to comply with subpart B 

if, based on the facts and circumstances, the 

person provides remittance transfers in the 

normal course of business and is thus a 

remittance transfer provider. 

* * * * * 

Section 1005.31—Disclosures 

* * * * * 

31(b) Disclosure Requirements. 

* * * * * 

31(b)(2) Receipt 

* * * * * 

4. Date of transfer on receipt. Where 

applicable, § 1005.31(b)(2)(vii) requires 

disclosure of the date of transfer for the 

remittance transfer that is the subject of a 

receipt required by § 1005.31(b)(2), including 

a receipt that is provided in accordance with 

the timing requirements in § 1005.36(a). For 

any subsequent preauthorized remittance 

transfer subject to § 1005.36(d)(2)(ii), the 

future date of transfer must be provided on 

any receipt provided for the initial transfer in 

that series of preauthorized remittance 

transfers, or where permitted, or disclosed as 

permitted by § 1005.31(a)(3) and (a)(5), in 

accordance with § 1005.36(a)(1)(i). 

5. Transfer date disclosures. The following 

example demonstrates how the information 

required by § 1005.31(b)(2)(vii) and 

§ 1005.36(d)(1) should be disclosed on 

receipts: On July 1, a sender instructs the 

provider to send a preauthorized remittance 

transfer of US$100 each week to a designated 

recipient. The sender requests that first 

transfer in the series be sent on July 15. On 

the receipt, the remittance transfer provider 

discloses an estimated exchange rate to the 

sender pursuant to § 1005.32(b)(2). In 

accordance with § 1005.31(b)(2)(vii), the 

provider should disclose the date of transfer 

for that particular transaction (i.e., July 15) 

on the receipt provided when payment is 

made for the transfer pursuant to the timing 

requirements in § 1005.36(a)(1)(i). The 

second receipt, which § 1005.36(a)(1)(ii) 

requires to be provided within one business 

day after the date of the transfer or, for 

transfers from the sender’s account held by 

the provider, on the next regularly scheduled 

periodic statement or within 30 days after 

payment is made if a periodic statement is 

not provided, is also required to include the 

date of transfer. If the provider discloses on 

either receipt the cancellation period 

applicable to and dates of subsequent 

preauthorized remittance transfers in 

accordance with § 1005.36(d)(2), the 

disclosure must be phrased and formatted in 

such a way that it is clear to the sender 

which cancellation period is applicable to 

any date of transfer on the receipt. 

6. Cancellation disclosure. Remittance 

transfer providers that offer remittance 

transfers scheduled three or more business 

days before the date of the transfer, as well 

as remittance transfers scheduled fewer than 

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three business days before the date of the 

transfer, may meet the cancellation 

disclosure requirements in § 1005.31(b)(2)(iv) 

by describing the three-business-day and 30- 

minute cancellation periods on the same 

disclosure and using a checkbox or other 

method to clearly designate the applicable 

cancellation period. The provider may use a 

number of methods to indicate which 

cancellation period applies to the transaction 

including, but not limited to, a statement to 

that effect, use of a checkbox, highlighting, 

circling, and the like. For transfers scheduled 

three business days before the date of the 

transfer, the cancellation disclosures 

provided pursuant to § 1005.31(b)(2)(iv) 

should be phrased and formatted in such a 

way that it is clear to the sender which 

cancellation period is applicable to the date 

of transfer disclosed on the receipt. 

* * * * * 

31(b)(3) Combined Disclosures 

* * * * * 

2. Confirmation of scheduling. As 

discussed in comment 31(e)–2, payment is 

considered to be made when payment is 

authorized for purposes of various timing 

requirements in subpart B, including with 

regard to the timing requirement for 

provision of the proof of payment described 

in § 1005.31(b)(3)(i). However, where a 

transfer (whether a one-time remittance 

transfer or the first in a series of 

preauthorized remittance transfers) is 

scheduled before the date of transfer and the 

provider does not intend to process payment 

until at or near the date of transfer, the 

provider may provide a confirmation of 

scheduling in lieu of the proof of payment 

required by § 1005.31(b)(3)(i). No further 

proof of payment is required when payment 

is later processed. 

