6194 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

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

1073 (2010). 

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

codified in 15 U.S.C. 1693o–1. 3 76 FR 29902 (May 23, 2011). 

4See, e.g., Committee on Payment and Settlement 

Systems and the World Bank, General Principles for 

International Remittance Services 6 (Jan. 2007), 

available at: siteresources.worldbank.org/ 

INTPAYMENTREMMITTANCE/Resources/New_

Remittance_Report.pdf (‘‘CPSS Principles’’). 

5See, e.g., Ole E. Andreassen, Remittance Service 

Providers in the United States: How Remittance 

Firms Operate and How They Perceive Their 

Business Environment 15–16 (June 2006), available 

at: siteresources.worldbank.org/INTPAYMENT

REMMITTANCE/Resources/Businessmodels

FSEseries.pdf) (‘‘Andreassen’’); Manuel Orozco, 

Inter-American Dialogue, Migration and 

Remittances in Times of Recession: Effects on Latin 

American and Caribbean Economies 13–14 (Apr. 

2009), available at: www.oecd.org/dataoecd/48/8/

42753222.pdf; Bendixen & Amandi, Survey of Latin 

American Immigrants in the United States 23 (Apr. 

30, 2008), available at: idbdocs.iadb.org/wsdocs/

getdocument.aspx?docnum=35063818. (‘‘Bendixen 

Survey’’) 

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 provides 

new protections, including disclosures 

and error resolution and cancellation 

rights, to consumers who send 

remittance transfers to other consumers 

or businesses in a foreign country. The 

amendments implement statutory 

requirements set forth in the DoddFrank Wall Street Reform and Consumer 

Protection Act. 

DATES: The rule is effective February 7, 

2013. 

FOR FURTHER INFORMATION CONTACT: 

Mandie Aubrey, Dana Miller, or 

Stephen Shin, Counsels, or Krista 

Ayoub or Vivian Wong, Senior 

Counsels, Division of Research, Markets, 

and Regulations, Bureau of Consumer 

Financial Protection, 1700 G Street NW., 

Washington, DC 20006, at (202) 435– 

7000. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

The Bureau of Consumer Financial 

Protection (Bureau) is publishing this 

final rule to implement section 1073 of 

the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act),1 which creates a comprehensive 

new system of consumer protections for 

remittance transfers sent by consumers 

in the United States to individuals and 

businesses in foreign countries. 

Consumers transfer tens of billions of 

dollars from the United States each year. 

However, these transactions were 

generally excluded from existing 

Federal consumer protection regulations 

in the United States until the DoddFrank Act expanded the scope of the 

Electronic Fund Transfer Act (EFTA) 2

to provide for their regulation. 

The new protections will significantly 

improve the predictability of remittance 

transfers and provide consumers with 

better information for comparison 

shopping. First, the statute requires 

consistent, reliable disclosures about the 

price of a transfer, the amount of 

currency to be delivered to the 

recipient, and the date of availability. 

Consumers must receive pricing 

information before they make payment, 

and under the final rule will generally 

have 30 minutes after making payment 

to cancel a transaction. Second, the new 

requirements also increase consumer 

protections where transfers go awry by 

requiring providers to investigate 

disputes and remedy errors. Because the 

statute defines ‘‘remittance transfers’’ 

broadly, most electronic transfers of 

funds sent by consumers in the United 

States to recipients in other countries 

will be subject to the new protections. 

Authority to implement the new 

Dodd-Frank Act provisions amending 

the EFTA transferred from the Board of 

Governors of the Federal Reserve 

System (Board) to the Bureau effective 

July 21, 2011. The Dodd-Frank Act 

requires that regulations to implement 

certain of these provisions be issued by 

January 21, 2012. To ensure compliance 

with this deadline, the Board issued a 

Notice of Proposed Rulemaking in May 

2011 (May 2011 Proposed Rule) with 

the expectation that the Bureau would 

complete the rulemaking process.3

The Bureau is now issuing the final 

rule to define standards and provide 

initial guidance to industry. The final 

rule provides for a one-year 

implementation period. The Bureau is 

also publishing elsewhere in today’s 

Federal Register a Notice of Proposed 

Rulemaking (January 2012 Proposed 

Rule) to further refine application of the 

final rule to certain transactions and 

remittance transfer providers. The 

Bureau expects to complete any further 

rulemaking on matters raised in the 

January 2012 Proposed Rule on an 

expedited basis before the end of the 

one-year implementation period. 

The Bureau will work actively with 

consumers, industry, and other 

regulators in the coming months to 

follow up on the final rule. For instance, 

the Bureau has begun discussions with 

other Federal and state regulators 

concerning the fact that Congress’s 

decision to regulate remittance transfers 

under the EFTA affects the application 

of certain State laws and Federal antimoney laundering regulations, as 

discussed further below. In coming 

months, the Bureau also expects to 

develop a small business compliance 

guide and engage in dialogue with 

industry regarding implementation 

issues. Finally, as the implementation 

date approaches, the Bureau expects to 

conduct a public awareness campaign to 

educate consumers about the new 

disclosures and their other rights under 

the Dodd-Frank Act. 

II. Background 

A. Scope and Regulation of Remittance 

Activities 

The term ‘‘remittance transfer’’ has 

been used in other contexts to describe 

consumer-to-consumer transfers of low 

monetary value, often made via nondepository companies known as 

‘‘money transmitters’’ by migrants 

supporting friends and relatives in their 

home countries.4 But while this likely is 

the single largest category of electronic 

transfers of funds by consumers in the 

United States to recipients in foreign 

countries, it is not the only one. For 

instance, transfers can be sent abroad by 

any consumers in the United States, not 

just immigrants. In addition to using 

money transmitters, consumers can 

transfer funds to recipients in foreign 

countries through depository 

institutions or credit unions, for 

instance through wire transfers or 

automated clearing house (ACH) 

transactions. Furthermore, consumers in 

the United States may transfer funds to 

businesses as well as to individuals in 

foreign countries, for instance to pay 

bills, tuition, or other expenses. 

Although a number of studies of certain 

sets of consumers’ international funds 

transfers have shown that transactions 

average several hundred dollars per 

transfer,5 average transfer sizes vary 

significantly among subsets of the 

market, e.g., among sets of consumer 

transfers sent to particular destination 

regions, or among consumer transfers 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6195 

6For example, one study found that 52% of total 

worldwide transfers to India from Indians living 

abroad were made in amounts of $1,100 and above, 

and of that category, 63% exceeded $2,200. 

Muzaffar Chishti, Migration Policy Institute, The 

Rise in Remittances to India: A Closer Look 

(February 2007), available at: http://www.migration

information.org/Feature/display.cfm?ID=577 (citing 

to 2006 study by the Reserve Bank of India; study 

was not limited to transfers from the United States); 

see also Manuel Orozco, Inter-American Dialogue, 

Worker Remittances in an International Scope 10 

(Feb. 28, 2003), available at: www.iadb.org/ 

document.cfm?id=35076501. 

7World Bank, Migration and Remittances 

Factbook 2011 15, 17 (2d ed. 2011). The World 

Bank estimates include cash and in-kind transfers 

by migrants to their native countries, earnings of 

temporary workers, and certain asset transfers. 

8Bureau of Economic Analysis (BEA’’), Personal 

Transfers, 1992:I –2011:III (Dec. 15, 2011). For more 

on the BEA’s methodology, see Mai-Chi Hoang and 

Erin M. Whitaker, BEA, ‘‘Annual Revision of the 

U.S. International Transaction Accounts,’’ Surv. of 

Current Bus, vol. 91, no. 7 (July 2011) at 47–61; 

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

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

Current Bus. vol. 85, no. 7 (July 2005) at 64–66. 

9 KPMG LLP Economic and Valuation Services, 

2005 Money Services Business Industry Survey 

Study for Financial Crimes Enforcement Network 5 

(Sept. 26, 2005), available at: www.fincen.gov/news_

room/rp/reports/pdf/FinCEN_MSB_2005_

Survey.pdf (‘‘KPMG Report’’) (Volume estimates 

included fees charged, as well as principal 

transferred. It is unclear whether estimate includes 

inbound, as well as outbound, transfers). 

10Elizabeth M. Grieco, Patricia de la Cruz et al., 

Who in the United States Sends and Receives 

Remittances? An Initial Analysis of the Monetary 

Transfer Data from the August 2008 CPS Migration 

Supplement, U.S. Census Bureau Working Paper 

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

gov/population/www/documentation/twps0087/

twps0087.html. The report recognizes the 

substantial difference between its estimate and that 

of the BEA and offers several possible explanations, 

but does not reach a conclusion about the difference 

between the estimates. 

11U.S. Gov’t Accountability Office, GAO–06–204, 

International Remittances: Information on 

Products, Costs, and Consumer Disclosures 7 

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

Budget Office, Migrants’ Remittances and Related 

Economic Flows 7 (Feb. 2011). 

12 In light of the transfer of the rulemaking 

authority for the EFTA (other than Section 920 of 

the EFTA) from the Board to the Bureau, the Bureau 

published for public comment an interim final rule 

establishing a new Regulation E at 12 CFR part 

1005. See 76 FR 81020 (Dec. 27, 2011). 

Consequently, provisions in the Board’s Regulation 

E at 12 CFR part 205 were republished as the 

Bureau’s Regulation E at 12 CFR part 1005. 

13See EFTA section 903(7), which has been 

implemented in 12 CFR 1005.3(c). 

14See generally CPSS Principles at 9–10. 

15Federal law requires money transmitters to 

register with the Financial Crimes Enforcement 

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

U.S.C. 5330; 31 CFR 1022.380. Most states also 

require money transmitters to be licensed by the 

State. 

sent via particular methods or for 

particular purposes.6

As described further below, the DoddFrank Act defines ‘‘remittance transfer’’ 

broadly to include most electronic 

transfers of funds sent by consumers in 

the United States to recipients in other 

countries. There is no available data 

regarding the volume of remittance 

transfers using the statutory definition, 

but a number of studies regarding 

related financial flows indicate that 

consumers in the United States transfer 

tens of billions of dollars abroad 

annually. Globally, the World Bank 

estimates that the worldwide volume of 

certain cash, asset, and in-kind transfers 

made by migrants to developing 

countries reached $325 billion in 2010, 

and that the United States was the 

source of the greatest number of such 

transfers.7 The U.S. Bureau of Economic 

Analysis estimates that in 2010, $37.1 

billion in cash and in-kind transfers 

were made from the United States to 

foreign households by foreign-born 

individuals who had spent one or more 

years here.8 Similarly, a private 

consulting firm estimates that in 2005, 

$42 billion in international transfers 

were made by money transmitters in the 

United States.9 The U.S. Census Bureau, 

in contrast, estimates that monetary 

transfers from U.S. households to family 

and friends abroad totaled 

approximately $12 billion in 2008.10

The available data suggest that the 

majority of consumers’ international 

transfers from the United States are sent 

to the Caribbean and Latin America, and 

primarily to Mexico. Significant sums 

are also sent to Asia, and to the 

Philippines in particular.11

In the United States, remittance 

transfers sent by non-bank ‘‘money 

transmitters,’’ depository institutions, 

and credit unions are generally subject 

to Federal anti-money laundering laws 

and restrictions on transfers to or from 

certain persons. Money transmitters are 

also subject to State licensing and (in 

some cases) State regulatory regimes. 

However, consumer protections for 

remittance and other funds transfers 

vary widely at the State level, and 

international money transfers fall 

largely outside the scope of existing 

Federal consumer protections. For 

instance, the EFTA was enacted in 1978 

to provide a basic framework 

establishing the rights, liabilities, and 

responsibilities of participants in 

electronic fund transfer (EFT) systems. 

As implemented by Regulation E (12 

CFR part 1005),12 the EFTA governs 

transactions such as transfers initiated 

through automated teller machines, 

point-of-sale terminals, automated 

clearing house systems, telephone billpayment plans, or remote banking 

services. However, prior to the new 

Dodd-Frank Amendments, Congress had 

specifically structured the EFTA to 

exclude wire transfers,13 and transfers 

sent by money transmitters also 

generally fall outside the scope of 

existing Regulation E. As described in 

more detail below, these categories of 

transfers are believed to compose the 

majority of the remittance transfer 

market. 

B. Specific Methods of Consumer 

Remittance and Other Money Transfers 

Consumers can choose among several 

methods of transferring money to 

foreign countries, as detailed below. 

Information on the volume of certain 

methods, particularly consumer wire 

transfers, is very limited, but the Bureau 

believes that transactions by non-bank 

‘‘money transmitters’’ and wire transfers 

by depository institutions and credit 

unions make up the majority of the 

remittance transfer market. 

The various methods of remittance 

transfer can generally be categorized as 

involving either closed network or open 

network systems, although new hybrids 

between open and closed networks are 

developing. In closed networks, a 

principal remittance transfer provider 

offers a service through a network of 

agents or other partners that help collect 

funds in the United States and disburse 

funds abroad. Through the provider’s 

own contractual arrangements with 

those agents or other partners, or 

through the contractual relationships 

owned by the provider’s business 

partner, the principal provider can 

exercise some control over the transfer 

from end-to-end. 

In contrast, in an open network, no 

single provider has control over or 

relationships with all of the participants 

that may collect funds in the United 

States or disburse funds abroad. A 

number of principal providers may 

access the system. National laws, 

individual contracts, and the rules of 

various messaging, settlement, or 

payment systems may constrain certain 

parts of transfers sent through an open 

network system. But any participant, 

such as a U.S. depository institution, 

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.14

Remittance Transfers Through Money 

Transmitters 

Historically, many consumers have 

sent remittance transfers through nondepository institutions called ‘‘money 

transmitters.’’15 Money transmitters 

generally operate through closed 

networks, receiving and disbursing 

funds through their own outlets or 

through agents, such as grocery stores, 

neighborhood convenience stores, or 

depository institutions. Money 


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6196 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

16Bureau, Report on Remittance Transfers 6 (July 

20, 2011), available at: http://www.consumer

finance.gov/wp-content/uploads/2011/07/Report_

20110720_RemittanceTransfers.pdf (‘‘Bureau 2011 

Report’’). 

17KPMG Report at 47. 

18See, e.g., Remittance Prices Worldwide: Making 

Markets More Transparent, Sending Money FROM 

United States, at: http://remittanceprices.

worldbank.org/Country-Corridors/from-UnitedStates (tracking select providers’ prices for sending 

$200 and $500 transfers from the United States to 

select countries). 

19Manuel Orozco, Elizabeth Burgess et al, InterAmerican Dialogue, A Scorecard in the Market for 

Money Transfers: Trends in Competition in Latin 

American and the Caribbean 6 (June 18, 2010) 

(‘‘Scorecard’’). Like cash-to-cash remittances, many 

of these new offerings rely on closed networks, 

though others rely on open networks or reflect some 

characteristics of both open and closed network 

transactions. The primary means of open network 

transfers are wire transfers and international ACH 

transfers, discussed in more detail below. 

20There are a variety of ways to measure the 

wholesale exchange rate. For example, researchers 

may rely on publicly available interbank exchange 

rates, which are the rates available to large financial 

institutions exchanging very large quantities of 

currency with each other. By contrast, in calculating 

their revenues due to spread, money transmitters 

generally rely on the rates at which they buy 

currency, which may be different from interbank 

rates. 

21See generally Andreassen at 3–5; CPSS 

Principles at 41–42. 

22Wire transfers can, in fact, be composed of a 

sequence of payment orders, each of which are 

settled using different payment systems. For 

instance, an international wire transfer may be 

composed, in part, by a domestic wire transaction 

between the sending institution in the United States 

and an intermediary also operating in the United 

States; a ‘‘book transfer’’ between two accounts held 

by the intermediary institution; and a transaction 

between that intermediary and the receiving 

institution (that may be conducted through the 

domestic wire system in the receiving country). 

transmitters have traditionally 

dominated the market for transfers from 

consumers in the United States to 

relatives or other households abroad.16

These businesses, in turn, have tended 

to focus on modest-sized transfers. 

Many cap the size of individual 

transfers,17 and some evidence suggests 

that for some destination markets, 

money transmitters’ prices for transfers 

of several hundred dollars tend to be 

lower than depository institutions’ 

prices.18

For a remittance transfer conducted 

through a money transmitter, a 

consumer typically provides basic 

identifying information about himself 

and the recipient, and pays cash 

sufficient to cover the transfer amount 

and any transfer fees charged by the 

money transmitter. The consumer is 

often provided a confirmation code, 

which the consumer relays to the 

recipient. The money transmitter sends 

an instruction to a specified payout 

location or locations in the recipient’s 

country where the recipient may pick 

up the transferred funds in cash, often 

in local currency, on or after a specified 

date, upon presentation of the 

confirmation code and/or other 

identification. These transfers are 

generally referred to as cash-to-cash 

remittances. 

Although most money transmitters 

focus on cash-to-cash remittance 

transfers, many have also broadened 

their product offerings, with respect to 

both the methods for sending and the 

methods for receiving remittance 

transfers. For example, money 

transmitters may permit transfers to be 

initiated using credit cards, debit cards, 

or bank account debits, through Web 

sites, dedicated telephone lines at agent 

locations, at stand-alone kiosks, or by 

telephone. Abroad, money transmitters 

and their partners may allow funds to be 

deposited into recipients’ bank 

accounts, or distributed directly onto 

prepaid cards. Funds can also be 

transferred among consumers’ ‘‘virtual 

wallets,’’ through accounts identified by 

individuals’ email addresses or mobile 

phone numbers. A recent survey of 

companies sending funds from the 

United States to Latin America showed 

that approximately 75% permit 

consumers to send transfers of funds 

that can be deposited directly into 

recipients’ bank accounts, and about 

15% offer internet-based transfers.19

The cost of a transfer sent through a 

money transmitter generally has two 

components, in addition to any 

governmental taxes. The first 

component is fees. In general, money 

transmitters charge up-front fees at the 

time that a transaction is sent. Though 

it is possible that agents that disburse 

funds may charge additional fees, the 

contractual relationships that money 

transmitters hold with their agents—or 

with intermediaries that manage such 

agents—may allow money transmitters, 

as a condition of network participation, 

to forbid such fees. 

The second component is the 

exchange rate applied to the transfer, 

which determines how much money a 

consumer will have to pay in order for 

a recipient to receive a certain amount 

of local currency. Money transmitters 

also often set the exchange rates that 

apply to the transfers they send, at or 

before the time that a consumer tenders 

payment. However, some money 

transmitters offer floating rate products 

where the exchange rate is not 

determined until the recipient picks up 

the funds. In either scenario, the 

exchange rate that applies to a transfer 

usually reflects a spread: a percentage 

difference between that exchange rate 

(the ‘‘retail’’ rate) and some ‘‘wholesale’’ 

exchange rate.20 Spreads can be used to 

generate revenue for the money 

transmitter or its partners. Spreads are 

also one of several mechanisms that 

money transmitters or their partners 

may use to manage exchange rate risk, 

which arises due to the frequent 

fluctuations in most wholesale currency 

markets and the time lags between when 

transfers are initiated, when destination 

market currency is bought, when 

transfers are picked up by recipients, 

and when the parties settle their 

transactions. 

Funds sent through a money 

transmitter are generally available in 

one to three business days, although 

same day delivery may be available, 

often for a higher fee. At the time of the 

transaction, transmitters generally set a 

date (and possibly time) when funds 

will be available. Based on the 

contractual relationships among 

network participants, money 

transmitters may require agents in the 

recipient country to make funds 

available to recipients before accounts 

are settled among the agent in the 

United States, the money transmitter, 

the agent abroad, and any other entities 

involved. But the processes and 

methods that agents in the United 

States, money transmitters, agents 

abroad, and other entities communicate 

with each other, transfer funds among 

each other, and settle accounts can vary 

widely.21

Because money transmitters generally 

work through closed networks, even 

those that do not operate their own 

retail outlets often have direct 

contractual relationships with agents in 

the United States through which 

consumers initiate transfers, as well as 

agents abroad, which make funds 

available to recipients. Alternatively, 

money transmitters may have direct 

relationships with intermediaries that, 

in turn, contract with and manage 

individual agents. In either scenario, 

money transmitters can use the terms of 

their contractual relationships to restrict 

the terms under which agents or other 

network partners can operate and to 

obtain information from the agents or 

other networks to monitor their 

compliance with contractual and legal 

requirements. 

International Wire Transfers 

Depository institutions and credit 

unions have traditionally offered 

consumers remittance transfer services 

by way of wire transfers, which are 

certain electronically transmitted orders 

that direct receiving depository 

institutions to pay identified 

beneficiaries.22 Unlike closed network 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6197 

23A correspondent relationship is generally one 

in which a financial institution has a contractual 

arrangement to hold deposits and provide services 

to another financial institution, which has limited 

access to certain financial markets. 

24Board, Report to the Congress on the Use of the 

Automated Clearinghouse System for Remittance 

Transfers to Foreign Countries 4–6, 7, 9 (July 2011), 

available at: http://www.federalreserve.gov/

boarddocs/rptcongress/ACH_report_201107.pdf 

(‘‘Board ACH Report’’). 

25Board ACH Report at 4, 10; Fed. Reserve Bank 

Services, FedGlobal® ACH Payments Service 

Origination Manual 23, 48, available at: http://www.

frbservices.org/files/serviceofferings/pdf/fedach_

global_service_orig_manual.pdf (‘‘FedGlobal 

Originations Manual’’). 

26FedGlobal Originations Manual at 11, 49. 

transactions, which generally can only 

be sent to agents or other entities that 

have signed on to work with the specific 

provider in question, wire transfers are 

generally open network transactions 

that can reach virtually any bank 

worldwide through national payment 

systems that are connected through 

correspondent and other intermediary 

bank relationships.23 Historically, while 

money transmitters have focused on 

modest-sized transfers between persons 

who may not use depository institutions 

or credit unions, wire transfers have 

generally been used for large 

transactions sent by consumers with 

deposit accounts to recipients with 

deposit accounts. Wire transfers are 

generally not capped on the amount that 

can be sent, and individual transactions 

can involve thousands or millions of 

dollars. Because flat fees are common, 

the price of a wire transfer, as a percent 

of the transaction amount, often 

decreases as the size of the transfer 

increases. Information on the volume of 

consumer wire transfers is very limited. 

To initiate a wire transfer, a consumer 

typically provides the sending 

depository institution or credit union 

not only information about himself and 

the recipient of the transfer, but also 

technical information about the 

recipient’s financial institution and the 

account into which money will be 

received. The fees charged by the 

sending institution and the principal 

amount to be transferred are deducted 

from the consumer’s account. No access 

code or similar device is typically 

required because the funds will be 

deposited into the designated recipient’s 

account in the foreign country. 

Like money transmitters, providers of 

wire transfers usually charge up-front 

fees at the time of the transaction. In 

some cases, intermediary institutions 

impose additional fees (sometimes 

referred to as ‘‘lifting fees’’) and 

recipient institutions may also charge 

fees for converting funds into local 

currency and/or depositing them into 

recipients’ accounts. Often, 

intermediary and recipient institutions 

charge fees to the consumer by 

deducting them from the principal 

amount transferred, although sometimes 

fees are charged to the sending 

institution instead. 

For wire transfers that will be 

received in a foreign currency, the 

mechanics of the currency exchange 

may depend on the circumstances. A 

sending depository institution or credit 

union that participates in foreign 

exchange markets may exchange the 

currency at the time of transfer, using an 

exchange rate that the sending 

institution sets. In such cases, the 

principal amount will be then 

transferred in the foreign currency. Even 

if the funds are to be received in a 

foreign currency, however, the sending 

financial institution may not conduct 

the foreign exchange itself. Some 

financial institutions, particularly 

smaller institutions, may not participate 

in any foreign currency markets. In 

other cases, a depository institution or 

credit union may choose not to trade an 

illiquid currency or a consumer may 

request that the financial institution 

send the transfer in U.S. dollars. In 

these cases, the sending institution’s 

correspondent institution, the first 

cross-border intermediary institution in 

the recipient’s country, or the 

recipient’s institution, may set the 

exchange rate that applies to the 

transfer. Like exchange rates applied to 

closed network transfers, exchange rates 

applied to wire transfers may reflect a 

spread between the retail rate and the 

wholesale rate; this spread can be used 

to generate revenue or to help manage 

exchange rate risk. 

Funds that are sent by wire transfers 

are usually not available on the same 

day that the transaction is initiated. 

Because of time zone differences, and 

because payment is often not made 

before funds are settled among the 

various parties, wire transfers generally 

take at least one day for delivery. They 

may take longer, depending on the 

number of institutions involved in the 

transmittal route, the payment systems 

used, and individual institutions’ 

business practices. 

Communications within the open 

network can be complicated. Where a 

sending institution has no contractual, 

account, or other relationships with a 

recipient institution, it may 

communicate indirectly by sending 

funds and payment instructions to a 

correspondent institution, which will 

then transmit the instructions and funds 

to the recipient institution directly or 

indirectly through other intermediary 

institutions. In some cases the sending 

institutions may not know the identity 

of the intermediary institution prior to 

initiating the transfer because more than 

one transfer route may be possible. 

Institutions may learn about each 

other’s practices through any direct 

contractual or other relationships that 

do exist, through experience in 

effectuating wire transfers over time, 

through reference materials, or through 

information provided by the consumer. 

However, as open networks operate 

today, there is no global practice of 

communications by intermediary and 

recipient institutions that do not have 

direct relationships with a sending 

institution regarding fees deducted from 

the principal amount or charged to the 

recipient, exchange rates that are set by 

the intermediary or recipient institution, 

or compliance practices. Furthermore, 

even among contractual partners, 

communication practices could vary. 

International ACH 

More recently, some depository 

institutions and credit unions have 

begun to offer other methods for 

initiating remittance transfers, such as 

through the automated clearing house 

system (ACH), which provides for 

batched electronic fund transfers 

generally on a nightly basis. To reach a 

foreign recipient, transfers initiated 

through the ACH system must generally 

pass through a ‘‘gateway operator’’ in 

the United States, to an entity in the 

recipient country (such as a foreign 

financial institution) according to the 

terms of an agreement between the two; 

the transfers are then cleared and settled 

through a payment system in the 

recipient country. Individual financial 

institutions can serve as gateway 

operators, and through a set of branded 

services called FedGlobal ACH 

Payments, the Federal Reserve Banks 

also offer international ACH gateway 

services.24

Similar to the typical money 

transmitter services, the FedGlobal ACH 

Payments services have been designed 

for modest sized transfers. They have 

been marketed, at least in part, to serve 

migrants sending money to their 

countries of origin, and some of the 

FedGlobal services include transaction 

limits.25 Unlike some money 

transmitters, FedGlobal does not offer 

transfers that can be picked up on the 

same day on which they are sent.26

Development of the FedGlobal system 

has occurred in the last decade. In 2001, 

the Federal Reserve Banks began 

offering cross-border ACH services to 

Canada. In 2004, the Federal Reserve 

Banks launched an interbank 

mechanism in partnership with the 

central bank of Mexico, later branded 


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27Board ACH Report at 9, 14; Fed. Reserve Bank 

Services, FedGlobal ACH Payments, available at: 

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

fedach_international_ach_payments.html 

(‘‘FedGlobal ACH Payments’’). 

28FedGlobal Originations Manual. 

29FedGlobal ACH Payments, http://www.

frbservices.org/serviceofferings/fedach/fedach_

international_ach_payments.html. 

30 See, e.g., Lenora Suki, Competition and 

Remittances in Latin America: Lower Prices and 

More Efficient Markets, Working Paper at 27 (Feb. 

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

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

Remittances’’). 

31FedGlobal Originations Manual at 13, 27, 37, 

42, 51. For transfers to Europe, the terms of the 

service provide for reimbursement of any fees 

deducted from the principal. 

32Board ACH Report at 10–11. 

33See Foreign Exchange Rate, available at: 

http://directoamexico.com/en/tipodecam.html. 

34Board ACH Report at 11; FedGlobal 

Originations Manual at 11, 13. 

35Board ACH Report at 12 & n.53, 14–15. 

36Board ACH Report at 5 & n.20, 9. 

37Board ACH Report at 6. 

38See, e.g., Scorecard at 7, 25–26. 

39 Depending on the business model, a prepaid 

card could also be reloaded at in-person locations 

or through other reload mechanisms. 

40Consumers may also use informal methods to 

send money abroad, such as sending funds through 

the mail or with a friend, relative, or courier 

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

Bendixen Survey 24 (estimating about 12% of Latin 

American migrants’ transfers from the United States 

to their families are sent through mail, courier, or 

friends traveling abroad). 

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

United States and Mexico. The Federal 

Reserve Banks now offer international 

ACH services to 35 countries in Europe, 

Canada, and Latin America through 

agreements with private-sector or 

government entities.27 In each case, the 

Federal Reserve and the entity or 

entities with which the Federal Reserve 

has an agreement receive, process, and 

distribute ACH payments to financial 

institutions or recipients within the 

respective domestic payment systems, 

and in accordance with the terms of the 

FedGlobal ACH service.28 Depending on 

the recipient country, institutions may 

offer customers account-to-account 

transfers, or allow customers to send 

transfers that may be picked up in cash 

at a participating institution or other 

payout location abroad.29

The Federal Reserve provides U.S. 

financial institutions access to its 

FedGlobal ACH Payments Service for a 

fee. Financial institutions, in turn, offer 

the product to their customers for a 

fee.30 For the purposes of this 

discussion, international ACH 

transactions will be considered open 

network transactions. However, 

depending in part on the nature of the 

agreements between U.S. gateway 

operators and the foreign entities 

involved, international ACH transfers 

also share some characteristics of closed 

network transfers. For example, like 

wire transfers, international ACH 

transfers can involve payment systems 

in which a large number of sending and 

receiving institutions may participate, 

such that the sending institution and the 

receiving institution may have no direct 

relationship. Agreements formed by the 

gateway operator with foreign entities 

may, however, restrict some terms of the 

service and the participants in the 

system. For example, unlike institutions 

that receive wire transfers, institutions 

that receive FedGlobal ACH transfers 

are generally restricted, by the terms of 

the service, from deducting a fee from 

the principal amount (though the 

service may permit recipient 

institutions to charge certain other fees, 

such as fees for receiving a transfer).31

In some instances, the financial 

institution originating a FedGlobal ACH 

transfer can choose to conduct the 

foreign exchange, and send the transfer 

in the foreign currency. In other cases, 

however, transfers are sent in U.S. 

dollars and any applicable exchange 

rate is determined afterward, by the 

foreign ACH counterpart, either directly 

or through foreign depository 

institutions.32 For such transfers, the 

terms of the FedGlobal service can 

determine how and when the applicable 

rate is set. For instance, for FedGlobal 

transfers to Mexico, the exchange rate is 

based on rate published by the Bank of 

Mexico on the date the transfer is 

credited to the beneficiary’s account, 

minus a fixed spread.33 Funds are 

deposited into the recipient’s account or 

made available to be picked up, in 

accordance with a delivery schedule 

that is established by the rules 

applicable to each FedGlobal service, 

and the practice of receiving financial 

institutions.34

International ACH transfers sent 

through the FedGlobal service or other 

mechanisms likely account for a small 

share of the remittance transfers sent 

annually. In July 2011, the Board 

reported that about 410 financial 

institutions had enrolled in the 

FedGlobal ACH Payments Service, and 

that only about one-third of those 

initiated transfers in a typical month. 

The Board further reported that some 

enrolled institutions do not offer the 

service for consumer-initiated transfers; 

a large portion of the transfers sent 

through the FedGlobal’s Canadian and 

European services were commercial 

payments; and the volume of transfers 

through the FedGlobal’s Latin America 

service was negligible.35

The FedGlobal ACH services account 

for only about 20 percent of cross-border 

transactions that are processed through 

the U.S. ACH networks.36 The Bureau 

believes that remittance transfers 

account for only a small portion of these 

additional transactions, which include 

not only outbound, consumer-initiated 

transfers, but also inbound transfers and 

transfers initiated by government and 

businesses.37 Section 1073 of the DoddFrank Act directs the Board to work 

with the Federal Reserve Banks and the 

Department of the Treasury to expand 

the use of the ACH system and other 

payment mechanisms for remittance 

transfers to foreign countries. 

Other Transfer Methods 

Over the last decade, some depository 

institutions and credit unions have 

independently developed other 

remittance transfer products, or have 

directly partnered with or joined other 

networks of financial institutions or 

other payout locations. Often designed 

with a focus on modest-sized transfers, 

these products include account-toaccount, account-to-cash, and cash-toaccount products that may be offered 

through closed network systems and 

resemble those offered by money 

transmitters.38 Services may be offered 

to non-account holders, as well as 

accountholders. 

In addition, depository institutions, 

credit unions, money transmitters, and 

other entities, including brokerages, 

may directly, or in partnership with 

others, offer consumers other closed 

network, open network, and other 

models for sending money abroad. Some 

of these other models relying on prepaid 

and debit cards can be used to deliver 

funds to a person located abroad. For 

example, consumers may send funds to 

recipients abroad using prepaid cards. 

In one model, a consumer in the United 

States purchases a prepaid card, loads 

funds onto the card, and has it sent to 

a recipient in another country. The 

recipient may then use the prepaid card 

at an ATM or at a point of sale, at which 

time any currency exchange typically 

occurs. The consumer can reload the 

recipient’s prepaid card through the 

provider’s Web site.39

A consumer may also add a recipient 

in another country as an authorized user 

on his or her checking or savings 

account based in the United States, 

which could be denominated in dollars 

or in a foreign currency. A debit card 

linked to the consumer’s account is 

provided to the recipient, who can use 

it to withdraw funds at an ATM or at a 

point of sale.40


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41Marianne A. Hilgert, Jeanne M. Hogarth, et al. 

‘‘Banking on Remittances: Extending Financial 

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

(2005); Competition and Remittances at 25; May 

2011 Proposed Rule, 76 FR 29905 (summarizing 

results of consumer research conducted by the 

Board in connection with development of the 

proposed rule). 

42 GAO Report at 8; May 2011 Proposed Rule, 76 

FR 29905. See also Appleseed, The Fair Exchange: 

Improving the Market for International Remittances 

7 (Apr. 2007). 

43 Dean Yang, ‘‘Migrant Remittances,’’ Journal of 

Economic Perspectives, Vol. 25, No. 3 (Summer 

2011) at 129–152. 

44 Manuel Orozco, Inter-American Dialogue, 

International Flow of Remittances: Cost, 

Competition and Financial Access in Latin America 

and the Caribbean—Toward an Industry Scorecard 

4 (2006), available at: www.iadb.org/news/docs/

internationalflows.pdf (Technology may also be a 

driving factor). See also, The World Bank, Global 

Economic Prospects: Economic Implications of 

Remittances and Migration 137–38 (2006), available 

at: http://www-wds.worldbank.org/external/default/ 

WDSContentServer/IW3P/IB/2005/11/14/

000112742_20051114174928/Rendered/PDF/

343200GEP02006.pdf. 

45Scorecard at 2, 13 (price includes upfront fee 

plus spread between exchange rate applied to the 

transfer and the wholesale exchange available at the 

time); see also Inter-American Development Bank, 

Multilateral Investment Fund, Ten Years of 

Innovation in Remittances: Lessons Learned and 

Models for the Future 8 (2010). 

46 Scorecard at 10. 

47See generally S. Rep. 111–176, at 179–80 

(2010); Remittances: Regulation and Disclosure in 

a New Economic Environment, Hearing Before 

House Subcomm. on Fin. Insts. and Cons. Credit, 

House Comm. on Fin. Servs., No. 111–39 (June 3, 

2009) (‘‘2009 House Hearing’’); Remittances: 

Access, Transparency, and Market Efficiency—A 

Progress Report, Hearing Before House Subcomm. 

on Domestic and Int’l Monetary Policy, Trade, and 

Technology, House Comm. on Fin. Servs., No. 110– 

32 (May 17, 2007) (‘‘2007 House Hearing’’). 

48See, e.g., Bureau 2011 Report at 17–20; 

Testimony of Annette LoVoi, Appleseed, 2009 

House Hearing at 8–9, 13, 24; Testimony of Manuel 

Orozco, Inter-American Dialogue, 2009 House 

Hearing at 61–63; Testimony of Mark A. Thompson, 

The Western Union Company, 2009 House Hearing 

at 20; Testimony of Beatriz Ibarra, National Council 

of La Raza, 2007 House Hearing at 41. 

49See, e.g., Bureau 2011 Report at 13–14, 17–20; 

Testimony of Tom Haider, MoneyGram 

International, 2007 House Hearing at 14. 

50Okla. Stat. § 63–2–503.1j; Letter from Bobi 

Shields-Farrelly, United Nations Federal Credit 

Union, to Board of Governors of the Federal Reserve 

System, June 29, 2011. 

51Bureau 2011 Report at 14–16; see also 

Testimony of Annette LoVoi, Appleseed, 2007 

House Hearing at 19; Testimony of Beatriz Ibarra, 

National Council of La Raza, 2007 House Hearing 

at 42. 

52See generally, Catalina Amuedo-Dorantes, 

Cynthia Bansak, and Susan Pozo, ‘‘On the Remitting 

Patterns of Immigrants: Evidence from Mexican 

Survey Data,’’ Economic Review (First Quarter 

2005) 37–58 at 41, CPSS Principles at 3. 

53See, e.g., S. Rep. 111–176, at 179–80 (2010); 

Testimony of Annette LoVoi, Appleseed, 2009 

House Hearing at 8–9, 13, 24; Testimony of Mark 

A. Thompson, The Western Union Company, 2009 

House Hearing at 20; Testimony of Tom Haider, 

MoneyGram, 2007 House Hearing at 9; Testimony 

of Annette LoVoi, Appleseed, 2007 House Hearing 

at 3, 49; Testimony of James C. Orr, Microfinance 

International Corporation, 2007 House Hearing at 

59. 

54See also, e.g., Testimony of Annette LoVoi, 

Appleseed, 2009 House Hearing at 8 (‘‘[C]onsumers 

value, above all, understanding the amount of 

money that will be delivered to their family 

member upon pick-up.’’); Testimony of Annette 

LoVoi, Appleseed, 2007 House Hearing at 3, 21 

Continued 

C. Consumer Choice, Pricing, and 

Disclosure 

Research suggests that consumers 

choose a particular remittance transfer 

provider or product over another for a 

number of reasons. Significant factors 

include price, trust in the provider, 

security, reliability (i.e., having 

specified funds available at the 

specified time), and convenience, 

particularly in markets with limited 

locations for recipients to pick up 

funds.41 The relative importance of 

these factors can vary. For instance, 

some studies indicate that consumers 

are willing to pay higher prices to 

ensure that recipients receive the entire 

amount promised at the promised 

delivery time, and that consumers also 

tend to continue using a service 

provider once it proves reliable.42

Though the available information is 

limited, similar factors may also affect 

some consumers’ decisions about 

whether to send money at all, or how 

much money to send. For instance, one 

study showed that small decreases in 

fees charged led to significant increases 

in the number of transfers made by 

migrant consumers sending remittances 

to their home countries.43

In recent years, studies suggest that 

increasing competition and other factors 

have contributed to downward market 

pressure on prices in some remittance 

markets.44 One study shows that the 

average price for sending $200 transfers 

to Latin America dropped by nearly half 

between 2001 and 2008, although prices 

have risen slightly since.45 Furthermore, 

a recent survey of Latin American 

immigrants in the United States 

indicated that a majority were satisfied 

with the ease of use, inexpensiveness, 

and exchange rate and fee transparency 

of the companies that they used to send 

money, though fewer than half were 

satisfied with those companies’ overall 

value.46

However, this information is limited, 

in both its scope and its applicability. 

For instance, not all remittance transfer 

markets are as competitive as the market 

for modest-sized transfers to Latin 

America. Furthermore, across markets, a 

number of concerns with regard to the 

clarity and reliability of information 

provided to consumers have been 

identified.47

First, pricing for remittance transfers 

is complex. The overall price of the 

transaction depends on three 

components (fees, taxes, and exchange 

rates). As a result, determining what 

amount of funds will actually be 

received and which provider offers the 

lowest price requires arithmetic that can 

be challenging for consumers.48

Second, pricing models can vary 

widely and change frequently, making it 

even more difficult for consumers to 

compare transfer options. Fees may be 

charged to senders up front or deducted 

from the principal amount. Because 

wholesale currency markets can 

fluctuate constantly over the course of 

the day, the exchange rates applied to 

individual remittance transfers may also 

change over the course of the day, 

depending on how frequently 

remittance transfer providers update 

their retail rates. Remittance transfer 

providers may also vary their exchange 

rates and fees charged based on a range 

of factors, such as the sending and 

receiving locations, and size and speed 

of the transfer.49 Taxes may vary 

depending on the type of remittance 

transfer provider, the type of recipient 

institution, and various other factors.50

These variations can also make it 

difficult for consumers to compare 

prices across providers or among 

remittance products. 

Third, disclosure practices have 

varied in the absence of a consistent 

Federal regime. In the last decade, the 

number of states that require provision 

of post-transaction receipts stating fees 

and/or exchange rates has increased, 

and several class action lawsuits against 

large money transmitters also resulted 

in settlement agreements requiring 

disclosure of certain pricing 

information. However, the legal 

requirements vary and coverage is 

limited. Moreover, many of the State 

requirements do not require pretransaction disclosures or disclosure of 

the amount of foreign currency to be 

received.51

Finally, the reliance of many 

remittance senders on foreign languages 

can further complicate consumers’ 

ability to obtain and understand 

transaction information from various 

remittance transfer providers.52

Congressional hearings prior to 

enactment of the Dodd-Frank Act 

focused on the need for standardized 

and reliable pre-payment disclosures, 

suggesting that disclosure of the amount 

of money to be received by the 

designated recipient is particularly 

critical.53 As discussed above, research 

suggests that consumers place a high 

value on reliability to ensure that the 

promised amount is made available to 

recipients.54 In addition, the amount to 


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(‘‘[P]redictability of transfer is of paramount 

importance. The senders want to know how much 

money will be received in a foreign country.’’); 

Testimony of Tom Haider, MoneyGram, 2007 House 

Hearing at 9 (describing the amount of local 

currency to be received as ‘‘most important to the 

consumer’’ among other items disclosed). 

55Testimony of Mark A. Thompson, The Western 

Union Company, 2009 House Hearing at 20; 

Testimony of James C. Orr, Microfinance 

International Corporation, 2007 House Hearing at 

59. 

56Testimony of Annette LoVoi, Appleseed, 2009 

House Hearing at 9, 48, 49; Testimony of Annette 

LoVoi, Appleseed, 2007 House Hearing at 51; 

Testimony of Beatriz Ibarra, National Council of La 

Raza, 2007 House Hearing at 5, 43, 44; see also S. 

Rep. 111–176, at 179–80 (2010). 

57Testimony of Tom Haider, MoneyGram, 2007 

House Hearing at 8, 32–33; see also Testimony of 

Mark A. Thompson, The Western Union, 2007 

House Hearing at 11, 67 (arguing that legislation 

should not create an unlevel playing field between 

different types of providers). 