* * * * * 

Section 1005.32—Estimates 

1. Disclosures where estimates can be used. 

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

estimates to be used in certain circumstances 

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

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

extent permitted in § 1005.32(a) and (b)(1), 

estimates may be used in the pre-payment 

disclosure described in § 1005.31(b)(1), the 

receipt disclosure described in 

§ 1005.31(b)(2), the combined disclosure 

described in § 1005.31(b)(3), and the prepayment disclosures and receipt disclosures 

for both first and subsequent preauthorized 

remittance transfers described in 

§ 1005.36(a)(1) and (a)(2). Section 

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

certain information if the remittance transfer 

is scheduled by a sender five or more 

business days before the date of the transfer, 

for disclosures described in § 1005.36(a)(1)(i) 

and (a)(2)(i). 

* * * * * 

32(b) Permanent Exceptions 

32(b)(1) Permanent Exceptions for Transfers 

to Certain Countries 

1. Laws of the recipient country. The laws 

of the recipient country do not permit a 

remittance transfer provider to determine 

exact amounts required to be disclosed when 

a law or regulation of the recipient country 

requires the person making funds directly 

available to the designated recipient to apply 

an exchange rate that is: 

i. Set by the government of the recipient 

country after the remittance transfer provider 

sends the remittance transfer or 

ii. Set when the designated recipient 

receives the funds. 

2. Example illustrating when exact 

amounts can and cannot be determined 

because of the laws of the recipient country. 

i. The laws of the recipient country do not 

permit a remittance transfer provider to 

determine the exact exchange rate required to 

be disclosed under § 1005.31(b)(1)(iv) when, 

for example, the government of the recipient 

country, on a daily basis, sets the exchange 

rate that must, by law, apply to funds 

received and the funds are made available to 

the designated recipient in the local currency 

the day after the remittance transfer provider 

sends the remittance transfer. 

ii. In contrast, the laws of the recipient 

country permit a remittance transfer provider 

to determine the exact exchange rate required 

to be disclosed under § 1005.31(b)(1)(iv) 

when, for example, the government of the 

recipient country ties the value of its 

currency to the U.S. dollar. 

3. Method by which transactions are made 

in the recipient country. The method by 

which transactions are made in the recipient 

country does not permit a remittance transfer 

provider to determine exact amounts 

required to be disclosed when transactions 

are sent via international ACH on terms 

negotiated between the United States 

government and the recipient country’s 

government, under which the exchange rate 

is a rate set by the recipient country’s central 

bank or other governmental authority after 

the provider sends the remittance transfer. 

4. Example illustrating when exact 

amounts can and cannot be determined 

because of the method by which transactions 

are made in the recipient country. 

i. The method by which transactions are 

made in the recipient country does not 

permit a remittance transfer provider to 

determine the exact exchange rate required to 

be disclosed under § 1005.31(b)(1)(iv) when 

the provider sends a remittance transfer via 

international ACH on terms negotiated 

between the United States government and 

the recipient country’s government, under 

which the exchange rate is a rate set by the 

recipient country’s central bank on the 

business day after the provider has sent the 

remittance transfer. 

ii. In contrast, a remittance transfer 

provider would not qualify for the 

§ 1005.32(b)(1)(i)(B) methods exception if it 

sends a remittance transfer via international 

ACH on terms negotiated between the United 

States government and a private-sector entity 

or entities in the recipient country, under 

which the exchange rate is set by the 

institution acting as the entry point to the 

recipient country’s payments system on the 

next business day. However, a remittance 

transfer provider sending a remittance 

transfer using such a method may qualify for 

the § 1005.32(a) temporary exception. 

iii. A remittance transfer provider would 

not qualify for the § 1005.32(b)(1)(i)(B) 

methods exception if, for example, it sends 

a remittance transfer via international ACH 

on terms negotiated between the United 

States government and the recipient 

country’s government, under which the 

exchange rate is set by the recipient country’s 

central bank or other governmental authority 

before the sender requests a transfer. 

5. Safe harbor list. If a country is included 

on a safe harbor list published by the Bureau 

under § 1005.32(b)(1)(ii), a remittance 

transfer provider may provide estimates of 

the amounts to be disclosed under 

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

country does not appear on the Bureau’s list, 

a remittance transfer provider may provide 

estimates under § 1005.32(b)(1)(i) if the 

provider determines that the recipient 

country does not legally permit or method by 

which transactions are conducted in that 

country does not permit the provider to 

determine exact disclosure amounts. 

6. Reliance on Bureau list of countries. A 

remittance transfer provider may rely on the 

list of countries published by the Bureau to 

determine whether the laws of a recipient 

country do not permit the remittance transfer 

provider to determine exact amounts 

required to be disclosed under 

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

country is on the Bureau’s list, the provider 

may give estimates under this section, unless 

a remittance transfer provider has 

information that a country on the Bureau’s 

list legally permits the provider to determine 

exact disclosure amounts. 