58Summaries of these meetings are available on 

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

gov/newsevents/reform_consumer.htm. 

be received can facilitate cost 

comparisons because it factors in both 

the exchange rate used and charges 

deducted from the principal amount to 

be transferred.55 Consumer advocates 

also argued that requiring error 

resolution mechanisms where funds are 

not received as expected is also 

important.56 Industry advocates 

emphasized the need for consistency, 

arguing that the current patchwork of 

regulatory approaches leads to 

unnecessary administrative costs that 

make remittances more expensive for 

consumers.57

III. Summary of Statute and 

Rulemaking Process 

A. Overview of the Statute 

The Dodd-Frank Act creates a 

comprehensive system of consumer 

protections across various types of 

remittance transfers. The statute: (i) 

Mandates disclosure of the exchange 

rate and the amount to be received, 

among other things, by the remittance 

transfer provider, prior to and at the 

time of payment by the consumer for the 

transfer; (ii) provides for Federal rights 

regarding consumer cancellation and 

refund policies; (iii) requires remittance 

transfer providers to investigate 

disputes and remedy errors regarding 

remittance transfers; and (iv) establishes 

standards for the liability of remittance 

transfer providers for the acts of their 

agents and authorized delegates. The 

statute also contains other provisions to 

encourage provision and use of low-cost 

remittance transfers, including directing 

the Bureau and other agencies to assist 

in the execution of a national financial 

empowerment strategy, as it relates to 

remittances. 

The requirements apply broadly. 

Congress defined ‘‘remittance transfer’’ 

to include all electronic transfers of 

funds to designated recipients located in 

foreign countries that are ‘‘initiated by 

a remittance transfer provider’’ upon the 

request of consumers in the United 

States; only very small dollar transfers 

are excepted by the statute. The statute 

thus expands the scope of the EFTA, 

which has historically focused on 

electronic fund transfers involving 

‘‘accounts’’ held at financial 

institutions, which include depository 

institutions, credit unions, and other 

companies that directly or indirectly 

hold checking, savings, or other assets 

accounts. The remittance transfer 

provisions, in contrast, apply regardless 

of whether the consumer holds an 

account with the remittance transfer 

provider or whether the remittance 

transfer is also an ‘‘electronic fund 

transfer’’ as defined under the EFTA. 

Congress also provided a specific 

accommodation for depository 

institutions and credit unions, in 

apparent recognition of the fact they 

would need time to improve 

communications with foreign financial 

institutions that conduct currency 

exchanges or impose fees on certain 

open network transactions. The statute 

creates a temporary exception to permit 

insured depository institutions and 

credit unions to provide ‘‘reasonably 

accurate estimates’’ of the amount to be 

received where the remittance transfer 

provider is ‘‘unable to know [the 

amount], for reasons beyond its control’’ 

at the time that the sender requests a 

transfer to be conducted through an 

account held with the provider. The 

exception sunsets five years from the 

date of enactment of the Dodd-Frank 

Act (i.e., July 21, 2015), but the statute 

authorizes the Bureau to extend that 

date for no more than five years if it 

determines that termination of the 

exception would negatively affect the 

ability of depository institutions and 

credit unions to send remittances to 

locations in foreign countries. 

Thus, once the temporary exception 

expires, the statute will generally 

require all remittance transfer providers 

to disclose the actual amounts to be 

received by designated recipients. The 

statute creates a permanent exception 

authorizing the Bureau to issue rules to 

permit use of reasonably accurate 

estimates where the Bureau determines 

that a recipient nations’ laws or the 

methods by which transfers are made to 

a recipient nation do not permit 

remittance transfer providers to know 

the amount of currency to be received. 

The statute further mandates that all 

remittance transfer providers investigate 

and remedy errors that are reported by 

the sender within 180 days of the 

promised date of delivery, specifically 

including situations in which the 

amount of currency designated in the 

disclosures was not in fact made 

available to the designated recipient in 

the foreign country. Under the statute, 

senders may designate whether funds 

should be refunded to them or made 

available to the designated recipient at 

no additional cost, or any other remedy 

determined by the Bureau. The statute 

also directs the Bureau to issue rules 

concerning appropriate cancellation and 

refund policies, as well as appropriate 

standards or conditions of liability for 

providers with regard to the acts of 

agents and authorized delegates. 

B. Outreach and Consumer Testing 

Both the Board and the Bureau have 

conducted extensive outreach and 

research on remittances issues in 

preparation for the rulemaking process. 

Starting in fall 2010, Board staff 

conducted outreach with various parties 

regarding remittances and 

implementation of the statute. Board 

staff met with representatives from a 

variety of money transmitters, financial 

institutions, industry trade associations, 

consumer advocates, and other 

interested parties to discuss current 

remittance transfer business models, 

consumer disclosure and error 

resolution practices, operational issues, 

and specific provisions of the statute.58

In addition, the Board engaged a 

testing consultant, ICF Macro (Macro), 

to conduct focus groups and one-on-one 

interviews regarding remittance 

transfers. Participants were all 

consumers who had made at least one 

remittance transfer and represented a 

range of ages, education levels, amount 

of time lived in the United States, and 

country or region to which remittances 

were sent. In December 2010, Macro 

conducted a series of six focus groups 

with eight to ten participants each, to 

explore current remittance provider 

practices and attitudes about remittance 

disclosures. Three focus groups were 

held in the Washington, DC metro area 

(specifically Bethesda, Maryland), and 

three were held in Los Angeles, 

California. At each location, two of the 

three focus groups were conducted in 

English, and the third in Spanish. In 

early 2011, Macro conducted a series of 

one-on-one interviews in New York 

City, Atlanta, Georgia, and the 

Washington, DC metro area (Bethesda, 

Maryland), with nine to ten participants 

in each city. During the interviews, 

participants were given scenarios in 

which they completed hypothetical 

remittance transfers and received one or 


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59See Bureau 2011 Report. The Bureau is 

currently engaged in quantitative research to 

explore further the potential relationships between 

consumers’ remittance histories and credit scores. 

60Summaries of these meetings are available at: 

http://www.regulations.gov. 

61 76 FR 29902 (May 23, 2011). 

62Pursuant to EFTA section 919(a)(6), the Board 

in the months prior to issuing the proposal studied 

whether requiring storefront and Internet notices 

would facilitate the ability of consumers to compare 

prices and understand the types and amounts of 

fees or costs imposed on remittance transfers. Based 

on the results of this analysis, the Board decided 

not to propose rules that would require posting of 

such notices. 

63While some commenters addressed their 

comments to the Board, the Bureau is assuming that 

all comments regarding this rulemaking are directed 

to the Bureau. 

more disclosure forms. For each 

scenario, participants were asked 

specific questions to test their 

understanding of the information 

presented in the disclosure forms. 

The Bureau has also conducted 

additional outreach and research on 

remittances issues. Section 1073 of the 

Dodd-Frank Act required the Bureau to 

provide a report regarding the feasibility 

of and impediments to the use of 

remittance history in the calculation of 

a consumer’s credit score, and 

recommendations on the manner in 

which maximum transparency and 

disclosure to consumers of exchange 

rates for remittance transfers may be 

accomplished.59 The Bureau has also 

conducted further outreach on 

remittance transfers with 

representatives from industry and 

consumer groups after closing of the 

comment period on the Board proposal 

and transfer of the rulewriting 

authorities.60 The Bureau also held 

multiple meetings with appropriate 

Federal agencies to consult with them 

regarding the May 2011 Proposed Rule 

and the January 2012 Proposed Rule, as 

discussed further below. 

C. Summary of the Board’s Proposal 

The Board published the May 2011 

Proposed Rule to amend Regulation E 

and the official staff commentary to 

implement the Dodd-Frank Act 

remittance transfer provisions.61 Under 

the May 2011 Proposed Rule, a 

remittance transfer provider was 

generally required to provide a written 

pre-payment disclosure to a ‘‘sender,’’ 

as defined in the statute and the 

proposed regulation, containing 

information about the specific transfer, 

such as the exchange rate, applicable 

fees and taxes, and the amount to be 

received by the designated recipient. 

The remittance transfer provider was 

also generally required to provide a 

written receipt at the time the sender 

pays for the remittance transfer. The 

receipt would have included the 

information provided on the prepayment disclosure, as well as the date 

of availability, the recipient’s contact 

information, and information regarding 

the sender’s error resolution and 

cancellation rights. Alternatively, the 

May 2011 Proposed Rule permitted 

remittance transfer providers to provide 

senders a single written pre-payment 

disclosure containing all of the 

information required on the receipt. 

Consistent with the statute, the May 

2011 Proposed Rule would have 

required that these disclosures generally 

be provided in English and in each of 

the foreign languages principally used 

by the remittance transfer provider to 

advertise, solicit, or market remittance 

transfer services at a particular office.62

The May 2011 Proposed Rule also 

contained provisions to implement two 

statutory exceptions to permit 

disclosure of reasonably accurate 

estimates of the amount of currency to 

be received. The first proposed 

exception would have implemented the 

temporary exception for insured 

depository institutions and credit 

unions to estimate exchange rates or 

fees that are determined by persons with 

which the financial institution has no 

correspondent banking relationship. 

The proposed rule stated that the 

exception would expire on July 21, 

2015, as specified in the statute. The 

second proposed exception defined the 

circumstances in which providers could 

use estimates because the amount of 

currency to be received could not be 

determined due to: (i) The laws of a 

recipient country; or (ii) the method by 

which transactions are made in the 

recipient country. 

Additionally, the May 2011 Proposed 

Rule included error resolution 

standards, including recordkeeping 

standards, similar to those that currently 

apply to a financial institution under 

Regulation E with respect to errors 

involving electronic fund transfers. The 

proposal also would have provided a 

one business day period for consumers 

to cancel their transactions and obtain a 

full refund. Finally, the May 2011 

Proposed Rule set forth two alternative 

approaches for implementing the 

standards of liability for remittance 

transfer providers that act through an 

agent. Under the first proposed 

alternative, a remittance transfer 

provider would have been liable for 

violations by an agent when such agent 

acts for the provider. Under the second 

proposed alternative, a remittance 

transfer provider would have been liable 

for violations by an agent acting for the 

provider, unless the provider 

established and maintained policies and 

procedures for agent compliance, 

including appropriate oversight 

measures, and the provider corrected 

any violation reported by a particular 

consumer, to the extent appropriate. 

D. Overview of Public Comments 

The Board received more than 60 

comment letters on the May 2011 

Proposed Rule. These comment letters 

were received by the Board and 

subsequently transferred to the Bureau. 

The majority of the comment letters 

were submitted by industry 

commenters, including banks, credit 

unions, money transmitters, and 

industry trade associations. In addition, 

letters were submitted by individual 

consumers and academics, consumer 

groups, State banking and money 

transmitter regulators, two Federal 

Reserve Banks, and two members of 

Congress.63

Many industry commenters, 

particularly financial institution 

commenters, argued that the scope of 

the May 2011 Proposed Rule was 

overbroad and would have unintended 

consequences. Many commenters 

asserted that the regulation should not 

apply to transfers where the originating 

institution does not control the transfer 

from end to end, such as international 

wire transfers and international ACH 

transfers. Commenters stated that 

compliance with the disclosure 

requirements, particularly the 

disclosure of fees charged by 

intermediary institutions handling the 

transfer and taxes levied in the recipient 

country, would be difficult or 

impossible for open network transfers. 

Commenters suggested that subjecting 

open network transfers to these 

requirements would cause financial 

institutions to withdraw from the 

market or restrict where such transfers 

may be sent, which would either 

decrease consumer access or increase 

costs to consumers. Commenters 

asserted that the Bureau should extend 

the temporary exception allowing use of 

estimates to 2020 or that the Bureau had 

and should use exception authority to 

make the exemption provision 

permanent. Several commenters also 

asserted that remittances to businesses 

and large-value consumer transactions 

should be exempted from the rule. 

Consumer group commenters, on the 

other hand, supported the May 2011 

Proposed Rule as faithfully 

implementing the statutory mandates, 

asserting that Congress had specifically 

intended the disclosure regime to 

change business practices by depository 


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64The analyses below under section 1022 of the 

Dodd-Frank Act, the Regulatory Flexibility Act, and 

the Paperwork Reduction Act detail the Bureau’s 

attempts to assess various categories of benefits, 

costs, and impacts upon various categories of 

stakeholders. 

institutions and credit unions that allow 

undisclosed exchange rates and fees. 

The commenters urged the Bureau not 

to extend the sunset date for the 

temporary exception allowing 

depository institutions and credit 

unions to use estimates under certain 

circumstances, and to publish a list of 

countries in which the laws or transfer 

methods prevent remittance transfer 

providers from determining the amount 

to be provided in order to prevent the 

exception from being abused. 

Furthermore, consumer group 

commenters asserted that the required 

disclosures would provide information 

that consumers currently lack about the 

foreign exchange rate, fees, and the date 

of delivery associated with a transfer. 

However, the commenters criticized the 

proposed disclosures as providing 

inadequate information regarding error 

resolution rights and failing to make 

clear when pricing information was 

estimated. They also urged the Bureau 

to reject combined disclosure forms 

because they did not provide clear proof 

that a contract had been formed and 

payment rendered. 

Regarding the proposed foreign 

language disclosure requirements, 

industry commenters recommended that 

the rule provide limits on the number or 

type of languages in which disclosures 

must be provided. These commenters 

stated that the May 2011 Proposed Rule 

would provide a disincentive for 

remittance transfer providers to provide 

a wide range of foreign language 

services to customers. Consumer group 

commenters and a Congressional 

commenter believed that the proposed 

foreign language provisions were 

appropriate and that the final rule 

should ensure that non- and limitedEnglish speaking consumers have access 

to meaningful remittance transaction 

disclosures. 

Industry commenters also generally 

objected to proposed error resolution 

provisions that place liability on 

remittance transfer providers for errors 

caused by parties other than the 

provider. These commenters believed 

that these provisions inappropriately 

shifted liability to remittance transfer 

providers that did not err or control the 

circumstances that caused the error. 

Some commenters suggested that 

remittance transfer providers may not 

have the ability to recover funds from 

third parties involved in the transfer 

and that the financial impact of losses 

experienced by the provider as a result 

of errors by another party could be 

significant enough for remittance 

transfer providers to exit the market. 

Furthermore, industry commenters 

generally did not agree with the 

proposed refund and cancellation 

provisions, arguing, among other things, 

that the proposed cancellation period 

was too long. Consumer group 

commenters generally supported the 

proposed error resolution and refund 

and cancellation provisions, though 

some consumer group commenters also 

suggested that the cancellation period 

could be shortened. 

Finally, with respect to agent liability, 

consumer group commenters, State 

regulator commenters, and a Federal 

Reserve Bank commenter supported 

proposed Alternative A under the May 

2011 Proposed Rule. This alternative 

would make the remittance transfer 

provider liable for violations by an 

agent, when such agent acts for the 

provider. Industry commenters, on the 

other hand, supported proposed 

Alternative B. This alternative would 

impose liability on a remittance transfer 

provider for violations by an agent 

acting for the provider, unless the 

provider established and maintained 

policies and procedures for agent 

compliance, including appropriate 

oversight measures, and the provider 

corrected any violation, to the extent 

appropriate. 

IV. Summary of Final Rule and 

Concurrent Proposal 

A. Introduction 

As described in more detail below, 

the final rule implements the DoddFrank Act by largely adopting the 

proposal as published in May 2011, 

with several amendments and 

clarifications based on commenters’ 

suggestions and further analysis by the 

Bureau. In the concurrent proposal, the 

Bureau is seeking public comment and 

data that would permit the Bureau to 

develop clearer and more appropriately 

tailored standards for: (i) Setting a 

specific numeric threshold as a safe 

harbor for determining which providers 

of remittance services are excluded from 

compliance with the new requirements 

because they do not provide remittance 

transfers ‘‘in the normal course of 

business’’; and (ii) applying the 

disclosure and cancellation 

requirements where senders request one 

or more transfers several days in 

advance of the transfer date. 

The Bureau takes seriously concerns 

raised by commenters, particularly 

implementation challenges in the open 

network context.64 The Bureau believes 

that a number of providers likely do not 

currently possess or have easy access to 

the information needed to satisfy the 

new disclosure requirements for every 

transaction. For these providers, as well 

as their operating partners, compliance 

may require modification of current 

systems, protocols, and contracts. 

Nevertheless, the Bureau believes that it 

would be premature to make a 

determination about extending the 

temporary exception allowing 

depository institutions and credit 

unions to estimate disclosure 

information. The statute specifies a very 

narrow role for the Bureau by according 

it discretion only to extend the 

exception for a limited time period 

upon a specific finding regarding the 

ability of depository institutions and 

credit unions to send remittance 

transfers. Forecasting how the market 

will evolve in response to the final rule 

is difficult prior to the rule’s release and 

more than three years in advance of the 

sunset date set by the statute. It is not 

clear how providers, and in particular 

small companies and companies that 

send remittance transfers only 

infrequently, may react to the new 

requirements and potential 

implementation costs. Nor is it clear 

what new models and systems may be 

developed to enable these and other 

companies to comply more easily with 

the statutory and regulatory 

requirements. The remittances market 

has already undergone significant 

evolution over the last two decades, in 

response to increasing transaction flows, 

new technology, new business models, 

and other factors. New products and 

partnerships have been developing, and 

may be further spurred by 

implementation of the Dodd-Frank Act 

requirements. 

The final rule therefore generally 

tracks the language and structure of the 

Dodd-Frank Act and the May 2011 

Proposed Rule, with some additional 

tailoring to provide guidance on 

complying with the requirements in 

particular circumstances such as 

transactions conducted by mobile 

applications or text message and 

transactions in which a sender 

preauthorizes remittance transfers to 

recur at substantially regular intervals. 

Going forward, the Bureau expects to 

develop a small business compliance 

guide, engage in a dialogue with both 

industry and consumer groups to 

monitor implementation issues, and 

consider what data will be useful to 

monitor the effect of the new regime on 

consumer access and market 

competition over time. 


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B. Summary of the Final Rule 

The final rule incorporates the 

definitions of ‘‘remittance transfer,’’ 

‘‘sender,’’ ‘‘remittance transfer 

provider,’’ and ‘‘designated recipient’’ 

generally as set forth in the statute. As 

in the May 2011 Proposed Rule, 

remittance transfer is defined broadly to 

include international wire and ACH 

transfers, consistent with the statutory 

language. In response to commenters’ 

comments, the final rule also provides 

guidance for assessing whether a 

company qualifies as a ‘‘remittance 

transfer provider’’ under the statute by 

providing remittance transfers in the 

‘‘normal course of its business.’’ Further 

guidance is also provided to describe 

the circumstances in which loading 

funds to a prepaid card may be 

considered a remittance transfer. 

Consistent with the statute and the 

May 2011 Proposed Rule, the final rule 

requires a remittance transfer provider 

to provide a written pre-payment 

disclosure to a sender containing 

information about the specific transfer, 

such as the exchange rate, applicable 

fees and taxes, and the amount to be 

received by the designated recipient. 

Under the final rule, the remittance 

transfer provider is also generally 

required to provide a written receipt 

when payment is made. The receipt 

must include the information provided 

on the pre-payment disclosure, as well 

as additional information, such as the 

date of availability, the recipient’s 

contact information, and information 

regarding the sender’s error resolution 

and cancellation rights. Alternatively, 

the final rule permits remittance transfer 

providers to give senders a single 

written disclosure prior to payment 

containing all of the information 

required on the receipt, so long as the 

provider also provides proof of payment 

such as a stamp on the earlier 

document. 

The final rule generally requires that 

these disclosures be provided in English 

and in each of the foreign languages 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfer services at a 

particular office. Language in the model 

disclosure forms has been modified 

slightly to clarify and provide additional 

detail that may be useful to consumers, 

as well as to reflect substantive changes 

in the final rule regarding the period to 

exercise cancellation rights. The final 

rule also contains additional guidance 

on how the required disclosures may be 

provided when the remittance transfer 

is made using text message or a mobile 

application. Moreover, in light of the 

timing and disclosure challenges for 

preauthorized remittance transfers, 

which are authorized in advance to 

recur at substantially regular intervals, 

the final rule sets forth alternative 

disclosure requirements for such 

transfers. In particular, while the 

disclosures requirements for the first 

transfer in a preauthorized remittance 

transfer are the same as for single 

remittance transfers, for subsequent 

transfers in a series of preauthorized 

remittance transfers, a provider must 

provide a pre-payment disclosure 

within a reasonable time prior to the 

scheduled date of the transfer. The 

receipt for each subsequent transfer 

generally must be provided no later than 

one business day after the date on 

which the transfer is made. 

The final rule also implements the 

two statutory exceptions that permit a 

remittance transfer provider to disclose 

an estimate of the amount of currency 

to be received, rather than the actual 

amount. As discussed above, the final 

rule provides that the first exception, 

which applies to insured depository 

institutions and insured credit unions 

that cannot determine certain disclosed 

amounts for reasons beyond their 

control, expires on July 21, 2015. The 

second exception applies when the 

provider cannot determine certain 

amounts to be disclosed because of: (i) 

The laws of a recipient country; or (ii) 

the method by which transactions are 

made in the recipient country. The 

Bureau expects to issue a safe harbor list 

of countries to which the second 

exception applies prior to the effective 

date of the final rule and to update it 

periodically thereafter to facilitate 

compliance and enforcement. The final 

rule also provides clarification on use of 

particular estimate methodologies. 

Consistent with the May 2011 

Proposed Rule, the error resolution 

procedures for remittance transfers set 

forth in the final rule are similar to 

those that currently apply to financial 

institutions under Regulation E with 

respect to errors involving electronic 

fund transfers. The Bureau is adopting 

certain modifications to the proposed 

error resolution provisions in response 

to commenters’ concerns, including 

defining additional circumstances that 

would not be considered errors. The 

final rule also provides senders 

specified cancellation and refund rights. 

In response to commenters’ concerns, 

the Bureau is reducing the cancellation 

period from one business day to 30 

minutes. Furthermore, the Bureau is 

adopting a different cancellation and 

refund procedure for any remittance 

transfer scheduled by the sender at least 

three business days before the date of 

the transfer. For these transfers 

scheduled in advance, senders may 

generally cancel the transfer as long as 

the request to cancel is received by the 

provider at least three business days 

before the scheduled date of the 

remittance transfer. Finally, the Bureau 

is adopting a standard of liability under 

which a remittance transfer provider 

will be liable for violations by an agent, 

when such agent acts for the provider. 

C. Summary of Concurrent Proposal 

The Bureau is also issuing a 

concurrent proposal (January 2012 

Proposed Rule), published elsewhere in 

today’s Federal Register. This proposal 

has two parts. First, it seeks comment 

on the addition of a possible safe harbor 

to the definition of the term ‘‘remittance 

transfer provider’’ to make it easier to 

determine when certain companies are 

excluded from the statutory scheme 

because they do not provide remittance 

transfers in ‘‘the normal course of 

business.’’ Second, it seeks comment on 

a possible safe harbor and other 

refinements to disclosure and 

cancellation requirements for certain 

transfers scheduled in advance, 

including ‘‘preauthorized’’ remittance 

transfers that are scheduled in advance 

to recur at substantially regular 

intervals. The Bureau believes that 

further tailoring of the final rule may be 

warranted both to reduce compliance 

burden for providers and to increase the 

benefits of the disclosure and 

cancellation requirements to consumers. 

The Bureau believes that these issues 

would benefit from further public 

comment. 

Regarding the first part of the January 

2012 Proposed Rule, the Bureau is 

soliciting comment on 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.’’ 

Under the proposed safe harbor, if a 

person makes no more than 25 

remittance transfers in the previous 

calendar year, the person would not be 

deemed to be providing remittance 

transfers in the normal course of 

business for the current calendar year if 

it provides no more than 25 remittance 

transfers in the current calendar year. 

The Bureau is soliciting comment on 

whether the threshold number for the 

safe harbor should be higher or lower 

than 25 transfers, such as 10 or 50 

transfers. 

Regarding the second part of the 

January 2012 Proposed Rule, the Bureau 

is also seeking comment on a possible 

safe harbor and other refinements to 

disclosure and cancellation 

requirements for certain transfers 

scheduled in advance, including 


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6204 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

65Throughout the SUPPLEMENTARY INFORMATION, 

the Bureau is citing its authority under both EFTA 

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

of simplicity. The Bureau notes, however, that with 

respect to some of the provisions referenced in the 

text, use of only one of the authorities may be 

sufficient. 

66The consultation and economic impact analysis 

requirement previously contained in EFTA sections 

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

Bureau. Nevertheless, the Bureau consulted with 

the appropriate prudential regulators and other 

Federal agencies and considered the potential 

benefits, costs, and impacts of the rule to consumers 

and covered persons as required under section 1022 

of the Dodd-Frank Act, and through these processes 

would have satisfied the requirements of these 

EFTA provisions if they had been applicable. 

preauthorized remittance transfers. 

Specifically, the proposal solicits 

comment whether use of estimates 

should be permitted in the pre-payment 

disclosure and receipt given at the time 

the transfer is requested and authorized 

in the following two circumstances: (i) 

A consumer schedules a one-time 

transfer or the first in a series of 

preauthorized transfers to occur more 

than 10 days after the transfer is 

authorized; or (ii) a consumer enters 

into an agreement for preauthorized 

remittance transfers where the amount 

of the transfers can vary and the 

consumer does not know the exact 

amount of the first transfer at the time 

the disclosures for that transfer are 

given. The January 2012 Proposed Rule 

is also requesting comment on whether 

a provider that uses estimates in the prepayment disclosure and receipt given at 

the time of the transfer is requested and 

authorized in the two situations 

described above should be required to 

provide a second receipt disclosure with 

accurate information within a 

reasonable time prior to the scheduled 

date of the transfer. 

The January 2012 Proposal Rule also 

solicits comment on possible 

refinements to the disclosure rules 

applicable to subsequent preauthorized 

remittance transfers. Specifically, the 

Bureau is soliciting comment on two 

alternative approaches to the 

disclosures rules for subsequent 

preauthorized remittance transfers: (i) 

Whether the Bureau should retain the 

requirement that a provider give a prepayment disclosure for each subsequent 

transfer, and should provide a safe 

harbor interpreting the ‘‘within a 

reasonable time’’ standard for providing 

this disclosure; or (ii) whether the 

Bureau instead should eliminate the 

requirement to provide a pre-payment 

disclosure for each subsequent transfer. 

The January 2012 Proposed Rule also 

seeks comment on possible changes to 

the cancellation requirements for certain 

remittance transfers that a sender 

schedules in advance, including 

preauthorized remittance transfers. The 

January 2012 Proposed Rule solicits 

comment on whether the threebusiness-day deadline to cancel such 

remittances transfers in the final rule 

should be changed to be earlier or later 

than three business days. Furthermore, 

the January 2012 Proposed Rule solicits 

comment on three issues related to the 

disclosure of the deadline to cancel as 

set forth in the final rule: (i) Whether the 

three-business-day deadline to cancel 

transfers scheduled in advance should 

be disclosed more clearly to consumers, 

such as requiring a provider to disclose 

in the receipt the specific date the 

deadline to cancel will expire; (ii) 

whether a provider should be allowed 

on a receipt to describe both the threebusiness-day and 30 minute deadlineto-cancel time frames and either 

describe to which transfers each 

deadline to cancel is applicable, or 

alternatively, use a check box or other 

method to indicate which deadline is 

applicable to the transfer; and (iii) 

whether the disclosure of the deadline 

to cancel should be disclosed in the prepayment disclosure for each subsequent 

transfer, rather than in the receipt given 

for each subsequent transfer. 

V. Legal Authority 

Section 1073 of the Dodd-Frank Act 

creates a new Section 919 of the EFTA 

and requires remittance transfer 

providers to provide disclosures to 

senders of remittance transfers, 

pursuant to rules prescribed by the 

Bureau. In particular, providers must 

give senders a written pre-payment 

disclosure containing specified 

information applicable to the sender’s 

remittance transfer. The remittance 

transfer provider must also provide a 

written receipt that includes the 

information provided on the prepayment disclosure, as well as 

additional specified information. EFTA 

section 919(a). 

In addition, EFTA section 919 

provides for specific error resolution 

procedures. The Act directs the Bureau 

to promulgate error resolution standards 

and rules regarding appropriate 

cancellation and refund policies. EFTA 

section 919(d). Finally, EFTA section 

919 requires the Bureau to establish 

standards of liability for remittance 

transfer providers, including those that 

act through agents. EFTA section 919(f). 

Except as described below, the 

remittance transfer rule is finalized 

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 in the 

SUPPLEMENTARY INFORMATION, the 

following provisions are adopted in part 

or in whole pursuant to the Bureau’s 

authority in EFTA sections 904(a) and 

904(c) include: §§ 1005.30(e)(2)(ii), 

1005.31(a)(2), (a)(5), (b)(1)(i), (b)(1)(ii), 

(b)(1)(iii), (b)(1)(iv), (b)(1)(v), (b)(1)(vi), 

(b)(2)(i), (b)(3), (e)(2), (g)(1)(ii), (g)(2), 

1005.32(a) and (b), 1005.33(c)(1), and 

1005.36. 65 The proposed Model Forms 

in Appendix A are also adopted 

pursuant to EFTA section 904(a).66

VI. Section-by-Section Analysis 

Section 1005.1 Authority and Purpose 

Section 1005.1(b) addresses the 

purpose of Regulation E, which is to 

carry out the purpose of the EFTA. The 

Dodd-Frank Act revised EFTA section 

902(b) to state in part that the purpose 

of the EFTA is to provide a basic 

framework establishing the rights, 

liabilities, and responsibilities of 

participants in electronic fund and 

remittance transfer systems. * * * ’’ 

(emphasis added). Accordingly, the 

final rule makes a technical amendment 

to § 1005.1(b) to incorporate this 

revision. Furthermore, because 

remittance transfers can be offered by 

persons other than financial 

institutions, the final rule also makes a 

technical amendment to § 1005.1(b) to 

include a reference to other persons. 

Section 1005.2 Definitions 

Section 1005.2 generally sets forth the 

definitions that apply to Regulation E. 

One commenter suggested that the 

Bureau clarify the applicability of the 

definitions contained in § 1005.2, which 

have been placed in a new subpart A, 

to the remittance provisions in subpart 

B. Section 1005.2 is prefaced with: ‘‘For 

purposes of this part. * * *.’’ ‘‘This 

part’’ refers to the entirety of part 1005, 

including all subparts. Therefore, except 


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as modified or limited by subpart B 

(which modifications or limitations 

apply only to subpart B), the definitions 

in § 1005.2 apply to all of Regulation E, 

including subpart B. The final rule 

adopts comment 30–1 to clarify the 

applicability of the definitions 

contained in § 1005.2 to subpart B. The 

final rule also amends § 1005.2 to cross 

reference subpart B to make clear that 

the definitions in § 1005.2 apply to 

subpart B unless otherwise provided in 

subpart B. 

Section 1005.3 Coverage 

Currently, § 1005.3(a) states that 

Regulation E generally applies to 

financial institutions. Section 1005.3(a) 

is revised to state that the requirements 

of subpart B apply to remittance transfer 

providers. The revision reflects the fact 

that the scope of the Dodd-Frank Act’s 

remittance transfer provisions is not 

limited to financial institutions. 

Specifically, EFTA section 919(g)(3) 

defines a remittance transfer provider as 

‘‘any person that provides remittance 

transfers for a consumer in the normal 

course of its business, whether or not 

the consumer holds an account with 

such person’’ (emphasis added). Thus, 

subpart B applies to non-financial 

institutions, such as non-bank money 

transmitters, that send remittance 

transfers. This revision is adopted as 

proposed. 

Section 1005.30 Remittance Transfer 

Definitions 

EFTA section 919(g) sets forth several 

definitions applicable to the remittance 

transfer provisions in subpart B. As 

discussed in more detail below, many 

commenters requested clarification on 

specific definitions, and also urged the 

Bureau to consider a number of 

revisions and exemptions to limit the 

application of the rule to different types 

of transactions. Final § 1005.30 

incorporates the statutory definitions 

generally as proposed, with additional 

interpretations and clarifications in 

response to specific concerns raised by 

commenters. The final rule revises the 

definition of ‘‘business day’’ in 

§ 1005.30(b) to more closely track the 

definition of ‘‘business day’’ in 

§ 1005.2(d) of Regulation E. In addition, 

the final rule adds a new definition of 

‘‘preauthorized remittance transfer.’’ 

30(a) Agent 

Proposed § 205.30(a) stated that an 

‘‘agent’’ means an agent, authorized 

delegate, or person affiliated with a 

remittance transfer provider under State 

or other applicable law, when such 

agent, authorized delegate, or affiliate 

acts for that remittance transfer 

provider. The final rule adopts the 

definition as proposed in renumbered 

§ 1005.30(a). 

EFTA section 919 does not use 

consistent terminology concerning 

agents of remittance transfer providers. 

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

uses the phrase ‘‘agent, authorized 

delegate, or person affiliated with a 

remittance transfer provider,’’ when that 

person ‘‘acts for that remittance transfer 

provider,’’ while other provisions use 

the phrase ‘‘agent or authorized 

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

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

The Bureau does not believe that these 

statutory wording differences are 

intended to establish different standards 

across the rule. Therefore, the rule 

generally refers to ‘‘agents,’’ as defined 

in § 1005.30(a), to provide consistency 

across the rule. 

Commenters suggested that the 

Bureau provide further clarity on the 

definition of ‘‘agent,’’ including 

clarifying that financial institutions’ 

relationships with intermediary and 

correspondent institutions are not 

agency relationships unless an 

agreement creates such a relationship as 

a matter of law. The final rule does not 

contain these suggested clarifications. 

The Bureau believes that because the 

concept of agency has historically been 

defined by common law, it is 

appropriate for the definition to defer to 

applicable law regarding agents, 

including with respect to what creates 

or constitutes an agency relationship. 

30(b) Business Day 

Several provisions in the final rule 

use the term ‘‘business day.’’ See, e.g., 

§§ 1005.31(e)(2) and 1005.33(c)(1). 

Because the definition of ‘‘business 

day’’ in § 1005.2(d) of Regulation E 

applies only to financial institutions 

and includes inapt commentary, the 

Board proposed an alternative definition 

of ‘‘business day’’ applicable to 

remittance transfer providers. The 

proposed rule stated that ‘‘business 

day’’ means any day on which a 

remittance transfer provider accepts 

funds for sending remittance transfers. 

Commenters generally objected to the 

proposed definition. In particular, 

financial institution commenters 

expressed concern that the date on 

which an institution ‘‘accepts funds’’ is 

unclear, because it could be interpreted 

either as the date on which funds are 

deposited into an account, or when the 

institution accepts a sender’s order to 

transfer funds. Other commenters 

suggested replacing the proposed 

definition with a definition closer to the 

definition of ‘‘business day’’ in 

§ 1005.2(d) Regulation E. Upon further 

review, and for greater consistency 

among definitions, the Bureau is 

adopting a revised ‘‘business day’’ 

definition in renumbered § 1005.30(b) as 

explained in related commentary that 

more closely tracks the general 

definition of ‘‘business day’’ in 

§ 1005.2(d), but that is tailored to the 

particular aspects of remittance 

transfers. 

Specifically, § 1005.30(b) states that 

‘‘business day’’ means any day on 

which the offices of a remittance 

transfer provider are open to the public 

for carrying on substantially all business 

functions. Similar to proposed comment 

30(b)–1, final comment 30(b)–1 clarifies 

that with respect to subpart B, a 

business day includes the entire 24-hour 

period ending at midnight, and a notice 

given under any section of subpart B is 

effective even if given outside of normal 

business hours. However, comment 

30(b)–1 states that a remittance transfer 

provider is not required under subpart 

B to make telephone lines available on 

a 24-hour basis. 

Comment 30(b)–2 explains that 

‘‘substantially all business functions’’ 

include both the public and the backoffice operations of the provider. For 

example, if the offices of a provider are 

open on Saturdays for customers to 

request remittance transfers, but not for 

performing internal functions (such as 

investigating errors), then Saturday is 

not a business day for that provider. In 

this case, Saturday does not count 

toward the business-day standard for 

subpart B for purposes of determining 

the number of days for resolving errors, 

processing refunds, etc. 

Comment 30(b)–3 clarifies that a 

provider may determine, at its election, 

whether an abbreviated day is a 

business day. For example, if a provider 

engages in substantially all business 

functions until noon on Saturdays 

instead of its usual 3 p.m. closing, it 

may consider Saturday a business day. 

Finally, comment 30(b)–4 states that if 

a provider makes a telephone line 

available on Sundays for cancelling the 

transfer, but performs no other business 

functions, Sunday is not a business day 

under the ‘‘substantially all business 

functions’’ standard. 

30(c) Designated Recipient 

EFTA section 919(g)(1) provides that 

‘‘designated recipient’’ means ‘‘any 

person located in a foreign country and 

identified by the sender as the 

authorized recipient of a remittance 

transfer to be made by a remittance 

transfer provider, except that a 

designated recipient shall not be 

deemed to be a consumer for purposes 

of [the EFTA].’’ Proposed § 205.30(c) 


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67The term ‘‘State’’ is defined in 12 CFR 

1005.2(l). 

implemented EFTA section 919(g)(1), 

with several edits for clarity. First, the 

Board proposal noted that a remittance 

transfer provider will generally only 

know the location where funds are to be 

sent, rather than where a designated 

recipient is physically located. For 

instance, although the sender may 

indicate that funds are to be sent to the 

recipient in Mexico City, the recipient 

could actually be in the United States at 

the time of the transfer. Thus, the Board 

stated that the statutory reference to a 

‘‘person located in a foreign country’’ 

should be read with a view to the 

location where funds are to be sent. 

Additionally, the statute references a 

remittance transfer ‘‘to be made by a 

remittance transfer provider.’’ As 

discussed below, the definition of 

‘‘remittance transfer’’ requires that it be 

sent by a remittance transfer provider, 

so this language is unnecessary. 

Accordingly, proposed § 205.30(c) 

stated that a designated recipient is any 

person specified by the sender as an 

authorized recipient of a remittance 

transfer to be received at a location in 

a foreign country. The final rule adopts 

the proposed rule as proposed in 

renumbered § 1005.30(c), but with 

additional explanatory commentary to 

address issues raised by commenters. 

Proposed comment 30(c)–1 stated that 

a designated recipient can be either a 

natural person or a business. Several 

commenters argued that transfers to 

entities other than natural persons 

should be excluded, so that the rule 

would cover only consumer-toconsumer transfers. However, the 

statute clearly anticipates covering 

consumer-to-business transfers, as it 

defines ‘‘designated recipient’’ to 

include transfers to ‘‘persons,’’ and does 

not limit its application to consumer 

recipients. See 15 U.S.C. 1693p(g)(1). 

The EFTA defines ‘‘consumer’’ to mean 

a natural person, but does not define the 

term ‘‘person.’’ Nonetheless, the EFTA 

uses the term ‘‘person’’ in many 

provisions, and the context of how the 

term ‘‘person’’ is used in those EFTA 

provisions indicates that it includes 

entities that are natural persons, as well 

as organizations. For example, the EFTA 

defines the term ‘‘financial institution’’ 

to mean ‘‘a State or National bank, a 

State or Federal savings and loan 

association, a mutual savings bank, a 

State or Federal credit union, or any 

other person who, directly or indirectly, 

holds an account belonging to a 

consumer.’’ (emphasis added). As a 

result, Regulation E has long defined 

‘‘person’’ to mean a natural person or an 

organization. See § 1005.2(j). The 

Bureau believes that the statute by using 

the term ‘‘person’’ intended to cover 

remittance transfers sent by consumers 

not just to family members, but also 

directly to businesses abroad to pay 

tuition, mortgage, medical, utilities, or 

other bills or to fulfill other obligations. 

Accordingly, the final rule does not 

generally exclude consumer-to-business 

transfers where a remittance transfer 

provider is acting as an electronic 

intermediary. Instead, the Bureau is 

adopting comment 30(c)–1 to state that 

a designated recipient can be either a 

natural person or an organization, such 

as a corporation. 

Proposed comment 30(c)–2 explained 

that a remittance transfer is received at 

a location in a foreign country if funds 

are to be received at a location 

physically outside of any State.67 One 

money transmitter commenter noted 

that it may know the country to which 

a transfer is being sent, but not the 

specific payout location. The comment 

was intended to address the receipt of 

funds at a foreign location in the general 

sense; that is, any location that is 

outside of a State. Thus, the final 

comment, adopted as renumbered 

comment 30(c)–2.i., clarifies that a 

sender need not designate a specific 

pick-up location. 

In addition, commenters requested 

further clarification for determining 

whether there is a designated recipient 

when a transfer is made to an account. 

For example, in a wire transfer 

transaction, commenters stated that the 

consumer requesting the transfer may 

only identify the recipient of funds by 

an account number or the location or 

routing number of the receiving 

institution. Other commenters argued 

that transfers to an account associated 

with an institution in a State should not 

be viewed as transfers to a designated 

recipient, even if a person in a foreign 

country has exclusive access to the 

account. 

New comment 30(c)–2.ii. provides 

further guidance to address these issues. 

For transfers to a designated recipient’s 

account, comment 30(c)–2.ii. states that 

whether funds are to be received at a 

location physically outside of any State 

depends on where the account is 

located. If the account is located in a 

State, the funds will not be received at 

a location in a foreign country. 

The Bureau concurs with the Board’s 

statement that the statutory reference to 

a ‘‘person located in a foreign country’’ 

should be read with a view to the 

location where funds are to be sent, and 

believes that comment 30(c)–2.ii. is 

consistent with this approach. Thus, the 

Bureau agrees that transfers to domestic 

accounts should not be considered 

transfers to a location in a foreign 

country. The Bureau also agrees that 

providers may not always know where 

a recipient is physically located at the 

time a consumer requests a transfer to 

be sent, and believes that directing 

providers to look to the location of the 

account, rather than the location of the 

individual recipient, creates an 

appropriate bright line that will 

facilitate compliance with the final rule, 

ease compliance burden, and most 

effectively accomplish the purpose of 

the statute to apply the provisions to 

transfers to foreign countries. 

One commenter suggested revising 

the definition of ‘‘designated recipient’’ 

to exclude senders, such that transfers 

made by a sender to a sender’s separate 

account abroad would be excluded. 

However, nothing in the statute 

indicates that the definition of 

‘‘designated recipient’’ should exclude 

transfers to a foreign-based account of 

the sender. The Bureau believes that a 

sender would also benefit from 

disclosures indicating the ultimate 

amount to be received in a transfer, 

particularly where an exchange rate is 

applied. The final rule adopts comment 

30(c)–3 to clarify that a sender may also 

be a designated recipient, such as where 

a sender requests that a provider send 

an electronic transfer of funds from the 

sender’s checking account in a State to 

the sender’s checking account located in 

a foreign country. 

The Board solicited comment on 

whether there could be instances where 

a remittance provider may receive a 

recipient’s email address but no other 

information to determine the location 

where funds are to be received. Several 

commenters affirmed this could happen. 

For example, one commenter stated that 

consumers can provide a recipient’s 

email address to use its transfer service; 

while recipients must register with the 

provider to access the transferred funds, 

it is possible that the provider would 

not know whether the transferred funds 

will be received at a location in a 

foreign country until the funds are 

claimed. 

Final comment 30(c)–2.iii. addresses 

this scenario. Where the sender does not 

specify information about a recipient’s 

account, but instead just provides 

information about the recipient, a 

remittance transfer provider must 

determine whether the funds will be 

received at a location in a foreign 

country based on information that is 

provided by the sender, and other 

information the provider may have, at 

the time the transfer is requested. For 

example, if a consumer gives a provider 


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the recipient’s email address, and the 

provider has no other information about 

whether the funds will be received by 

the recipient at a location in a foreign 

country, then the provider may 

determine that funds are not to be 

received at a location in a foreign 

country. However, if the provider has 

additional information at the time the 

transfer is requested indicating that 

funds are to be received in a foreign 

country, such as where the recipient’s 

email address is registered with the 

provider and associated with a foreign 

account, then the provider has sufficient 

information to conclude that the 

remittance transfer is to be received at 

a location in a foreign country. 

Commenters also noted that, with 

regard to prepaid cards, the provider 

may not know at the time the prepaid 

card is purchased whether the funds 

will be received at a location physically 

outside of any State. These commenters 

stated that where general-purpose 

reloadable prepaid cards or payroll 

cards are issued to two persons—one 

person in a State and another person in 

a foreign country—and both cards 

access the same funds, the provider may 

not be able to ascertain at the time of the 

request for the cards that funds will be 

received at a location physically outside 

of any State. In this case, the issuer does 

not know at the time of the request the 

ultimate recipient of the funds. 

The Bureau notes that funds that can 

be accessed by a prepaid card are 

generally not considered to be an 

‘‘account’’ as defined in § 1005.2(b) of 

Regulation E. Thus, where the funds 

that can be accessed by a prepaid card 

are held does not determine whether a 

prepaid card is being issued to a 

designated recipient. The Bureau 

believes when a participant in a prepaid 

card program, such as a prepaid card 

issuer or a prepaid card program 

manager, issues prepaid cards, the 

participant in the prepaid card program 

must look to where it or another 

participant in the prepaid card program 

sends the prepaid cards, to determine 

whether the prepaid card funds will be 

received in a foreign country. Likewise, 

when a participant in a prepaid card 

program adds additional funds at the 

sender’s direct request to prepaid cards 

that it or any other participant 

previously issued, the participant in the 

prepaid card program must look to 

where it or another participant in the 

prepaid card program has sent the cards 

to determine whether the prepaid card 

funds will be received in a foreign 

country. The Bureau does not believe 

that it is appropriate for a participant in 

the prepaid card program to determine 

whether the funds will be received in a 

foreign country based on where the 

participants have decided to hold the 

funds the cards access. The Bureau 

believes that such a rule would allow 

participants in the prepaid card program 

to circumvent the remittance transfer 

rules by holding the funds in a State. 

Under such an approach, participants in 

the prepaid card program would not be 

required to comply with the remittance 

transfer rules if the funds are located in 

a State even where prepaid cards that 

access the funds are sent only to 

recipients located in a foreign country. 

In the case where two prepaid cards 

are issued to two persons—one person 

in a State and another person in a 

foreign country—and both cards access 

the same funds, the Bureau believes that 

the provider has sufficient information 

to determine that the funds will be 

received in a foreign country because it 

has sent one of the prepaid cards to a 

person in a foreign country. Proposed 

comment 30(d)–3 suggested that in this 

situation, the transfer would not be to a 

designated recipient because the sender 

retained the ability to draw down the 

funds on the prepaid card. Proposed 

comment 30(d)–3 is not adopted. The 

Bureau is concerned that if it adopted a 

rule that the transfer is not to a 

designated recipient in this case, a 

provider that sends prepaid cards 

abroad with the intent of providing a 

service where funds loaded in a State 

are intended to be accessed in a foreign 

country could circumvent the 

remittance transfer rules by always 

automatically providing a second 

prepaid card to the sender, even if the 

sender did not request a second card. 

Thus, final comment 30(c)–2.iii. 

clarifies that if a consumer in a State 

purchases a prepaid card, the provider 

has sufficient information to conclude 

that the funds are to be received in a 

foreign country if the remittance transfer 

provider sends a prepaid card to a 

specified recipient in a foreign country, 

even if a person located in a State, 

including the sender, retains the ability 

to access funds on the prepaid card. In 

this case, the prepaid issuer knows at 

the time of the request that a prepaid 

card has been sent to a recipient located 

in a foreign country. In contrast, if the 

provider provides the card directly to 

the consumer, the provider may 

conclude that funds are not to be 

received in a foreign country, because 

the provider does not know whether the 

consumer will subsequently send the 

prepaid card to a recipient in a foreign 

country. 

30(d) Preauthorized Remittance 

Transfer 

In the May 2011 Proposed Rule, the 

Board requested comment on the 

treatment of preauthorized bill 

payments under the definition of 

‘‘remittance transfer.’’ This issue, and its 

resolution, are discussed in more detail 

below in the discussions of § 1005.30(e) 

and new § 1005.36. 

The term ‘‘preauthorized electronic 

fund transfer’’ is currently defined 

under 12 CFR 1005.2(k) to mean an 

‘‘electronic fund transfer authorized in 

advance to recur at substantially regular 

intervals.’’ Because subpart B applies to 

more than just EFTs, the final rule 

includes a new definition of 

‘‘preauthorized remittance transfer’’ in 

§ 1005.30(d). The definition tracks the 

definition in § 1005.2(k), but revises its 

applicability to ‘‘remittance transfers 

authorized in advance to recur at 

substantially regular intervals.’’ 

Similarly, the final rule adopts a new 

comment 30(d)–1 that tracks existing 

comment 2(k)–1, but with references to 

remittance transfers replacing references 

to EFTs. 

30(e) Remittance Transfer 

30(e)(1) General Definition 

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

‘‘remittance transfer’’ as an ‘‘electronic 

(as defined in section 106(2) of the 

Electronic Signatures in Global and 

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

et seq. [(‘‘E-Sign Act’’)]) transfer of funds 

requested by a sender located in any 

State to a designated recipient that is 

initiated by a remittance transfer 

provider.’’ The statute further specifies 

that such a transaction is a remittance 

transfer whether or not the sender holds 

an account with the remittance transfer 

provider and whether or not the 

remittance transfer is also an electronic 

fund transfer, as defined in EFTA 

section 903. The statute thus brings 

within the scope of the EFTA certain 

transactions that have traditionally been 

outside the scope of the EFTA, if those 

transactions meet the elements of the 

definition of ‘‘remittance transfer.’’ Such 

transactions include cash-based 

remittance transfers sent through a 

money transmitter as well as consumer 

wire transfers and international ACH 

transactions. Proposed § 205.30(d) 

incorporated the definition of 

‘‘remittance transfer’’ in EFTA section 

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

Board also proposed commentary to 

provide further guidance on the 

definition, as well as examples of 

transactions that are and are not 

remittance transfers under the rule. 


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Proposed § 205.30(d)(1) set forth the 

general definition in EFTA section 

919(g)(2)(A). Proposed § 205.30(d)(1) 

stated that a remittance transfer means 

the electronic transfer of funds 

requested by a sender to a designated 

recipient that is sent by a remittance 

transfer provider. Proposed 

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

term applies regardless of whether the 

sender holds an account with the 

remittance transfer provider and 

regardless of whether the transfer is also 

an electronic fund transfer, as defined in 

Regulation E. Section 1005.30(e)(1) of 

the final rule incorporates the definition 

generally as proposed, with additional 

revisions to the commentary for clarity. 

Industry commenters, particularly 

financial institution commenters, 

opposed the definition of ‘‘remittance 

transfer’’ as overly broad. These 

commenters argued that the definition 

should not apply to open network 

transactions, such as international wire 

transfers and ACH transactions, or 

alternatively, that a separate rule 

tailored to these transactions should be 

adopted. Citing to legislative history, 

these commenters argued that the 

statute was intended only to address 

traditional cash-based, low-dollar-value 

remittances. Industry commenters 

argued that based on the difficulty with 

complying with the rule’s disclosure 

requirements, as discussed below in 

connection with § 1005.31, including 

open network transactions in the 

remittance transfer definition could 

have unintended consequences. These 

commenters maintained that providers 

would withdraw from the market or 

restrict where transfers may be sent if 

the final rule were applied to 

international wire transfers and ACH 

transactions, and that this would either 

decrease consumer access to remittance 

transfers or increase costs to consumers. 

Thus, these commenters argued that the 

Bureau should exercise its authority 

under EFTA section 904(c) to exempt 

these transactions from the definition of 

‘‘remittance transfer.’’ Industry 

commenters also urged the Bureau to 

adopt other exclusions and limitations 

to the ‘‘remittance transfer’’ definition, 

which are addressed below in the 

discussion of § 1005.30(e)(2). In 

contrast, consumer group commenters 

supported the proposed definition of 

‘‘remittance transfer,’’ including its 

inclusion of open network transactions. 

These commenters argued that the 

proposed definition is consistent with 

the language of the statute and the 

purpose of the statute’s provisions. 

The Bureau acknowledges the 

compliance challenges raised by the 

inclusion of open network transactions. 

Nevertheless, the Bureau believes the 

unambiguous language of the statute 

requires coverage of these transactions, 

such as wire transfers. The statute is 

broad in scope, specifically covering 

transactions that are account-based and 

that are not electronic fund transfers. 

The Bureau finds no statutory language 

to support excluding open network 

transactions—indeed, quite the 

contrary: The statute includes a 

temporary exception for certain insured 

institutions permitting estimates to be 

used in providing disclosures under 

specified circumstances in EFTA 

section 919(a)(4)(A). There would be no 

need for such an exception if open 

network transactions were not covered 

by the statute. Congress specifically 

recognized that it would be difficult for 

financial institutions to meet certain 

disclosure requirement with regard to 

open network transactions and tailored 

a specific accommodation to allow use 

of reasonably accurate estimates for an 

interim period until financial 

institutions can develop methods to 

determine exact disclosures, such as 

fees and taxes charged by third parties. 

Therefore, the Bureau does not believe 

it should exercise its exception 

authority under EFTA section 904(c) to 

exclude open network transactions from 

the definition of ‘‘remittance transfer.’’ 

Proposed comments 30(d)–1 through 

30(d)–4 provided further guidance on 

each of the elements of the proposed 

definition of ‘‘remittance transfer.’’ 

Proposed comment 30(d)–1 provided 

that there must be an electronic transfer 

of funds. The term ‘‘electronic’’ has the 

meaning given in section 106(2) of the 

E-Sign Act. There may be an electronic 

transfer of funds if a provider makes an 

electronic book entry between different 

settlement accounts to effectuate the 

transfer. However, the proposed 

comment explained that where a sender 

mails funds directly to a recipient, or 

provides funds to a courier for delivery 

to a foreign country, there has not been 

an electronic transfer of funds, and thus 

no remittance transfer. 

Citing the electronic book entry 

comment, one commenter suggested 

that the Bureau should expressly 

exclude the sale or issuance of checks, 

money orders, or other paper 

instruments from the ‘‘remittance 

transfer’’ definition. The Bureau agrees 

that issuing a paper check, draft, money 

order, or other paper instrument to be 

mailed abroad generally does not 

constitute an electronic transfer of 

funds. For clarity, the final comment, 

adopted as comment 30(e)–1, notes that 

where a provider issues a check, draft, 

or other paper instrument to be mailed 

abroad, there is not an electronic 

transfer of funds, except as described 

below with respect to online bill 

payments. 

A few commenters suggested that 

with respect to online bill payments, a 

consumer does not request an electronic 

transfer of funds. Instead, commenters 

stated that the consumer requests only 

that an amount be paid out of an 

account, and the payment method is 

generally left up to the institution. Thus, 

these commenters argued, there is no 

specific sender request to send a 

remittance transfer. The final rule 

adopts an approach that is consistent 

with the treatment of online bill 

payment services as an EFT under 

Regulation E in § 1005.3(b). Specifically, 

comment 3(b)(1)–1.vi. makes clear that 

an EFT includes ‘‘a payment made by a 

bill payer under a bill-payment service 

available to a consumer via computer or 

other electronic means, unless the terms 

of the bill-payment service explicitly 

state that all payments, or all payments 

to a particular payee or payees, will be 

solely by check, draft, or similar paper 

instrument drawn on the consumer’s 

account, and the payee or payees that 

will be paid in this manner are 

identified to the consumer.’’ 

Accordingly, final comment 30(e)–1 

provides that an electronic transfer of 

funds occurs for a payment made by a 

provider under a bill-payment service 

available to a consumer via computer or 

other electronic means, unless the terms 

of the bill-payment service explicitly 

state that all payments, or all payments 

to a particular payee or payees, will be 

solely by check, draft, or similar paper 

instrument drawn on the consumer’s 

account to be mailed abroad, and the 

payee or payees that will be paid in this 

manner are identified to the consumer. 

Thus, with respect to such a billpayment service, if a provider provides 

a check, draft or similar paper 

instrument drawn on a consumer’s 

account to be mailed abroad for a payee 

that is not identified to the consumer as 

described above, this payment by check, 

draft or similar payment instrument will 

be considered an electronic transfer of 

funds. In this case, the sender has 

requested the transfer using a billpayment service available to a consumer 

via computer or other electronic means 

and would expect the transfer to be 

conducted electronically because the 

terms of the bill-payment service have 

not explicitly stated that payments to 

the particular payee will be solely by a 

check, draft, or similar paper instrument 

drawn on the consumer’s account to be 

mailed abroad. In this case, the Bureau 

believes that it not appropriate to allow 

a provider to avoid providing the 

disclosures required by § 1005.31 at the 


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time of the sender’s request, simply 

because the payee may ultimately be 

paid by a check, draft or similar paper 

instrument drawn on the consumer’s 

account mailed abroad. 

Proposed comment 30(d)–2 provided 

that the definition of ‘‘remittance 

transfer’’ requires a specific sender to 

request a remittance transfer provider 

send a remittance transfer. The 

proposed comment explained that a 

deposit by a consumer into a checking 

or savings account does not itself 

constitute such a request, even if a 

person in a foreign country is an 

authorized user on that account, where 

the consumer retains the ability to 

withdraw funds in the account. This 

comment is not adopted in the final 

rule, as inconsistent with guidance 

adopted in comment 30(c)–2.ii. As 

discussed above under the section-bysection analysis to § 1005.30(c), when a 

sender requests that a remittance 

transfer provider send an electronic 

transfer of funds to a recipient’s 

account, the location of the account 

determines whether the transfer is made 

to a designated recipient and thus is a 

remittance transfer. If the recipient’s 

account is located in a State, the transfer 

will not be a remittance transfer because 

the transfer will not be received at a 

location in a foreign country, and thus 

the recipient would not be a 

‘‘designated recipient.’’ By contrast, if 

the recipient’s account is located in a 

foreign country, the transfer will be a 

remittance transfer, even if the sender 

has the ability to withdraw funds in the 

account, because the transfer will be 

received at a location in a foreign 

country, and the recipient would be a 

‘‘designated recipient.’’ See comment 

30(c)–2.ii. 

Proposed comment 30(d)–3 provided 

that the definition of ‘‘remittance 

transfer’’ also requires that the transfer 

be sent to a designated recipient. As 

noted above, the definition of 

‘‘designated recipient’’ requires a person 

to be identified by the sender as the 

authorized recipient of a remittance 

transfer to be sent by a remittance 

transfer provider. Proposed comment 

30(d)–3 explained that there is no 

designated recipient unless the sender 

specifically identifies the recipient of a 

transfer. Proposed comment 30(d)–3 

specified that there would be a 

designated recipient if, for example, the 

sender instructs a remittance transfer 

provider to send a prepaid card to a 

specified recipient in a foreign country, 

and the sender does not retain the 

ability to draw down funds on the 

prepaid card. In contrast, proposed 

comment 30(d)–3 specified that there 

would be no designated recipient where 

the sender retains the ability to 

withdraw funds, such as when a person 

in a foreign country is made an 

authorized user on the sender’s 

checking account, because the 

remittance transfer provider cannot 

identify the ultimate recipient of the 

funds. As discussed in more detail in 

the section-by-section analysis to 

§ 1005.30(c), both examples are not 

adopted, as inconsistent with guidance 

in comment 30(c)–2.ii. and iii. 

Proposed comment 30(d)–4 provided 

that the definition of ‘‘remittance 

transfer’’ requires that the remittance 

transfer must be sent by a remittance 

transfer provider. The proposed 

comment explained that this means that 

there must be an intermediary actively 

involved in sending the electronic 

transfer of funds. Examples in the 

proposed comment included a person 

(other than the sender) sending an 

instruction to an agent in a foreign 

country to make funds available to a 

recipient; executing a payment order 

pursuant to a consumer’s instructions; 

executing a consumer’s online bill 

payment request; or otherwise engaging 

in the business of accepting or debiting 

funds for transmission to a recipient and 

transmitting those funds. 

However, the proposed comment 

explained that a payment card network 

or other third party payment service that 

is functionally similar to a payment card 

network does not send a remittance 

transfer when a consumer designates a 

debit or credit card as the payment 

method to purchase goods or services 

from a foreign merchant. For example, 

in such a case, the payment card 

network or third party payment service 

is not directly engaged with the sender 

to send a transfer of funds to a person 

in a foreign country; rather, the network 

or third party payment service is only 

providing contemporaneous third-party 

payment processing and settlement 

services on behalf of the merchant or the 

remittance transfer provider, rather than 

on behalf of the sender. Similarly, 

where a consumer provides a checking 

or other account number directly to a 

merchant as payment for goods or 

services, the merchant is not acting as 

a remittance transfer provider when it 

submits the payment information for 

processing. 

Commenters generally supported the 

proposed comment. One commenter 

suggested that the Bureau should revise 

the discussion about the use of a 

payment card network using a debit or 

credit card as a payment method to 

include the use of a payment card 

network using a prepaid card for 

consistency with other provisions of the 

rule. 

The final comment is adopted as 

comment 30(e)–2, and is revised. As 

with the proposed comment, the final 

comment provides that the definition of 

‘‘remittance transfer’’ requires that the 

remittance transfer must be sent by a 

remittance transfer provider. The final 

comment explains that this means that 

there must be an intermediary that is 

directly engaged with the sender to send 

an electronic transfer of funds on behalf 

of the sender to a designated recipient. 

The final comment clarifies that a 

payment card network or other third 

party payment service that is 

functionally similar to a payment card 

network does not send a remittance 

transfer when a consumer provides a 

debit, credit, or prepaid card directly to 

a foreign merchant as the payment 

method to purchase goods or services. 

In such a case, the payment card 

network or third party payment service 

is not directly engaged with the sender 

to send a transfer of funds to a person 

in a foreign country; rather, the network 

or third party payment service is merely 

providing contemporaneous third-party 

payment processing and settlement 

services on behalf of the merchant or the 

card issuer, rather than on behalf of the 

sender. The final comment in 30(e)-2 

also clarifies that in such a case, the 

card issuer also is not directly engaged 

with the sender to send an electronic 

transfer of funds to the foreign merchant 

when the card issuer provides payment 

to the merchant. Similarly, where a 

consumer provides a checking or other 

account number, or a debit, credit or 

prepaid card, directly to a foreign 

merchant as payment for goods or 

services, the final comment clarifies that 

the merchant is not acting as an 

intermediary that sends a transfer of 

funds on behalf of the sender when it 

submits the payment information for 

processing. The Bureau notes that this 

comment applies only for purposes of 

this rule. In other contexts, a person 

may act as a provider even when it is 

not directly engaged with the consumer 

to provide a consumer financial product 

or service. 

Finally, comment 30(e)–2 also 

discusses the situation where a card 

issuer or a payment card network is an 

intermediary that is directly engaged 

with the sender to obtain funds using 

the sender’s debit, prepaid or credit card 

and to send those funds to a recipient’s 

checking account located in a foreign 

country. In this case, the final comment 

clarifies that the card issuer or payment 

card network is an intermediary that is 

directly engaged with the sender to send 

an electronic transfer of funds on behalf 

of the sender, and this transfer of funds 


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is a remittance transfer because it is 

made to a designated recipient. See also 

comment 30(c)–2.ii. 

As noted in the proposal, some 

transactions that have not traditionally 

been considered remittance transfers 

will fall within the scope of the rule. In 

contrast, other transfer methods 

specifically marketed for use by a 

consumer to send money abroad, but 

that do not meet all elements of the 

definition of ‘‘remittance transfer,’’ may 

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

a prepaid card where the participants in 

the prepaid card program do not send a 

card to a designated recipient in a 

foreign country). While the Board stated 

that it believed the proposed definition 

of ‘‘remittance transfer’’ in § 205.30(d) 

implemented the broad statutory 

definition, the Board solicited comment 

on whether it should exempt online bill 

payments made through the sender’s 

institution, including preauthorized bill 

payments, from the rule, as it could be 

challenging for institutions to provide 

timely disclosures. 

Most industry commenters urged the 

Bureau to exempt online bill payments 

from the rule, including preauthorized 

bill payments, given the challenges 

associated with providing disclosures 

for transfers that occur in the future. 

Commenters stated that the disclosures 

for such payments would be 

burdensome and would provide only 

marginal benefits to consumers, 

particularly given that Regulation E 

already addresses online bill payments. 

Commenters also noted that different 

coverage would apply to payments 

initiated through a financial institution, 

which would be covered, versus 

payments initiated directly with a 

billing party, which would not be 

covered. With respect to preauthorized 

bill payments, commenters stated that it 

would be impracticable to provide prepayment disclosures when the request is 

made for transactions that could be 

scheduled months in advance. 

Overall, the Bureau believes the 

protections afforded by the statute favor 

the inclusion of online bill payments in 

the rule, as well as other types of 

transfers that a sender schedules in 

advance. subpart A of Regulation E 

applies to EFTs from an account at a 

financial institution and provides 

certain protections to consumers. 

However, the subpart A provisions do 

not require disclosures regarding the 

exchange rate to be applied at transfer 

or certain other items that must be 

disclosed under EFTA section 919 and 

this rule (although related up-front fees 

would be disclosed in or with the 

account agreement). In addition, the 

Bureau also understands that there are 

non-bank money transmitters not 

covered by existing provisions in 

Regulation E that offer international bill 

payment services. 

Moreover, some of the disclosure 

challenges raised by commenters are 

similar to those that have been raised in 

connection with other remittance 

transfer methods that are included in 

the rule, for example, where the 

exchange rate is not necessarily known 

at the time of transfer. The Bureau 

recognizes that the rule’s coverage 

differs depending on whether a foreign 

payee is paid through a remittance 

transfer provider or paid directly by a 

consumer. However, this difference 

arises due to the EFTA’s definition of 

‘‘remittance transfer.’’ As discussed 

above, for a transfer to be considered a 

‘‘remittance transfer,’’ the transfer must 

involve an intermediary that is directly 

engaged with the sender to send an 

electronic transfer of funds on behalf of 

the sender to a designated recipient. A 

foreign merchant is not acting as an 

intermediary that sends a transfer of 

funds on behalf of the sender when it 

processes a payment paid to it directly 

by the sender. In addition, in this case, 

the financial institution is not directly 

engaged with the sender to send an 

electronic transfer of funds to the 

foreign merchant when the institution 

provides payment to the merchant. The 

Bureau believes this is different from 

the situation where an institution offers 

online international bill payment 

services to consumers. In this 

circumstance, the institution is directly 

engaged with the sender to send an 

electronic transfer of funds on behalf of 

the sender to a designated recipient. 

Thus, the final rule does not exclude 

online bill payments from the 

definition. As a result, under the final 

rule, providers will generally need to 

provide pre-payment disclosures and 

receipts for these types of transfers in 

accordance with § 1005.31. 

However, in light of the timing 

challenges noted above, the final rule 

sets forth tailored disclosure and 

cancellation requirements with respect 

to certain remittance transfers that a 

sender schedules in advance, including 

preauthorized remittance transfers 

(defined and discussed above in 

§ 1005.30(d)), in a new § 1005.36. In 

addition, the Bureau is issuing the 

January 2012 Proposed Rule, published 

elsewhere in today’s Federal Register, 

soliciting comment on alternative 

disclosure and cancellation 

requirements with respect to these 

transfers. These are discussed in more 

detail below in the discussion of 

§ 1005.36. 

Proposed comment 30(d)–5 provided 

a non-exclusive list of examples of 

transactions that are, and are not, 

remittance transfers. The list addressed 

online bill payments in the examples in 

30(d)–5.i.E. and 30(d)–5.ii.C. However, 

electronic transfers of funds to be sent 

abroad can also be scheduled through 

other means, such as over the telephone, 

and such scheduled transfers may not 

necessarily relate specifically to the 

payment of bills. Thus, while the final 

comment, renumbered as comment 

30(e)–3, does not contain an exhaustive 

list of examples, in order to clarify the 

rule’s application, the online bill 

payment examples in the final comment 

have been revised to more generally 

address transfers that senders can 

schedule in advance, including 

preauthorized remittance transfers. 

30(e)(2) Exceptions 

EFTA section 919(g)(2)(B) states that a 

remittance transfer does not include a 

transfer described in EFTA section 

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

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

be excluded from the requirements 

under section 906(a)’’ of the EFTA. 

EFTA section 906(a) addresses the 

requirements for electronic terminal 

receipts. The Board previously 

determined by rule that financial 

institutions are not subject to the 

requirement to provide electronic 

terminal receipts for small-value 

transfers of $15 or less. See § 1005.9(e). 

Proposed § 205.30(d)(2) incorporated 

this exception for small-value transfers 

by providing that remittance transfers 

do not include transfer amounts of $15 

or less. The final rule adopts the smallvalue exception in § 1005.30(e)(2)(i). 

The $15 exception refers to the amount 

that will be transferred to the designated 

recipient in the currency in which the 

transfer will be funded, as described in 

§ 1005.31(b)(1)(i). 

Industry commenters urged the 

Bureau to adopt a variety of additional 

exceptions to the rule, in addition to 

exempting wire transfers and other open 

network transactions. Most industry 

commenters argued that the Bureau 

should exclude wire transfers and ACH 

transactions above a certain dollar 

amount, generally ranging from $500 to 

$1,000. These commenters argued that 

the average value of consumer transfers 

from the United States is lower than the 

dollar thresholds that they advocated 

for, so these thresholds would capture 

most traditional remittances, while 

excluding higher-dollar transfers that 

they argued were not intended to be 

captured in the statute. Several 

commenters also presented data that 


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68Chishti, supra note 6. 

69Commercial wire transfers are not affected 

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

many wire transfers exceed the 

suggested dollar amount, and thus, such 

an exclusion would limit the costs and 

risks of the proposal, including fraud 

risks; would mitigate risks associated 

with the loss of UCC Article 4A 

coverage for wire transfers (as described 

in more detail below); and would more 

properly focus the final rule on 

traditional remittance transfers. 

The final rule does not contain an 

exclusion for remittance transfers above 

a specified dollar amount. The Bureau 

believes that consumers who choose to 

transfer funds less frequently but in 

higher dollar amounts or who send 

relatively large remittance transfers to 

pay tuition, medical, and other larger 

bills should receive the same 

protections as frequent, low-value 

senders. Indeed, given the amounts 

involved, such consumers may stand to 

benefit even more from the disclosures 

and error resolution rights afforded by 

the rule to ensure that the proper 

amount is received by the recipient. 

Accordingly, the Bureau believes that an 

exception based solely on a dollar 

amount would not be consistent with 

the purposes of the statute. Finally, the 

dollar amounts suggested by the 

commenters did not account for 

variations in average transfer amounts 

by destination region or type of transfer, 

some of which exceed the thresholds 

proposed by commenters.68

Similarly, the Bureau does not believe 

that the rule should exclude remittance 

transfers requested by high net-worth 

consumers, as urged by one commenter. 

Again, there is no indication that 

Congress intended such an exclusion. 

Further, a high net-worth consumer has 

an interest in knowing the amount that 

will be received by a recipient, and the 

applicable exchange rate, just as a 

consumer who does not have a high net 

worth. A high net-worth consumer also 

has a similar stake in the resolution of 

any errors. 

The final rule does contain one new 

exclusion. Several commenters argued 

that the final rule should exclude from 

the definition of ‘‘remittance transfer’’ 

any transfers the primary purposes of 

which is the purchase or sale of 

securities or commodities as described 

in § 1005.3(c)(4). Section 1005.3(c)(4) 

exempts from the definition of 

‘‘electronic fund transfer’’ any transfer 

of funds the primary purposes of which 

is the purchase or sale of a security or 

commodity where the security or 

commodity is: (i) Regulated by the 

Securities and Exchange Commission or 

the Commodity Futures Trading 

Commission; (ii) purchased or sold 

through a broker-dealer regulated by the 

Securities and Exchange Commission or 

through a futures commission merchant 

regulated by the Commodity Futures 

Trading Commission; or (iii) held in 

book-entry form by a Federal Reserve 

Bank or Federal agency. To effectuate 

the purposes of the EFTA and facilitate 

compliance, the Bureau believes it is 

necessary and proper to use its authority 

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

adopt a new § 1005.30(e)(2)(ii) to 

exclude from the definition of 

‘‘remittance transfer’’ any transfer that is 

excluded from the definition of 

‘‘electronic fund transfer’’ under 

§ 1005.3(c)(4). This exception is narrow 

in that it only exempts transfers of funds 

the primary purposes of which is the 

purchase or sale of certain securities or 

commodities, as discussed above. The 

Bureau believes that use of its authority 

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

this circumstance is appropriate so as 

not to impact the purchase or sale of 

securities or commodities. 

Application of the EFTA; Relationship 

to Uniform Commercial Code 

As described above, the statute 

applies to remittance transfers whether 

or not they are electronic fund transfers. 

This raises certain issues with respect to 

traditional cash-based remittance 

transfers sent through money 

transmitters, which have not previously 

been covered by the EFTA or Regulation 

E, as well as international wire transfers, 

which are not EFTs. 

The statute outlines the application of 

the EFTA to remittance transfers that are 

not electronic fund transfers. 

Specifically, EFTA section 919(e)(1) 

states that a remittance transfer that is 

not an electronic fund transfer is not 

subject to any of the provisions of EFTA 

sections 905 through 913. For example, 

a money transmitter sending a 

remittance transfer (that is not an EFT) 

is not subject to the requirement in 

EFTA section 906(b), as implemented in 

§ 1005.9(b), to provide periodic 

statements to consumers. The 

transmitter will, however, generally be 

subject to other provisions of the EFTA, 

including provisions on liability under 

EFTA sections 916 through 918. EFTA 

section 919(e)(2)(A) also clarifies that a 

transaction that will not otherwise be an 

electronic fund transfer under the 

EFTA, such as a wire transfer, does not 

become an electronic fund transfer 

because it is a remittance transfer under 

EFTA section 919. 

Until the Dodd-Frank Act provisions 

become effective, wire transfers are 

entirely exempt from the EFTA and 

Regulation E and instead are governed 

by State law through State enactment of 

Article 4A of the Uniform Commercial 

Code. UCC Article 4A primarily governs 

the rights and responsibilities among 

the commercial parties for wire 

transfers, including payment obligations 

among the parties and allocation of risk 

of loss for unauthorized or improperly 

executed payment orders. 

UCC Article 4A–108 provides that 

UCC Article 4A does not apply ‘‘to a 

funds transfer, any part of which is 

governed by the Electronic Fund 

Transfer Act’’ (emphasis added). When 

EFTA section 919, as implemented by 

this rule, becomes effective, wire 

transfers sent on a consumer’s behalf 

that are remittance transfers will be 

governed in part by the EFTA. As noted 

in the proposal, EFTA section 919(e)(1) 

explicitly applies the EFTA to 

remittance transfers that are not 

electronic fund transfers, except for 

certain enumerated provisions. Further, 

the disclosure and error resolution 

requirements for remittance transfers are 

set forth in the EFTA. As a result, by 

operation of UCC Article 4A–108, the 

Bureau believes UCC Article 4A will no 

longer apply to such international 

consumer wire transfers.69

Many commenters, including the 

Office of the Comptroller of the 

Currency (OCC), argued that this 

outcome creates legal uncertainty that 

will disrupt the long-standing legal 

framework governing the allocation of 

risks among financial institutions of 

wire transfers. Industry commenters 

urged the Bureau to preempt any 

provision of State law that prevents a 

remittance transfer from being treated as 

a funds transfer under UCC Article 4A 

based solely upon the inclusion of the 

remittance transfer provisions in EFTA 

section 919. Specifically, commenters 

urged the Bureau to preempt UCC 

Article 4A–108. Under this suggested 

approach, the error resolution 

provisions of EFTA section 919(b)(1) 

would govern remittance transfers as 

between a sender and a remittance 

transfer provider, but the remaining 

provisions in UCC Article 4A would 

continue to govern the allocation of risk 

of loss as between the remittance 

transfer provider and another financial 

institution that carries out part of the 

transfer (to the extent not otherwise 

inconsistent with the rule). 

Under EFTA section 922 and 

§ 1005.12, the Bureau may determine 

whether a State law relating to, among 

other things, electronic fund transfers is 

preempted by the EFTA or Regulation E. 

However, the statutory preemption 

provisions states that a State law may be 


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70See Credit Card Act § 402, Public Law 111–24, 

123 Stat. 1734 (2009). The preemption provision 

was amended to describe how certain State gift card 

laws may be preempted, to the extent that those 

laws are inconsistent with the EFTA, in the same 

manner as State EFT laws. 

71Several commenters noted that EFTA section 

920 is excluded from the list of ‘‘enumerated 

consumer laws’’ under section 1002(12)(c) of the 

Dodd-Frank Act. Prior to the Dodd-Frank Act, EFTA 

section 920 addressed the EFTA’s relation to State 

laws. Section 1075 of the Dodd-Frank Act created 

a new EFTA section 920 relating to debit 

interchange fees, which is the provision excluded 

under Dodd-Frank section 1002(12)(c). The relation 

to State laws provision is now contained in EFTA 

section 922. 72 76 FR 64259 (Oct. 18, 2011). 

preempted only if the State law is 

inconsistent with the EFTA or 

Regulation E and then only to the extent 

of the inconsistency. 15 U.S.C. 1693s. 

Moreover, the statute and regulation 

provide that a State law is not 

inconsistent with any provision if it is 

more protective of consumers. The 

Bureau does not believe that UCC 

Article 4A–108 is inconsistent with the 

EFTA. No provision of the EFTA 

conflicts with UCC Article 4A–108, and 

UCC Article 4A–108 does not require or 

permit a practice prohibited by the 

EFTA. See, e.g., § 1005.12(b)(2)(i). 

Rather, UCC Article 4A–108 provides 

when State law applies to fund 

transfers, including consumer wire 

transfers, and specifically states that 

UCC Article 4A does not apply if the 

EFTA ‘‘governs’’ the transaction. The 

amendments to the EFTA under the 

Dodd-Frank Act address consumer wire 

transfers, but do not address the 

application of State law to those 

transfers. Applying the EFTA 

preemption provisions to effectively 

require the application of more State 

laws than would apply in the absence 

of such action is simply not what the 

EFTA preemption standard provides. 

In the May 2011 Proposed Rule, the 

Board noted that Congress amended the 

EFTA’s preemption provision to include 

a specific reference to State gift card 

laws when it enacted new EFTA 

protections for gift cards as part of the 

Credit Card Accountability 

Responsibility and Disclosure Act of 

2009 (Credit Card Act).70 By contrast, 

Congress did not amend the EFTA’s 

preemption provision with respect to 

State laws relating to remittance 

transfers, including those that are not 

electronic fund transfers, when it 

enacted the Dodd-Frank Act.71 In 

response, some commenters argued that 

Sections 1041(a) and (b) of the DoddFrank Act, which discusses the 

relationship between Title X of the 

Dodd-Frank Act and State law, 

separately permit the Bureau to preempt 

UCC Article 4A–108. These provisions 

may be invoked, however, only if the 

Bureau finds an inconsistency between 

Title X and State law. The Bureau does 

not believe that such an inconsistency 

exists. Moreover, Section 1041(b) of the 

Dodd-Frank Act specifically provides, 

with one exception not relevant here, 

that no provision of Title X ‘‘shall be 

construed as modifying, limiting, or 

superseding the operation of any 

provision of an enumerated consumer 

law that relates to the application of a 

law in effect in any State with respect 

to such Federal law.’’ 

Several commenters suggested that 

the Bureau incorporate UCC Article 4A, 

or a similar framework in place of UCC 

Article 4A, into Regulation E. The 

Bureau does not believe it is appropriate 

to incorporate UCC Article 4A into 

Regulation E. The EFTA and the UCC 

generally focus on different 

relationships. Under EFTA section 

902(b), the primary purpose of the EFTA 

is the provision of individual consumer 

rights. In contrast, UCC Article 4A is 

primarily intended to govern the rights 

and responsibilities among the 

commercial parties to a funds transfer, 

that is, the financial institution that 

accepts a payment order for a funds 

transfer and any other financial 

institutions that may be involved in 

carrying out the transfer. 

Consumers currently receive some 

protections under UCC Article 4A in the 

event the wire transfer is not completed, 

or in the event of errors in execution of 

the transfer, or in connection with an 

unauthorized transfer. Nonetheless, 

although consumers who request wire 

transfers that are remittance transfers 

may no longer have the protections set 

forth in UCC Article 4A, these 

consumers will receive error resolution, 

refund and cancellation rights and other 

protections for these transfers as set 

forth in §§ 1005.33 and 1005.34. 

In addition, the Bureau does not 

believe it is appropriate to incorporate 

UCC Article 4A into Regulation E 

because while UCC Article 4A is a 

uniform code, it may be adopted 

differently in the various states. 

Incorporation of UCC Article 4A 

(presumably, without a similar 

provision as UCC Article 4A–108) on its 

own could have the unintended 

consequence of the Bureau choosing one 

State’s version of the UCC over another. 

There could also be a lag between 

updates and revisions to the UCC among 

the states and the version incorporated 

into Regulation E, which could create 

confusion and potential operational 

conflicts for those institutions that use 

the same systems to send commercial 

and consumer wire transfers. 

The Bureau recognizes that one 

consequence of covering remittance 

transfers under the EFTA could be legal 

uncertainty under the UCC for certain 

remittance transfer providers. 

Specifically, to the extent that providers 

of international wire transfers were 

previously able to rely on UCC Article 

4A’s rules governing the rights and 

responsibilities among the parties to a 

wire transfer, they may no longer be 

able to do so. However, given the factors 

discussed above, the Bureau believes 

that the best mechanisms for resolving 

this uncertainty rests with the states, 

which can amend their respective 

versions of UCC Article 4A, with the 

purveyors of rules applicable to specific 

wire transfer systems, which can bind 

direct participants in the system, and 

with participants in wire transfers who 

can incorporate UCC Article 4A into 

their contracts. In addition, the Bureau 

recommends that Congress adopt 

legislation to help resolve the legal 

uncertainty under the UCC for 

remittance transfers, so parties engaged 

in remittance transfers will be able to 

continue to rely on UCC Article 4A, 

notwithstanding the implementation of 

these final rules. 

The final rule will be effective one 

year from the date of publication of the 

rule in the Federal Register. Thus, 

before the final rule becomes effective, 

states have the opportunity to amend 

UCC Article 4A to the extent needed or 

appropriate to address its application to 

consumer international wire transfers 

and wire transfer systems have the 

opportunity to amend their operating 

rules to incorporate UCC Article 4A, 

and participants in wire transfer 

transactions have the opportunity to 

enter into contracts incorporating UCC 

Article 4A. For example, the Board has 

recently issued a proposal to revise its 

Regulation J, 12 CFR part 210, to ensure 

the continued application of UCC 

Article 4A to remittance transfers 

carried out through Fedwire.72 In 

addition, Congress would have an 

opportunity to enact legislation to help 

resolve the legal uncertainty under the 

UCC for remittance transfers, so parties 

engaged in remittance transfers will be 

able to continue to rely on UCC Article 

4–A, notwithstanding the 

implementation of these final rules. The 

Bureau will continue to monitor 

developments in this area to evaluate 

whether these issues are being 

effectively dealt with by the states, 

Congress or through private contractual 

arrangements. 


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73The Bureau notes that it has issued a separate 

notice of request for information in which the 

Bureau requests comment on whether it should 

revise these threshold numbers in Regulation Z. See 

76 FR 75825 (Dec. 5, 2011). 

Application of the EFTA; Relationship 

to Regulations Implementing the Bank 

Secrecy Act 

The Bureau also recognizes that 

regulations issued by the Financial 

Crimes Enforcement Network (FinCEN) 

to implement the Bank Secrecy Act also 

contain references to the EFTA. These 

regulations generally set certain 

requirements applicable to a ‘‘funds 

transfer’’ and ‘‘transmittal of funds.’’ 

The definitions of ‘‘funds transfer’’ and 

‘‘transmittal of funds’’ in FinCEN’s 

regulations exclude any funds transfers 

governed by the EFTA. See 31 CFR 

1010.100(w) and (ddd), respectively. 

When EFTA section 919, as 

implemented by this rule, becomes 

effective, certain transactions that have 

traditionally been outside the scope of 

the EFTA will be governed by the EFTA, 

such as consumer-initiated wire 

transfers. The Bureau has had 

discussions with FinCEN about the 

importance of FinCEN amending its 

rules so that they continue to apply to 

remittance transfers after the effective 

date of this rule. The OCC also stated 

that it will be imperative that FinCEN 

act quickly to amend their rules. The 

Bureau does not believe, however, that 

it can fill the gap by incorporating 

FinCEN’s regulations into Regulation E. 

The Bureau believes consolidating the 

requirements of the Bank Secrecy Act 

and the EFTA in Regulation E would be 

impracticable under the respective 

authorities of two agencies. 

30(f) Remittance Transfer Provider 

Proposed § 205.30(e) incorporated the 

definition of ‘‘remittance transfer 

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

Proposed § 205.30(e) stated that a 

remittance transfer provider (or 

provider) means any person that 

provides remittance transfers for a 

consumer in the normal course of its 

business, regardless of whether the 

consumer holds an account with such 

person. To eliminate redundancy, the 

proposed rule revised statutory 

references to ‘‘any person or financial 

institution’’ to ‘‘any person,’’ because 

the term ‘‘person’’ under Regulation E 

includes financial institutions. Proposed 

comment 30(e)–1 clarified that an agent 

is not deemed to be a remittance transfer 

provider by merely providing 

remittance transfer services on behalf of 

the remittance transfer provider. The 

proposed regulation is adopted 

generally as proposed in renumbered 

§ 1005.30(f). Comment 30(f)–1 is revised 

for clarity to state that a person is not 

deemed to be acting as a remittance 

transfer provider when it performs 

activities as an agent on behalf of a 

remittance transfer provider. New 

comments 30(f)–2 and –3 are added as 

described below. The Bureau notes that 

this comment 30(f)–1 applies only for 

purposes of this rule. In other contexts, 

a person may act as a provider when it 

performs activities on behalf of a 

provider. 