7. Change in laws of recipient country. i. 

If the laws of a recipient country change such 

that a remittance transfer provider can 

determine exact amounts, the remittance 

transfer provider must begin providing exact 

amounts for the required disclosures as soon 

as reasonably practicable if the provider has 

information that the country legally permits 

the provider to determine exact disclosure 

amounts. 

ii. If the laws of a recipient country change 

such that a remittance transfer provider 

cannot determine exact disclosure amounts, 

the remittance transfer provider may provide 

estimates under § 1005.32(b)(1)(i), even if 

that country does not appear on the list 

published by the Bureau. 

32(b)(2) Permanent Exceptions for Transfers 

Scheduled Before the Date of Transfer 

1. Fixed amount of foreign currency. The 

following is an example of when and how a 

remittance transfer provider may disclose 

estimates for remittance transfers scheduled 

five or more business days before the date of 

transfer where the provider agrees to the 

sender’s request to fix the amount to be 

transferred in a currency in which the 

transfer will be received and not the currency 

in which it was funded. If on February 1, a 

sender schedules a 1000 Euro wire transfer 

to be sent from the sender’s bank account 

denominated in U.S. dollars to a designated 

recipient on February 15, § 1005.32(b)(2) 

allows the provider to estimate the amount 

that will be transferred to the designated 

recipient (i.e., the amount described in 

§ 1005.31(b)(1)(i)), any fees and taxes 

imposed on the remittance transfer by the 

provider (if based on the amount transferred) 

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(i.e., the amount described in 

§ 1005.31(b)(1)(ii)), and the total amount of 

the transaction (i.e., the amount described in 

§ 1005.31(b)(1)(iii)). The provider may also 

estimate any fees and taxes imposed on the 

remittance transfer by a person other than the 

provider if the exchange rate is also 

estimated and the estimated exchange rate 

affects the amount of fees and taxes (as 

allowed by § 1005.32(b)(2)(ii)). 

2. Relationship to § 1005.10(d). To the 

extent § 1005.10(d) requires, for an electronic 

fund transfer that is also a remittance 

transfer, notice when a preauthorized 

electronic fund transfer from the consumer’s 

account will vary in amount from the 

previous transfer under the same 

authorization or from the preauthorized 

amount, that provision applies even if 

subpart B would not otherwise require notice 

before the date of transfer. However, insofar 

as § 1005.10(d) does not specify the form of 

such notice, a notice sent pursuant to 

§ 1005.36(a)(2)(i) will satisfy § 1005.10(d) as 

long as the timing requirements of 

§ 1005.10(d) are satisfied. 

32(c) Bases for Estimates 

32(c)(1) Exchange Rate 

1. Most recent exchange rate for qualifying 

international ACH transfers. If the exchange 

rate for a remittance transfer sent via 

international ACH that qualifies for the 

§ 1005.32(b)(1)(i)(B) exception is set the 

following business day, the most recent 

exchange rate available for a transfer is the 

exchange rate set for the day that the 

disclosure is provided, i.e., the current 

business day’s exchange rate. 

* * * * * 

32(d) Bases for Estimates for Transfers 

Scheduled Before the Date of Transfer 

1. In general. When providing an estimate 

pursuant to § 1005.32(b)(2), § 1005.32(d) 

requires that a remittance transfer provider’s 

estimated exchange rate must be the 

exchange rate (or estimated exchange rate) 

that the remittance transfer provider would 

have used or did use that day in providing 

disclosures to a sender requesting such a 

remittance transfer to be made on the same 

day. If, for the same-day remittance transfer, 

the provider could utilize either of the other 

two exceptions permitting the provision of 

estimates in § 1005.32(a) or (b)(1), the 

provider may provide estimates based on a 

methodology permitted under § 1005.32(c). 

For example, if, on February 1, the sender 

schedules a remittance transfer to occur on 

February 10, the provider should disclose the 

exchange rate as if the sender was requesting 

the transfer be sent on February 1. However, 

if at the time payment is made for the 

requested transfer, the remittance transfer 

provider could not send any remittance 

transfer until the next day (for reasons such 

as the provider’s deadline for the batching of 

transfers), the remittance transfer provider 

can use the rate (or estimated exchange rate) 

that the remittance transfer provider would 

have used or did use in providing disclosures 

that day with respect to a remittance transfer 

requested that day that could not be sent 

until the following day. 

Section 1005.36—Transfers Scheduled 

Before the Date of Transfer 

36(a) Timing 

36(a)(2) Subsequent Preauthorized 

Remittance Transfers 

1. Changes in disclosures. When a sender 

schedules a series of preauthorized 

remittance transfers, the provider is generally 

not required to provide a pre-payment 

disclosure prior to the date of each 

subsequent transfer. However, 

§ 1005.36(a)(1)(i) requires the provider to 

provide a pre-payment disclosure and receipt 

for the first in the series of preauthorized 

remittance transfers in accordance with the 

timing requirements set forth in § 1005.31(e). 

While certain information in those 

disclosures is expressly permitted to be 

estimated (see § 1005.32(b)(2)), other 

information is not permitted to be estimated, 

or is limited in how it may be estimated. 

When any of the information on the most 

recent receipt provided pursuant to 

§ 1005.36(a)(1)(i) or (a)(2)(i), other than the 

temporal disclosures required by 

§ 1005.31(b)(2)(ii) and (b)(2)(vii), is no longer 

accurate with respect to a subsequent 

preauthorized remittance transfer for reasons 

other than as permitted by § 1005.32, the 

provider must provide, within a reasonable 

time prior to the scheduled date of the next 

preauthorized remittance transfer, a receipt 

that complies with § 1005.31(b)(2) and which 

discloses, among the other disclosures 

required by § 1005.31(b)(2), the changed 

terms. For example, if the provider discloses 

in the pre-payment disclosure for the first in 

the series of preauthorized remittance 

transfers that its fee for each remittance 

transfer is $20 and, after six preauthorized 

remittance transfers, the provider increases 

its fee to $30 (to the extent permitted by 

contract law), the provider must provide the 

sender a receipt that complies with 

§§ 1005.31(b)(2) and 1005.36(b)(2) within a 

reasonable time prior to the seventh transfer. 

Barring a further change, this receipt will 

apply to transfers after the seventh transfer. 

Or, if, after the sixth transfer, a tax increases 

from 1.5% of the amount that will be 

transferred to the designated recipient to 

2.0% of the amount that will be transferred 

to the designated recipient, the provider must 

provide the sender a receipt that complies 

with §§ 1005.31(b)(2) and 1005.36(b)(2) 

within a reasonable time prior to the seventh 

transfer. In contrast, § 1005.36(a)(2)(i) does 

not require an updated receipt where an 

exchange rate, estimated as permitted by 

§ 1005.32(b)(2), changes. 

2. Clearly and conspicuously. In order to 

indicate clearly and conspicuously that the 

provider’s fee has changed as required by 

§ 1005.36(a)(2)(i), the provider could, for 

example, state on the receipt: ‘‘Transfer Fees 

(UPDATED) * * * $30.’’ To the extent that 

other figures on the receipt must be revised 

because of the new fee, the receipt should 

also indicate that those figures are updated. 

3. Reasonable time. If a disclosure required 

by § 1005.36(a)(2)(i) or (d)(1) is mailed, the 

disclosure would be considered to be 

received by the sender five business days 

after it is posted in the mail. If hand 

delivered or provided electronically, the 

receipt would be considered to be received 

by the sender at the time of delivery. Thus, 

if the provider mails a disclosure required by 

§ 1005.36(a)(2)(i) or (d)(1) not later than ten 

business days before the scheduled date of 

the transfer, or hand or electronically 

delivers a disclosure not later than five 

business days before the scheduled date of 

the transfer, the provider would be deemed 

to have provided the disclosure within a 

reasonable time prior to the scheduled date 

of the subsequent preauthorized remittance 

transfer. 

36(b) Accuracy 

1. Use of estimates. In providing the 

disclosures described in § 1005.36(a)(1)(i) or 

(a)(2)(i), remittance transfer providers may 

use estimates to the extent permitted by any 

of the exceptions in § 1005.32. When 

estimates are permitted, however, they must 

be disclosed in accordance with § 1005.31(d). 