Normal Course of Business 

The Board solicited comment on 

whether guidance should be adopted 

interpreting the phrase ‘‘normal course 

of business’’ based on the number of 

remittance transfers in a given year. 

Many industry commenters argued that 

the final rule should provide for a de 

minimis exception based on the number 

of remittance transfers sent in a given 

time period, although one credit union 

commenter stated that it could be 

difficult to track numbers. Suggestions 

ranged from 1,200 or fewer transfers 

annually to 2,400 transfers annually, per 

method (i.e., 2,400 wire transfers plus 

2,400 international ACH transfers). 

The commenters did not provide any 

data on the overall distribution and 

frequency of remittance transfers across 

various providers to support treating 

such high numbers of transactions as 

being outside the normal course of 

business. Nor did they suggest other 

means of determining when remittance 

transfer providers are engaging in 

transfers merely as an accommodation 

to occasional consumer requests rather 

than part of a business of payment 

services. Absent significant additional 

information, the Bureau is skeptical that 

Congress intended to exclude 

companies averaging 100 or more 

remittance transfer providers per month 

from the statutory scheme. Based on the 

data presented by commenters, such a 

range would appear to exclude the 

majority of providers of open network 

transfers, such as international wire 

transfers and ACH transactions, from 

the rule. For example, one trade 

association commenter stated that most 

respondents to an information request 

said that they make fewer than 2,400 

international transactions per year. As 

discussed above, the Bureau believes 

that the statute clearly covers open 

network transfers, such as wire transfers 

and ACH transactions. Providing an 

exception based on the ranges suggested 

by these commenters would allow many 

financial institutions that arguably 

regularly and in the normal course of 

business provide remittance transfers to 

not be subject to the regulation. The 

Bureau believes in general that the term 

‘‘normal course of business’’ covers 

remittance transfer activities at a level 

significantly lower than the ranges 

suggested by these commenters. 

In other contexts, regulatory coverage 

is triggered by a relatively small number 

of transactions. For example, under 

Regulation Z, 12 CFR part 1026, a 

creditor is a person who regularly 

extends consumer credit under 

specified circumstances. A person 

regularly extends consumer credit when 

it extends consumer credit more than 25 

times in the preceding calendar year or 

in the current year (and five times for 

transactions secured by a dwelling, or 

even one time for certain high-cost 

mortgages).73 See 12 CFR 1026.2(a)(17). 

Under State law, a single money 

transmission may trigger a requirement 

to register as a money transmitter. 

The Bureau does not believe it has 

sufficient information on the frequency 

with which entities engage in 

remittance transfers to set a specific 

numerical threshold based on the 

current administrative record. 

Accordingly, the final rule adopts a new 

comment 30(f)–2 addressing ‘‘normal 

course of business.’’ Comment 30(f)–2 

states that whether a person provides 

remittance transfers in the normal 

course of business depends on the facts 

and circumstances, including the total 

number and frequency of remittance 

transfers sent by the provider. For 

example, if a financial institution 

generally does not make international 

consumer wire transfers available to 

customers, but sends a couple of 

international consumer wire transfers in 

a given year as an accommodation for a 

customer, the institution does not 

provide remittance transfers in the 

normal course of business. In contrast, 

if a financial institution makes 

international consumer wire transfers 

generally available to customers 

(whether described in the institution’s 

deposit account agreement, or in 

practice) and makes transfers multiple 

times per month, the institution 

provides remittance transfers in the 

normal course of business. 

While the final comment does not 

include a numerical threshold for 

‘‘normal course of business,’’ the Bureau 

recognizes that a bright-line number 

may ease compliance. Thus, in the 

January 2012 Proposed Rule, published 

elsewhere in the Federal Register today, 

the Bureau is soliciting further comment 

on a potential safe harbor threshold. 

Multiple Remittance Transfer Providers 

New comment 30(f)–3 provides 

guidance where more than one 

remittance transfer provider is involved 


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6214 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

in providing a remittance transfer. The 

Bureau recognizes that in some 

situations more than one remittance 

transfer provider may be involved in 

providing a remittance transfer. For 

example, prepaid card programs may 

involve, among others: (i) A program 

sponsor that establishes the program 

relationships, identifies and procures 

the necessary parties and sets 

contractual terms and conditions; (ii) a 

program manager which functions as a 

day-to-day operations ‘‘control center’’ 

for the program; and (iii) an issuing 

bank whose contractual involvement is 

required to invoke the payment network 

and which also may serve as the holder 

of funds that have been prepaid and are 

awaiting instructions to be disbursed. 

Any and all of these entities may be a 

‘‘remittance transfer provider’’ if they 

meet the definition as set forth in 

§ 1005.30(f). 

Comment 30(f)–3 provides that if the 

remittance transfer involves more than 

one remittance transfer provider, only 

one set of disclosures must be given, 

and the remittance transfer providers 

must agree among themselves which 

provider must take the actions necessary 

to comply with the requirements that 

subpart B imposes on any or all of them. 

Even though the providers must 

designate one provider to take the 

actions necessary to comply with the 

requirements that subpart B imposes on 

any or all of them, all remittance 

transfer providers involved in the 

remittance transfer remain responsible 

for compliance with the applicable 

provisions of the EFTA and Regulation 

E. 

30(g) Sender 

Proposed § 205.30(f) incorporated the 

definition of ‘‘sender’’ from EFTA 

section 919(g)(4) with minor edits for 

clarity. Specifically, proposed 

§ 205.30(f) defined ‘‘sender’’ to mean ‘‘a 

consumer in a state who requests a 

remittance transfer provider to send a 

remittance transfer to a designated 

recipient.’’ The final rule adopts the 

definition largely as proposed in 

renumbered § 1005.30(g), with 

additional clarifications and a new 

explanatory comment. 

Several commenters suggested that 

the Bureau limit remittance transfers to 

those sent for personal, family, or 

household purposes. Although 

Regulation E’s applicability is generally 

limited to such consumer-purpose 

transactions, the limitation is contained 

in the definition of ‘‘account’’ in 

§ 1005.2(b). However, the remittance 

transfer rule applies to more than just 

account-based transfers. As a result, 

these commenters stated that an 

individual who requests a transfer for 

business purposes could arguably be a 

‘‘sender’’ under the rule. 

To address these concerns, the Bureau 

is revising the definition of ‘‘sender’’ in 

§ 1005.30(g) to clarify that a sender is a 

consumer in a State who primarily for 

personal, family, or household purposes 

requests a remittance transfer provider 

to send a remittance transfer to a 

designated recipient. This revision is 

consistent with § 1005.2(b) and clarifies 

that the final rule does not apply to 

business-to-consumer or business-tobusiness transactions or to transactions 

that are not for personal, family or 

household purposes. For example, a 

transfer requested by a sole proprietor 

on behalf of his or her company would 

not be covered by the rule. 

As with the definition of ‘‘designated 

recipient,’’ some commenters requested 

guidance as to how they should 

determine whether a consumer is 

located in a State for account-based 

transfers. Commenters also requested 

clarification on how to determine where 

a consumer is located if the transfer 

request is made electronically or by 

telephone, and where the consumer’s 

presence is not readily apparent. To 

address these questions, new comment 

30(g)–1 clarifies that for transfers from 

an account, whether a consumer is 

located in a State depends on where the 

consumer’s account is located. If the 

account is located in a State, the 

consumer will be located in a State for 

purposes of the definition of ‘‘sender’’ 

in § 1005.30(g), notwithstanding 

comment 3(a)–3. Where a transfer is 

requested electronically or by telephone 

and the transfer is not from an account, 

the provider may make the 

determination of whether a consumer is 

located in a State on information that is 

provided by the consumer and on any 

records associated with the consumer 

that it might have, such as an address 

provided by the consumer. 

One commenter asked the Bureau to 

clarify the application of Regulation E’s 

comment 3(a)–3 to subpart B. Comment 

3(a)–3 addresses the foreign 

applicability of Regulation E with 

respect to EFTs. The proposed 

definition of ‘‘sender’’ and the proposed 

commentary did not address how 

comment 3(a)–3 would apply with 

respect to remittance transfers that are 

EFTs, such as international ACH 

transfers from an account. The statutory 

definition of ‘‘sender,’’ and thus the 

definition in § 1005.30(g), does not turn 

on a consumer’s residency; rather, the 

definition only requires that there be a 

consumer in a State requesting a 

remittance transfer. As with the 

definition of ‘‘designated recipient,’’ the 

Bureau believes that directing providers 

to look to the location of the account as 

a proxy for the location of the sender 

will create a bright line that will 

facilitate compliance with the final rule 

and ease compliance burden. Thus, as 

discussed above, under the final rule, 

for remittance transfers from an account, 

providers must look to the location of 

the account to determine whether there 

is a sender, and not the residency of the 

consumer requesting the transfer. 

Accordingly, final comment 30(g)–1 

clarifies that the provider should make 

its determination notwithstanding 

comment 3(a)–3. 

Section 1005.31 Disclosures 

Section 1073 of the Dodd-Frank Act 

imposes several disclosure requirements 

relating to remittance transfers. Among 

these, EFTA sections 919(a)(2)(A) and 

(B) require a remittance transfer 

provider to provide two sets of 

disclosures to a sender in connection 

with a remittance transfer. A remittance 

transfer provider must generally provide 

a written pre-payment disclosure to a 

sender when a sender requests a 

transfer. This disclosure provides 

information about the sender’s 

remittance transfer, such as the 

exchange rate, fees, and the amount to 

be received by the designated recipient. 

A remittance transfer provider must also 

provide a written receipt to the sender 

when payment is made. This disclosure 

includes the information provided on 

the pre-payment disclosure, as well as 

additional information, such as the 

promised date of delivery, contact 

information for the designated recipient, 

and information regarding the sender’s 

error resolution rights. 

EFTA section 919(a)(5) provides the 

Bureau with certain exemption 

authority, including the authority to 

permit a remittance transfer provider to 

provide a single written disclosure to a 

sender, in lieu of providing both a prepayment disclosure and receipt. This 

single disclosure must be provided to 

the sender prior to payment for the 

remittance transfer and must accurately 

disclose all of the information required 

on both the pre-payment disclosure and 

the receipt. See EFTA section 

919(a)(5)(C). EFTA section 919(b) also 

provides that disclosures under EFTA 

section 919 must be made in English 

and in each foreign language principally 

used by the remittance transfer 

provider, or any of its agents, to 

advertise, solicit, or market, either orally 

or in writing, at that office. The Board 

proposed § 205.31 to implement the 

content and formatting requirements for 

these disclosures, and the Bureau is 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6215 

74EFTA section 919(a)(5)(C) incorporates the 

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

reference, including the clear and conspicuous 

requirement. 

finalizing these requirements in 

§ 1005.31, as discussed below. 

Section 1005.31(a) sets forth the 

requirements for the general form of 

disclosures required under subpart B. 

Section 1005.31(b)(1) and (2) implement 

the pre-payment disclosure and receipt 

requirements of EFTA section 

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

1005.31(b)(3) sets forth the requirements 

for providing a combined disclosure, as 

permitted by EFTA section 919(a)(5)(C). 

Section 1005.31(b)(4) contains 

disclosure requirements relating to a 

sender’s error resolution and 

cancellation rights. Section 1005.31(c) 

addresses specific format requirements 

for subpart B disclosures, including 

grouping, proximity, prominence and 

size, and segregation requirements. 

Section 1005.31(d) sets forth the 

disclosure requirements for providing 

estimates, to the extent they are 

permitted by § 1005.32. Section 

1005.31(e) generally implements the 

timing requirements of EFTA sections 

919(a)(2) and 919(a)(5)(C). Section 

1005.31(f) clarifies that, except as 

provided in § 1005.36(b), disclosures 

required by § 1005.31 must be accurate 

when a sender makes payment for the 

remittance transfer, except to the extent 

permitted by § 1005.32. Finally, 

§ 1005.31(g) contains the requirements 

for providing foreign language 

disclosures in certain circumstances. 

31(a) General Form of Disclosures 

31(a)(1) Clear and Conspicuous 

Proposed § 205.31(a) set forth the 

requirements for the general form of 

disclosures required under proposed 

subpart B. Pursuant to EFTA sections 

919(a)(3)(A) and (a)(5)(C),74 proposed 

§ 205.31(a)(1) provided that the 

disclosures required by subpart B must 

be clear and conspicuous. Proposed 

comment 31(a)(1)–1 clarified that 

disclosures are clear and conspicuous 

for purposes of subpart B if they are 

readily understandable and, in the case 

of written and electronic disclosures, 

the location and type size are readily 

noticeable to senders. The proposed 

comment stated that oral disclosures, to 

the extent permitted, are clear and 

conspicuous when they are given at a 

volume and speed sufficient for a sender 

to hear and comprehend them. 

One industry trade association 

commenter supported the proposal, but 

suggested that the Bureau should also 

establish a reasonable person standard 

in determining whether a disclosure is 

clear and conspicuous. The Bureau 

believes the proposed comment, as well 

as the font and other formatting 

requirements provided in § 1005.31(c), 

below, provide remittance transfer 

providers with the guidance necessary 

to determine if disclosures are clear and 

conspicuous. Therefore, the clear and 

conspicuous standard is adopted as 

proposed in § 1005.31. Proposed 

comment 31(a)(1)–1 is also adopted 

substantially as proposed. 

Proposed § 205.31(a)(1) also provided 

that disclosures required by subpart B 

may contain commonly accepted or 

readily understandable abbreviations or 

symbols. Proposed comment 31(a)(1)–2 

clarified that using abbreviations or 

symbols such as ‘‘USD’’ to indicate 

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

indicate currency in Mexican pesos 

would be permissible. The Bureau did 

not receive comment regarding the use 

of commonly accepted or readily 

understandable abbreviations or 

symbols. Therefore, this aspect of 

proposed § 205.31(a)(1) is adopted as 

proposed in renumbered § 1005.31(a)(1). 

Comment 31(a)(1)–2 is also adopted as 

proposed. 

31(a)(2) Written and Electronic 

Disclosures 

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

requirements for written and electronic 

disclosures under subpart B. Proposed 

§ 205.31(a)(2) stated that disclosures 

required by subpart B generally must be 

provided to the sender in writing. 

However, the proposal permitted a prepayment disclosure under proposed 

§ 205.31(b)(1) to be provided to the 

sender in electronic form, if the sender 

electronically requests the remittance 

transfer provider to send a remittance 

transfer. In such a case, proposed 

comment 31(a)(2)–1 explained that a 

pre-payment disclosure could be 

provided to the sender without 

complying with the consumer consent 

and other applicable provisions of the ESign Act. The proposed comment also 

clarified that if a sender electronically 

requests the remittance transfer provider 

to send a remittance transfer, the receipt 

required by proposed § 205.31(b)(2) also 

could be provided to the sender in 

electronic form, but only if the provider 

complies with the consumer consent 

and other applicable provisions of the ESign Act. 

Consumer group commenters and one 

industry commenter supported the 

requirement that disclosures must be 

provided in writing and the exception 

for pre-payment disclosures to be 

provided electronically if a sender 

initiates the transaction electronically. 

Some industry commenters, however, 

argued that the pre-payment disclosures 

should be permitted to be provided on 

a computer screen or orally, if a 

transaction is conducted in person. One 

industry commenter suggested that prepayment disclosures could be provided 

on a screen similar to those used at a 

point-of-sale to authorize payment card 

transactions. Industry commenters 

asked the Bureau to also permit the 

combined disclosures to be disclosed 

electronically without obtaining E-Sign 

consent. 

As discussed in the proposal, the 

statute generally requires disclosures 

under subpart B to be in writing, see 

EFTA sections 919(a)(2), (a)(5)(C), and 

(d)(1)(B)(iv), and generally requires 

compliance with E-Sign in conjunction 

with electronic transactions, see EFTA 

section 919(a)(3)(B). Because EFTA 

section 919(a)(5)(D) specifically allows 

the Bureau to waive E-Sign 

requirements only with regard to prepayment disclosures where the sender 

initiates the transaction electronically 

and the provider provides the prepayment disclosure in an electronic 

form that the consumer may keep, the 

Bureau believes that provision of 

combined disclosures and receipts must 

be in compliance with E-Sign as 

specified in 919(a)(3)(B). Similarly, the 

Bureau believes that pre-payment 

disclosures provided when a sender 

conducts a transaction in person must 

be provided in writing. Thus, the 

Bureau believes it would not be 

consistent with the statute to permit the 

pre-payment disclosure or the combined 

disclosure to be provided orally or to be 

shown to a sender on a computer screen 

at the point-of-sale prior to payment for 

point-of-sale transactions. 

One industry commenter argued that 

remittance transfer providers that are 

broker-dealers should be permitted to 

comply with guidance published by the 

Securities and Exchange Commission 

regarding electronic disclosures, rather 

than being required to obtain E-Sign 

consent. To the extent that transfers 

made in connection with securities 

transactions have been exempted from 

the rule, as discussed above in 

§ 1005.30(e)(2)(ii), the commenter’s 

concerns should be mitigated. 

Therefore, the Bureau is adopting as 

proposed the provisions regarding 

written and electronic disclosures in 

§ 1005.31(a)(2) of the final rule. The 

Bureau is also adopting comment 

31(a)(2)–1 in the final rule substantially 

as proposed. 

Proposed comment 31(a)(2)–2 

clarified that written disclosures may be 

provided on any size paper, as long as 

the disclosures are clear and 

conspicuous. The proposed comment 


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6216 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

75See for example, § 1005.20(c)(2) and 

§ 1026.5a(a)(2). 

stated that disclosures may be provided, 

for example, on a register receipt or on 

an 8.5 inch by 11 inch sheet of paper, 

consistent with current practices in the 

industry. The Bureau did not receive 

comment regarding proposed comment 

31(a)(2)–2, and it is finalized as 

proposed. 

Proposed § 205.31(a)(2) also provided 

that the written and electronic 

disclosures required by subpart B must 

be made in a retainable form. In the 

proposal, the Board requested comment 

on how the requirement to provide 

electronic disclosures in a retainable 

form could be applied to transactions 

conducted via mobile application or text 

message. Consumer group commenters 

stated that disclosures sent through text 

were not likely made in a form the 

sender can keep because mobile phone 

carriers regularly delete text message 

data or limit the size of texts. These 

commenters argued that the Bureau 

should not permit disclosures to be 

provided solely through mobile 

application or text message until 

technology allowed them to be 

retainable. These commenters stated 

that receipts should not be provided 

through mobile application or text 

message because they would not 

provide a sender with meaningful, 

consumer-friendly disclosures in a 

retainable form. Instead, consumer 

group commenters suggested that the 

Bureau should permit receipts for 

mobile telephone transactions to be 

provided through other electronic forms 

or written mailed receipts. 

Industry commenters, in contrast, 

argued that the final rule should provide 

sufficient flexibility to accommodate 

disclosures relating to remittance 

transfers sent via mobile application or 

text message. Some commenters stated 

that the Bureau should permit 

remittance transfer providers to provide 

disclosures through the provider’s 

preferred method, including by mobile 

application or text message, so long as 

the sender is capable of receiving 

disclosures through that method. 

Another industry commenter argued 

that the retainability requirement 

should only apply to the receipt and not 

to the pre-payment disclosures for 

transactions conducted via mobile 

application or text message. One 

industry commenter stated that for a 

remittance transfer initiated by mobile 

telephone, the Bureau should allow 

disclosures to be provided on the 

telephone if accompanied by the 

delivery of a retainable version of the 

same disclosure through the Internet, 

since mobile telephones typically do not 

allow for printing. 

As discussed below regarding 

§ 1005.31(a)(5), the Bureau is permitting 

the pre-payment disclosures required by 

§ 1005.31(b)(1) to be disclosed orally or 

via mobile application or text message 

if the transaction is conducted entirely 

by telephone via mobile application or 

text message. The Bureau understands 

that given current technical limitations, 

in many cases, disclosures provided via 

mobile application or text message 

could not be provided in a retainable 

form or in a manner that satisfies 

formatting requirements. The Bureau 

notes, however, that the statute 

expressly permits the pre-payment 

disclosures to be provided orally for 

transfers conducted entirely by 

telephone. Thus, if a transaction is 

conducted entirely by telephone via 

mobile application or text message, a 

provider may give the pre-payment 

disclosure orally. Because oral 

disclosures are not retainable, the 

Bureau does not believe senders would 

be less protected by receiving prepayment disclosures via mobile 

application or text message that are also 

not retainable. Moreover, in some cases, 

disclosures provided via mobile 

application or text message may be 

better than oral disclosures. For 

example, a disclosure provided by text 

message stored in a mobile telephone 

could be viewed by the sender for a 

period of time after the transaction is 

complete or forwarded to an email or 

other savable file. Therefore, 

§ 1005.31(a)(2) provides that written and 

electronic disclosures required by 

subpart B generally must be made in a 

retainable form. However, to effectuate 

the purposes of the EFTA and facilitate 

compliance, the Bureau believes it is 

necessary and proper to use its authority 

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

provide in the final rule that for 

transfers conducted entirely by 

telephone via mobile application or text 

message, the pre-payment disclosures 

may be provided via mobile application 

or text message in accordance with 

§ 1005.31(a)(5) and need not be 

retainable. The Bureau is also adding a 

new comment 31(a)(2)–4 to clarify that 

disclosures provided electronically to a 

mobile telephone that are not provided 

via mobile application or text message 

must be retainable. For example, 

disclosures provided via email must be 

retainable, even if a sender accesses 

them by mobile telephone. 

Proposed comment 31(a)(2)–3 

clarified that a remittance transfer 

provider may satisfy the requirement to 

provide electronic disclosures in a 

retainable form if it provides an online 

disclosure in a format that is capable of 

being printed. The proposed comment 

clarified that electronic disclosures 

cannot be provided through a hyperlink 

or in another manner by which the 

sender can bypass the disclosure. A 

provider is not required to confirm that 

the sender has read the electronic 

disclosures. 

Consumer group commenters 

generally supported these retainability 

requirements. Industry commenters 

suggested that the Bureau revise or 

clarify the rules regarding the provision 

of electronic disclosures. Industry 

commenters stated that the Bureau 

should permit a remittance transfer 

provider to provide disclosures by 

sending a hyperlink to the sender or to 

permit the provider to make a disclosure 

available on its Web site where 

disclosures can be viewed. One 

commenter suggested that the Bureau 

should clarify that disclosures are 

retainable as long as they may be saved 

or stored on a computer. This 

commenter stated that a disclosure 

would be retainable if, for example, a 

sender could save a screen shot or 

download a file that could be saved. 

The Bureau believes proposed 

comment 31(a)(2)–3 appropriately 

addressed how disclosures may be 

provided in a retainable format when 

disclosed electronically. The proposed 

comment sets forth general principles 

for providing electronic disclosures that 

can be applied to various scenarios in 

which electronic disclosures are 

provided. For example, a provider could 

determine that a screen shot or 

downloadable file complies with the 

retainability requirement if those 

formats are also capable of being 

printed. The proposed comment is also 

consistent with other of the Bureau’s 

electronic disclosure provisions that 

ensure that senders are provided with 

disclosures, rather than permitting 

disclosures to simply be made available 

to them.75 Therefore, comment 31(a)(2)– 

3 is adopted as proposed. 

31(a)(3) Oral Disclosures for Oral 

Telephone Transactions 

Relying upon authority in EFTA 

section 919(a)(5)(A), proposed 

§ 205.31(a)(3) permitted the prepayment disclosures to be provided 

orally if the transaction was conducted 

entirely by telephone and if the 

remittance transfer provider complied 

with the foreign language disclosure 

requirements of proposed § 205.31(g)(2), 

discussed below. One industry 

commenter opposed the oral disclosure 

authorization for telephone transactions, 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6217 

arguing that the length of time to 

process a transfer made by telephone 

would increase significantly due to the 

number of items that must be disclosed 

orally. Because the Bureau believes the 

statute intends for senders to receive 

pre-payment disclosures regardless of 

the format of the transaction, the Bureau 

is permitting oral pre-payment 

disclosures in certain circumstances in 

§ 1005.31(a)(3) of the final rule. 

Moreover, as discussed below, the 

Bureau is permitting in § 1005.31(a)(5) 

the pre-payment disclosures required by 

§ 1005.31(b)(1) to be disclosed orally or 

via mobile application or text message 

for transactions conducted entirely by 

telephone via mobile application or text 

message. Therefore, the final rule is 

limiting the application of 

§ 1005.31(a)(3) to transactions 

conducted through oral conversations. 

Therefore, § 1005.31(a)(3)(i) is amended 

to clarify that § 1005.31(a)(3) only 

applies if the transaction is conducted 

orally and entirely by telephone. The 

final rule also adds comment 31(a)(3)– 

2 to clarify that § 1005.31(a)(3) applies 

to transactions conducted orally and 

entirely by telephone, such as 

transactions conducted orally on a 

landline or mobile telephone. 

The final rule also adds another 

condition for providers to be permitted 

to disclose pre-payment disclosures 

orally, in addition to the requirements 

that the transaction be conducted 

entirely by telephone and that the 

provider comply with the foreign 

language disclosure requirements of 

§ 1005.31(g)(2). The Bureau believes that 

for oral telephone transactions, senders 

should be informed of their cancellation 

rights before the cancellation period has 

passed. Because a receipt may be mailed 

to a sender for telephone transactions, 

see § 1005.31(e)(2), the sender would 

not receive the abbreviated statement 

about the sender’s cancellation rights 

required by § 1005.31(b)(2)(iv) until 

after the cancellation period had passed. 

Therefore, the Bureau is requiring in 

§ 1005.31(a)(3) that a provider disclose 

orally 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) 

in order to disclose the pre-payment 

disclosures orally for oral telephone 

transactions. 

Proposed comment 31(a)(3)–1 stated 

that, for transactions conducted 

partially by telephone, disclosures may 

not be provided orally. For example, a 

sender may begin a remittance transfer 

at a remittance transfer provider’s 

dedicated phone in a retail store, and 

then provide payment in person to a 

store clerk to complete the transaction. 

In such cases, the proposed comment 

clarified that all disclosures must be 

provided in writing. Proposed comment 

31(a)(3)–1 clarified that for such a 

transaction, a provider may comply 

with the disclosure requirements by 

providing the written pre-payment 

disclosure in person prior to the 

sender’s payment for the transaction, 

and the written receipt when payment 

is made for the remittance transfer. 

Industry commenters argued that the 

Bureau should permit oral pre-payment 

disclosures for these hybrid 

transactions. For example, one industry 

commenter stated that providing the 

information to senders at the time the 

sender is speaking with the remittance 

transfer provider would enable the 

sender to discuss the disclosed fees or 

currency delivery options. This 

commenter stated that it would be 

difficult to continue providing 

remittance transfers using a provider’s 

dedicated telephone in a retail store if 

pre-payment disclosures could not be 

provided orally. 

The Bureau believes that by allowing 

oral disclosures only for transactions 

performed entirely by telephone, 

Congress did not intend to permit 

providers to satisfy the disclosure 

requirements orally for transactions 

conducted partially by telephone. See 

EFTA section 919(a)(5)(A). Therefore, 

comment 31(a)(3)–1 is adopted 

substantially as proposed, with a 

revision to more precisely state that 

providing the information required by 

§ 1005.31(b)(1) to a sender orally does 

not fulfill the requirement to provide 

the disclosures required by 

§ 1005.31(b)(1). The Bureau notes that 

nothing prohibits a provider from 

stating orally the information required 

to be disclosed by § 1005.31(b)(1) to a 

sender, even though this would not 

fulfill a provider’s pre-payment 

disclosure requirements. 

31(a)(4) Oral Disclosures for Certain 

Error Resolution Notices 

Proposed § 205.31(a)(4) permitted a 

remittance transfer provider to provide 

an oral report of the results of an 

investigation of a notice of error, if the 

remittance transfer provider determined 

that an error occurred as described by 

the sender, and if the remittance transfer 

provider complied with the foreign 

language disclosure requirements of 

proposed § 205.31(g)(2). The Bureau did 

not receive comment on proposed 

§ 205.31(a)(4), and it is adopted 

substantially as proposed as 

§ 1005.31(a)(4). 

31(a)(5) Disclosures for Mobile 

Application or Text Message 

Transactions 

In the May 2011 Proposed Rule, the 

Board noted that retainability and 

formatting requirements could pose 

challenges for providing disclosures in 

transactions conducted via mobile 

application or text message. As 

discussed above, many industry 

commenters argued that the Bureau 

should change or provide for tailored 

retainability or formatting requirements 

for transactions conducted via mobile 

application or text message to ensure 

that senders would continue to have 

access to these services. Several 

industry commenters noted that they 

offered or were developing technology 

to permit senders to send a remittance 

transfer via a mobile telephone. The 

commenters believed that such services 

were evolving rapidly and urged the 

Bureau to provide flexibility in the final 

rule. 

As discussed above, because 

remittance transfers sent via mobile 

application or text message on a 

telephone are ‘‘conducted entirely by 

telephone,’’ the Bureau believes that 

EFTA section 919(a)(5)(A) permits the 

Bureau to allow oral pre-payment 

disclosures in connection with transfers 

sent via mobile application or text 

message if the transfer is conducted 

entirely by telephone. Because oral 

disclosures are not retainable, the 

Bureau does not believe senders would 

be less protected by receiving prepayment disclosures via mobile 

application or text message that is also 

not retainable. Moreover, in some cases, 

senders receiving disclosures via mobile 

application or text message may be 

informed of the cost of their transaction 

in a manner that is better than oral 

disclosures. For example, a disclosure 

provided by text message stored in a 

mobile telephone could be viewed by 

the sender for a period of time after the 

transaction is complete or forwarded to 

an email or other savable file. 

Therefore, to effectuate the purposes 

of the EFTA and facilitate compliance, 

the Bureau believes it is necessary and 

proper to use its authority under EFTA 

sections 904(a) and (c) to add in the 

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 


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6218 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

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). 

The final rule also adds comment 

31(a)(5)–1 to illustrate how a provider 

could provide pre-payment disclosures 

for mobile application and text message 

transactions. The comment states that, 

for example, if a sender conducts a 

transaction via text message on a mobile 

telephone, the remittance transfer 

provider may call the sender and orally 

provide the required pre-payment 

disclosures. Alternatively, the provider 

may provide the required pre-payment 

disclosures via text message. The 

comment also clarifies that 

§ 1005.31(a)(5) applies only to 

transactions conducted entirely by 

mobile telephone via mobile application 

or text message. 

31(b) Disclosures 

Proposed section 205.31(b) set forth 

substantive disclosure requirements for 

remittance transfers. EFTA sections 

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

transfer provider to provide to a sender: 

(i) A written pre-payment disclosure 

with information applicable to the 

sender’s remittance transfer— 

specifically, the exchange rate, the 

amount of transfer and other fees, and 

the amount that would be received by 

the designated recipient; and (ii) a 

written receipt that includes the 

information provided on the prepayment disclosure, plus the promised 

date of delivery, contact information for 

the designated recipient, information 

regarding the sender’s error resolution 

rights, and contact information for the 

remittance transfer provider and 

applicable regulatory agencies. EFTA 

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

Bureau to permit a remittance transfer 

provider to provide a single written 

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

accurately discloses all of the 

information required on both the prepayment disclosure and the receipt. 

Section 1005.31(b)(1) and (2) finalize 

these substantive disclosure 

requirements for pre-payment 

disclosures and receipts, respectively. 

The final rule also permits the use of a 

combined disclosure, in lieu of the prepayment disclosure and receipt, subject 

to the requirements in § 1005.31(b)(3). 

As discussed below, consumer group 

commenters opposed the combined 

disclosures, but otherwise generally 

supported the disclosures as proposed. 

These commenters stated that senders 

currently lack the information about 

exchange rate, fees, and timing that is 

required in the disclosures. Many 

industry commenters generally opposed 

the proposed disclosures. One industry 

commenter stated that the Board’s 

consumer testing demonstrated that 

senders were satisfied with remittance 

transfer providers’ existing disclosures, 

and that the new requirements would 

impose significant costs without 

commensurate benefits to senders. 

Many industry commenters further 

argued that compliance with the 

disclosure requirements was not 

possible for wire transfers and 

international ACH transactions. 

Specifically, industry commenters 

opposed the requirements to disclose 

the exchange rate, fees and taxes 

imposed by a person other than the 

provider, and the date of funds 

availability. One money transmitter 

commenter stated that these disclosure 

requirements could also be problematic 

for some money transmitters, where an 

international wire transfer is part of the 

transaction, such as when a sender 

conducts an account-to-account 

remittance transfer through a money 

transmitter. 

As discussed below, the Bureau 

understands the unique compliance 

challenges for institutions that send 

remittance transfers via wire transfer or 

ACH. However, as previously noted, the 

statute specifically applies the 

disclosure requirements in EFTA 

sections 919(a)(2)(A) and (B) to both 

open network and closed network 

transactions and provides a specific 

accommodation to address the 

compliance challenges faced for open 

network transactions. As such, the final 

rule requires all remittance transfer 

providers to provide either the prepayment disclosure and a receipt, or a 

combined disclosure, except to the 

extent estimates are permitted by 

§ 1005.32. 

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

information on a pre-payment 

disclosure and a receipt need only be 

provided to the extent applicable to the 

transaction. Similarly, the information 

required on a combined disclosure need 

only be provided as applicable because 

the combined disclosure is simply a 

consolidation of the pre-payment 

disclosure and the receipt. See EFTA 

section 919(a)(2)(A) and (B). Proposed 

comment 31(b)–1 clarified that a 

remittance transfer provider could 

choose to omit an inapplicable item 

provided in proposed § 205.31(b). 

Alternatively, a remittance transfer 

provider could disclose a term and state 

that an amount or item is ‘‘not 

applicable,’’ ‘‘N/A,’’ or ‘‘None.’’ The 

proposed comment provided examples 

of when certain disclosures may not be 

applicable. For example, if fees or taxes 

are not imposed in connection with a 

particular transaction, the provider need 

not provide the disclosures about fees 

and taxes generally required by 

proposed § 205.31(b)(1)(ii) and (vi). 

Similarly, a Web site need not be 

disclosed if the provider does not 

maintain a Web site. The proposed 

comment also included an example of 

instances in which exchange rate 

information was not required on the 

disclosures for transactions that are both 

funded and received in U.S. dollars. 

One industry trade association 

commenter argued that dollar-to-dollar 

transactions should be completely 

excluded from the disclosure 

requirements. The Bureau believes, 

however, that fee and tax information 

should be disclosed to senders, even if 

there is no exchange rate applied to the 

transfer. The final rule does not exclude 

dollar-to-dollar transactions from the 

disclosure requirements, but clarifies 

that the exchange rate disclosure is not 

required for such transactions. 

Comment 31(b)–1 is adopted 

substantially as proposed, with 

clarifying revisions providing that an 

exchange rate is not required to be 

disclosed if an exchange rate is not 

applied to the transfer, even if it is not 

a dollar-to-dollar transaction. As such, 

the final comment states that a provider 

need not provide the exchange rate 

disclosure required by 

§ 1005.31(b)(1)(iv) if a recipient receives 

funds in the currency in which the 

remittance transfer is funded, or if funds 

are delivered into an account 

denominated in the currency in which 

the remittance transfer is funded. For 

example, if a sender in the United States 

transfers funds from an account 

denominated in Euros to an account in 

France denominated in Euros, no 

exchange rate would need to be 

provided. Similarly, if a sender funds a 

remittance transfer in U.S. dollars and 

requests that a remittance transfer be 

delivered to the recipient in U.S. 

dollars, a provider need not disclose an 

exchange rate. 

Proposed comment 31(b)–2 addressed 

the requirements in proposed 

§ 205.31(b) that certain disclosures be 

described either using the terms set 

forth in § 205.31(b) or substantially 

similar terms. As discussed in the May 

2011 Proposed Rule, the Board 

developed and selected the terms used 

in proposed § 205.31(b) through 

consumer testing to ensure that senders 

could understand the information 

disclosed to them. However, the May 

2011 Proposed Rule provided 

remittance transfer providers with 

flexibility in developing their 


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disclosures, both for disclosures in 

English and in each of the foreign 

languages principally used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfers, either orally or in writing, at 

that office. See § 1005.31(g) below. 

The Bureau did not receive comment 

regarding proposed comment 31(b)–2, 

and it is finalized substantially as 

proposed. In the final rule, comment 

31(b)–2 states that terms may be more 

specific than the terms used in the final 

rule. For example, a remittance transfer 

provider sending funds to Colombia 

may describe a tax disclosed under 

§ 1005.31(b)(1)(vi) as a ‘‘Colombian 

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

Taxes.’’ Foreign language disclosures 

required under § 1005.31(g) must 

contain accurate translations of the 

terms, language, and notices required by 

§ 1005.31(b). 

31(b)(1) Pre-Payment Disclosures 

Pursuant to EFTA section 

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

stated that a remittance transfer 

provider must make specified prepayment disclosures to a sender, as 

applicable. The disclosures are 

discussed below. 

31(b)(1)(i) Transfer Amount 

Proposed § 205.31(b)(1)(i) provided 

that the remittance transfer provider 

must disclose the amount that will be 

transferred to the designated recipient 

using the term ‘‘Transfer Amount’’ or a 

substantially similar term. Under the 

proposal, the transfer amount would 

have to be disclosed in the currency in 

which the funds will be transferred 

because the Board believed the 

disclosure of the transfer amount would 

help demonstrate to a sender how a 

provider calculates the total amount of 

the transaction, discussed below. 

Consumer group commenters agreed 

that the disclosure of the transfer 

amount as a separate line item would 

help senders understand the total 

amount to be paid in order to send the 

requested amount of currency to a 

recipient. Industry commenters asked 

the Bureau to clarify how to make a 

disclosure in the currency in which 

funds will be transferred. These 

commenters asked if this requirement 

only applied where a remittance transfer 

provider performed the conversion. 

These commenters suggested that the 

final rule should clarify that the 

disclosures should be provided in the 

denomination of the account used to 

fund the transfer or in the currency 

submitted by the sender for the transfer. 

The Bureau believes that the transfer 

amount should be disclosed as proposed 

in order to help demonstrate the cost of 

the transfer to a sender. Therefore, to 

effectuate the purposes of the EFTA, the 

Bureau deems is necessary and proper 

to use its authority under EFTA sections 

904(a) and (c) to finalize this 

requirement in § 1005.31(b)(1)(i). For 

clarity, the final rule provides that the 

transfer amount must be disclosed in 

the currency in which the remittance 

transfer is funded, rather than the 

currency in which funds will be 

transferred. The Bureau believes that 

disclosing the transfer amount in the 

currency in which the remittance 

transfer is funded—whether the sender 

pays with cash, with currency in an 

account, or by other means—will, when 

combined with the other required 

disclosures, help senders calculate the 

effect of the exchange rate on the 

transaction, if there is a currency 

exchange. For example, if the funds will 

be exchanged from U.S. dollars to 

Mexican pesos, the transfer amount 

required by § 1005.31(b)(1)(i) must be 

disclosed in U.S. dollars. Therefore, 

§ 1005.31(b)(1)(i) provides that the 

remittance transfer provider must 

disclose the amount that will be 

transferred to the designated recipient, 

in the currency in which the remittance 

transfer is funded, using the term 

‘‘Transfer Amount’’ or a substantially 

similar term. 

31(b)(1)(ii) Fees and Taxes Imposed by 

the Provider 

Proposed § 205.31(b)(1)(ii) required 

that a remittance transfer provider 

disclose any fees and taxes that are 

imposed on the remittance transfer by 

the remittance transfer provider, in the 

currency in which the funds will be 

transferred. The proposal stated that the 

disclosure must be described using the 

term ‘‘Transfer Fees,’’ ‘‘Transfer Taxes,’’ 

or ‘‘Transfer Fees and Taxes,’’ or a 

substantially similar term. These 

disclosures were proposed pursuant to 

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

requires a remittance transfer provider 

to disclose the amount of transfer fees 

and any other fees charged by the 

remittance transfer provider for the 

remittance transfer. 

Proposed comment 31(b)(1)–1.i. 

clarified that taxes imposed by the 

remittance transfer provider include 

taxes imposed on the remittance transfer 

by a State or other governmental body. 

The proposed comment also provided 

guidance applicable to the disclosure of 

both fees and taxes imposed on the 

remittance transfer by the provider, as 

well as fees and taxes imposed on the 

remittance transfer by a person other 

than the provider, which are discussed 

in detail below. See § 1005.31(b)(1)(vi), 

below. The proposed comment 

addressed the requirement that a 

remittance transfer provider only 

disclose fees or taxes as applicable. The 

proposed comment also stated that if 

both fees and taxes are imposed, the fees 

and taxes may be disclosed as one 

disclosure or as separate, itemized 

disclosures. 

Consumer group commenters and an 

industry commenter argued that the 

Bureau should require itemized fees and 

tax disclosures. They believed itemized 

disclosures would help senders 

understand what costs are fixed, such as 

taxes, and what costs may vary 

depending on the provider, such as fees. 

However, another industry commenter 

stated that disclosing fees and taxes 

together provided senders with 

adequate information on the total cost of 

the transaction. 

The Bureau agrees that separately 

listing the fees and taxes on disclosures 

provides better information to the 

sender about fixed and variable costs of 

the transaction, and the final rule 

provides that fees and taxes must be 

disclosed separately. Section 

1005.31(b)(1)(ii) also clarifies that the 

fees and taxes must be disclosed in the 

currency in which the remittance 

transfer is funded. See § 1005.31(b)(1)(i), 

above. Therefore, § 1005.31(b)(1)(ii) 

states that a remittance transfer provider 

must disclose any fees and taxes 

imposed on the remittance transfer by 

the provider, in the currency in which 

the remittance transfer is funded, using 

the terms ‘‘Transfer Fees’’ for fees and 

‘‘Transfer Taxes’’ for taxes or 

substantially similar terms. Comment 

31(b)(1)–1.i. in the final rule is changed 

from the proposal to state that if both 

fees and taxes are imposed, the fees and 

taxes must be disclosed as separate, 

itemized disclosures. For example, a 

provider would disclose all transfer fees 

using the term ‘‘Transfer Fees’’ or a 

substantially similar term and would 

separately disclose all transfer taxes as 

‘‘Transfer Taxes’’ or a substantially 

similar term. 

One industry commenter argued that 

because a tax is imposed by the 

government, and not by the remittance 

transfer provider, EFTA section 

919(a)(2)(A)(ii) does not require taxes to 

be disclosed and, as such, the rule 

should not require disclosure of taxes. 

The Bureau believes the statute 

intended to require the disclosure of all 

charges imposed on the remittance 

transfer that would affect the cost of a 

remittance transfer to the sender. To the 

extent taxes imposed on the remittance 

transfer by a State or other governmental 

body are charged to the sender by the 

remittance transfer provider, the Bureau 


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6220 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

believes they are required to be 

disclosed under EFTA section 

919(a)(2)(A)(ii), which requires a 

remittance transfer provider to disclose 

transfer fees and any other fees charged 

by the remittance transfer provider for 

the remittance transfer. Even if EFTA 

section 919(a)(2)(A)(ii) did not require 

that such taxes be disclosed to senders, 

the Bureau believes that disclosing the 

taxes imposed on the remittance transfer 

will demonstrate to the sender the 

calculation of the total amount that the 

sender pays for the transfer and how 

this amount relates to amount that will 

be received by the designated recipient 

and is therefore necessary and proper to 

effectuate the purposes of the EFTA. As 

such, to the extent necessary, the 

Bureau is also requiring these taxes to 

be disclosed pursuant to its authority 

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

Therefore, as proposed, comment 

31(b)(1)–1.i. in the final rule clarifies 

that taxes imposed on the remittance 

transfer by the remittance transfer 

provider include taxes imposed on the 

remittance transfer by a State or other 

governmental body. 

Finally, as proposed, comment 

31(b)(1)–1.i. addresses the disclosure of 

fees and taxes that are applicable to the 

transfer. The comment in the final rule 

states that a provider need only disclose 

fees or taxes imposed on the remittance 

transfer by the provider in 

§ 1005.31(b)(1)(ii) and imposed on the 

remittance transfer by a person other 

than the provider in § 1005.31(b)(1)(vi), 

as applicable. For example, if no 

transfer taxes are imposed on a 

remittance transfer, a provider would 

only disclose applicable transfer fees. 

Proposed comment 31(b)(1)–1.ii. 

distinguished between the fees and 

taxes imposed on the remittance transfer 

by the provider and the fees and taxes 

imposed on the remittance transfer by a 

person other than the provider. This 

proposed comment is addressed in the 

discussion regarding fees and taxes 

imposed on the remittance transfer by a 

person other than the provider in 

§ 1005.31(b)(1)(vi), below. 

31(b)(1)(iii) Total Amount of the 

Transaction 

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

the disclosure of the total amount of the 

transaction. Although this total is not 

required by the statute, the Board 

proposed to require the disclosure of the 

total amount of the transaction to 

further the purposes of the EFTA by 

enabling a sender to understand the 

total amount to be paid out-of-pocket for 

the transaction. The Bureau did not 

receive comment on the proposed 

provision. Therefore, to effectuate 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 § 205.31(b)(1)(iii) 

as proposed in § 1005.31(b)(1)(iii).The 

final rule requires a remittance transfer 

provider to disclose the total amount of 

the transaction, which is the sum of 

§ 1005.31(b)(1)(i) and (ii), in the 

currency in which the remittance 

transfer is funded, using the term 

‘‘Total’’ or a substantially similar term. 

31(b)(1)(iv) Exchange Rate 

Proposed § 205.31(b)(1)(iv) required 

the disclosure of any exchange rate used 

by the provider for the remittance 

transfer, rounded to the nearest 1/100th 

of a decimal point, consistent with 

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

proposed rule stated that the exchange 

rate must be described using the term 

‘‘Exchange Rate’’ or a substantially 

similar term. The proposed rule did not 

permit floating rates, where the 

exchange rate is set when the designated 

recipient claims the funds. 

Consumer group commenters strongly 

supported the prohibition of unknown 

or floating exchange rates. Many 

industry commenters, however, urged 

that the final rule should accommodate 

floating rates and other circumstances in 

which an exchange rate may not be 

known at the time the sender requests 

the remittance transfer. A few industry 

commenters argued that the statute does 

not require the disclosure of an 

exchange rate set by institutions other 

than the remittance transfer provider. 

The commenters stated that by requiring 

the disclosure of the exchange rate to be 

used by the remittance transfer provider 

for the remittance transfer, EFTA 

section 919(a)(2)(A)(iii) only requires 

disclosure of an exchange rate that the 

remittance transfers provider itself set 

for the remittance transfer. 

For example, industry commenters 

stated that most credit unions offering 

international transfers do not perform 

currency conversions themselves, but 

instead rely on correspondent banks or 

other business partners to do so. Some 

industry commenters also stated that 

most credit unions offering international 

transfers work with currency providers 

in real time to contract for exchange 

rates. The commenters argued that this 

allows the credit unions to provide their 

members with the most competitive 

exchange rates. However, in such an 

arrangement the exchange rate that will 

be applied is only known at the time the 

contract is accepted, and would not be 

known at the time disclosures are 

provided to the senders. Similarly, other 

industry commenters stated that with 

their current processes and systems, 

they would know an exchange rate once 

a remittance transfer is processed, but 

not when the remittance transfer is 

requested. 

Some industry commenters also 

stated the exchange rate cannot be 

determined at the time of the request 

when a sender designates the receipt of 

a transaction in one currency, but the 

receiving account is denominated in 

another currency. In those cases, the 

receiving institution must convert the 

funds into another currency in order to 

complete the transfer. One industry 

commenter stated that its customers 

sometimes request remittance transfers 

to be sent to their foreign accounts in 

U.S. dollars. These senders, however, 

have arrangements with the recipient 

institutions holding their foreign 

accounts to convert the funds to the 

currencies of the accounts either at the 

spot rates available at the time the 

accounts are credited or at rates prearranged by contracts between the 

senders and the recipient institutions. 

One industry commenter stated that, in 

some countries, a recipient may choose 

to be paid in one of multiple currencies. 

The commenter also stated that it 

permits consumers to change the 

designated country for pick up. In these 

cases, the currency in which funds will 

be received may change at the option of 

the recipient. 

A Federal Reserve Bank commenter, 

as well as industry commenters, argued 

that requiring a fixed exchange rate for 

purposes of providing an exchange rate 

disclosure would result in less favorable 

exchange rates for senders. These 

commenters stated that if providers are 

required to fix the exchange rate, they 

will increase the spread they use in 

order to minimize the risks associated 

with rate volatility, so the cost of 

sending remittance transfers would 

increase for senders. One money 

transmitter commenter argued that 

requiring a disclosure of a fixed rate 

could also lead remittance transfer 

providers to stop providing services to 

some locations in which they have 

historically used floating rates. This 

commenter noted that such a 

requirement would require it to 

renegotiate its contracts with 

approximately 100 foreign agents 

representing about 10,000 locations that 

currently offer only floating rates. This 

commenter stated that this change 

would affect about a half million 

customers annually. 

One industry commenter believed 

that a remittance transfer provider 

should instead be permitted to disclose 

that the exchange rate will be changed 

at the rate set by a daily central bank or 

other official rate plus or minus a fixed 


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offset, such as a commission. Other 

industry commenters suggested 

permitting disclosure of an estimated 

exchange rate, as long as the provider 

also discloses that the rate is subject to 

change. A Federal Reserve Bank 

commenter believed that floating 

exchange rate products should be 

exempted from the disclosure 

provisions in the rule. 

The Bureau interprets the statute to 

require a remittance transfer provider to 

disclose to the sender the exchange rate 

to be used for the remittance transfer to 

the sender, both at the time the sender 

requests the remittance transfer and 

when the sender pays for the transfer. 

This interpretation is based on several 

factors. First, the fact that the exchange 

rate may be set by another institution 

involved in the remittance transfer does 

not change the fact that it will be used 

by the remittance transfer provider in 

effectuating the sender’s request. 

Second, the statute specifically requires 

disclosure of the amount to be received 

by the designated recipient, using the 

values of the currency into which the 

funds will be exchanged. This 

disclosure requires a provider to 

determine the exchange rate to be used 

to effectuate the transfer, whether that 

rate is set by the remittance transfer 

provider or a third party. 

The purpose of the statute supports 

the same conclusion. As discussed in 

the May 2011 Proposed Rule, the 

disclosure was intended to provide 

senders with certainty regarding the 

exchange rate and the amount of 

currency their designated recipients 

would receive. Senders would not be 

able to tell, for example, whether the 

funds they transmit are sufficient to pay 

household expenses and other bills 

where remittance products are based on 

floating rates. 

The Bureau understands, however, 

that there may be instances in which a 

sender will request funds to be 

delivered in a particular currency, but 

the funds are later converted into 

another currency due to facts that 

cannot be known to the provider. In 

these circumstances, the Bureau 

believes the remittance transfer provider 

complies with the requirement to 

disclose the exchange rate when it 

discloses information based on the 

request of the sender, even if the funds 

are ultimately received in a different 

currency. If the sender does not know 

the currency in which the funds will be 

received or requests funds to be 

received in the currency in which the 

remittance transfer is funded, the 

Bureau believes that the provider may 

assume that the currency in which 

funds will be received is the currency in 

which the remittance transfer is funded. 

See also comment 31(b)(1)(vi)–1, below. 

Section 1005.31(b)(iv) of the final rule 

requires disclosure of the exchange rate 

used by the provider for the remittance 

transfer, as proposed. Comment 

31(b)(1)(iv)–1 clarifies that if the 

designated recipient will receive funds 

in a currency other than the currency in 

which the remittance transfer is funded, 

a remittance transfer provider must 

disclose the exchange rate to be used by 

the provider for the remittance transfer. 

An exchange rate that is estimated must 

be disclosed pursuant to the 

requirements of § 1005.32, discussed 

below. A remittance transfer provider 

may not disclose, for example, that an 

exchange rate is ‘‘unknown,’’ ‘‘floating,’’ 

or ‘‘to be determined.’’ 

Comment 31(b)(1)(iv)–1 further 

clarifies that if a provider does not have 

specific knowledge regarding the 

currency in which the funds will be 

received, the provider may rely on a 

sender’s representation as to the 

currency in which funds will be 

received for purposes of determining 

whether an exchange rate is applied to 

the transfer. For example, if a sender 

requests that a remittance transfer be 

deposited into an account in U.S. 

dollars, the provider need not disclose 

an exchange rate, even if the account is 

actually denominated in Mexican pesos 

and the funds are converted prior to 

deposit into the account. If a sender 

does not know the currency in which 

funds will be received, the provider may 

assume that the currency in which 

funds will be received is the currency in 

which the remittance transfer is funded. 

The Bureau notes that if a provider does 

not independently have specific 

knowledge of the currency in which 

funds will be received, the provider may 

rely on the sender’s representation as to 

the currency in which funds will be 

received. For example, the rule does not 

impose on providers a duty to inquire 

about this information with a third 

party. 

Some industry commenters also 

argued that the exchange rate should be 

permitted to include more than two 

decimal places, consistent with their 

current disclosure practices. One 

industry commenter stated that 

providing exchange rates that include 

more than two decimal places provides 

senders with more accurate and detailed 

exchange rate information. 

The Bureau agrees that it may be 

appropriate for some providers to 

disclose an exchange rate that includes 

more than two decimal places, because 

a provider may determine that the 

disclosure would provide a sender with 

a more accurate representation of the 

remittance transfer’s cost, based on the 

particular type of transaction or type of 

currency being used. However, the 

Bureau also believes that some 

providers may determine that rounding 

to fewer digits may sufficiently inform 

senders of the cost of the exchange. The 

Bureau is also mindful that a disclosure 

that includes a long string of numbers 

could confuse some senders. The 

Bureau believes it is appropriate to 

permit a remittance transfer provider to 

disclose an exchange rate rounded to a 

number of decimal places that best 

reflects the cost to the sender, within a 

range that will not potentially confuse 

the sender. 

Therefore, to effectuate the purposes 

of the EFTA, the Bureau believes it is 

necessary and proper to exercise its 

EFTA sections 904(a) and (c) authority 

in § 1005.31(b)(1)(iv) to permit the 

exchange rate to be rounded 

consistently for each currency to no 

fewer than two decimal places and no 

more than four decimal places. The 

exchange rate must be disclosed using 

the term ‘‘Exchange Rate’’ or a 

substantially similar term. Comment 

31(b)(1)(iv)–2 of the final rule is revised 

to reflect the more flexible rounding 

requirements. Comment 31(b)(1)(iv)–2 

clarifies that the exchange rate disclosed 

by the provider for the remittance 

transfer is required to be rounded. The 

provider may round to two, three, or 

four decimal places, at its option. For 

example, if one U.S. dollar exchanges 

for 11.9483779 Mexican pesos, a 

provider may disclose that the U.S. 

dollar exchanges for 11.9484 Mexican 

pesos. The provider may alternatively 

disclose, for example, that the U.S. 

dollar exchanges for 11.948 pesos or 

11.95 pesos. On the other hand, if one 

U.S. dollar exchanges for exactly 11.9 

Mexican pesos, the provider may 

disclose that ‘‘US$1=11.9 MXN’’ in lieu 

of, for example, ‘‘US$1=11.90 MXN.’’ 

Though the Bureau is permitting 

flexibility for rounding exchange rate 

disclosures, the Bureau believes that 

each provider should disclose its 

exchange rates in a consistent manner. 

The Bureau believes that if a provider 

were permitted to round exchange rates 

for a particular currency on a 

transaction-by-transaction basis, a 

provider could round exchange rates 

differently in order to make the 

exchange rate appear to be more 

favorable. For example, the Bureau does 

not believe a provider that typically 

rounds to four decimal places for a 

specific currency (e.g., the U.S. dollar 

exchanges for 0.7551 Euros) should be 

permitted to round to two decimal 

places for some of those currency 

transactions (e.g., the U.S. dollar 


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exchanges for 0.76 Euros). Comment 

31(b)(1)(iv)–2 thus clarifies that the 

exchange rate disclosed for the 

remittance transfer must be rounded 

consistently for each currency. For 

example, a provider may not round to 

two decimal places for some 

transactions exchanged into Euros and 

round to four decimal places for other 

transactions exchanged into Euros. 

As discussed above, a provider may 

use an exchange rate that is not 

necessarily set by the provider itself. 

The final rule adds a new comment 

31(b)(1)(iv)–3 to clarify that the 

exchange rate used by the provider and 

applied to the remittance transfer need 

not be set by that provider. For example, 

an exchange rate set by an intermediary 

institution and applied to the remittance 

transfer would be the exchange rate 

used for the remittance transfer and 

must be disclosed by the provider. 

Consumer group commenters and an 

industry trade association asked the 

Bureau to clarify how the exchange rate 

requirements would apply when a 

remittance transfer involves a prepaid 

card. These commenters asked how 

disclosures, such as the exchange rate, 

could be provided in accordance with 

the timing provisions in the May 2011 

Proposed Rule when a provider would 

not know when the recipient would 

withdraw funds abroad or how much 

the recipient would withdraw. To the 

extent a prepaid card is covered by the 

rule, see § 1005.30(e), the funds that will 

be received by the designated recipient 

are those that are loaded on to the 

prepaid card by the sender at the time 

of the transaction. Often a prepaid card 

is both funded and loaded in U.S. 

dollars, and funds remain on the card in 

U.S. dollars until a cardholder 

withdraws funds in a foreign country. In 

these instances, a provider need not 

provide the exchange rate disclosure 

required by § 1005.31(b)(1)(iv), because 

a recipient will receive the currency in 

the currency in which the remittance 

transfer is funded. See comment 31(b)– 

1. 

Finally, a Federal Reserve Bank 

commenter noted that the exchange rate 

cannot be determined when a sender 

initiates payment on a recurring basis. 

The Bureau recognizes the unique 

challenges relating to recurring 

payments, and the final rule provides 

alternative provisions for these 

circumstances in § 1005.36, discussed 

below. 

31(b)(1)(v) Transfer Amount 

Proposed § 205.31(b)(1)(v) generally 

required providers to repeat the 

disclosure of the transfer amount in 

proposed § 205.31(b)(1)(i). Proposed 

§ 205.31(b)(1)(v), however, required the 

transfer amount to be disclosed in the 

currency in which the funds will be 

received by the designated recipient to 

demonstrate to the sender how third 

party fees or taxes imposed under 

proposed § 205.31(b)(1)(vi), which are 

also required to be disclosed in the 

currency in which the funds will be 

received, would reduce the amount 

received by the designated recipient. 

Proposed § 205.31(b)(1)(v), however, 

only required this repeat disclosure if 

third party fees or taxes are imposed 

under proposed § 205.31(b)(1)(vi), 

because it would not otherwise be 

necessary to demonstrate a reduction of 

the transfer amount by third party fees 

and taxes. The proposed disclosure was 

required to be described using the term 

‘‘Transfer Amount’’ or a substantially 

similar term. Both the transfer amount 

required to be disclosed by proposed 

§ 205.31(b)(1)(i) and the transfer amount 

required to be disclosed by proposed 

§ 205.31(b)(1)(v) were proposed to 

effectuate the purposes of the EFTA. 

The Bureau did not receive comment 

on the requirement to disclose the 

transfer amount in proposed 

§ 205.31(b)(1)(v). Therefore, to effectuate 

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 finalize this 

requirement as proposed in 

§ 1005.31(b)(1)(v). The Bureau received 

comments regarding concerns about 

making disclosures in the currency in 

which the funds will be received by the 

designated recipient. These comments, 

and a clarification regarding the 

currency in which the funds will be 

received by the designated recipient, are 

discussed below. See comment 

31(b)(1)(vi)–1. 

Proposed comment 31(b)(1)–2 

provided more guidance on the 

requirement to repeat the transfer 

amount disclosure in some 

circumstances, and it is adopted 

substantially as proposed. The comment 

reflects the clarification in the final rule 

that disclosure under § 1005.31(b)(1)(i) 

must be disclosed in the currency in 

which the remittance transfer is funded. 

Comment 31(b)(1)–2 clarifies that two 

transfer amounts are required to be 

disclosed by § 1005.31(b)(1)(i) and (v). 

First, a provider must disclose the 

transfer amount in the currency in 

which the remittance transfer is funded 

to show the calculation of the total 

amount of the transaction. Typically, 

the remittance transfer is funded in U.S. 

dollars, so the transfer amount would be 

expressed in U.S. dollars. However, if 

remittance transfer is funded, for 

example, from a Euro-denominated 

account, the transfer amount would be 

expressed in Euros. 

Second, a provider must disclose the 

transfer amount in the currency in 

which the funds will be made available 

to the designated recipient. For 

example, if the funds will be picked up 

by the designated recipient in Japanese 

yen, the transfer amount would be 

expressed in Japanese yen. However, the 

comment also clarifies that this second 

transfer amount need not be disclosed if 

fees and taxes are not imposed for the 

remittance transfer under 

§ 1005.31(b)(1)(vi). As discussed above, 

in such cases, there is no consumer 

benefit to the additional information if 

the transferred amount is not reduced 

by other fees and taxes. 

Section 1005.31(b)(1)(v) also requires 

a remittance transfer provider to use the 

term ‘‘Transfer Amount’’ or a 

substantially similar term to describe 

the disclosure required under this 

paragraph. Comment 31(b)(1)-2 clarifies, 

as proposed, that the terms used to 

describe each transfer amount should be 

the same. 

Finally, the Bureau believes that the 

rounded exchange rate required to be 

disclosed under § 1005.31(b)(1)(iv) is 

intended only to ensure that senders are 

not overwhelmed by a disclosure of an 

exchange rate with many numbers 

following the decimal point. The Bureau 

does not believe it is intended to 

constrain the number of decimal places 

involved in calculating other 

disclosures. Therefore, 

§ 1005.31(b)(1)(v) adds the clarification 

that the exchange rate used to calculate 

the transfer amount in § 1005.31(b)(1)(v) 

is the exchange rate in 

§ 1005.31(b)(1)(iv), including an 

estimated exchange rate to the extent 

permitted by § 1005.32, prior to any 

rounding of the exchange rate. Comment 

31(b)(1)-3 provides examples to 

demonstrate the exchange rate that must 

be used to calculate not only the transfer 

amount in § 1005.31(b)(1)(v), but also 

the fees and taxes imposed on the 

remittance transfer by a person other 

than the provider in § 1005.31(b)(1)(vi) 

and the amount received in 

§ 1005.31(b)(1)(vii). For example, if one 

U.S. dollar exchanges for 11.9483779 

Mexican pesos, a provider must 

calculate these disclosures using this 

rate, even though the provider may 

disclose pursuant to § 1005.31(b)(1)(iv) 

that the U.S. dollar exchanges for 

11.9484 Mexican pesos. Similarly, if a 

provider estimates pursuant to § 1005.32 

that one U.S. dollar exchanges for 

11.9483 Mexican pesos, a provider must 

calculate these disclosures using this 

rate, even though the provider may 

disclose pursuant to § 1005.31(b)(1)(iv) 


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that the U.S. dollar exchanges for 11.95 

Mexican pesos (Estimated). If an 

exchange rate need not be rounded, a 

provider must use that exchange rate to 

calculate these disclosures. For 

example, if one U.S. dollar exchanges 

for exactly 11.9 Mexican pesos, a 

provider must calculate these 

disclosures using this exchange rate. 

31(b)(1)(vi) Fees and Taxes Imposed by 

a Person Other Than the Provider 

Proposed § 205.31(b)(1)(vi) stated that 

a remittance transfer provider must 

disclose any fees and taxes imposed on 

the remittance transfer by a person other 

than the provider, in the currency in 

which the funds will be received by the 

designated recipient. Such fees and 

taxes could include lifting fees charged 

in connection with an international wire 

transfer, a fee charged by a recipient 

institution or agent, or a tax imposed by 

a government in the designated 

recipient’s country. Because such fees 

and taxes affect the amount ultimately 

received by the designated recipient, the 

Board proposed the disclosure of other 

fees and taxes to effectuate the purposes 

of the EFTA. 

Consumer group commenters 

supported the disclosure of third party 

fees and taxes to senders of remittance 

transfers, stating that such a disclosure 

would be consistent with the language 

and purpose of the statute, and would 

best inform the sender of the amount the 

recipient would ultimately receive. In 

contrast, industry commenters opposed 

the disclosure. Most industry 

commenters argued that compliance 

with the proposed disclosure 

requirement would be burdensome, if 

not impossible. Commenters stated that 

financial institutions sending wire 

transfers and international ACH 

transactions only have control over the 

delivery to the next institution, and in 

some cases do not have a relationship 

with all of the subsequent intermediary 

institutions involved in a transfer or 

with the recipient institution. The 

originating institution may, in some 

cases, know the routing, but in other 

cases have no legal or technological 

means to control routing of a transaction 

once the transfer has been initiated and, 

therefore, it cannot know what 

institutions might be imposing fees or 

taxes on the remittance transfer. One 

industry commenter suggested that 

providing the disclosures may be 

possible for repeat wire transfers, 

because fee and tax information is 

known from the previous transfers, but 

not for new wire transfers. 

Industry commenters and a Federal 

Reserve Bank commenter argued that 

third party fees and taxes may not be 

known at the time of the transaction, 

which could result in the remittance 

transfer provider providing misleading 

information to the sender. Industry 

commenters also argued that smaller 

institutions do not have the resources to 

obtain or monitor information about 

foreign tax laws or fees charged by 

unrelated financial institutions that may 

be involved in the transfer. Some 

commenters noted that intermediary 

financial institutions, both inside and 

outside of the United States, are not 

required to disclose their fees. 

Moreover, some industry commenters 

argued, the sharing of fee information 

among financial institutions could 

violate privacy and competition laws. 

Industry commenters stated that no 

comprehensive information is available 

regarding foreign tax laws. Because an 

institution may not have resources to 

track tax laws in every foreign country 

to which it sends a remittance transfer, 

the commenters argued that some 

providers would limit the locations to 

which they send remittance transfers. 

Further, some industry commenters 

noted that a recipient may enter into an 

agreement with a recipient institution 

that permits the institution to impose 

fees for an international payment 

received by the institution and applied 

to the recipient’s account. The 

commenters stated that remittance 

transfer providers would not know 

whether the recipient has agreed to pay 

such fees or how much the recipient 

may have agreed to pay. The 

commenters argued that such fees 

charged to a recipient by a third party 

pursuant to an agreement between the 

recipient and a third party should not be 

required to be disclosed. 

Some industry commenters argued 

that the statute did not intend for third 

party fees and taxes to be included in 

the disclosure of the total amount that 

will be received by the designated 

recipient. For example, one industry 

commenter argued that the statute only 

intended to include in the calculation of 

the amount of currency to be received 

the elements specifically required to be 

disclosed under EFTA section 

919(a)(2)(A)(ii) and (iii) (i.e., the amount 

of transfer fees and any other fees 

charged by the remittance transfer 

provider, and any exchange rate to be 

used by the remittance transfer provider 

for the remittance transfer). Another 

industry commenter argued that State 

laws that require a remittance transfer 

provider to disclose to a sender the total 

amount to be received by the designated 

recipient do not require disclosure of 

third party fees and taxes that may be 

imposed on the remittance transfer. 

Instead, the commenters argued, State 

laws only require the remittance transfer 

provider to disclose the amount of 

currency to be received after application 

of the exchange rate. Therefore, the 

commenters stated that fees or taxes set 

by a party other than the remittance 

transfer provider are not required to be 

included in the disclosure of the total 

amount received and, therefore, should 

not be required to be disclosed 

separately. 

Overall, many industry commenters 

stated that the proposed disclosure 

requirements would cause financial 

institutions to withdraw from the 

market or restrict the locations to which 

wire transfers will be sent. The 

commenters also stated that the 

proposed requirements would increase 

costs to senders, and some argued that 

the proposed requirements would delay 

transactions while financial institutions 

determined the required information in 

order to make disclosures. Some 

industry commenters argued that the 

requirements put financial institutions 

at a competitive disadvantage compared 

to money transmitters, which, they 

argued, are typically able to know the 

required disclosures due to their closed 

network structure. Further, they argued 

that the proposed requirements could 

deter foreign financial institutions from 

agreeing to process U.S.-originated 

remittance transfers. 

Generally, industry commenters urged 

the Bureau to exempt financial 

institutions that provide remittance 

transfers through correspondent 

relationships from the requirement to 

disclose third party fees or require 

different disclosures for these types of 

transactions. Industry commenters and a 

Federal Reserve Bank commenter also 

suggested that the final rule should 

incorporate a good faith standard with 

respect to these fee and tax disclosures. 

Some industry commenters further 

argued that the Bureau should not 

require foreign taxes to be provided, 

regardless of whether a remittance 

transfer was sent through a 

correspondent relationship. Industry 

commenters alternatively suggested that 

the Bureau only require a disclosure 

that the amount received may be subject 

to foreign taxes. A Federal Reserve Bank 

commenter suggested that the Bureau 

should provide a safe harbor for the 

foreign tax disclosure for providers that 

disclosed current or historical 

information available to the provider 

through reasonable efforts. 

Commenters also suggested that the 

Bureau assist industry with determining 

unknown fees and taxes, particularly to 

help ease the disclosure burden on 

small providers. One industry 

commenter believed the Bureau should 


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76 Due to a scrivener’s error, § 205.31(b)(vi) in the 

proposed rule had stated that these fees and taxes 

must be disclosed using the term ‘‘Other Transfer 

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

Fees and Taxes,’’ or a substantially similar term 

(emphasis added). The model forms as proposed, 

however, used the term ‘‘Other Fees and Taxes.’’ 

The terms set forth in § 1005.31(b)(vi) are adopted 

without the word ‘‘transfer’’ in order to more 

concisely describe the fees and taxes required to be 

disclosed in § 1005.31(b)(vi). The terms used in the 

final rule conform to the language used in the 

model forms, which participants in consumer 

testing generally understood to mean fees and taxes 

charged by a person other than the provider. 

require correspondent institutions to 

publish the fees and taxes that are 

charged. Industry and consumer group 

commenters suggested that the Bureau 

should maintain a resource that 

provides relevant foreign taxes. 

As discussed in the introduction 

above, the Bureau recognizes the 

challenges for remittance transfer 

providers to determining fees and taxes 

imposed by third parties. However, the 

plain language of the statute requires 

disclosure of the amount of currency 

that will be received by the designated 

recipient. The Bureau believes this 

requires remittance transfer providers to 

determine the costs specifically related 

to the remittance transfer that may 

reduce the amount received by the 

designated recipient. Congress 

specifically recognized that these 

determinations would be difficult with 

regard to open network transactions by 

financial institutions and tailored a 

specific accommodation to allow use of 

reasonably accurate estimates for an 

interim period until financial 

institutions can develop methods to 

determine exact disclosures, such as 

fees and taxes charged by third parties. 

This disclosure provides consumer 

benefits by making senders aware of the 

impact of these fees and taxes, which is 

essential to fulfill the purpose of the 

statute. Providing a total to recipient 

that reflects the impact of third party 

fees and taxes, and separately disclosing 

those fees and taxes, will provide 

senders with a greater transparency 

regarding the cost of a remittance 

transfer. For many senders and 

recipients, disclosure of the amount of 

third party fees and taxes that may be 

deducted could be crucial to knowing 

whether the amount transferred will be 

sufficient to pay important household 

expenses and other bills. Senders also 

need to know the amount of such fees 

and taxes to determine whether to use 

the same provider for any future 

transfers. Without such information, it 

would be difficult for a sender to 

determine the costs of the transfer that 

would enable the sender to choose the 

most cost-effective method of sending 

remittance transfers. Moreover, as 

discussed below, the cost of third party 

taxes may vary depending on the types 

of institutions involved in the 

transmittal route, and disclosure of 

these taxes will assist senders 

comparing costs between providers. 

While the Bureau understands that tax 

information may not be readily available 

to a provider, the provider is in the best 

position to obtain the information to 

comply with the disclosure 

requirements. Because a provider will 

be engaged in sending remittance 

transfers to certain countries and, in 

some cases, will have relationships with 

entities in those countries, the Bureau 

believes the provider itself is in the best 

position to determine foreign tax 

information. 

Therefore, to effectuate 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 

require in § 1005.31(b)(vi) of the final 

rule the disclosure of any fees and taxes 

imposed on the remittance transfer by a 

person other than the provider, using 

the terms ‘‘Other Fees’’ for fees and 

‘‘Other Taxes’’ for taxes, or substantially 

similar terms.76 As discussed above, 

fees and taxes must be disclosed 

separately from one another in order to 

show which costs are fixed and which 

costs are variable. See comment 

31(b)(1)–1.i. As discussed above, the 

Bureau believes that the rounded 

exchange rate required to be disclosed 

under § 1005.31(b)(1)(iv) is not intended 

to constrain the number of decimal 

places involved in calculating other 

disclosures. Therefore, 

§ 1005.31(b)(1)(vi) adds the clarification 

that the exchange rate used to calculate 

the fees and taxes in § 1005.31(b)(1)(vi) 

is the exchange rate in 

§ 1005.31(b)(1)(iv), including an 

estimated exchange rate to the extent 

permitted by § 1005.32, prior to any 

rounding of the exchange rate. As 

discussed above, comment 31(b)(1)–3 

provides examples to demonstrate the 

exchange rate that must be used to 

calculate the fees and taxes imposed on 

the remittance transfer by a person other 

than the provider. 

As noted above, proposed comment 

31(b)(1)–1.ii. distinguished between the 

fees and taxes imposed by the provider, 

discussed above in § 1005.31(b)(1)(ii), 

and the fees and taxes imposed by a 

person other than the provider. The 

proposed comment provided examples 

of each of these types of fees and taxes. 

Proposed comment 31(b)(1)–1.ii. also 

clarified that the terms used to describe 

each of these types of fees and taxes 

must differentiate between such fees 

and taxes and provided an example to 

illustrate this differentiation. 

Industry commenters requested 

clarification regarding the types of fees 

imposed on the remittance transfer by a 

person other than the provider. For 

example, an industry commenter and a 

Federal Reserve Bank commenter asked 

the Bureau to clarify that these fees and 

taxes do not include fees and taxes that 

banks and other parties charge one 

another for handling a remittance 

transfer, so long as the fees do not affect 

the amount of the transfer. Another 

industry commenter asked whether 

funds deducted from the amount 

received in a remittance transfer by a 

recipient institution exercising its rights 

of set-off would be required to be 

disclosed as a fee to a sender. 

Comment 31(b)(1)–1.ii. of the final 

rule clarifies that the fees and taxes 

required to be disclosed include only 

those that are charged to the sender or 

designated recipient and are specifically 

related to the remittance transfer. The 

Bureau does not believe that any fee or 

tax is required to be disclosed solely 

because it is charged at the same time 

that a remittance transfer is sent, 

because such fees and taxes are not 

necessarily ‘‘imposed on the remittance 

transfer.’’ For example, an overdraft fee 

charged by a bank at the same time that 

a remittance transfer is sent or received 

in an account is not imposed on the 

remittance transfer. In order to further 

clarify what charges should be disclosed 

to senders, the comment in the final rule 

provides examples of the types of fees 

that are not required to be disclosed 

under this provision, in addition to the 

examples of the types of fees that should 

be included that were included in the 

May 2011 Proposed Rule. 

Specifically, comment 31(b)(1)–1.ii. 

states that the fees and taxes required to 

be disclosed by § 1005.31(b)(1)(ii) 

include all fees and taxes imposed on 

the remittance transfer by the provider. 

For example, a provider must disclose a 

service fee and any State taxes imposed 

on the remittance transfer. In contrast, 

the fees and taxes required to be 

disclosed by § 1005.31(b)(1)(vi) include 

fees and taxes imposed on the 

remittance transfer by a person other 

than the provider. Fees and taxes 

imposed on the remittance transfer by a 

person other than the provider include 

only those fees and taxes that are 

charged to the sender or designated 

recipient and are specifically related to 

the remittance transfer. For example, a 

provider must disclose fees imposed on 

a remittance transfer by the receiving 

institution or agent at pick-up for 

receiving the transfer, fees imposed on 

a remittance transfer by intermediary 

institutions in connection with an 

international wire transfer, and taxes 


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imposed on a remittance transfer by a 

foreign government. 

However, the comment states that a 

provider need not disclose, for example, 

overdraft fees that are imposed by a 

recipient’s bank or funds that are 

garnished from the proceeds of a 

remittance transfer to satisfy an 

unrelated debt, because these charges 

are not specifically related to the 

remittance transfer. Similarly, fees that 

banks charge one another for handling 

a remittance transfer or other fees that 

do not affect the total amount of the 

transaction or the amount that will be 

received by the designated recipient are 

not charged to the sender or designated 

recipient. For example, an interchange 

fee that is charged to a provider when 

a sender uses a credit or debit card to 

pay for a remittance transfer need not be 

disclosed. The comment also clarifies 

that the terms used to describe the fees 

or taxes imposed on the remittance 

transfer by the provider in 

§ 1005.31(b)(1)(ii) and imposed on the 

remittance transfer by a person other 

than the provider in § 1005.31(b)(1)(vi) 

must differentiate between such fees 

and taxes. For example, the terms used 

to describe fees disclosed under 

§ 1005.31(b)(1)(ii) and (vi) may not both 

be described solely as ‘‘Fees.’’ 

Proposed comment 31(b)(1)(vi)–1 

clarified how a provider must disclose 

fees and taxes in the currency in which 

funds will be received. Industry 

commenters expressed concern that a 

remittance transfer provider may not 

know the currency in which the funds 

will be received. As discussed above in 

comment 31(b)(1)(iv)–1, if a provider 

does not have specific knowledge 

regarding the currency in which the 

funds will be received, the provider may 

rely on a sender’s representations as to 

the currency in which funds will be 

received. 

Comment 31(b)(1)(vi)–1 is adopted 

substantially as proposed, with an 

added clarification regarding reliance on 

a sender’s representation regarding the 

currency in which the funds will be 

received. The Bureau is also revising the 

comment to reflect the clarification that 

disclosures that require an exchange 

rate to be applied should use the 

exchange rate in § 1005.31(b)(1)(iv), 

including an estimated exchange rate to 

the extent permitted by § 1005.32, prior 

to any rounding of the exchange rate. 

Comment 31(b)(1)(vi)–1 states that 

§ 1005.31(b)(1)(vi) requires the 

disclosure of fees and taxes in the 

currency in which the funds will be 

received by the designated recipient. A 

fee or tax described in 

§ 1005.31(b)(1)(vi) may be imposed in 

one currency, but the funds may be 

received by the designated recipient in 

another currency. In such cases, the 

remittance transfer provider must 

calculate the fee or tax to be disclosed 

using the exchange rate in 

§ 1005.31(b)(1)(iv), including an 

estimated exchange rate to the extent 

permitted by § 1005.32, prior to any 

rounding of the exchange rate. For 

example, an intermediary institution in 

an international wire transfer may 

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

are ultimately deposited in the 

recipient’s account in Euros. In this 

case, the provider would disclose the 

fee to the sender expressed in Euros, 

calculated using the exchange rate used 

by the provider for the remittance 

transfer. 

The comment further states that for 

purposes of § 1005.31(b)(1)(v), (vi), and 

(vii), if a provider does not have specific 

knowledge regarding the currency in 

which the funds will be received, the 

provider may rely on a sender’s 

representation as to the currency in 

which funds will be received. For 

example, if a sender requests that a 

remittance transfer be deposited into an 

account in U.S. dollars, the provider 

may provide the disclosures required in 

§ 1005.31(b)(1)(v), (vi), and (vii) in U.S. 

dollars, even if the account is 

denominated in Mexican pesos and the 

funds are subsequently converted prior 

to deposit into the account. If a sender 

does not know the currency in which 

funds will be received, the provider may 

assume that the currency in which 

funds will be received is the currency in 

which the remittance transfer is funded. 

The final rule also adds a new 

comment 31(b)(1)(vi)–2 to address 

situations where the information needed 

to determine the foreign taxes that apply 

to a transaction is not known to the 

provider and not publically available. 

Some industry commenters stated that 

foreign taxes may depend on variables 

other than the country to which the 

remittance transfer is sent, such as by 

the specific tax status of the sender and 

receiver, account type, or type of 

financial institution. The commenters 

stated that a sender may not be aware 

of the information needed to determine 

the tax obligation that applies to the 

transaction. 

The Bureau believes that when these 

types of variables affect the foreign taxes 

that apply to the transaction, providers 

may have to rely on representations 

made by the sender. If the sender does 

not know the information, and the 

provider does not otherwise have 

specific knowledge of the information, 

the Bureau believes it is necessary to 

provide a reasonable mechanism by 

which the provider may disclose the 

foreign tax. The Bureau believes it is 

appropriate in these instances to 

disclose the highest tax that could be 

imposed with respect to a particular 

variable, so the sender is not surprised 

that the amount received is reduced by 

more taxes than what is disclosed. 

Comment 31(b)(1)(vi)–2 states that the 

amount of taxes imposed by a person 

other than the provider may depend on 

the tax status of the sender or recipient, 

the type of accounts or financial 

institutions involved in the transfer, or 

other variables. For example, the 

amount of tax may depend on whether 

the receiver is a resident of the country 

in which the funds are received or the 

type of account to which the funds are 

delivered. If a provider does not have 

specific knowledge regarding variables 

that affect the amount of taxes imposed 

by a person other than the provider for 

purposes of determining these taxes, the 

provider may rely on a sender’s 

representations regarding these 

variables, pursuant to 

§ 1005.31(b)(1)(vi). If a sender does not 

know the information relating to the 

variables that affect the amount of taxes 

imposed by a person other than the 

provider, the provider may disclose the 

highest possible tax that could be 

imposed for the remittance transfer with 

respect to any unknown variable. 

The Bureau notes that if a provider 

does not independently have specific 

knowledge regarding variables that 

affect the amount of taxes imposed by 

a person other than the provider, the 

provider may rely on the sender’s 

representations regarding these 

variables. For example, the rule does not 

impose on providers a duty to inquire 

about this information with a third 

party. The Bureau also notes that a 

provider may continue to rely on the 

sender’s representations in any 

subsequent remittance transfers, unless 

the provider has specific knowledge that 

information relating to such variables 

has changed. 

31(b)(1)(vii) Amount Received 

Proposed § 205.31(b)(1)(vii) stated 

that a remittance transfer provider must 

disclose to the sender the amount that 

will be received by the designated 

recipient, in the currency in which the 

funds will be received. See EFTA 

section 919(a)(2)(A)(i). The proposed 

rule stated that the disclosures should 

be described using the term ‘‘Total to 

Recipient’’ or a substantially similar 

term. The proposed rule provided that 

the disclosure must reflect all charges 

that would affect the amount to be 

received. 

For the reasons discussed above, 

industry commenters objected to the 


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proposal because, they argued, costs 

that are required to be known to 

disclose the amount received, such as 

the exchange rate and third party fees 

and taxes, cannot be known at the time 

the pre-payment disclosure and receipt 

are required to be disclosed. As 

discussed above, an industry 

commenter argued that the statute only 

intended the amount of currency that 

will be received by the designated 

recipient to reflect the other elements 

that are required to be disclosed 

separately under EFTA section 

919(a)(2)(A)(ii) and (iii). Other industry 

commenters argued that the disclosure 

should only reflect the exchange rate, 

fees, and taxes set by the remittance 

transfer provider itself, and not those set 

or charged by persons other than the 

provider. Some industry commenters 

believed the amount that will be 

received by the designated recipient 

should be subject to a good faith 

standard, should be permitted to be 

estimated, or should include a statement 

that the total amount is subject to 

change. 

EFTA section 919(a)(2)(A)(i) requires 

a remittance transfer provider to 

disclose the amount received by the 

designated recipient using the values of 

the currency into which the funds will 

be exchanged. The Bureau interprets the 

amount to be received by the designated 

recipient as the amount net of all fees 

and taxes that will be paid for the 

transfer. An exchange rate, if one is 

applied, is just one of the factors that 

could affect the actual amount received 

by the designated recipient. Providing a 

total amount to be received that does 

not take into account all cost elements 

would not be consistent with the 

statute’s goal of providing disclosures of 

the total costs of a remittance transfer. 

The Bureau is not persuaded that the 

amount to be received by the designated 

recipient should only reflect those 

elements that are separately required to 

be disclosed under the statute. Under 

the plain language of EFTA section 

919(a)(2)(A)(i), the amount of funds that 

will be received by the designated 

recipient must be disclosed to the 

sender. The Bureau believes this 

amount must reflect all fees and taxes 

specifically related to the remittance 

transfer, regardless of the entity that 

charges them. Moreover, the Bureau 

believes that the exchange rate to be 

used to calculate the total to recipient is 

the exchange rate that is used for the 

remittance transfer, whether or not the 

remittance transfer provider itself sets 

the exchange rate or merely applies an 

exchange rate set by another entity to 

the transaction. Absent this approach, 

providers could disclose different 

amounts received depending only on 

whether the provider itself or a different 

institution applies the exchange rate. 

The Bureau believes such a result would 

be inconsistent with the statutory goal 

of providing the sender with the actual 

amount that will be received by the 

designated recipient. 