2. Subsequent preauthorized remittance 

transfers. For a subsequent transfer in a series 

of preauthorized remittance transfers, the 

receipt provided pursuant to 

§ 1005.36(a)(1)(i), except for the temporal 

disclosures in that receipt required by 

§ 1005.31(b)(2)(ii) (Date Available) and 

(b)(2)(vii) (Transfer Date), applies to each 

subsequent preauthorized remittance transfer 

unless and until it is superseded by a receipt 

provided pursuant to § 1005.36(a)(2)(i). For 

each subsequent preauthorized remittance 

transfer, only the most recent receipt 

provided pursuant to § 1005.36(a)(1)(i) or 

(a)(2)(i) must be accurate as of the date each 

subsequent transfer is made. 

3. Receipts. A receipt required by 

§ 1005.36(a)(1)(ii) or (a)(2)(ii) must accurately 

reflect the details of the transfer to which it 

pertains and may not contain estimates 

pursuant to § 1005.32(b)(2). However, the 

remittance transfer provider may continue to 

disclose estimates to the extent permitted by 

§ 1005.32(a) or (b)(1). In providing receipts 

pursuant to § 1005.36(a)(1)(ii) or (a)(2)(ii), 

§ 1005.36(b)(2) and (3) do not allow a 

remittance transfer provider to change figures 

previously disclosed on a receipt provided 

pursuant to § 1005.36(a)(1)(i) or (a)(2)(i), 

unless a figure was an estimate or based on 

an estimate disclosed pursuant to § 1005.32. 

Thus, for example, if a provider disclosed its 

fee as $10 in a receipt provided pursuant to 

§ 1005.36(a)(1)(i) and that receipt contained 

an estimate of the exchange rate pursuant to 

§ 1005.32(b)(2), the second receipt provided 

pursuant to § 1005.36(a)(1)(ii) must also 

disclose the fee as $10. 

* * * * * 

36(d) Date of Transfer for Subsequent 

Preauthorized Remittance Transfers 

1. General. Section 1005.36(d)(2)(i) permits 

remittance transfer providers some flexibility 

in determining how and when the 

disclosures required by § 1005.36(d)(1) may 

be provided to senders. The disclosure 

described in § 1005.36(d)(1) may be provided 

as a separate disclosure, or on or with any 

other disclosure required by this subpart B 

related to the same series of preauthorized 

remittance transfers, provided that the 

disclosure and timing requirements in 

§ 1005.36(d)(2) and other applicable 

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50288 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

provisions in subpart B are satisfied. For 

example, the required disclosures may be 

made on or with a receipt provided pursuant 

to § 1005.36(a)(1)(i); a receipt provided 

pursuant to § 1005.36(a)(2); or in a separate 

disclosure created by the provider. Thus, for 

example, a remittance transfer provider 

complies with § 1005.36(d)(1) for a period of 

one year if it provides in the receipt provided 

to the sender when payment is made for the 

initial preauthorized remittance transfer, a 

schedule or summary of the dates of transfer 

of all the subsequent preauthorized 

remittance transfers in the series scheduled 

to occur over the next 12 months (and the 

applicable cancellation requirements and 

contact information). 

2. Delivery of disclosure. Section 

1005.36(d)(2)(i) requires that the sender 

receive disclosure of the date of transfer, 

applicable cancellation requirements, and the 

provider’s contact information no more than 

12 months, and no less than 5 business days 

prior to the date of transfer of the subsequent 

preauthorized remittance transfer. For 

purposes of determining when a disclosure 

required by § 1005.36(d)(1) is received by the 

sender, refer to comment 36(a)(2)–3. 

3. Disclosure of the date of transfer. The 

date of transfer of a subsequent preauthorized 

remittance transfer may be disclosed as a 

specific date (e.g., July 19, 2013) or by using 

a method that clearly permits identification 

of the date of the transfer, such as periodic 

intervals (e.g., the third Monday of every 

month, or the 15th of every month). If the 

future dates of transfer are disclosed as 

occurring periodically and there is a break in 

the sequence, or the date of transfer does not 

otherwise conform to the described period, 

e.g., if a holiday or weekend causes the 

provider to deviate from the normal 

schedule, the remittance transfer provider 

should disclose the specific date of transfer 

for the affected transfer. 

4. Accuracy requirements. Section 

1005.36(d)(4) sets forth accuracy 

requirements for disclosures required for 

subsequent preauthorized remittance 

transfers under § 1005.36(d)(1). If any of the 

information provided in these disclosures 

change, the provider must provide an 

updated disclosure with the revised 

information that is accurate as of when the 

transfer is made, pursuant to § 1005.36(d)(2). 

Dated: August 7, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–19702 Filed 8–14–12; 4:15 pm] 

BILLING CODE 4810–AM–P 

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