Therefore, proposed § 205.31(b)(1)(vii) 

is adopted substantially as proposed in 

renumbered § 1005.31(b)(1)(vii), with an 

addition to clarify the appropriate 

exchange rate that must be used to 

calculate the amount received, 

discussed below. Comment 

31(b)(1)(vii)–1 is also adopted 

substantially as proposed to clarify the 

charges that must be reflected in the 

amount received. The comment is 

amended to clarify that the disclosed 

amount received must be reduced by the 

amount of any fee or tax, whether the 

fee or tax is imposed on the remittance 

transfer by the remittance transfer 

provider or by a person other than the 

remittance transfer provider. The 

comment clarifies that the fees and taxes 

that must be disclosed are those fees 

and taxes that are imposed on the 

remittance transfer. See comment 

31(b)(1)–1–ii. Specifically, comment 

31(b)(1)(vii)–1 states that the disclosed 

amount to be received by the designated 

recipient must reflect all charges 

imposed on the remittance transfer that 

affect the amount received, including 

the exchange rate and all fees and taxes 

imposed on the remittance transfer by 

the remittance transfer provider, the 

receiving institution, or any other party 

in the transmittal route of a remittance 

transfer. The disclosed amount received 

must be reduced by the amount of any 

fee or tax that is imposed on the 

remittance transfer by any person, even 

if that amount is imposed or itemized 

separately from the transaction amount. 

Finally, § 1005.31(b)(1)(vii) revises 

proposed § 205.31(b)(1)(vii) to clarify 

the exchange rate that should be used in 

calculating the amount received. One 

industry commenter stated that using a 

rounded exchange rate may add some 

de minimis value to the amount 

received. For some currencies, this may 

result in a transaction amount being 

disclosed in a foreign currency for 

which no coins are available to 

complete the transaction. The 

commenter recommended a de minimis 

exemption for error resolution triggered 

based on rounding. As discussed above, 

the Bureau believes that the rounded 

exchange rate required to be disclosed 

under § 1005.31(b)(1)(iv) is not intended 

to constrain the number of decimal 

places involved in calculating other 

disclosures. Therefore, 

§ 1005.31(b)(1)(vii) adds the clarification 

that the exchange rate used to calculate 

the amount received in 

§ 1005.31(b)(1)(vii) is the exchange rate 

in § 1005.31(b)(1)(iv), including an 

estimated exchange rate to the extent 

permitted by § 1005.32, prior to any 

rounding of the exchange rate. As 

discussed above, comment 31(b)(1)–3 

provides examples to demonstrate the 

exchange rate that must be used to 

calculate the amount received. 

31(b)(2) Receipt 

Proposed § 205.31(b)(2) provided that 

a remittance transfer provider must 

disclose a written receipt to a sender 

when payment is made for the 

remittance transfer. As with the 

proposed pre-payment disclosure, the 

disclosures required on the receipt 

could be omitted if not applicable. The 

required disclosures are discussed 

below. 

31(b)(2)(i) Pre-Payment Disclosures on 

Receipt 

Proposed § 205.31(b)(2)(i) provided 

that the same disclosures included in 

the pre-payment disclosure must be 

disclosed on the receipt, pursuant to 

EFTA section 919(a)(2)(B)(i)(I). As 

discussed above, the Bureau is requiring 

providers to disclose some information 

in the pre-payment disclosure, such as 

the transfer amount, that is not 

specifically required by EFTA section 

919(a)(2)(A). The Bureau did not receive 

comment regarding the requirement to 

provide the same pre-payment 

disclosures on the receipt. Therefore, to 

effectuate 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 finalize that 

requirement in renumbered 

§ 1005.31(b)(2)(i), as proposed. 

31(b)(2)(ii) Date Available 

Proposed § 205.31(b)(2) also provided 

for the disclosure of additional elements 

on the receipt. EFTA section 

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

of the promised date of delivery to the 

designated recipient on a receipt. The 

Board stated its belief that the statute 

requires disclosure of the date the 

currency will be available to the 

designated recipient, not the date the 

funds are physically picked up by the 

designated recipient, because the 

recipient may not pick up the funds for 

some period of time after the funds are 

available. Thus, proposed 

§ 205.31(b)(2)(ii) stated that a remittance 

transfer provider must disclose the date 

of availability of funds to the designated 

recipient, using the term ‘‘Date 

Available’’ or a substantially similar 

term. Proposed comment 31(b)(2)–1 


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provided further guidance on this 

disclosure. 

In the proposal, the Board recognized 

that in some instances, it may be 

difficult to determine the exact date on 

which a remittance transfer will be 

available to a designated recipient. For 

example, an international wire transfer 

may pass through several intermediary 

institutions prior to becoming available 

at the institution of a designated 

recipient, and the time it takes to pass 

through these intermediaries may be 

difficult to determine. As a result, the 

Board recognized that remittance 

transfer providers would likely disclose 

the latest date on which the funds 

would be available, even if funds are 

often available sooner. Thus, proposed 

§ 205.31(b)(2)(ii) permitted a provider to 

include a statement that funds may be 

available to the designated recipient 

earlier than the date disclosed, using the 

term ‘‘may be available sooner’’ or a 

substantially similar term. The Board 

had tested various terms in consumer 

testing for communicating the fact that 

funds may be available earlier than the 

date disclosed. Participants generally 

understood the meaning of the 

statement that funds ‘‘may be available 

sooner’’ better than other terms. 

Consumer group commenters 

supported the disclosure of the date 

funds will be available. Many industry 

commenters argued, however, that it 

would be difficult or impossible to 

determine when funds would be made 

available to a recipient in an open 

network system, such as where transfers 

are made to an account at a financial 

institution with which the provider 

does not have a correspondent 

relationship. Industry commenters 

argued that even if the date of receipt by 

a recipient financial institution is 

known, there could be a delay in 

depositing the funds into a recipient 

account due to delays at intermediary 

financial institutions or at the recipient 

institution. One industry trade 

association stated that infrastructure 

deficiencies in some countries may 

make it impossible to determine the 

actual date on which funds will be 

available. 

An industry commenter supported the 

flexibility provided by the term ‘‘may be 

available sooner,’’ but stated that dates 

still may be unpredictable for reasons 

beyond a provider’s control. One 

industry trade association argued that in 

order to mitigate compliance risks, some 

remittance transfer providers will 

disclose a date well past a reasonable 

estimate of the date funds will be made 

available, which would render the 

disclosure meaningless. 

Due to these factors, some industry 

commenters urged the Bureau to permit 

an estimated date of availability, 

including an estimate of the date that 

funds may be available to a recipient 

institution, and not the recipient. One 

commenter suggested that the disclosure 

could state that a transfer may be 

delayed by intermediaries or other 

factors beyond the provider’s control. 

As stated in the proposal, EFTA 

section 919(a)(2)(B)(i)(II) requires 

disclosure of a single, promised date of 

delivery of the funds. Neither EFTA 

section 919(a)(4) nor EFTA section 

919(c) permit a remittance transfer 

provider to provide an estimate of this 

promised date, despite the fact that the 

statute permits estimates in other 

circumstances. Moreover, because the 

statute requires a remittance transfer 

provider to provide a disclosure of the 

promised date of delivery to the 

designated recipient, the Bureau 

believes that permitting a provider to 

disclose the date that funds will be 

made available to the recipient 

institution would not comply with the 

statute. 

The Bureau believes that by 

permitting the provider to disclose a 

date by which funds will certainly be 

delivered, but also stating that funds 

‘‘may be available sooner,’’ a provider 

can comply with the disclosure 

requirement. The Bureau recognizes that 

providers may overestimate the 

disclosed date on which funds will be 

available to mitigate compliance risks. 

However, the Bureau believes that 

competitive pressures will give 

providers an incentive to provide as 

accurate a date as possible. 

Therefore, § 1005.31(b)(2)(ii) is 

finalized substantially as proposed. 

Section 1005.31(b)(2)(ii), however, 

clarifies in the rule, rather than the 

commentary, as proposed, that a 

provider must disclose the date in the 

foreign country on which funds will be 

available to the designated recipient. 

This clarification is included to account 

for instances where time zone 

differences result in a date in the United 

States being different from the date in 

the country of the designated recipient. 

The final rule also adopts comment 

31(b)(2)–1 substantially as proposed. 

The comment clarifies that a remittance 

transfer provider may not provide a 

range of dates that the remittance 

transfer may be available, nor an 

estimate of the date on which funds will 

be available. If a provider does not know 

the exact date on which funds will be 

available, the provider may disclose the 

latest date on which the funds will be 

available. For example, if funds may be 

available on January 3, but are not 

certain to be available until January 10, 

then a provider complies with 

§ 1005.31(b)(2)(ii) if it discloses January 

10 as the date funds will be available. 

However, a remittance transfer provider 

may also disclose that funds ‘‘may be 

available sooner’’ or use a substantially 

similar term to inform senders that 

funds may be available to the designated 

recipient on a date earlier that the date 

disclosed. For example, the provider 

may disclose ‘‘January 10 (may be 

available sooner).’’ 

31(b)(2)(iii) Recipient 

Proposed § 205.31(b)(2)(iii) provided 

that a remittance transfer provider must 

disclose the name and, if provided by 

the sender, the telephone number and/ 

or address of the designated recipient. 

The proposed rule stated that the 

remittance transfer provider must 

describe the disclosure using the term 

‘‘Recipient’’ or a substantially similar 

term. The Bureau did not receive 

comment on proposed 

§ 205.31(b)(2)(iii), which is adopted as 

proposed in renumbered 

§ 1005.31(b)(2)(iii). 

31(b)(2)(iv) Rights of Sender 

As discussed in more detail below 

regarding §§ 1005.33 and 1005.34, EFTA 

section 919(d) provides the sender with 

substantive error resolution and 

cancellation rights. EFTA section 

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

transfer provider to provide a statement 

containing information about the rights 

of the sender regarding the resolution of 

errors on the receipt or combined 

disclosure. EFTA section 919(d)(3) 

requires the Bureau to issue final rules 

regarding appropriate cancellation and 

refund policies for senders. The Board 

stated its belief that providing a lengthy 

disclosure to the sender each time the 

sender makes a remittance transfer 

could be ineffective at conveying the 

most important information that a 

sender would need to resolve an error 

or cancel a transaction. However, the 

Board also stated that a sender should 

have access to a complete description of 

the sender’s error resolution and 

cancellation rights in order to effectively 

exercise those rights. As a result, the 

Board proposed § 205.31(b)(2)(iv) in 

conjunction with a long form error 

resolution notice in proposed 

§ 205.31(b)(4). The two disclosures were 

intended to balance the interest in 

providing a sender a concise disclosure 

with the sender’s ability to obtain a full 

explanation of those rights. 

Proposed § 205.31(b)(2)(iv) stated that 

a remittance transfer provider must 

disclose to a sender an abbreviated 

statement about the sender’s error 


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resolution and cancellation rights using 

language set forth in Model Form A–37 

of Appendix A or substantially similar 

language. The proposed statement 

included a brief disclosure of the 

sender’s error resolution and 

cancellation rights, as well as a 

notification that a sender may contact 

the remittance transfer provider for a 

written explanation of these rights. 

Consumer group commenters argued 

that the abbreviated disclosure in 

proposed § 205.31(b)(2)(iv) should 

provide more comprehensive 

information to a sender. These 

commenters also suggested that the 

abbreviated disclosure would not 

comply with the statute. One of the 

consumer group commenters stated that 

all of the senders’ rights should be 

disclosed on the receipt, instead of a 

shorter disclosure, because senders of 

remittance transfers may be less 

educated or less likely to have access to 

phone and internet compared to other 

consumers. 

The Bureau agrees that education of 

senders about the consumer protections 

created by EFTA section 919 is an 

important statutory and policy goal. 

However, the Bureau believes EFTA 

section 919(a)(2)(B)(ii)(I) does not 

require a remittance transfer provider to 

enumerate a sender’s error resolution 

rights. Rather, the statute requires the 

provider to disclose information about 

the rights of the sender under EFTA 

section 919 regarding the resolution of 

errors, and the Bureau believes the 

proposed language satisfies this 

requirement. Moreover, consumer 

testing participants understood and 

responded positively to the concise, 

abbreviated disclosure and favorably 

compared the statement against current 

error resolution disclosures with which 

they had experience and which they 

noted could be long and in ‘‘fine print.’’ 

Thus, the Bureau is finalizing the 

abbreviated disclosure requirement in 

renumbered § 1005.31(b)(2)(iv). See also 

§ 1005.31(b)(4), below. The Bureau, 

however, is amending the language in 

the abbreviated statement about senders’ 

error resolution rights on Model Form 

A–37 to include a more explicit 

statement informing senders that they 

have such rights. The Bureau is also 

adding a requirement in 

§ 1005.31(b)(2)(iv) to account for the 

alternative cancellation requirements in 

§ 1005.36(c) for remittance transfers 

scheduled by the sender at least three 

business days before the date of the 

transfer, as discussed below. Section 

1005.31(b)(2)(iv), therefore, also 

provides that for any remittance transfer 

scheduled by the sender at least three 

business days before the date of the 

transfer, the statement about the rights 

of the sender regarding cancellation 

must instead reflect the requirements of 

§ 1005.36(c). 

31(b)(2)(v) Contact Information of the 

Provider 

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

generally requires that the remittance 

transfer provider disclose appropriate 

contact information for the remittance 

transfer provider, its State regulator, and 

the Bureau. The Board stated that 

appropriate contact information 

includes the name, telephone number, 

and Web site of these entities, so that 

senders would have multiple options for 

addressing any issues that may arise 

with respect to a remittance transfer 

provider. Proposed § 205.31(b)(2)(v) 

provided for the disclosure of the name, 

telephone number, and Web site of the 

remittance transfer provider. The 

Bureau did not receive comment on 

proposed § 205.31(b)(2)(v), and the 

Bureau is finalizing it substantially as 

proposed in renumbered 

§ 1005.31(b)(2)(v). The final rule adds 

language to allow providers to disclose 

more than one telephone number to 

account for circumstances, for example, 

where a provider maintains a separate 

TTY/TDD telephone number. 

31(b)(2)(vi) Agency Contact Information 

Proposed § 205.31(b)(2)(vi) provided 

for disclosure of a statement that the 

sender can contact the State agency that 

regulates the remittance transfer 

provider and the Bureau for questions or 

complaints about the remittance transfer 

provider, using language set forth in 

Model Form A–37 of Appendix A or 

substantially similar language. The 

proposed statement included contact 

information for these agencies, 

including the toll-free telephone 

number of the Bureau established under 

section 1013 of the Dodd-Frank Act. 

The Board requested comment on 

several aspects of proposed 

§ 205.31(b)(2)(vi). First, the Board 

solicited comment on whether and how 

a remittance transfer provider should be 

required to disclose information 

regarding a State agency that regulates 

the provider for remittance transfers 

conducted through a toll-free telephone 

number or online and, if so, what would 

be the appropriate State agency to 

disclose to a sender. Some commenters 

believed the disclosure of Bureau 

contact information would be sufficient. 

Several industry commenters argued 

that the Bureau should not require a 

remittance transfer provider to disclose 

the State agency that regulates the 

remittance transfer. These commenters 

believed the requirement would create 

operational hurdles for providers that 

operate in multiple states and would 

provide negligible consumer protection 

benefit. 

One money transmitter commenter 

stated that it would be difficult to tailor 

State regulator disclosures to each 

individual agent, and that managing 

State-specific receipts and forms would 

be costly. This commenter stated that 

agents that provide services in multiple 

states often distribute forms to their 

locations as part of their chain of 

distribution. Requiring these agents to 

manage State-specific forms, the 

commenter argued, would be a 

significant change in distribution 

processes and could create liability risk 

for the remittance transfer provider. 

This commenter believed remittance 

transfer providers would thus create a 

multi-State disclosure form, which 

would provide senders with superfluous 

information. 

Another money transmitter 

commenter noted that many states 

already have guidance regarding the 

prominence and placement of contact 

information on a remittance transfer 

provider’s Web site and in storefront 

locations. The commenter stated that 

many states prefer senders to contact the 

remittance transfer provider before 

contacting a State agency for questions 

and complaints. The commenter 

believed that the Bureau should instead 

require a statement that would refer to 

other sources, such as a Web site or tollfree number, to obtain contact 

information for the appropriate State 

agency, and that the Bureau should 

maintain contact information for State 

agencies, so that senders could contact 

the Bureau for appropriate State agency 

information. 

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

requires a remittance transfer provider 

to provide appropriate contact 

information for the State agency that 

regulates the remittance transfer 

provider. The Bureau does not believe 

that providing contact information for 

an alternative source that maintains a 

list of State agencies would satisfy the 

statutory requirement. The Bureau 

recognizes that remittance transfer 

providers that have locations in 

multiple states, or that provide 

remittance transfers online or by 

telephone, will have to determine the 

appropriate State agency to disclose on 

a receipt. The Bureau believes that due 

to segregation and other formatting 

requirements, discussed below, a 

remittance transfer provider may not 

disclose contact information for 

agencies in other states. Therefore, the 

final rule maintains the requirement to 

disclose information regarding a State 


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agency that regulates the remittance 

transfer provider. 

However, several changes are made in 

the final rule to clarify which State 

agency should be disclosed, because a 

remittance transfer provider may be 

regulated by more than one agency in a 

particular State. The Bureau believes 

that the statute is meant to provide 

senders a resource for addressing 

problems regarding a particular 

remittance transfer and that the State 

agency that licenses or charters the 

remittance transfer provider is the 

appropriate State agency to provide 

such assistance to senders. Thus, in 

§ 1005.31(b)(2)(vi), the final rule adds 

the clarification that the disclosure must 

disclose the State agency that licenses or 

charters the remittance transfer provider 

with respect to the remittance transfer. 

Second, the Board requested comment 

on whether a remittance transfer 

provider should be required to disclose 

the contact information for the Bureau, 

including the toll-free telephone 

number, in cases where the Bureau is 

not the primary Federal regulator for 

consumer complaints against the 

remittance transfer provider. The Board 

also requested comment on whether it 

would be appropriate to instead require 

the contact information of the primary 

Federal regulator of the remittance 

transfer provider for consumer 

complaints. 

Consumer group commenters and an 

industry commenter stated that the 

Bureau’s contact information should be 

included on the receipt. These 

commenters stated that listing the 

Bureau’s contact information, rather 

than the primary Federal regulator, 

would ensure that consumer complaints 

about remittance transfer provider were 

centralized in one Federal agency. The 

commenter suggested that even if the 

Bureau does not directly regulate a 

remittance transfer provider, the Bureau 

could track complaints and launch an 

investigation if a pattern and practice of 

non-compliance emerges. 

The Bureau agrees that it is 

appropriate to provide the Bureau’s 

contact information, even in instances 

where the Bureau is not the provider’s 

primary Federal regulator, as required 

by EFTA section 919(a)(2)(B)(ii)(II)(bb). 

The Bureau believes that providing a 

single Federal agency as the appropriate 

contact for senders will assist in 

tracking complaints. The Bureau is not 

requiring a separate disclosure of a 

primary Federal regulator in the final 

rule, because the disclosure of multiple 

Federal agencies could confuse senders. 

Instead, the Bureau believes consumers 

are better served by contacting the 

Bureau, which can direct senders to the 

appropriate Federal agency as 

necessary. Therefore, § 1005.31(b)(2)(vi) 

in the final rule requires a remittance 

transfer provider to disclose the contact 

information for the Bureau, including 

the toll-free telephone number. 

Finally, the Board requested comment 

on whether financial institutions that 

are primarily regulated by Federal 

banking agencies, such as national 

banks, should be required to disclose 

State regulatory agency information. 

The Board requested comment regarding 

the circumstances in which it might be 

appropriate to disclose such a State 

regulatory agency. 

Some industry commenters stated that 

the rule should only require Federallychartered depository institutions to 

provide contact information for their 

primary Federal regulator. One industry 

commenter argued that providing 

information regarding State regulators 

would be confusing and ineffective, 

since its primary Federal regulator 

already has an established procedure for 

addressing errors. 

The Bureau believes the final rule 

sufficiently accounts for circumstances 

in which an institution may not be 

licensed or chartered by a State agency. 

Under the final rule, the provider must 

disclose the State agency that licenses or 

charters the remittance transfer 

provider. However, disclosures must 

only be disclosed as applicable. 

Consequently, if no State agency 

licenses or charters a particular 

provider, then no State agency is 

required to be disclosed. 

The Bureau is also adding several 

other changes to § 1005.31(b)(2)(vi) in 

the final rule for clarity. The final rule 

adds language to allow providers to 

disclose more than one telephone 

number for the State agency that 

licenses or charters the provider and the 

Bureau to account for circumstances, for 

example, where these agencies maintain 

separate TTY/TDD telephone numbers. 

The provision also adds the requirement 

that a remittance transfer provider must 

disclose the name of both the State 

agency that licenses or charters the 

remittance transfer provider and the 

Bureau, in addition to the telephone 

number(s) and Web site of each agency. 

Section 1005.31(b)(2)(vi) of the final 

rule states that a remittance transfer 

must provide 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. The 

statement must use the language set 

forth in Model Form A–37 of Appendix 

A to this part or substantially similar 

language. The disclosure also 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, tollfree telephone number(s), and Web site 

of the Consumer Financial Protection 

Bureau. 

Comment 31(b)(2)–2 has been added 

to the final rule to clarify that a 

remittance transfer provider must only 

disclose information about a State 

agency that licenses or charters the 

remittance transfer provider with 

respect to the remittance transfer, as 

applicable. For example, if a financial 

institution is solely regulated by a 

Federal agency, and not licensed or 

chartered by a State agency, then the 

institution need not disclose 

information about a State agency and 

would solely disclose information about 

the Bureau, whether or not the Bureau 

is the provider’s primary Federal 

regulator. 

The final rule also adds comment 

31(b)(2)–3 to clarify that a remittance 

transfer provider must only disclose 

information about one State agency that 

licenses or charters the remittance 

transfer provider with respect to the 

remittance transfer, even if other State 

agencies also regulate the remittance 

transfer provider. For example, a 

provider may disclose information 

about the State agency which granted its 

license. If a provider is licensed in 

multiple states, and the State agency 

that licenses the provider with respect 

to the remittance transfer is determined 

by a sender’s location, a provider may 

make the determination as to the State 

in which the sender is located based on 

information that is provided by the 

sender and on any records associated 

with the sender. For example, if the 

State agency that licenses the provider 

with respect to an online remittance 

transfer is determined by a sender’s 

location, a provider could rely on the 

sender’s statement regarding the State in 

which the sender is located and disclose 

the State agency that licenses the 

provider in that State. A State-chartered 

bank must disclose information about 

the State agency that granted its charter, 

regardless of the location of the sender. 

31(b)(3) Combined Disclosure 

EFTA section 919(a)(5)(C) grants the 

Bureau authority to permit a remittance 

transfer provider to provide to a sender 

a single written disclosure instead of the 

pre-payment disclosure and receipt, if 

the information disclosed is accurate at 

the time at which payment is made. The 

combined disclosure must include the 


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content provided in the pre-payment 

disclosure and the receipt under EFTA 

sections 919(a)(2)(A) and (B). As 

discussed above, the Bureau is also 

requiring providers to disclose some 

information in the pre-payment 

disclosure and receipt, such as the 

transfer amount, that is not specifically 

required by EFTA section 919(a)(2)(A) 

or (B). The Board determined through 

consumer testing that participants 

understood the information provided on 

the combined disclosure, and about half 

of the participants stated that they 

would prefer to receive the single, 

combined disclosure rather than a prepayment disclosure and a separate 

receipt. Therefore, proposed 

§ 205.31(b)(3) generally permitted a 

remittance transfer provider to provide 

the disclosures described in proposed 

§ 205.31(b)(1) and (2) in a single 

disclosure prior to payment, as 

applicable, as an alternative to 

providing the two disclosures described 

in proposed § 205.31(b)(1) and (2). 

Consumer group commenters urged 

the Bureau not to permit combined 

disclosures. One consumer group 

commenter stated that requiring both a 

pre-payment disclosure and a receipt 

would permit consumers to audit the 

transaction and ensure that providers do 

not impose hidden fees. This 

commenter noted that the combined 

disclosure would not likely reduce 

compliance burdens for providers 

because State laws may already mandate 

a post-transaction receipt. Another 

consumer group commenter argued that 

two disclosures were necessary to 

perform two different legal functions. 

This commenter stated that a pretransaction disclosure serves as an offer 

that provides terms of written contract, 

and a receipt indicates that the contract 

has been agreed upon. This commenter 

believed a combined disclosure would 

be too confusing to senders and that the 

proposed rule did not address how the 

combined disclosure will ensure 

information is accurate. Some industry 

commenters argued that the Bureau 

should permit the combined disclosure, 

but maintained that it should be 

permitted to be provided after payment 

is made. See also § 1005.31(e), 

discussed below. 

Some consumer testing participants 

stated that they would prefer to receive 

a pre-payment disclosure and a receipt 

because they were concerned that the 

combined disclosure would not provide 

proof of payment for the remittance 

transfer. Therefore, in the proposal, the 

Board solicited comment on whether 

proof of payment should also be 

required for remittance transfer 

providers using the combined 

disclosure and, if so, solicited comment 

on appropriate methods of 

demonstrating proof of payment for the 

combined disclosure. Consumer group 

commenters contended that methods for 

providing proof of payment could not be 

adequately set forth in the final rule. An 

industry commenter argued against 

requiring proof of payment for the 

combined disclosure, based on the 

challenges posed by the required timing 

of combined disclosures. Another 

industry commenter maintained that 

senders were satisfied with the existing 

proof of payment provided to them. 

The Bureau believes a combined 

disclosure has benefits. Based on the 

Board’s consumer testing, the Bureau 

believes that senders will understand 

the combined disclosures provided to 

them and that some senders will prefer 

to receive disclosures in a combined 

format. As discussed with respect to 

§ 1005.31(f), below, the provider must 

ensure that the combined disclosure is 

accurate when payment is made. 

Moreover, the Bureau believes that the 

combined disclosure could reduce the 

compliance burden for some providers 

because the provider would only be 

required to provide one disclosure, 

rather than two, with mandated content 

in a specified format. Therefore, the 

Bureau believes it is appropriate to 

permit this alternative disclosure. 

However, the Bureau also believes 

that senders need to be able to confirm 

that they have completed the 

transaction. A proof of payment enables 

senders to demonstrate that the 

combined disclosure they received was 

part of a completed transaction. A proof 

of payment would also help remittance 

transfer providers determine which 

transfers have actually been completed, 

so that a sender cannot assert error 

resolution rights based on a combined 

disclosure, where a sender has not made 

payment for the transfer. Thus, the 

Bureau is adding a proof of payment 

requirement to the final rule. 

Accordingly, to effectuate 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 finalize the combined 

disclosure requirement. Section 

1005.31(b)(3) states that as an 

alternative to providing the disclosures 

described in § 1005.31(b)(1) and (2), a 

remittance transfer provider may 

provide the disclosures described in 

§ 1005.31(b)(2), as applicable, in a single 

disclosure pursuant to the timing 

requirements of § 1005.31(e)(1). 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. The final rule also 

adds new comment 31(b)(3)–1, which 

clarifies that the combined disclosure 

must be provided to the sender when 

the sender requests the remittance 

transfer, but prior to payment for the 

transfer, pursuant to § 1005.31(e)(1), and 

the proof of payment must be provided 

when payment is made for the 

remittance transfer. The comment also 

clarifies that the proof of payment for 

the transaction may be provided on the 

same piece of paper as the combined 

disclosure or on a separate piece of 

paper. For example, a provider may feed 

a combined disclosure through a 

computer printer when payment is 

made to add the date and time of the 

transaction, a confirmation code, and an 

indication that the transfer was paid in 

full. A provider may also provide this 

additional information to a sender on a 

separate piece of paper when payment 

is made. 

The Bureau notes that the use of the 

term ‘‘proof of payment’’ does not 

suggest or establish an evidentiary 

standard. The requirement to provide a 

sender with proof of payment is only 

intended to convey to a sender that 

payment has been received. To this end, 

new comment 31(b)(3)–1 also clarifies 

that a remittance transfer provider does 

not comply with the requirements of 

§ 1005.31(b)(3) by providing a combined 

disclosure with no further indication 

that payment has been received. 

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

Cancellation Notice 

Proposed § 205.31(b)(4) stated that a 

remittance transfer provider must 

provide a notice to the sender 

describing the sender’s error resolution 

and cancellation rights under proposed 

§§ 205.33 and 205.34 upon the sender’s 

request. As discussed above, consumer 

group commenters argued that 

comprehensive error resolution and 

cancellation rights should be stated on 

the receipt or combined disclosure in 

lieu of an abbreviated disclosure, and 

not only upon request by a sender. The 

Bureau is retaining the abbreviated 

disclosure in the final rule. However, 

the Bureau also believes that a sender 

must have access to a complete 

description of the sender’s error 

resolution and cancellation rights. 

The requirement to provide a long 

form error resolution and cancellation 

notice is adopted substantially as 

proposed in renumbered § 1005.31(b)(4). 

The final rule adds the requirement that 


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the notice must be provided promptly to 

the sender. The Bureau believes that 

adding a timing requirement to the 

provision will ensure that providers do 

not delay in providing the notice to a 

sender, and the requirement to provide 

notices promptly is consistent with 

other provisions in Regulation E. See, 

e.g., § 1005.11(d)(1). Therefore, 

§ 1005.31(b)(4) states that, upon the 

sender’s request, a remittance transfer 

provider must promptly provide to the 

sender a notice describing the sender’s 

error resolution and cancellation rights, 

using language set forth in Model Form 

A–36 of Appendix A to this part or 

substantially similar language. As 

discussed above with respect to 

§ 1005.31(b)(2)(iv), the Bureau is adding 

a requirement in § 1005.31(b)(4) to 

account for the alternative cancellation 

requirements in § 1005.36(c) for 

remittance transfers scheduled by the 

sender at least three business days 

before the date of the transfer, as 

discussed below. Therefore, 

§ 1005.31(b)(4) also provides that for 

any remittance transfer scheduled by 

the sender at least three business days 

before the date of the transfer, a 

description of the rights of the sender 

regarding cancellation must instead 

reflect the requirements of § 1005.36(c). 

31(c) Specific Format Requirements 

Proposed § 205.31(c) set forth specific 

format requirements for the written and 

electronic disclosures required by this 

section. Proposed § 205.31(c)(1) and (2) 

contained grouping and proximity 

requirements for certain disclosures 

required under proposed § 205.31. 

Proposed § 205.31(c)(3) set forth 

prominence and size requirements for 

disclosures required by subpart B. 

Proposed § 205.31(c)(4) contained 

segregation requirements for disclosures 

provided under subpart B, with certain 

specified exceptions. 

In the proposal, the Board recognized 

that the specific formatting 

requirements set forth in proposed 

§ 205.31(c) were more prescriptive than 

other disclosures required under 

Regulation E. The Board requested 

comment on whether certain 

requirements in proposed § 205.31(c) 

could be less prescriptive, while still 

ensuring that senders are provided with 

clear and conspicuous disclosures. The 

Board also solicited comment on how 

the formatting requirements in proposed 

§ 205.31 could be applied to 

transactions conducted via mobile 

application or text message. 

The Bureau received comments 

regarding each of the proposed format 

requirements, which are discussed in 

turn below. Additionally, one industry 

commenter suggested that the 

formatting requirements in the final rule 

should accommodate State law 

disclosures. The Bureau believes it is 

appropriate to establish formatting 

requirements tailored to the elements 

required to be disclosed under the 

statute. Providers can separately comply 

with each State’s formatting 

requirements, to the extent that they 

meet or exceed the requirements set 

forth in the final rule. The Bureau 

believes that the proposed formatting 

requirements will ensure that 

disclosures are clear and conspicuous as 

required under EFTA section 

919(a)(3)(A) and will thereby help 

senders understand the costs of 

remittance transactions. As discussed in 

the proposal, the formatting 

requirements demonstrate to senders the 

mathematical relationship between one 

line item and another, in part by 

presenting the required information in a 

logical sequence. Therefore, the Bureau 

is generally adopting the formatting 

requirements as proposed. 

Commenters also raised concerns 

regarding the proposed formatting 

requirements as applied to disclosures 

provided via mobile application or text 

message. Industry commenters argued 

that prescriptive formatting 

requirements conducive to paper 

disclosures may not easily apply to new 

methods of conducting remittance 

transfers, and that the proposed rule 

could make compliance difficult as new 

technologies arise. These commenters 

urged the Bureau to provide flexibility 

for formatting requirements for 

disclosures provided via mobile 

application or text message. These 

commenters noted that formatting may 

be constrained by data and character 

limits, and that a remittance transfer 

provider does not necessarily control 

formatting when disclosures are sent 

through these methods. 

Industry commenters also noted that 

senders using mobile applications or 

text messages could incur additional 

costs due to the formatting 

requirements. For example, additional 

data charges may apply for disclosures 

provided via mobile application or text 

message to accommodate formatting 

requirements. These charges could make 

senders reluctant to make transfers via 

mobile application or text message and, 

therefore, create a disincentive for 

providers to make remittance transfers 

available through these alternative 

methods. They argued that the provider 

should have the flexibility to provide 

disclosures using various methods— 

such as text message, mobile 

application, email, internet, or mail—as 

long as the sender is capable of 

receiving the disclosures. 

As discussed above in the 

supplementary information to 

§ 1005.31(a)(5), remittance transfer 

providers can provide oral pre-payment 

disclosures for transactions conducted 

by mobile application or text message. 

The Bureau does not believe senders 

would be less protected by receiving 

disclosures via mobile application or 

text message than if they received oral 

disclosures, even if the mobile 

applications and text messages are not 

subject to standard formatting 

requirements. 

Therefore, the Bureau is generally not 

requiring in the final rule that prepayment disclosures provided via 

mobile application or text message 

comply with the grouping, proximity, 

font size, and segregation requirements 

of the final rule. Though these 

disclosures are not subject to these 

formatting requirements in the final 

rule, the Bureau expects that providers 

will provide mobile application or text 

message disclosures in a logical 

sequence to demonstrate to senders the 

mathematical relationship between one 

line item and another in order to 

disclose the information clearly and 

conspicuously. Moreover, pre-payment 

disclosures provided via mobile 

application or text message must be 

provided in equal prominence to each 

other, as required in § 1005.31(c)(3), 

discussed below. 

31(c)(1) Grouping 

Proposed § 205.31(c)(1) provided that 

the information about the transfer 

amount, fees and taxes imposed by the 

provider, and total amount of 

transaction must be grouped together. 

The purpose of this grouping 

requirement was to make clear to the 

sender that the total amount charged is 

comprised of the transfer amount plus 

any transfer fees and taxes. Proposed 

§ 205.31(c)(1) also provided that the 

information about the transfer amount 

in the currency to be made available to 

the designated recipient, fees and taxes 

imposed by a person other than the 

provider, and amount received by the 

designated recipient must be grouped 

together. The purpose of this grouping 

requirement was to make clear to the 

sender how the total amount to be 

transferred to the designated recipient, 

in the currency to be made available to 

the designated recipient, would be 

reduced by fees or taxes charged by a 

person other than the remittance 

transfer provider. 

The Bureau did not receive comments 

on the proposed grouping requirements 

beyond the general comments about the 


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proposed formatting requirements, 

discussed above. Thus, the Bureau is 

adopting the proposed requirement 

substantially as proposed in 

renumbered § 1005.31(c)(1), with 

revisions to address the applicability of 

the grouping requirements to mobile 

applications and text messages. Section 

1005.31(c)(1) states that the information 

required by § 1005.31(b)(1)(i), (ii), and 

(iii) generally must be grouped together. 

The information required by 

§ 1005.31(b)(1)(v), (vi), and (vii) 

generally must be grouped together. 

Disclosures provided via mobile 

application or text message, to the 

extent permitted by § 1005.31(a)(5), 

need not be grouped together. 

Comment 31(c)(1)–1 is also adopted 

substantially as proposed. The comment 

clarifies that information is grouped 

together for purposes of subpart B if 

multiple disclosures are in close 

proximity to one another and a sender 

can reasonably calculate the total 

amount of the transaction, and the 

amount that will be received by the 

designated recipient. Proposed Model 

Forms A–30 through A–35 in Appendix 

A, discussed in more detail below, 

illustrate how information may be 

grouped to comply with the rule. The 

proposed comment also clarifies that a 

remittance transfer provider may group 

the information in another manner. For 

example, a provider could provide the 

grouped information as a horizontal, 

rather than a vertical, calculation. 

31(c)(2) Proximity 

Proposed § 205.31(c)(2) provided that 

the exchange rate must be disclosed in 

close proximity to the other disclosures 

on the pre-payment disclosure. The 

Board stated in the May 2011 Proposed 

Rule that disclosing the exchange rate in 

close proximity to both the calculations 

that demonstrate the total transaction 

amount, as well as the total amount the 

recipient would receive, would help a 

sender understand the effect of the 

exchange rate on the transaction. 

Proposed § 205.31(c)(2) also provided 

that error resolution and cancellation 

disclosures must be disclosed in close 

proximity to the other disclosures on 

the receipt. The Board determined in 

consumer testing that providing a brief 

statement regarding error resolution and 

cancellation rights located near the 

other disclosures effectively 

communicated these rights to a sender. 

Therefore, the Board provided that the 

error resolution and cancellation 

disclosures should be closely proximate 

to the other disclosures on the receipt to 

prevent such disclosures from being 

overlooked by a sender. 

The Bureau did not receive comment 

on the proposed proximity requirements 

beyond the general comments 

addressing the proposed formatting 

requirements discussed above. Thus, the 

Bureau is adopting the proposed 

requirement substantially as proposed 

in renumbered § 1005.31(c)(2), with 

revisions to address the applicability of 

the proximity requirements to mobile 

applications and text messages. Section 

1005.31(c)(2) states that the exchange 

rate disclosure required by 

§ 1005.31(b)(1)(iv) generally must be 

disclosed in close proximity to the other 

information required by § 1005.31(b)(1). 

The abbreviated statement about the 

sender’s error resolution and 

cancellation rights required by 

§ 1005.31(b)(2)(iv) generally must be 

disclosed in close proximity to the other 

information required by § 1005.31(b)(2). 

Disclosures provided orally or via 

mobile application or text message, to 

the extent permitted by § 1005.31(a)(5), 

need not comply with the proximity 

requirements of § 1005.31(c)(2). 

31(c)(3) Prominence and Size 

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

requirements regarding the prominence 

and size of the disclosures required 

under subpart B. The proposed rule 

provided that written and electronic 

disclosures required by subpart B must 

be made in a minimum eight-point font. 

The Board solicited comment on 

whether a minimum font size should be 

required and, if so, whether an eightpoint font size is appropriate. 

One industry commenter supported 

the eight-point font requirement. 

However, other industry commenters 

urged the Bureau to eliminate the eightpoint font requirement. These 

commenters argued that the font 

requirement would add unnecessary 

compliance costs that did not have a 

corresponding consumer benefit. 

Industry commenters argued that the 

font requirement may not create the 

desired consistency in disclosures, 

because, for example, fonts may display 

differently on different screens and 

printers. Rather, these commenters 

believed the Bureau should only require 

that the disclosures be subject to either 

a clear and conspicuous or clear and 

readily understandable standard. 

The Bureau believes that disclosures 

should be disclosed in at least an eightpoint font, as proposed. As discussed in 

the proposal, the disclosures that the 

Board developed for consumer testing 

used eight-point font, consistent with 

the font size typically used in register 

receipts. Participants in the Board’s 

consumer testing generally found that 

the disclosures were readable, and they 

were able to locate the different 

disclosure elements during testing. The 

Bureau agrees with the Board that 

disclosures provided in a smaller font 

could diminish the readability and 

noticeability of the disclosures. 

Therefore, the eight-point font 

requirement is generally retained in the 

final rule. However, given the particular 

concerns raised above with respect to 

mobile disclosures, the final rule does 

not apply the font requirement to 

disclosures made by mobile application 

or text message, to the extent permitted 

by § 1005.31(a)(5). 

Proposed § 205.31(c)(3) further 

provided that written disclosures 

required by subpart B must be on the 

front of the page on which the 

disclosure is printed. The proposed 

paragraph also provided that each of the 

written and electronic disclosures 

required under proposed § 205.31(b) 

must be in equal prominence to each 

other. One industry commenter asked 

the Bureau to clarify how written and 

electronic disclosures should be 

disclosed in equal prominence to each 

other. As discussed in the proposal, 

disclosures that must be equally 

prominent to each other should be 

displayed in the same font and type 

size. 

The Bureau is adopting the 

prominence and size requirement 

substantially as proposed in 

renumbered § 1005.31(c)(3), with 

revisions to address the applicability of 

the font size requirement to mobile 

applications and text messages and 

revisions to better clarify that only 

disclosures provided in writing or 

electronically must be provided in equal 

prominence to each other and in eightpoint font. Section 1005.31(c)(3) states 

that written disclosures required by 

subpart B must be provided on the front 

of the page on which the disclosure is 

printed. Disclosures required by subpart 

B that are provided in writing or 

electronically must be in a minimum 

eight-point font, except for disclosures 

provided via mobile application or text 

message to the extent permitted by 

§ 1005.31(a)(5). Disclosures required by 

§ 1005.31(b) that are provided in writing 

or electronically must be in equal 

prominence to each other. 

31(c)(4) Segregation 

Proposed § 205.31(c)(4) provided that 

written and electronic disclosures 

required by subpart B must be 

segregated from everything else and 

contain only information that is directly 

related to the disclosures required under 

subpart B. Proposed comment 31(c)(4)– 

1 clarified how a remittance transfer 

provider could segregate disclosures. 


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

information that would be considered 

directly related to the required 

disclosures, for purposes of determining 

what information must be segregated 

from the required disclosures. 

The Board proposed the segregation of 

required disclosures from other 

information to avoid overloading the 

sender with information that could 

distract from the required disclosures. 

In permitting directly related 

information to be included with the 

required disclosures, the Board 

recognized that certain information not 

required by the statute or regulation 

could be integral to the transaction. The 

Board stated that remittance transfer 

providers should be able to 

communicate this information, such as 

the confirmation code that a designated 

recipient must provide in order to 

receive the funds, to a sender. The 

Board requested comment on the 

proposed segregation requirement and 

whether additional information should 

be permitted to be included with the 

required segregated disclosures. 

Industry commenters requested 

further guidance on the segregation 

requirement, including clarification 

regarding how disclosures presented on 

a computer screen could be segregated, 

and whether disclosures would be 

considered segregated in a variety of 

mailing scenarios, including when 

disclosures are mailed on or with a 

periodic statement. The Bureau believes 

proposed comment 31(c)(4)–1 provides 

sufficient guidance to enable providers 

to determine whether the disclosures 

are segregated in a variety of scenarios. 

For example, the comment requires 

segregated disclosures to be set off from 

other information, such as disclosures 

required by states, but does not require 

the information to be displayed on a 

separate sheet of paper. The comment 

also explains that disclosures may be set 

off from other information on a notice 

by outlining them in a box or series of 

boxes, with bold print dividing lines or 

a different color background, or by using 

other means. A provider could apply 

this guidance to develop, for example, 

segregated disclosures set off in a box on 

a periodic statement or set off with a 

different color background on a 

computer screen. Therefore, the Bureau 

is finalizing comment 31(c)(4)–1 

substantially as proposed, but adds 

another example for clarity. 

Industry commenters also suggested 

that certain additional information 

should be deemed ‘‘directly related’’ to 

the required disclosures, such that it 

would not have to be segregated from 

the required disclosures. Suggested 

additions included information 

regarding the retrieval of funds, such as 

the number of days the funds will be 

available to the recipient before the 

funds are returned to the sender, and a 

statement that a provider makes money 

from foreign currency exchange. The 

Bureau agrees that this information is 

directly related to the required 

disclosures and need not be segregated 

from them. Therefore, the Bureau is 

adding these to the list of ‘‘directly 

related’’ items in comment 31(c)(4)–2. 

The Bureau is adopting the 

segregation requirement substantially as 

proposed in renumbered § 1005.31(c)(4), 

with revisions to address the 

applicability of the requirement to 

mobile applications and text messages 

and revisions to better clarify that only 

disclosures provided in writing or 

electronically must be segregated. 

Section 1005.31(c)(4) states that except 

for disclosures provided via mobile 

application or text message, to the 

extent permitted by § 1005.31(a)(5), 

disclosures required by subpart B that 

are provided in writing or electronically 

must be segregated from everything else 

and must contain only information that 

is directly related to the disclosures 

required under subpart B. Comment 

31(c)(4)–1 of the final rule clarifies that 

disclosures may be segregated from 

other information in a variety of ways. 

For example, the disclosures may 

appear on a separate sheet of paper or 

may be set off from other information on 

a notice by outlining them in a box or 

series of boxes, with bold print dividing 

lines or a different color background, or 

by using other means. 

Comment 31(c)(4)–2 in the final rule 

clarifies that, for purposes of 

§ 1005.31(c)(4), the following is directly 

related information: (i) The date and 

time of the transaction; (ii) the sender’s 

name and contact information; (iii) the 

location at which the designated 

recipient may pick up the funds; (iv) the 

confirmation or other identification 

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

an indication that a disclosure is or is 

not a receipt or other indicia of proof of 

payment; (vii) a designated area for 

signatures or initials; (viii) a statement 

that funds may be available sooner, as 

permitted by § 1005.31(b)(2)(ii); (ix) 

instructions regarding the retrieval of 

funds, such as the number of days the 

funds will be available to the recipient 

before they are returned to the sender; 

and (x) a statement that the provider 

makes money from foreign currency 

exchange. 

31(d) Estimates 

Proposed § 205.31(d) provided that 

estimated disclosures may be provided 

to the extent permitted by proposed 

§ 205.32. See proposed § 205.32, 

adopted as § 1005.32, below. The 

proposed rule provided that such 

disclosures must be described as 

estimates, using the term ‘‘Estimated,’’ 

or a substantially similar term, in close 

proximity to the estimated term or terms 

described. As discussed in the proposal, 

consumer testing participants generally 

understood that where the term 

‘‘estimated’’ was used in close 

proximity to the estimated term or 

terms, the actual amount could vary (for 

example, the amount of currency to be 

received could be higher or lower than 

the amount disclosed). Proposed 

comment 31(d)–1 provided examples of 

terms that may be used to indicate that 

a disclosed amount is estimated. For 

instance, a remittance transfer provider 

could describe an estimated disclosure 

as ‘‘Estimated Transfer Amount,’’ 

‘‘Other Estimated Fees and Taxes,’’ or 

‘‘Total to Recipient (Est.).’’ A Member of 

Congress and consumer group 

commenters agreed that the Bureau 

should require disclosures to be labeled 

as estimates when estimates are used. 

Therefore, proposed § 205.31(d) and 

proposed comment 31(d)–1 are adopted 

substantially as proposed in 

renumbered § 1005.31(d) and comment 

31(d)–1. 

31(e) Timing 

Proposed § 205.31(e) set forth the 

timing requirements for the disclosures 

required by proposed § 205.31. 

31(e)(1) Timing of Pre-Payment and 

Combined Disclosures 

Proposed § 205.31(e)(1) provided that 

a pre-payment disclosure required by 

§ 205.31(b)(1) or a combined disclosure 

provided under § 205.31(b)(3) must be 

provided to the sender when the sender 

requests the remittance transfer, but 

prior to payment for the remittance 

transfer. 

Consumer group commenters strongly 

supported requiring these disclosures to 

be provided before payment, stating that 

providing pre-payment disclosures was 

a centerpiece of the statute. One 

consumer group commenter stated that 

pre-payment disclosures were necessary 

to facilitate shopping. 

Several industry commenters, 

however, opposed the requirement to 

provide disclosures before payment. 

One industry trade association 

commenter argued that the disclosure 

would provide negligible benefits, citing 

the fact that some participants in the 

Board’s consumer testing stated that 

they did not want a disclosure prior to 

payment. One industry commenter 

suggested that the pre-payment 

disclosures would confuse or irritate 


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customers who would not understand 

why disclosure was being provided at 

that time. Another industry commenter 

stated that the pre-payment disclosures 

created needless compliance costs, 

which would be passed on to senders. 

As discussed above, some industry 

commenters urged that if pre-payment 

disclosures were required, that they be 

permitted to be disclosed orally or on a 

screen, even when the transaction is 

conducted in person, to reduce 

compliance costs and delays for the 

sender. 

A few industry commenters argued 

that the combined disclosure should be 

permitted to be provided after payment 

is made. One industry commenter noted 

that EFTA section 919(a)(5)(C) only 

requires combined disclosure to be 

accurate at the time payment is made. 

This commenter stated that providing a 

document similar to a receipt prior to 

payment is not possible because such a 

disclosure could not provide accurate 

information regarding the date and time 

of the transaction, the amount paid, and 

the transaction number, which are 

elements that help establish proof of 

payment. Therefore, this commenter 

argued that the rule should permit the 

combined disclosure to be provided 

after payment, if a pre-payment 

disclosure is provided orally or on a 

screen at the point-of-sale. This 

commenter maintained that allowing 

oral or electronic disclosures would be 

appropriate in the context of EFTA 

section 919(a)(5) authority to permit 

combined disclosures and in light of the 

Bureau’s duty to consider the final 

rule’s costs and benefits. At minimum, 

this commenter believed the Bureau 

should permit this method of disclosure 

for senders who have used the 

provider’s service in the past. 

Another industry commenter stated 

that it currently only had the capability 

of providing information to senders on 

a register receipt after payment. This 

commenter believed that requiring a 

combined disclosure to be provided 

prior to payment would require printing 

a pre-payment disclosure in the middle 

of a sales transaction. 

The Bureau recognizes the operational 

challenges associated with providing 

pre-payment and particularly combined 

disclosures to senders prior to payment. 

However, although current practice 

generally is to provide written 

disclosures after payment is made, the 

statute clearly requires certain 

disclosures to be provided prior to 

payment and other disclosures to be 

provided when payment is made for the 

remittance transfer. The Bureau also 

believes that the statute precludes 

combined disclosures from being 

provided to senders after payment or in 

a non-written format. EFTA section 

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

the combined disclosure be accurate at 

the time at which payment is made 

(emphasis added). Such a requirement 

would be superfluous if the combined 

disclosure could be provided after 

payment because a disclosure provided 

after payment must accurately reflect 

the terms of the completed transaction 

pursuant to EFTA section 919(a)(2)(B). 

Accordingly, the Bureau believes the 

statute requires both the pre-payment 

disclosure and the combined disclosure 

be given prior to payment. 

As discussed below in § 1005.36, 

special timing rules have been adopted 

for preauthorized remittance transfers to 

account for the particular challenges 

associated with providing disclosures 

for transfers that may occur far in the 

future. Therefore, proposed 

§ 205.31(e)(1) is adopted substantially as 

proposed in renumbered § 1005.31(e)(1), 

with modifications to reference new 

§ 1005.36. Section 1005.31(e)(1) states 

that except as provided in § 1005.36(a), 

a pre-payment disclosure required by 

§ 1005.31(b)(1) or a combined disclosure 

required by § 1005.31(b)(3) must be 

provided to the sender when the sender 

requests the remittance transfer, but 

prior to payment for the transfer. 

Proposed comment 31(e)–1 clarified 

when a sender has requested a 

remittance transfer, for purposes of 

determining when a pre-payment or 

combined disclosure must be provided. 

The proposed comment is adopted 

substantially as proposed, with a 

reference to the provisions for 

preauthorized remittance transfers in 

new § 1005.36. Comment 31(e)–1 states 

that, except as provided in § 1005.36(a), 

pre-payment and combined disclosures 

are required to be provided to the 

sender when the sender requests the 

remittance transfer, but prior to 

payment for the transfer. The comment 

clarifies that whether a consumer has 

requested a remittance transfer depends 

on the facts and circumstances. A 

sender that asks a provider to send a 

remittance transfer, and that provides 

transaction-specific information to the 

provider in order to send funds to a 

designated recipient, has requested a 

remittance transfer. For example, a 

sender who asks the provider to send 

money to a recipient in Mexico and 

provides the sender and recipient 

information to the provider has 

requested the remittance transfer 

provider to send a remittance transfer. 

In contrast, a consumer who solely 

inquires about that day’s rates and fees 

to send to Mexico has not requested the 

remittance transfer provider to send a 

remittance transfer. 

31(e)(2) Timing of Receipts 

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

that a receipt be provided to a sender at 

the time the sender makes payment in 

connection with the remittance transfer. 

Proposed § 205.31(e)(2) provided that a 

receipt must be provided to the sender 

when payment is made for the 

transaction. The Bureau did not receive 

comment on this proposed provision. 

Under the final rule, a receipt required 

to be provided by § 1005.31(b)(2) 

generally must be provided to the 

sender when payment is made for the 

remittance transfer, except for 

preauthorized remittance transfers as 

provided in § 1005.36(a). The Bureau 

notes that the final rule does not require 

the receipt to be provided at an exact 

moment when the sender, for example, 

hands cash or a credit card to an agent 

to pay for the transfer. Rather, the 

Bureau believes that payment for a 

remittance transfer is a process that may 

involve several steps. For example, 

payment for a transfer by credit card 

could involve a sender handing a credit 

card to an agent, the agent asking the 

sender for identification, the agent 

sending the credit card authorization 

request, the card authorization being 

approved, the agent requesting signature 

on a credit card receipt, and the sender 

signing the credit card receipt. 

Proposed comment 31(e)–2 provided 

examples of when a remittance transfer 

provider may provide the sender a 

receipt. The Bureau did not receive 

comment on the proposed comment, 

which is adopted substantially as 

proposed. Comment 31(e)–2 in the final 

rule, however, adds a reference to the 

special timing rules for preauthorized 

remittance transfers in § 1005.36. The 

comment also adds a clarification 

regarding when a payment is made for 

purposes of the final rule, including an 

example stating that, for purposes of 

subpart B, payment is made when a 

sender authorizes a payment. The 

Bureau believes that, for purposes of 

subpart B, payment is made when a 

sender authorizes payment because a 

receipt will be most useful to a sender 

at that time. Otherwise, if payment is 

considered to be made when the funds 

actually leave the sender’s account due 

to delays in processing a payment, a 

receipt may not be provided to a sender 

for a day or more. Furthermore, it is not 

clear how a sender’s cancellation right 

would operate in this scenario. For 

example, because a sender does not 

know when funds leave an account, a 

sender would be unable to know when 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6235 

the cancellation right would be 

triggered. 

Comment 31(e)–2 in the final rule 

states that except as provided in 

§ 1005.36(a), a receipt required by 

§ 1005.31(b)(2) must be provided to the 

sender when payment is made for the 

remittance transfer. For example, a 

remittance transfer provider could give 

the sender the disclosures after the 

sender pays for the remittance transfer 

in person, but before the sender leaves 

the counter. A provider could also give 

the sender the disclosures immediately 

before the sender pays for the 

transaction. For purposes of subpart B, 

payment is made, for example, when a 

sender provides cash to the remittance 

transfer provider or when payment is 

authorized. 

Proposed § 205.31(e)(2) further stated 

that if a transaction is conducted 

entirely by telephone, a written receipt 

may be mailed or delivered to the 

sender no later than one business day 

after the date on which payment is 

made for the remittance transfer. If a 

transaction is conducted entirely by 

telephone and involves the transfer of 

funds from the sender’s account held by 

the provider, the written receipt may be 

provided on or with the next regularly 

scheduled periodic statement. See EFTA 

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

circumstances, a provider conducting 

such a transfer from the sender’s 

account held by the provider is not 

required to provide a periodic statement 

under other laws. The Board believed 

that in such circumstances, it would be 

appropriate to permit the provider to 

provide a written receipt within a 

similar period of time as a periodic 

statement. Therefore, pursuant to EFTA 

section 904(c), the Board also proposed 

in § 205.31(e)(2) that the written receipt 

may be provided within 30 days after 

payment is made for the remittance 

transfer if a periodic statement is not 

required. Under the proposal, in order 

for the written receipt to be mailed or 

delivered to a sender conducting a 

transaction entirely by telephone at 

these later times, the remittance transfer 

provider was required to comply with 

the foreign language requirements of 

proposed § 205.31(g)(3). 

One industry commenter argued that 

the Bureau should include a timing 

exception in circumstances where a 

receipt is required to be provided to a 

sender shortly before a periodic 

statement is produced. This commenter 

stated that a remittance transfer 

provider may not be able to provide the 

required disclosures to a sender for a 

remittance transfer that occurs at the 

end of a billing cycle in time to include 

in the statement. The commenter 

suggested that in such circumstances, 

the Bureau should permit the receipt to 

be provided by the later of the next 

periodic statement date or 30 days after 

payment. The Bureau believes the final 

rule gives providers sufficient time to 

provide a receipt to a sender after a 

remittance transfer is sent; thus, no 

accommodation for transfers made at 

the end of a billing cycle is included in 

§ 1005.31(e)(2). Because periodic 

statements must include certain 

information that occurs during a cycle, 

see § 1005.9(b), the Bureau expects that, 

for purposes unrelated to this rule, 

providers already delay sending a 

periodic statement for a short time after 

a cycle ends to ensure that all activity 

occurring within a cycle is included in 

the appropriate statement. 

Accordingly, to effectuate the 

purposes of the EFTA and to facilitate 

compliance, the Bureau believes it is 

necessary and proper to use its authority 

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

adopt the provisions regarding mailing 

a receipt in proposed § 205.31(e)(2) as 

§ 1005.31(e)(2) with revisions. Section 

1005.31(e)(2) in the final rule eliminates 

the requirement to comply with 

proposed § 205.31(g)(3), because the 

provision has been eliminated in the 

final rule, as discussed in further detail 

below. Section 1005.31(e)(2) is also 

revised to state that if a transaction is 

conducted entirely by telephone and 

involves the transfer of funds from the 

sender’s account held by the provider, 

the receipt may be provided within 30 

days after payment is made for the 

remittance transfer if a periodic 

statement is not provided, rather than if 

a periodic statement is not required. In 

some circumstances, a provider may 

provide a sender with a periodic 

statement even if one is not required to 

be provided. In these circumstances, the 

Bureau believes a provider should 

instead disclose the receipt on or with 

the periodic statement and that the 

provision allowing a provider to give a 

receipt 30 days after payment is made 

should not apply. 

Section 1005.31(e)(2) is further 

revised to account for circumstances in 

which a provider discloses the 

statement about the rights of the sender 

regarding cancellation required by 

§ 1005.31(b)(2)(iv), in order to use the 

telephone exceptions pursuant to 

§ 1005.31(a)(3)(iii) or (a)(5)(iii). In those 

circumstances, the Bureau does not 

believe a provider should be required to 

repeat the statement about the rights of 

the sender regarding cancellation on a 

receipt when it has already been 

disclosed to the sender. Thus, pursuant 

to the Bureau’s authority under EFTA 

section 919(d)(3), § 1005.31(e)(2) states 

that the statement about the rights of the 

sender regarding cancellation required 

by § 1005.31(b)(2)(iv) may, but need not, 

be disclosed pursuant to the timing 

requirements of § 1005.31(e)(2) if a 

provider discloses this information 

pursuant to § 1005.31(a)(3)(iii) or 

(a)(5)(iii). The Bureau also adds 

comment 31(e)(2)–5 to clarify that even 

though the statement about the rights of 

the sender regarding cancellation need 

not be disclosed pursuant to the timing 

requirements of § 1005.31(e)(2), the 

statement about the rights of the sender 

regarding error resolution required by 

§ 1005.31(b)(2)(iv) must be disclosed 

pursuant to the timing requirements of 

§ 1005.31(e)(2). 

Proposed comment 31(e)–3 provided 

further clarification regarding 

circumstances where a sender transfers 

funds from his or her account, as 

defined by § 205.2(b) (currently 

§ 1005.2(b)), that is held by the 

remittance transfer provider. The 

Bureau did not receive comment on 

proposed comment 31(e)–3, which is 

adopted substantially as proposed. 

The Bureau is providing further 

guidance in the final rule regarding the 

timing of receipts for remittance 

transfers made via mobile application or 

text message. As discussed above, 

because remittance transfers sent via 

mobile application or text message are 

conducted entirely by mobile telephone, 

the Bureau believes that EFTA section 

919(a)(5)(A) permits pre-payment 

disclosures to be provided orally for 

such transfers. Similarly, the Bureau 

believes that that EFTA section 

919(a)(5)(B) permits receipts for 

transfers sent entirely by telephone via 

mobile application or text message to be 

provided in accordance with the 

mailing rules provided for transactions 

conducted entirely by telephone in 

§ 1005.31(e)(2) or § 1005.36(a). 

Therefore, the final rule adds a new 

comment 31(e)–4 to clarify that if a 

transaction is conducted entirely by 

telephone via mobile application or text 

message, a receipt required by 

§ 1005.31(b)(2) may be mailed or 

delivered to the sender pursuant to the 

timing requirements in § 1005.31(e)(2) 

or § 1005.36(a). For example, if a sender 

conducts a transfer entirely by 

telephone via mobile application, a 

remittance transfer provider may mail or 

deliver the disclosures to a sender 

pursuant to the timing requirements in 

§ 1005.31(e)(2) or § 1005.36(a). 

Finally, several industry commenters 

requested that the Bureau specifically 

permit remittance transfer providers to 

provide receipts for transactions 

conducted via mobile application or text 

message by email or through a 


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6236 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

provider’s Web site. The Bureau notes 

that written receipts provided in 

accordance with § 1005.31(e)(2) or 

§ 1005.36(a) may be provided 

electronically, subject to compliance 

with the consumer consent and other 

applicable provisions of the E-Sign Act. 

See comment 31(a)(2)–1. 

31(f) Accurate When Payment Is Made 

Proposed § 205.31(f) provided that the 

disclosures required by proposed 

§ 205.31(b) must be accurate when a 

sender pays for the remittance transfer, 

except when estimates are permitted by 

proposed § 205.32. Proposed comment 

31(f)–1 clarified that a remittance 

transfer provider did not have to 

guarantee the terms of the remittance 

transfer in the disclosures required by 

§ 205.31(b) for any specific period of 

time. However, if any of the disclosures 

required by proposed § 205.31(b) are not 

accurate when a sender pays for the 

remittance transfer, a provider would be 

required to give new disclosures before 

receiving payment for the remittance 

transfer. For example, a sender at a 

retail store may be provided a prepayment disclosure under proposed 

§ 205.31(b)(1) at a customer service 

desk, but the sender may decide to leave 

the desk to go shopping. Upon the 

sender’s return to the customer service 

desk an hour later, the sender would 

have to be provided a new pre-payment 

disclosure if any of the information had 

changed. However, the sender would 

not need to be provided a new 

disclosure if the information had not 

changed. 

Consumer group commenters 

supported the requirement that 

disclosures must be accurate when 

payment is made. An industry trade 

association commenter asked the 

Bureau to permit remittance transfer 

providers to include a statement in the 

disclosures clarifying that changes to 

the disclosures may occur between the 

time of payment and the time a 

transaction clears. However, the Bureau 

notes that under the proposed rule, only 

disclosures provided before payment is 

made would not be guaranteed and thus 

subject to change. Disclosures provided 

on receipts generally would be 

guaranteed, and thus not subject to 

change, except where estimates are 

permitted. 

Proposed § 205.31(f) is adopted 

substantially as proposed in 

renumbered § 1005.31(f). The final rule, 

however, provides that the requirements 

of § 1005.31(f) and comment 31(f)–1 do 

not apply to preauthorized remittance 

transfers, which are subject to separate 

accuracy requirements in § 1005.36(a). 

31(g) Foreign Language Disclosures 

EFTA section 919(b) provides that 

disclosures required under EFTA 

section 919 must be made in English 

and in each of the foreign languages 

principally used by the remittance 

transfer provider, or any of its agents, to 

advertise, solicit, or market, either orally 

or in writing, at that office. The Board 

proposed § 205.31(g)(1) to implement 

EFTA section 919(b) for written or 

electronic disclosures generally, with 

some modifications as discussed in the 

May 2011 Proposed Rule. In addition, 

the Board proposed § 205.31(g)(2) and 

(3) to exempt from the general foreign 

language disclosure requirements oral 

disclosures and written receipts for 

telephone transactions. The Bureau is 

adopting § 205.31(g) in renumbered 

§ 1005.31(g) generally as proposed with 

some changes in response to suggestions 

from commenters, as discussed in detail 

below. 

31(g)(1) General 

Proposed § 205.31(g)(1) provided that 

disclosures required under subpart B, 

other than oral disclosures and written 

receipts for telephone transactions, must 

be made in English and in each of the 

foreign languages principally used by 

the remittance transfer provider to 

advertise, solicit, or market remittance 

transfer services, either orally, in 

writing, or electronically, at that office. 

Alternatively, proposed § 205.31(g)(1) 

provided that these disclosures may be 

made in English, and, if applicable, in 

the foreign language primarily used by 

the sender with the remittance transfer 

provider to conduct the transaction (or 

for written or electronic disclosures 

made pursuant to proposed § 205.33, in 

the foreign language primarily used by 

the sender with the remittance transfer 

provider to assert the error), provided 

that such foreign language is principally 

used by the remittance transfer provider 

to advertise, solicit, or market 

remittance transfer services, either 

orally, in writing, or electronically, at 

that office. 

As discussed in the May 2011 

Proposed Rule, proposed § 205.31(g)(1) 

contained certain exceptions and 

clarifications to the requirements of 

EFTA section 919(b). Specifically, the 

Board proposed: (i) To apply the 

provisions only to written or electronic 

disclosures and address oral disclosures 

separately in proposed § 205.31(g)(2); 

(ii) to simplify the statutory language in 

EFTA section 919(b) by removing the 

term ‘‘or its agents;’’ (iii) to include 

electronic advertising, soliciting or 

marketing as a trigger to the foreign 

language disclosure requirements, in 

addition to oral and written 

advertisements, solicitations, or 

marketing; (iv) to limit the trigger to 

foreign language advertisements, 

solicitations, or marketing of remittance 

transfer services, and to exclude from 

the trigger foreign language 

advertisements, solicitations, or 

marketing of other products or services; 

and (v) to permit, under its EFTA 

section 904(c) authority, a remittance 

transfer provider to fulfill its obligations 

by providing the sender with 

disclosures in English and, if applicable, 

the one triggered foreign language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction or assert an error in lieu 

of providing disclosures in each of the 

triggered foreign languages. 

Commenters did not object to these 

specific proposed modifications. 

However, several industry commenters 

stated that the foreign language 

disclosure requirements generally 

would provide a disincentive for 

remittance transfer providers to provide 

a wide range of foreign language 

services to customers. Some of these 

commenters suggested that if remittance 

transfer providers were to offer fewer 

foreign language services, this would 

drive some customers to use illicit 

operators who provide the foreignlanguage services discontinued by 

legitimate remittance transfer providers. 

Another commenter suggested that the 

disclosures should only be provided in 

English because the foreign language 

requirement would impose costs that 

would be passed on to consumers who 

might not derive any benefit from such 

services. 

Consumer group commenters and a 

member of Congress, however, thought 

the rule should ensure that non- and 

limited-English speaking consumers 

have access to meaningful remittance 

transfer disclosures. The Congressional 

commenter also agreed with the Board’s 

proposal to extend the advertising, 

soliciting, or marketing trigger to 

electronic advertisements, solicitations, 

and marketing. 

EFTA section 919(b) requires 

disclosures to be provided in certain 

foreign languages, and the Bureau 

believes the Board’s proposed 

modifications to the statutory 

requirements alleviates burden on 

remittance transfer providers. The 

Bureau believes that proposed 

§ 205.31(g)(1) reflects a proper balancing 

of interests in providing non- and 

limited-English speaking consumers 

with disclosures in a language with 

which they are familiar with the burden 

on remittance transfer providers of 

providing multilingual disclosures in 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6237 

77Regulation E contains some guidance on 

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

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

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

requirements pertaining to gift cards. See comments 

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

that guidance focuses on a narrow set of 

circumstances and does not address more broadly 

what actions generally constitute advertising, 

soliciting, or marketing. 

implementing EFTA section 919(b). The 

statute and the implementing regulation 

seek to ensure that if remittance transfer 

providers make a concerted effort to 

reach out to potential remittance 

transfer customers through 

advertisements, solicitations, and 

marketing in a foreign language in a 

particular office, then such providers 

should also be required to provide 

important disclosures in that language 

when such customers come to that 

office to purchase remittance transfer 

services from that provider or assert an 

error. 

Furthermore, the Bureau agrees with 

the Board’s proposed modifications and 

clarifications to the statutory language 

for the reasons discussed in the May 

2011 Proposed Rule, and commenters 

did not object to such modifications and 

clarifications. Therefore, to effectuate 

the purposes of the EFTA and facilitate 

compliance, the Bureau believes it is 

necessary and proper to use its authority 

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

adopt proposed § 205.31(g)(1) in 

renumbered § 1005.31(g)(1), with the 

removal of a reference to proposed 

§ 205.31(g)(3) regarding written receipts 

for telephone transactions, which is 

further discussed below, and other 

minor technical and clarifying 

amendments. Most notably, the Bureau 

is changing the references to ‘‘that 

office’’ in the proposed rule to ‘‘the 

office in which a sender conducts a 

transaction or asserts an error’’ for 

clarity. 

Principally Used 

Proposed comment 31(g)(1)–1 

clarified when a foreign language is 

principally used. As the Board stated in 

the May 2011 Proposed Rule, the statute 

indicates that more than one foreign 

language may be principally used. 

Consequently, the Board’s interpretation 

of the term ‘‘principally used’’ was not 

limited to the one foreign language used 

most frequently by the remittance 

transfer provider. Instead, proposed 

comment 31(g)(1)–1 adopted a factsand-circumstances approach to 

determining when a foreign language is 

principally used. Under proposed 

comment 31(g)(1)–1, factors 

contributing to whether a foreign 

language is principally used would 

include: (i) The frequency with which 

the remittance transfer provider 

advertises, solicits, or markets 

remittance transfers in a foreign 

language at a particular office; (ii) the 

prominence of such advertising, 

soliciting, or marketing in that language 

at that office; and (iii) the specific 

foreign language terms used to 

advertise, solicit, or market remittance 

transfer services at that office. Proposed 

comment 31(g)(1)–1 also included 

examples to illustrate when a foreign 

language is principally used and when 

there is incidental use of the language. 

As discussed in the May 2011 Proposed 

Rule, the Board also considered an 

objective standard based on whether a 

foreign language meets a certain 

percentage threshold of a remittance 

transfer provider’s advertisements at a 

particular office. However, the Board 

rejected such a standard based on the 

fact that the standard may be arbitrary, 

may be difficult to administer, and may 

inappropriately exclude instances 

where a foreign language is principally 

used to advertise, solicit or market 

remittance transfers, even if the number 

of advertisements in the foreign 

language is nominally low. 

Some industry commenters suggested 

that there be further clarification on the 

term ‘‘principally used,’’ but did not 

specifically state what kind of guidance 

would be helpful. A consumer group 

commenter agreed with the proposed 

facts-and-circumstances approach for 

determining foreign languages 

principally used in advertising, 

soliciting, or marketing remittance 

transfer services. A member of Congress 

agreed with the Board’s interpretation 

that the statutory provision 

contemplated that more than one 

foreign language could be principally 

used. 

The Bureau agrees with the Board’s 

reasoning in proposing comment 

31(g)(1)–1. Because the Bureau believes 

the particular facts and circumstances 

surrounding the use of a foreign 

language to advertise, solicit, or market 

remittance transfers will determine 

whether a foreign language is 

‘‘principally used’’ to advertise, solicit, 

or market at a particular office, the 

Bureau does not believe further general 

statements would be helpful. However, 

the Bureau is amending one of the 

illustrative examples in comment 

31(g)(1)–1 to provide a more clear 

example of when a remittance transfer 

provider would be considered to be 

principally using a foreign language to 

advertise, solicit, or market remittance 

transfers at an office. 

Advertise, Solicit, or Market 

Neither the EFTA nor Regulation E 

defines ‘‘advertising,’’ ‘‘soliciting,’’ or 

‘‘marketing.’’ 77 However, the general 

concept of advertising, soliciting, or 

marketing is explained in other 

regulations administered by the Bureau. 

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

1026.2(a)(2) and associated 

commentary; Regulation DD, 12 CFR 

1030.2(b) and 1030.11(b) and associated 

commentary. 

The Board proposed comment 

31(g)(1)–2 to provide positive and 

negative examples of advertising, 

soliciting, or marketing in a foreign 

language. These examples were based 

on examples from the commentary to 

other regulations (specifically, 

renumbered §§ 1026.2(a)(2) and 

1030.2(b)) regarding the definition of 

‘‘advertisement,’’ as well as examples 

related to the promotion of overdrafts 

under § 1030.11(b). Some industry 

commenters asked whether the terms 

‘‘market’’ and ‘‘solicit’’ mean something 

different than ‘‘advertise’’ and requested 

definitions for ‘‘market’’ or ‘‘solicit’’ if 

they are meant to have different 

meanings. The Bureau believes, that for 

purposes of subpart B of Regulation E, 

the terms ‘‘advertise,’’ ‘‘solicit’’ and 

‘‘market’’ have the same general 

meaning, and comment 31(g)(1)–2 is 

adopted substantially as proposed. 

At the Office 

Under EFTA section 919(b) and 

proposed § 205.31(g)(1), foreign 

language disclosures would be required 

when the foreign language is principally 

used to advertise, solicit, or market ‘‘at 

that office.’’ As discussed above, the 

Bureau is changing the reference in 

§ 1005.31(g)(1) from ‘‘that office’’ to ‘‘the 

office in which a sender conducts a 

transaction or asserts an error’’ for 

clarity in the final rule. The Board 

proposed comment 31(g)(1)–3 to clarify 

the meaning of ‘‘office.’’ As discussed in 

the May 2011 Proposed Rule, proposed 

31(g)(1)–3 reflected the Board’s belief 

that an office includes both physical 

and non-physical locations where 

remittance transfer services are offered 

to consumers, including any telephone 

number or Web site through which a 

consumer can complete a transaction or 

assert an error. The Board further noted 

that a telephone number or Web site 

that provides general information about 

the remittance transfer provider, but 

through which a consumer does not 

have the ability to complete a 

transaction or assert an error, is not an 

office. Proposed comment 31(g)(1)–3 

also clarified that a location need not 

exclusively offer remittance transfer 

services in order to be considered an 


srobinson on DSK4SPTVN1PROD with RULES2
6238 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

office for purposes of § 1005.31(g)(1) 

(proposed as § 205.31(g)(1)), and 

included an example to illustrate this 

point. 

Some industry commenters requested 

clarification on whether a Web site 

targeted to consumers outside of the 

United States could be an ‘‘office’’ for 

purposes of the foreign language 

disclosure requirements. In response, 

the Bureau is revising comment 

31(g)(1)–3 to clarify that because a 

consumer must be located in a State to 

be considered a ‘‘sender’’ under 

§ 1005.30(g), a Web site is not an 

‘‘office,’’ even if the Web site can be 

accessed by consumers that are located 

in the United States, unless a sender 

may conduct a remittance transfer on 

the Web site or may assert an error for 

a remittance transfer on the Web site. 

Therefore, a Web site that is targeted to 

people outside of the United States will 

not be deemed to be an ‘‘office’’ for 

purposes of § 1005.31(g) so long as 

senders cannot conduct a remittance 

transfer on the Web site or assert an 

error for a remittance transfer on the 

Web site. 

The Board also proposed comment 

31(g)(1)–4 to provide guidance on the 

phrase ‘‘at that office.’’ Proposed 

comment 31(g)(1)–4 stated that 

advertisements, solicitations, or 

marketing posted, provided, or made at 

a physical office, on a Web site of a 

remittance transfer provider, or during a 

telephone call with the remittance 

transfer provider would constitute 

advertising, soliciting, or marketing at 

an office of a remittance transfer 

provider. The proposed comment also 

clarified that for error resolution 

disclosures, the relevant office would be 

the office in which the sender first 

asserts the error and not the office 

where the remittance transfer was 

conducted. 

One industry commenter requested 

clarification on a number of situations 

where the remittance transfer provider 

may be engaging in general advertising, 

marketing, or soliciting that is not 

intended to be made at a particular 

office, but due to the nature of such 

advertising, marketing, or soliciting, it 

happens to occur at a particular office. 

The Bureau agrees that such a 

clarification is appropriate and has 

revised comment 31(g)(1)–4 to state that 

an advertisement, solicitation, or 

marketing that is considered to be made 

at an office does not include general 

advertisements, solicitations, or 

marketing that are not intended to be 

made at a particular office. The 

proposed comment includes an example 

to illustrate this concept. Specifically, if 

an advertisement for remittance 

transfers in Chinese appears in a 

Chinese newspaper that is being 

distributed at a grocery store in which 

the agent of a remittance transfer 

provider is located, such advertisement 

would not be considered to be made at 

that office. 

The Bureau is also amending 

comment 31(g)(1)–4 to provide that 

advertisements, soliciting, or marketing 

posted, provided, or made via mobile 

application or text message would also 

be considered advertising, soliciting, or 

marketing at an office of a remittance 

transfer provider. The amendment is 

consistent with the Bureau’s other 

revisions in the final rule clarifying that 

transfers through mobile application or 

text message are considered to be 

transfers conducted by telephone. See 

§ 1005.31(a)(5). The Bureau is also 

making other minor amendments to 

comment 31(g)(1)–4 for additional 

clarity, including changing ‘‘that office’’ 

to ‘‘the office in which a sender 

conducts a transaction or asserts an 

error’’ to be consistent with the change 

the Bureau is adopting in 

§ 1005.31(g)(1). Based on this change, 

comment 31(g)(1)–4 also contains a 

clarification that for disclosures 

required under § 1005.31, the relevant 

office would be the office in which the 

sender conducts the transaction. 

31(g)(2) Oral, Mobile Application or 

Text Message Disclosures 

In the May 2011 Proposed Rule, the 

Board proposed to use its authority 

under EFTA section 904(c) to exempt 

oral disclosures from the foreign 

language requirement under EFTA 

section 919(b). In proposed 

§ 205.31(g)(2), the Board proposed to 

use its authority under EFTA section 

919(a)(5)(A) to permit oral disclosures 

for transactions conducted entirety by 

telephone, subject to the requirement 

that they be made in the language 

primarily used by the sender with the 

remittance transfer provider to conduct 

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

also provided that disclosures permitted 

to be provided orally under proposed 

§ 205.31(a)(4) for error resolution 

purposes must be made in the language 

primarily used by the sender with the 

remittance transfer provider to assert the 

error. 

Some industry commenters thought 

that the rule should not require 

disclosures in any foreign language that 

is not principally used to advertise, 

solicit, or market remittance transfers. 

These commenters suggested that such 

a requirement could hurt consumers by 

reducing the number of languages that 

a remittance transfer provider would be 

willing to use to conduct a transaction. 

However, as the Board explained in 

the May 2011 Proposed Rule, if a foreign 

language must be principally used by 

the remittance transfer provider to 

advertise, solicit, or market remittance 

transfers in order to trigger the foreign 

language requirement for oral 

disclosures, a sender conducting a 

transaction or asserting an error in a 

foreign language on the telephone that 

did not meet the foreign language 

advertising trigger may only receive 

required oral disclosures in English. 

Consequently, if the remittance transfer 

provider conducted the actual 

transaction or communicated with the 

sender regarding the alleged error in a 

foreign language, a remittance transfer 

provider could then switch to English to 

orally disclose the required information 

under such a rule. The Bureau believes 

that senders would benefit from having 

the required oral disclosures provided 

in the same language primarily used by 

the sender with the remittance transfer 

provider to conduct the transaction or 

assert the error, regardless of whether 

the language meets the foreign language 

advertising trigger. Failure to include 

this modification from the general 

foreign language requirement for oral 

disclosures could lead to consumers not 

understanding the required disclosures, 

which would be contrary to the goals 

and purposes of the statute. 

Furthermore, the Bureau agrees with 

the Board’s reasoning in the May 2011 

Proposed Rule that disclosures provided 

orally under § 1005.31(a)(3) and (4) 

should be provided only in the language 

primarily used to conduct the 

transaction or assert the error. 

Otherwise, under EFTA section 919(b), 

a sender conducting a telephone 

transaction orally or receiving the 

results of an error investigation orally 

could be given disclosures in English 

and in every foreign language triggered 

by the regulation, which would likely 

lead to consumer confusion. While the 

Bureau recognizes that this rule might 

reduce the languages in which a 

remittance transfer provider would be 

willing to conduct a transaction, the 

Bureau believes that applying the 

general foreign language disclosure rule 

to oral disclosures would be harmful to 

consumers for the reasons set forth 

above. 

Moreover, as discussed above, the 

Bureau is adopting § 1005.31(a)(5) to 

permit disclosures to be provided orally 

or via mobile application or text 

message for transactions conducted 

entirely by telephone via mobile 

application or text message. Therefore, 

to effectuate the purposes of the EFTA 

and facilitate compliance, the Bureau 

believes it is necessary and proper to 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6239 

use its authority under EFTA sections 

904(a) and (c) to adopt proposed 

§ 205.31(g)(2) in renumbered 

§ 1005.31(g)(2) with amendments to 

include a reference to transactions 

conducted entirely by telephone via 

mobile application or text message and 

other minor, non-substantive 

amendments. 

Written Receipt for Telephone 

Transactions 

The Board also proposed 

§ 205.31(g)(3), which provided that 

written receipts for transactions 

conducted entirely by telephone must 

be made in English and, if applicable, in 

the foreign language primarily used by 

the sender with the remittance transfer 

provider to conduct the transaction, 

regardless of whether such foreign 

language is primarily used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfers. The Board, however, 

requested comment on whether the 

general rule proposed in § 205.31(g)(1) 

(adopted as § 1005.31(g)(1) above) 

should apply to the written receipt 

provided for transactions conducted 

entirely by telephone. Adopting the 

general rule proposed in § 205.31(g)(1) 

for written receipts provided for 

transactions conducted entirely by 

telephone would mean that a remittance 

transfer provider would not be obligated 

to provide the written receipt in a 

foreign language, even if such foreign 

language was used to conduct the 

telephone transaction, unless the foreign 

language was principally used to 

advertise, solicit, or market remittance 

transfers during the telephone call. 

As noted above, some industry 

commenters thought that the rule 

should not require disclosures in any 

foreign language that is not principally 

used to advertise, solicit, or market 

remittance transfers because this might 

cause remittance transfer providers to 

reduce the number of languages they 

would be willing to use to conduct a 

remittance transfer. Another industry 

commenter stated that in its experience, 

consumers can understand written 

English even though they may prefer to 

conduct a transaction orally in their 

native language for the fluency, ease, 

and speed at which the transaction may 

be conducted when speaking in one’s 

native language. 

The Bureau believes that applying the 

general rule under § 1005.31(g)(1) to 

written receipts provided to senders 

after payment would not cause the same 

type of consumer confusion as it would 

for pre-payment disclosures provided 

orally in transactions conducted entirely 

by telephone. Although some senders 

may not have enough familiarity with 

English to feel comfortable speaking 

with the remittance transfer provider in 

English, the same pressure to 

comprehend and respond quickly does 

not exist with written disclosures. 

Unlike with oral disclosures, senders 

have sufficient time to review written 

disclosures and, if necessary, find 

resources to help understand the 

disclosure. 

Furthermore, the Bureau notes that in 

the Board’s outreach with industry, 

remittance transfer providers generally 

stated that providing written disclosures 

in a foreign language can be more costly 

and burdensome than providing oral 

disclosures in a foreign language. The 

Bureau also notes that a remittance 

transfer provider may have employees 

or agents that happen to speak a certain 

foreign language for which the provider 

does not have written disclosures. The 

Bureau would not want providers to 

discourage such employees or agents 

from using their foreign language skills 

to help senders with their remittance 

transfer transactions in order to avoid 

having to provide written disclosures in 

the language spoken by the employee or 

agent. In order to minimize the potential 

unintended consequence of having 

remittance transfer providers reduce the 

number of foreign languages they may 

offer for telephone transactions, the 

Bureau is not adopting proposed 

§ 205.31(g)(3). Therefore, written 

receipts required to be provided to the 

sender after payment for transactions 

conducted entirely by telephone are 

subject to the general rule under 

§ 1005.31(g)(1). 

General Clarifications 

The Board also proposed additional 

commentary in the May 2011 Proposed 

Rule to provide general guidance on 

issues that affect each of the subsections 

of proposed § 205.31(g) (adopted as 

§ 1005.31(g)) discussed above. EFTA 

section 919(b) does not limit the number 

of languages that may be used on a 

single disclosure. However, proposed 

comment 31(g)–1 suggested that a single 

written or electronic document 

containing more than three languages is 

not likely to be helpful to a consumer. 

Since the proposed commentary was not 

a strict limit, the Board solicited 

comment on whether the regulation 

should strictly limit the number of 

languages that may be contained in a 

single written or electronic disclosure. 

The Board also sought comment on 

whether three languages is an 

appropriate suggested limit to the 

number of languages in a single written 

or electronic document. 

One industry commenter suggested 

that the rule cap the number of 

languages a remittance transfer provider 

would be required to disclose to three 

languages. The commenter also stated 

that requiring English, Spanish, and 

French would cover the vast majority of 

the languages used in transfers they 

send from the United States. This 

commenter also noted that other 

regulators that have required foreign 

language disclosures have typically 

limited the languages that must be 

disclosed to either English and Spanish, 

or a small subset of languages such as 

Spanish, Chinese, Tagalog, Vietnamese, 

and Korean. A consumer group 

commenter recommended that rather 

than adopting a ceiling on the number 

of languages that may appear on a 

disclosure, the Bureau should create 

guidelines that ensure disclosures with 

multiple foreign languages are easy to 

understand. 

The Bureau does not believe that 

limiting the foreign languages that may 

be used by a remittance transfer 

provider best effectuates the goals of the 

statute. In the Bureau’s view, if a 

remittance transfer provider principally 

uses a foreign language to advertise, 

solicit, or market remittance transfers at 

an office, the remittance transfer 

provider is deliberately reaching out to 

consumers speaking that foreign 

language, and the required disclosures 

should be provided in that foreign 

language, regardless of whether it is a 

language that is commonly used for 

remittance transfers originating in the 

United States. Furthermore, while too 

many languages on a single written 

document may diminish a consumer’s 

ability to read and understand the 

disclosures, the Bureau believes that 

remittance transfer providers may find 

ways to present the information in a 

number of foreign languages that are 

clear and conspicuous to senders, and 

that imposing a definitive limit on the 

number of languages that may appear on 

a single disclosure may be too 

inflexible. Moreover, the Bureau 

believes that the formatting 

requirements in § 1005.31(c), as 

discussed above, may help to ensure 

that senders can find and understand 

the information that is most important 

to them with respect to the remittance 

transfer. The Bureau is amending 

comment 31(g)–1 to note that 

disclosures must be clear and 

conspicuous pursuant to § 1005.31(a)(1) 

without suggesting a specific limit on 

the number of languages in a single 

disclosure. 

Proposed comment 31(g)–1 also 

clarified that the remittance transfer 

provider may provide disclosures in a 


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6240 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

78As discussed below, the Board performed an 

analysis in the proposed rule consistent with EFTA 

section 904(a)(2), as it existed prior to any 

amendments in the Dodd-Frank Act. Section 

904(a)(2), however, did not apply and was not 

amended by the Dodd-Frank Act to apply to the 

Bureau. Regardless, the Board’s analysis from the 

proposal is unchanged, and the Bureau concurs 

with the Board’s analysis. 

79A complete discussion of the Board’s findings 

is available at 76 FR at 29924–29927. 

single document with both languages or 

in two separate documents with one 

document in English and the other 

document in the applicable foreign 

language. The Board also proposed 

several examples in comment 31(g)–1 to 

illustrate the application of this concept. 

Some industry commenters thought 

that senders should be able to designate 

the language in which they prefer to 

receive disclosures, provided it is a 

language that is principally used by the 

remittance transfer provider to 

advertise, solicit, or market remittance 

transfers, instead of providing 

disclosures in both English and the 

applicable foreign language. The Bureau 

notes that EFTA section 919(b) requires 

disclosures to be provided in English 

and in each of the foreign languages 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market at that office. This means that 

regardless of which office a sender 

chooses to conduct a remittance 

transfer, he or she will always obtain 

written or electronic disclosures in 

English, even if the disclosure in a 

foreign language is not consistent among 

different offices because such disclosure 

will depend on whether the foreign 

language meets the foreign language 

disclosure trigger at that office. The 

Bureau believes that always disclosing 

in English is important to allow senders 

to compare disclosures received at 

different provider locations and for 

different providers. Therefore, the final 

rule requires remittance transfer 

providers to provide disclosures in 

English in all cases. This is fully 

consistent with EFTA section 919(b). 

Comment 31(g)–1 is adopted as 

proposed with some technical and 

clarifying amendments, including to 

remove references to § 205.31(g)(3), 

consistent with the Bureau’s decision 

regarding written receipts for telephone 

transactions, as discussed above. 

The Board also proposed comment 

31(g)–2 to clarify when a language is 

primarily used by the sender with the 

remittance transfer provider to conduct 

a transaction and assert an error. A 

remittance transfer provider must 

determine the language that is primarily 

used by the sender with the remittance 

transfer provider to conduct a 

transaction or assert an error if the 

provider chooses to provide written or 

electronic disclosures in English and the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to conduct the transaction or to 

assert an error. Furthermore, under 

§ 1005.31(g)(2), a remittance transfer 

provider is required to provide oral 

disclosures in the language that is 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction or assert an error. 

Specifically, proposed comment 

31(g)–2 clarified that the language 

primarily used by the sender with the 

remittance transfer provider to conduct 

the transaction is the primary language 

used to convey the information 

necessary to complete the transaction. 

Proposed comment 31(g)–2 also stated 

that the language primarily used by the 

sender with the remittance transfer 

provider to assert an error is the primary 

language used by the sender with the 

remittance transfer provider to provide 

the information required by § 1005.33(b) 

to assert an error. The proposed 

comment also provided examples to 

clarify this concept. 

One industry commenter suggested 

that the foreign language disclosure 

requirement should relate to the 

language used by the remittance transfer 

provider, rather than the language used 

by the sender. Some industry 

commenters recommended that the 

Bureau provide further clarification of 

the term ‘‘primarily used’’ without 

specifying what type of guidance would 

be helpful. The Bureau notes that 

proposed comment 31(g)–2 specifies 

that the relevant foreign language is the 

foreign language primarily used by the 

sender with the remittance transfer 

provider to conduct a transaction or 

assert an error, and the examples show 

that a foreign language must be used by 

both the sender and the remittance 

transfer provider to be primarily used by 

the sender with the remittance transfer 

provider to conduct a transaction or 

assert an error. The Bureau believes the 

proposed commentary is clear on this 

point. However, as additional 

clarification, the Bureau is including a 

new example in comment 31(g)–2 to 

illustrate when a sender primarily uses 

a foreign language with a remittance 

transfer provider in the internet context. 

Storefront and Internet Disclosures 

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

the Bureau may prescribe rules to 

require a remittance transfer provider to 

prominently post, and timely update, a 

notice describing a model remittance 

transfer for one or more amounts. The 

provision states that such a notice shall 

show the amount of currency that will 

be received by the designated recipient, 

using the values of the currency into 

which the funds will be exchanged. 

EFTA section 919(a)(6)(A) also states 

that the Bureau may require the notice 

prescribed to be displayed in every 

physical storefront location owned or 

controlled by the remittance transfer 

provider. Further, EFTA section 

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

prescribe rules to require a remittance 

transfer provider that provides 

remittance transfers via the internet to 

provide a notice, comparable to the 

storefront notice described in the 

statute, located on the home page or 

landing page (with respect to such 

remittance transfer services) owned or 

controlled by the remittance transfer 

provider. 

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

prior to proposing rules under EFTA 

section 919(a)(6)(A), appropriate studies 

and analyses must be performed to 

determine whether a storefront notice or 

internet notice facilitates the ability of a 

consumer to: (i) Compare prices for 

remittance transfers, and (ii) understand 

the types and amounts of any fees or 

costs imposed on remittance transfers. 

The studies and analyses must be 

consistent with EFTA section 904(a)(2), 

which requires an economic impact 

analysis that considers the costs and 

benefits of a regulation to financial 

institutions, consumers, and other users. 

These costs and benefits include the 

extent to which additional paperwork 

would be required, the effects upon 

competition in the provision of services 

among large and small financial 

institutions, and the availability of 

services to different classes of 

consumers, particularly low income 

consumers.78

Consistent with EFTA section 

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

analyzed the statute and a variety of 

independent articles, studies, and 

Congressional testimony; conducted 

outreach with industry and consumer 

advocates; and held focus groups with 

consumers who send remittance 

transfers. Based on its findings, 

summarized below, the Board 

concluded in the May 2011 Proposed 

Rule that the statutory notice would not 

facilitate a consumer’s ability to 

compare prices or to understand the fees 

and costs imposed on remittance 

transfers.79

The notice described by the statute 

illustrates only the exchange rate offered 

by that remittance transfer provider for 

the particular model transfer amount. In 

addition to the exchange rate, however, 

the total cost of a remittance transfer 

includes fees charged by the remittance 

transfer provider, any intermediary in 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6241 

the transfer, and the receiving entity. 

The total cost also includes any taxes 

that may be charged in the sending and 

receiving jurisdictions. Thus, the Board 

determined the statutory storefront 

notice would not present a complete 

picture to the consumer of all potential 

fees and costs for a remittance transfer. 

In the proposal, the Board considered 

two alternatives to the type of notice 

described in the statute that could more 

effectively communicate costs to a 

sender. The Board considered requiring 

the posting of transfer fee information 

for model send amounts, but believed 

that this alternative notice would have 

many of the same limitations as the 

statutory notice. The Board also 

considered requiring a notice that 

would reflect all the costs of a transfer. 

A notice with this alternative content 

could help consumers to obtain a better 

understanding of the total cost of a 

remittance transfer, but the length and 

complexity of such notices could limit 

their utility. 

The analysis conducted by the Board 

identified other limitations with both 

the statutory and alternative storefront 

disclosures. First, most consumers 

would be unable to apply the 

information provided by the statutory 

notice to their own transfers. The fees, 

exchange rate, and taxes for a remittance 

transfer can vary based upon the 

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

sending location to the receiving 

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

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

method of delivery (e.g., an electronic 

deposit into a bank account or a cash 

disbursement), and type of receiving 

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

transmitter’s payout partner). For 

example, some remittance transfer 

providers offer a discount on their 

exchange rate spread for large send 

amounts. Therefore, even if the 

consumer’s transfer were identical to 

the model transfer posted in the 

storefront notice except for the send 

amount, the consumer still may be 

unable to determine the exchange rate 

that would apply to the consumer’s 

transfer based on the storefront notice. 

Moreover, a consumer could be 

overwhelmed by the amount of data 

appearing in a long, complex storefront 

notice posted by these providers and, 

therefore, might not use it. A storefront 

notice for sending a specified amount to 

a single country could contain multiple 

rows of information to account for 

differences in pricing based on the 

transfer method, timing option, receipt 

location, and cost permutations 

described above. Many providers offer 

remittance transfers to multiple 

countries, and several locations within 

each country, which would multiply the 

number of data points on the notice. 

Finally, frequent fluctuations in 

exchange rates could result in 

disclosures being inaccurate for a period 

of time. Remittance transfer providers 

would have to update the storefront 

notice for each send location several 

times a week, or as frequently as several 

times a day, to account for the 

fluctuations in exchange rates. These 

rates could also be different at a single 

provider’s different send locations. 

Remittance transfer providers would 

need to distribute the updated notices to 

each send location, and each send 

location would need to replace the 

outdated notice just as frequently. Nonexclusive send locations that offer the 

services of two or more money 

transmitters would have to post and 

update the storefront notices for each 

remittance transfer provider. As a result, 

a storefront notice could be unhelpful 

and even misleading to consumers, 

while creating unnecessary legal risks 

for remittance transfer providers. 

The analysis also identified potential 

effects that the storefront notice 

requirement would have on competition 

and costs to the consumer. The work 

involved in posting and updating 

storefront notices could cause some 

agents to stop offering remittance 

transfers. Further, credit unions and 

small banks that infrequently conduct 

transfers could find the burden and cost 

of producing storefront notices 

prohibitive and discontinue the service. 

Given the costs and risks associated 

with posting and updating the storefront 

notices contemplated by the statute, 

some providers could decide to exit the 

market, which could reduce 

competition among providers and 

increase costs for consumers. 

Because the Board did not propose a 

rule mandating the posting of storefront 

notices, it did not propose a rule 

mandating the posting of internet 

notices. Since the proposal did not 

require a storefront notice, there could 

be no ‘‘comparable’’ internet notice. 

Moreover, the Board’s study of model 

internet notices indicated that 

consumers using internet remittance 

transfer providers to request remittance 

transfers would be less likely to use a 

model transfer notice than those using 

providers at a physical location. Many 

internet providers currently disclose 

transaction-specific information prior to 

the consumer’s payment for a transfer, 

and § 1005.31(b)(1), discussed above, 

makes this practice a regulatory 

requirement. 

Industry commenters supported the 

findings that the storefront notice and 

internet notice would not be useful to 

consumers. One consumer group 

commenter believed that the Bureau 

should require any storefront 

advertising to be in a storefront 

disclosure format prescribed by the 

Bureau. The commenter argued that the 

storefront disclosure should include the 

amount a sender pays to a remittance 

transfer provider and the amount to be 

received by a recipient for at least two 

sample amounts. The commenter 

suggested that disclosures could be 

based on the cost at a certain time, such 

as the previous business day, to 

alleviate the concerns about disclosures 

needing to be updated more frequently. 

The Bureau agrees with the Board’s 

analysis, and believes that the storefront 

and internet disclosures described in 

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

accomplish the statutory goals of 

facilitating the ability of consumers to 

compare prices for remittance transfers 

and to understand the types and 

amounts of any fees or costs imposed on 

remittance transfers. The disclosures 

would not provide a complete 

disclosure of all of the costs of a 

remittance transfer. Even if all costs 

were provided in the disclosures, 

consumers would be unable to 

extrapolate from a storefront disclosure 

the cost of their particular transaction, 

because the cost could depend on other 

variables. The Bureau also recognizes 

the burden on remittance transfer 

providers could be significant and could 

lead some providers to no longer 

provide remittance services. The burden 

on providers would be substantial even 

if the disclosures were only required to 

be updated daily. Moreover, requiring 

less frequent updating would result in 

the disclosures being inaccurate for a 

period of time. 

Because the cost to providers could be 

substantial, and the benefit of the 

storefront and internet disclosures 

would be minimal, the final rule does 

not require the posting of model 

remittance transfer notices at a 

storefront or on the internet. 

Section 1005.32 Estimates 

The statute provides two exceptions 

to the requirement to disclose the 

amount of currency that will be received 

by the designated recipient. The first 

exception is in EFTA section 919(a)(4). 

It provides that, subject to rules 

prescribed by the Bureau, disclosures by 

insured depository institutions or credit 

unions regarding the amount of 

currency that will be received by the 

designated recipient will be deemed to 

be accurate in certain circumstances so 

long as the disclosure provides a 

reasonably accurate estimate of the 

amount of currency to be received. 


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6242 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

Under the statute, a remittance transfer 

provider may use this exception only if: 

(i) It is an insured depository institution 

or insured credit union (collectively, an 

‘‘insured institution’’ as described in 

more detail below) conducting a transfer 

from an account that the sender holds 

with it; and (ii) the insured institution 

is unable to know, for reasons beyond 

its control, the amount of currency that 

will be made available to the designated 

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

This exception (the ‘‘temporary 

exception’’) expires five years after the 

enactment of the Dodd-Frank Act, on 

July 21, 2015. If the Bureau determines 

that expiration of the exception would 

negatively affect the ability of insured 

institutions to send remittances to 

foreign countries, the Bureau may 

extend the exception to not longer than 

ten years after enactment (i.e., to July 21, 

2020). See EFTA section 919(a)(4)(B). 

The second exception is in EFTA 

section 919(c). It provides that if the 

Bureau determines that a recipient 

country does not legally allow, or the 

method by which transactions are made 

in the recipient country do not allow, a 

remittance transfer provider to know the 

amount of currency that will be received 

by the designated recipient, the Bureau 

may prescribe rules addressing the 

issue. EFTA section 919(c) further states 

that if rules are prescribed, they must 

include standards for the remittance 

transfer provider to provide: (i) A 

receipt that is consistent with EFTA 

sections 919(a) and (b); and (ii) a 

reasonably accurate estimate of the 

currency to be received. The second 

exception (the ‘‘permanent exception’’) 

does not have a sunset date. 

The Board proposed § 205.32 to 

implement the two exceptions in EFTA 

sections 919(a)(4) and (c). Proposed 

§ 205.32 generally permitted a 

remittance transfer provider to disclose 

estimates if it cannot determine exact 

amounts for the reasons specified in the 

statute. The Bureau is adopting § 205.32 

generally as proposed in renumbered 

§ 1005.32, with clarifications and 

revisions in response to comments 

received, as discussed in detail below. 

In addition, the Bureau is adopting new 

comment 32–1 to provide additional 

guidance on the circumstances when 

estimates may be provided. Specifically, 

new comment 32–1 states that estimates 

as permitted in § 1005.32(a) and (b) may 

be used in the pre-payment disclosure 

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

disclosure described in § 1005.31(b)(2), 

the combined disclosure described in 

§ 1005.31(b)(3), and the pre-payment 

disclosures and receipt disclosures for 

both first and subsequent preauthorized 

remittance transfers described in 

§ 1005.36(a)(1) and (2). 

32(a) Temporary Exception for Insured 

Institutions 

Proposed § 205.32(a)(1) provided a 

temporary exception for remittance 

transfer providers, which permits them 

to disclose estimates of the exchange 

rate, the transfer amount, other fees and 

taxes, and total to recipient if: (i) A 

remittance transfer provider cannot 

determine exact amounts for reasons 

beyond its control; (ii) a remittance 

transfer provider is an insured 

institution; and (iii) the remittance 

transfer is sent from the sender’s 

account with the insured institution. 

Most industry commenters generally 

supported permitting insured 

institutions to disclose estimates. For 

example, one commenter stated that 

restricting the use of estimates could 

discourage innovation and increase 

costs to offset risk. Consumer group 

commenters generally supported the 

proposed use of estimates but requested 

that the temporary exception not be 

extended. Some industry commenters, 

however, objected to permitting 

estimates to be disclosed because 

estimates could lead to inaccurate or 

misleading disclosures which would 

disservice consumers. 

The Bureau believes permitting 

estimates, as provided by the temporary 

exception, is consistent with the 

statutory language and purpose of EFTA 

section 919(a)(4). The statute 

specifically provides that, subject to the 

Bureau’s rules, an insured institution 

may use a reasonably accurate estimate 

of the amount of currency received 

under certain circumstances. Section 

1005.32(a)(1) implements the temporary 

exception generally as proposed, as 

discussed below. 

EFTA section 919(a)(4) only addresses 

estimates for the amount of currency 

that will be received by a designated 

recipient. Nonetheless, proposed 

§ 205.32(a)(1) also permitted disclosure 

of an estimate for the exchange rate, the 

transfer amount in the currency made 

available to the designated recipient, the 

fees imposed by intermediaries in the 

transmittal route, and taxes imposed in 

the recipient country that are a 

percentage of the amount transferred to 

the designated recipient to the extent 

those amounts are not known for 

reasons beyond the insured institution’s 

control. In the May 2011 Proposed Rule, 

the Board stated its belief that, by 

permitting an estimate of the amount 

that will be received, Congress must 

have intended to permit estimates of the 

components that determine that 

amount. The inability to determine the 

exact amount of one or more of these 

additional items is the reason why the 

amount of currency that will be received 

by the designated recipient must be 

estimated. Furthermore, the Board 

stated that permitting estimates of these 

additional items would help consumers 

to understand why the amount of 

currency to be received is displayed as 

an estimate. The Bureau did not receive 

any comments on this aspect of the 

proposal. The Bureau concurs with the 

Board’s reasoning, and believes that to 

effectuate the purposes of the EFTA and 

facilitate compliance, it is necessary and 

proper to exercise its authority under 

EFTA sections 904(a) and (c) to allow an 

estimate of the exchange rate, transfer 

amount, and other fees and taxes 

disclosures in § 1005.32(a)(1). To not 

exercise the Bureau’s authority in this 

way would render the statutory 

exemption essentially meaningless, and 

the Bureau believes that result could not 

be intended by the statutory exemption 

for estimating the amount of currency 

received. 

In the proposed rule, the Board also 

stated that EFTA section 919(a)(4) only 

addresses the use of an estimate of the 

amount of foreign currency that will be 

received by a designated recipient. 

However, the proposed rule permitted 

an estimate of the currency that will be 

received, whether it is in U.S. dollars or 

foreign currency. The Bureau 

understands that senders may send 

remittance transfers to be paid to the 

designated recipient in U.S. dollars. 

When an insured institution sends a 

remittance transfer via international 

wire transfer, fees are sometimes 

deducted by intermediary institutions in 

the transmittal route with which the 

sending institution has no 

correspondent relationship. Although 

the insured institution may not know 

the total amount of these fees in 

advance, it must disclose them to the 

sender under § 1005.31(b)(1)(vi). The 

amount that will be received by the 

designated recipient, whether that 

currency is U.S. dollars or foreign 

currency, will be an estimate if fees 

imposed by intermediaries are disclosed 

as estimates. Therefore, to effectuate the 

purposes of EFTA and to facilitate 

compliance, the Bureau believes it is 

necessary and proper to exercise its 

authority under EFTA sections 904(a) 

and (c) to allow an estimate of the 

amount of currency that will be 

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

dollars. 

The proposed commentary to 

§ 205.32(a)(1) provided further guidance 

on the temporary exception. 

Specifically, proposed comment 

32(a)(1)–1 clarified that an insured 


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institution cannot determine exact 

amounts ‘‘for reasons beyond its 

control’’ when: (i) The exchange rate 

required to be disclosed under proposed 

§ 205.31(b)(1)(iv) is set by a person with 

which the insured institution has no 

correspondent relationship after the 

insured institution sends the remittance 

transfer; or (ii) fees required to be 

disclosed under proposed 

§ 205.31(b)(1)(vi) are imposed by 

intermediary institutions along the 

transmittal route and the insured 

institution has no correspondent 

relationship with those institutions. 

One industry commenter requested 

clarification regarding instances when 

an insured institution has a 

correspondent relationship but may not 

control or know what exchange rate the 

correspondent will use. For example, a 

remittance transfer provider may send a 

remittance transfer in U.S. dollars and a 

correspondent institution may be 

responsible for exchanging to the 

currency in which funds will be 

received. Similarly, other industry 

commenters noted that an insured 

institution may not know the taxes or 

fees imposed by a correspondent 

institution. Although the Bureau 

acknowledges that some insured 

institutions currently may not receive 

certain exchange rate, tax, or fee 

information from a correspondent 

institution, the Bureau believes that 

such information can be obtained 

through contractual arrangements in a 

correspondent relationship. The Bureau 

notes that the statutory exception is 

only available for circumstances beyond 

remittance transfer providers’ control, 

and the Bureau believes that adjusting 

contractual arrangements with 

correspondent banks to provide for 

better information relay is within the 

control of remittance transfer providers. 

Accordingly, comment 32(a)(1)–1 is 

adopted substantially as proposed with 

clarifying revisions and an example. 

Proposed comment 32(a)(1)–2 

provided examples of scenarios that 

qualify for the temporary exception. The 

Bureau did not receive significant 

comment on the examples provided in 

the proposed comment. Comment 

32(a)(1)–2 is adopted substantially as 

proposed with clarifying revisions. 

Comment 32(a)(1)–2.i. clarifies that an 

insured institution cannot determine the 

exact exchange rate to disclose for an 

international wire transfer if the insured 

institution does not set the exchange 

rate, and the rate is set when the funds 

are deposited into the recipient’s 

account by the designated recipient’s 

institution with which the insured 

institution does not have a 

correspondent relationship. The insured 

institution will not know the exchange 

rate that the recipient institution will 

apply when the funds are deposited into 

the recipient’s account. Comment 

32(a)(1)–2.ii. provides that an insured 

institution cannot determine the exact 

fees to disclose under § 1005.31(b)(1)(vi) 

if an intermediary institution or the 

designated recipient’s institution, with 

which the insured institution does not 

have a correspondent relationship, 

imposes a transfer or conversion fee. 

Finally, comment 32(a)(1)–2.iii. states 

that an insured institution cannot 

determine the exact taxes to disclose 

under § 1005.31(b)(1)(vi) if the insured 

institution cannot determine the 

applicable exchange rate or other fees, 

as described in proposed comments 

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

recipient country imposes a tax that is 

a percentage of the amount transferred 

to the designated recipient, less any 

other fees. 

Proposed comment 32(a)(1)–3 

provided several examples of when an 

insured institution would not qualify for 

the exception in proposed § 205.32(a). 

In each case, the insured institution 

could determine the exact amount for 

the relevant disclosure. The proposed 

examples illustrated that if an insured 

institution can determine the exact 

exchange rate, fees, and taxes required 

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

and (vi), it can determine the exact 

amounts to be derived from calculations 

involving them. 

The Bureau did not receive significant 

comment on the proposed provision, 

which is adopted substantially as 

proposed. Comment 32(a)(1)–3.i. 

explains that an insured institution can 

determine the exact exchange rate 

required to be disclosed under 

§ 1005.31(b)(1)(iv) if it converts the 

funds into the local currency to be 

received by the designated recipient 

using an exchange rate that it sets. 

Comment 32(a)(1)–3.ii. states that an 

insured institution can determine the 

exact fees required to be disclosed 

under § 1005.31(b)(1)(vi) if it has 

negotiated specific fees with a 

correspondent institution, and the 

correspondent institution is the only 

institution in the transmittal route to the 

designated recipient’s institution, which 

itself does not impose fees. Finally, 

comment 32(a)(1)–3.iii. clarifies that an 

insured institution can determine the 

exact taxes required to be disclosed 

under § 1005.31(b)(1)(vi) if the recipient 

country imposes a tax that is a 

percentage of the amount transferred to 

the designated recipient, less any other 

fees, and the insured institution can 

determine the exact amount of the 

applicable exchange rate and other fees. 

Similarly, the insured institution can 

determine these taxes if the recipient 

country imposes a specific sum tax that 

is not tied to the amount transferred. 

Proposed § 205.32(a)(2) provided that 

the temporary exception expires on July 

20, 2015, consistent with the five-year 

term set forth in EFTA section 

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

gives the Bureau authority to extend the 

application of the temporary exception 

to July 21, 2020, if it determines that 

termination of the exception would 

negatively affect the ability of insured 

institutions to send remittances to 

foreign countries. The Bureau 

understands that this exception was 

intended to avoid an immediate 

disruption of remittance transfer 

services by insured institutions using 

international wire transfers. The 

exception gives these institutions time 

to reach agreements and modify systems 

to provide accurate disclosures. 

Industry commenters argued that the 

temporary exception for insured 

institutions should be made permanent, 

or in the alternative, be extended to ten 

years after the date of enactment of the 

Dodd-Frank Act, which is July 21, 2020. 

The OCC also noted the ability of the 

Bureau to extend the temporary 

exception for insured institutions to ten 

years after the date of enactment of the 

Dodd-Frank Act and urged the Bureau 

to consider the impact of these 

standards on community banks. In 

contrast, consumer groups supported 

the five-year sunset of the temporary 

exception and requested that the Bureau 

indicate that the temporary exception 

will not be extended. 

The Bureau notes that the sunset of 

the temporary exception is statutory. In 

addition, the Bureau believes that there 

is no basis at this time to assess whether 

allowing the exception to expire in 

accordance with the statute would have 

negative effects where the final rule is 

just now being issued, initial 

implementation is expected to take a 

year, and the market has not yet had a 

chance to respond to the regulatory 

requirements. Therefore, the Bureau 

declines to extend the temporary 

exception at this time. Finally, the 

Bureau notes that in the May 2011 

Proposed Rule, proposed § 205.32(a)(2) 

stated July 20, 2015 as the sunset date 

for the temporary exception provided in 

§ 205.32(a)(1). The final rule includes a 

technical edit to clarify that the sunset 

date for the temporary exception is July 

21, 2015 in order to avoid potential 

confusion and promote consistency 

among references to the date of 

enactment of the Dodd-Frank Act. 

Accordingly, proposed § 205.32(a)(2) is 

adopted as proposed in renumbered 


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6244 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

80See 76 FR 29923. 

§ 1005.32(a)(2), with a technical edit to 

reflect the change in date to July 21, 

2015. 

For purposes of the temporary 

exception, proposed § 205.32(a)(3) 

provided that the term ‘‘insured 

institution’’ included insured 

depository institutions as defined in 

section 3 of the Federal Deposit 

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

insured credit unions as defined in 

section 101 of the Federal Credit Union 

Act (12 U.S.C. 1752). Industry 

commenters generally requested 

clarification on the application of the 

temporary exception to uninsured 

institutions. In particular, these 

commenters requested that the 

temporary exception should also 

include uninsured depository 

institutions, such as certain U.S. 

branches and agencies of foreign banks. 

They also argued that uninsured U.S. 

branches of foreign banks also process 

retail international wire transfers in the 

same manner as insured institutions, 

and would face similar compliance 

challenges as other insured institutions. 

The Bureau believes that including 

uninsured U.S. branches of foreign 

banks in the term ‘‘insured institution’’ 

is consistent with the purposes of the 

statutory exception and will prevent 

disruption in remittance transfer 

services. The Bureau notes that section 

3(c)(3) of the Federal Deposit Insurance 

Act provides that for certain purposes, 

the term ‘‘insured depository 

institution’’ includes any uninsured 

U.S. branch or agency of a foreign bank 

or a commercial lending company 

owned or controlled by a foreign bank. 

Therefore, the Bureau believes 

including uninsured U.S. branches and 

agencies of foreign banks in the term 

‘‘insured institution’’ is consistent with 

the statutory exception and section 3 of 

the Federal Deposit Insurance Act. 

Accordingly, proposed § 205.32(a)(3) is 

adopted with clarification in 

renumbered § 1005.32(a)(3). 

Similarly, one commenter argued that 

registered broker-dealers should be 

covered by the temporary exception 

because they may process international 

wire transfers. However, as discussed 

above, the Bureau is clarifying that, for 

the purposes of this rule, fund transfers 

in connection with securities 

transactions are not remittance transfers. 

Therefore, the Bureau believes further 

clarification in the rule with respect to 

this comment is not necessary. 

32(b) Permanent Exception for Transfers 

to Certain Countries 

Proposed § 205.32(b) contained the 

permanent exception set forth in EFTA 

section 919(c). Under EFTA section 

919(c), if the Bureau determines that a 

recipient nation does not legally allow, 

or the method by which transactions are 

made to the recipient country do not 

allow, a remittance transfer provider to 

know the amount of currency that will 

be received, the Bureau may issue rules 

to permit the remittance transfer 

provider to provide a reasonably 

accurate estimate. The Board’s proposal 

specifically noted that there is at least 

one recipient country where a particular 

method of remittances do not allow 

remittance transfer providers to know 

the amount of currency that will be 

received.80

In light of that determination, the 

proposed rule allowed estimates to be 

provided for amounts required to be 

disclosed under proposed 

§ 205.31(b)(1)(iv) through (vii) for 

transfers to certain countries. Like the 

temporary exception in EFTA section 

919(a)(4), the permanent exception in 

EFTA section 919(c) only addresses 

estimates for the amount of currency 

that will be received by a designated 

recipient. For the reasons described 

above with respect to the temporary 

exception, proposed § 205.32(b) also 

permitted disclosure of estimates for the 

exchange rate, the transfer amount in 

the currency made available to the 

designated recipient, and taxes imposed 

in the recipient country that are a 

percentage of the amount transferred to 

the designated recipient. The Bureau 

did not receive any comments on this 

aspect of the proposal. For the reasons 

set forth above with regard to the 

temporary exception and to effectuate 

the purposes of EFTA and facilitate 

compliance, the Bureau believes it is 

necessary and proper to exercise its 

authority under EFTA sections 904(a) 

and (c) to adopt this proposed 

permanent exception in § 1005.32(b). 

32(b)(1)(i) Laws of Recipient Country 

Proposed § 205.32(b)(1) allowed 

estimates to be provided for the 

exchange rate, transfer amount, other 

fees and taxes, and total to recipient 

disclosures (adopted as 

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

if a remittance transfer provider cannot 

determine exact amounts because the 

laws of the recipient country do not 

permit such a determination. 

Industry commenters raised concerns 

about whether remittance transfer 

providers have the resources to 

determine whether this exception 

applies. Consumer group commenters 

argued that the statute requires the 

Bureau to determine which recipient 

countries qualify for the permanent 

exception, rather than leaving the 

determination to individual market 

participants. Both industry and 

consumer group commenters 

recommended that the Bureau maintain 

a list of countries or a database, updated 

annually, to which the permanent 

exception based on the laws of a 

recipient country would apply. 

The Bureau believes that it is 

appropriate for remittance transfer 

providers to identify and comply with a 

recipient country’s currency laws. The 

Bureau also believes that remittance 

transfer providers and their 

correspondents generally are able to 

obtain this information because they are 

engaged in the business of remittance 

transfers to recipient countries and must 

comply with any applicable law that 

prevents the remittance transfer 

provider from determining exchange 

rates or exact amounts. Nonetheless, in 

response to comments received and 

upon further consideration, the Bureau 

is revising proposed § 205.32(b) to 

facilitate compliance by providing a safe 

harbor list of countries which qualify for 

the permanent exception. 

Accordingly, the Bureau is 

renumbering proposed § 205.32(b) as 

§ 1005.32(b)(1) and adopting new 

§ 1005.32(b)(2) to provide a safe harbor. 

New § 1005.32(b)(2) states that a 

remittance transfer provider may rely on 

the list of countries published by the 

Bureau to determine whether estimates 

may be provided under the permanent 

exception, 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. 

In addition, the Bureau is adopting 

commentary on new § 1005.32(b)(2). 

New comment 32(b)–5 provides 

guidance on the safe harbor list 

published by the Bureau. New comment 

32(b)–6 provides further guidance on 

reliance on the Bureau-provided list of 

countries that qualify for the permanent 

exception. New comment 32(b)–7 

addresses circumstance where there is a 

change in laws of the recipient country. 

Proposed comment 32(b)(1)–1 

clarified that the ‘‘laws of the recipient 

country’’ do not permit a remittance 

transfer provider to determine exact 

amounts when a law or regulation of the 

recipient country requires the person 

making funds directly available to the 

designated recipient to apply an 

exchange rate that is: (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 chooses 

to claim the funds. Comment 32(b)(1)– 


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1 is adopted substantially as proposed, 

but renumbered as comment 32(b)–1 for 

organizational purposes. 

One commenter requested 

clarification about whether proposed 

comment 32(b)(1)–1 covered instances 

where the local currency is thinly 

traded and the laws of a recipient 

country require an authorized dealer to 

set the exchange rate when the 

remittance transfer is received. The 

Bureau believes that the proposed 

comment already covers such 

circumstances because the government 

of the recipient country, acting through 

an authorized dealer, sets the exchange 

rate after the remittance transfer has 

been sent. In addition, the transfer may 

also qualify for the permanent exception 

if the exchange rate is required by law 

to be set by the authorized dealer when 

the recipient claims the funds. 

Proposed comments 32(b)(1)–2.i. and 

32(b)(1)–2.ii. provided examples 

illustrating the application of the 

exception. Proposed comment 32(b)(1)– 

2.i. explained that the laws of the 

recipient country do not permit a 

remittance transfer provider to 

determine the exact exchange rate 

required to be disclosed under proposed 

§ 205.31(b)(1)(iv) (adopted as 

§ 1005.31(b)(1)(iv) above) when, for 

example, the government of the 

recipient country sets the exchange rate 

daily and the funds are made available 

to the designated recipient in the local 

currency the day after the remittance 

transfer provider sends the remittance 

transfer. Under such circumstances, an 

estimate for the exchange rate would be 

permitted because the remittance 

transfer provider cannot determine a 

rate that a foreign government has yet to 

set. 

In contrast, proposed comment 

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

the recipient country permit a 

remittance transfer provider to 

determine the exact exchange rate 

required to be disclosed under proposed 

§ 205.31(b)(1)(iv) (adopted as 

§ 1005.31(b)(1)(iv) above) if, for 

example, the government of the 

recipient country ties the value of its 

currency to the U.S. dollar. The Bureau 

did not receive significant comment on 

comment 32(b)(1)–2. This comment is 

adopted substantially as proposed, but 

renumbered as comment 32(b)–2 for 

organizational purposes. 

32(b)(1)(ii) Method by Which 

Transactions are Made in the Recipient 

Country 

Proposed § 205.32(b)(2) allowed 

estimates to be provided for the 

exchange rate, transfer amount, other 

fees and taxes, and total to recipient 

disclosures (adopted as 

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

if a remittance transfer provider cannot 

determine exact amounts because the 

method by which transactions are made 

in the recipient country does not permit 

such a determination. 

Based on the Board’s outreach and 

interpretation of the statute, the Board 

stated its belief that the exception for 

methods by which transactions are 

made in the recipient country under 

proposed § 205.32(b)(2) was intended to 

permit estimates for certain 

international ACH transactions. 

Specifically, the Board interpreted the 

exception under § 205.32(b)(2) to apply 

to remittances sent via international 

ACH on terms negotiated by the 

government of the United States and the 

government of a recipient country 

where the exchange rate is set after the 

transfer is sent. Accordingly, proposed 

comment 32(b)(2)–1 stated that the 

‘‘method by which transactions are 

made in the recipient country’’ does not 

permit a remittance transfer provider to 

determine exact amounts when 

transactions are sent via international 

ACH on terms negotiated between the 

United States government and the 

recipient country’s government, under 

which the exchange rate is set by the 

recipient country’s central bank after the 

provider sends the remittance transfer. 

Industry commenters argued that the 

Bureau should adopt a broader reading 

of the statute, and that international 

wire transfers should be covered by the 

permanent exception. These 

commenters argued that international 

wire transfers are a method by which 

transactions are made in a recipient 

country that does not allow the 

remittance transfer provider to know the 

amount of currency that will be received 

by a designated recipient and should 

thus qualify for the permanent 

exception. One industry commenter 

stated that the permanent exception is 

helpful for certain international ACH 

transactions; however, the benefit is 

limited by the number of recipient 

countries that participate in the Federal 

Reserve System’s FedGlobal ACH 

program. Other industry commenters 

requested that all international ACH 

transfers be covered by the permanent 

exception and that the exception should 

not be limited to those that are sent on 

terms negotiated between the United 

States government and the recipient 

country’s government. These 

commenters noted that all cross-border 

ACH transfers, regardless of how the 

exchange rate is set, are subject to 

similar difficulties as certain 

international ACH transfers that qualify 

for the permanent exception. Consumer 

group commenters supported the 

proposal’s application of the permanent 

exception based on the method to 

certain international ACH transfers. 

In each case, the Bureau agrees with 

the Board’s interpretation. The Bureau 

believes that extending the permanent 

exception to international wire transfers 

and all international ACH transactions 

would be inconsistent with the statutory 

language and purpose of the provision, 

which specifically refers to methods of 

transfer in a recipient country (emphasis 

added). The Bureau must give meaning 

to this phrase, and does not believe that 

the interpretation urged by commenters 

is dependent on a method of transfer in 

a particular country. 

The Bureau does not believe that the 

permanent exception in EFTA section 

919(c) applies to international wire 

transfers because wire transfers are not 

a method that is particular to a specific 

country or group of countries. Rather, 

compliance challenges may arise due to 

the international wire transfer business 

model, which is based on a chain of 

correspondents and two-party 

contractual relationships. 

In addition, the application of the 

permanent exception to international 

wire transfers and ACH transactions 

generally would make the temporary 

exception superfluous. As discussed 

above, the statute is broad in scope, 

specifically covering transactions that 

are account-based and that are not 

electronic fund transfers, and therefore, 

covers open network transactions. 

Further, as described above with regard 

to the temporary exception, the statute 

specifically permits the use of estimates 

by depository institutions and credit 

unions for certain account-based 

transactions. If all open network 

transactions were included in the 

permanent exception, there would be no 

need for the temporary exception 

because nearly all, if not all, the types 

of transfers that qualify for the 

temporary exception would be covered 

by the permanent exception. The 

Bureau does not believe the temporary 

exception is superfluous. Therefore, it 

would not be appropriate to extend the 

permanent exception to these 

transactions. 

One commenter argued that the 

permanent exception for method of 

transfer should also include instances 

when the remittance transfer provider 

and the sender agree to have the 

exchange rate set at some point in the 

future (i.e., floating rate products). As 

with wire transfers, such an agreement 

is not a method by which a transaction 

is made that is particular to a specific 

country or group of countries. 

Therefore, the Bureau also believes that 


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6246 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

this circumstance would not be eligible 

for the permanent exception. The 

Bureau notes, however, that the 

remittance transfer provider that is party 

to such an agreement may provide 

estimates of the exchange rate if the 

remittance transfer provider qualifies for 

the temporary exception in § 1005.32(a). 

For the reasons discussed above, 

proposed § 205.32(b)(2) is adopted as 

proposed in renumbered 

§ 1005.32(b)(1)(ii). Proposed comment 

32(b)(2)–1 is adopted substantially as 

proposed with clarifying revision, but 

renumbered as comment 32(b)–3 for 

organizational purposes. 

Proposed comment 32(b)(2)–2 

provided examples illustrating the 

application of the permanent exception. 

The comment is adopted substantially 

as proposed, but renumbered as 

comment 32(b)–4 for organizational 

purposes. Comment 32(b)–4.i. provides 

an example of when a remittance 

transfer would qualify for the exception. 

The Bureau notes that some comments 

received indicate that there may be 

confusion as to the application of the 

permanent exception provided in 

§ 1005.32(b)(1)(ii) to any transfer sent 

via international ACH. However, 

comment 32(b)–4.i. explains that a 

transfer would only qualify for the 

exception when sent via international 

ACH on terms negotiated between the 

United States government and the 

recipient country’s government, under 

which the exchange rate is a rate set by 

the recipient country’s central bank or 

other governmental authority on the 

business day after the provider has sent 

the remittance transfer. Under such 

circumstances, the provider cannot 

determine the exact exchange rate 

required to be disclosed under 

§ 1005.31(b)(1)(iv). Thus, remittance 

transfers sent via Directo a Me ́xico 

currently would qualify for the 

permanent exception in 

§ 1005.32(b)(1)(ii). Accordingly, 

proposed comment 32(b)–4.i. is adopted 

substantially as proposed. 

Proposed comments 32(b)(2)–2.ii. and 

–2.iii. provided examples of when a 

remittance transfer would not qualify 

for the permanent exception in 

§ 1005.32(b)(1)(ii). The Bureau did not 

receive significant comment on the 

proposed comments, which are adopted 

substantially as proposed, with 

technical and clarifying edits, in 

renumbered comments 32(b)–4.ii. and 

32(b)–4.iii. Comment 32(b)–4.ii. 

explains that a remittance transfer 

provider is not permitted to provide 

estimates under the permanent 

exception if it sends a remittance 

transfer via international ACH on terms 

negotiated between the United States 

government and a private-sector entity 

in the recipient country, under which 

the exchange rate is set by the 

institution acting as the entry point to 

the recipient country’s payments system 

on the next business day. In this case, 

transactions are made using a method 

negotiated between the United States 

and a private entity. Nonetheless, 

remittance transfers sent using such a 

method may qualify for the temporary 

exception in § 1005.32(a). Comment 

32(b)–4.iii. explains that a remittance 

transfer provider does not qualify for the 

permanent exception if, for example, it 

sends transfers via international ACH on 

terms negotiated between the United 

States government and the recipient 

country’s government, under which the 

exchange rate is set by the recipient 

country’s central bank or other 

governmental authority before the 

sender requests a transfer. In such a 

case, the remittance transfer provider 

can determine the exchange rate 

required to be disclosed. 

32(c) Bases for Estimates 

If a remittance transfer qualifies for 

either the temporary exception in EFTA 

section 919(a)(4) or the permanent 

exception in EFTA section 919(c), the 

statute permits the provider to disclose 

a reasonably accurate estimate to the 

sender. Proposed § 205.32(c) stated that 

estimates provided pursuant to the 

exceptions in proposed § 205.32(a) and 

(b) (adopted as § 1005.32(a) and (b) 

above) must be based on an approach 

listed in the regulation for the required 

disclosure. 

Proposed § 205.32(c) further stated 

that if a remittance transfer provider 

bases an estimate on an approach that 

is not listed, the provider complies with 

proposed § 205.32(c) so long as the 

designated recipient receives the same, 

or greater, amount of currency that it 

would have received had the estimate 

been based on a listed approach. Thus, 

use of an approach other than one listed 

in the proposed rule is compliant with 

the regulation if the sender is not 

harmed by such use. 

Industry commenters generally 

requested greater flexibility in 

estimating exchange rates and fees. For 

example, commenters recommended 

less prescriptive approaches, such as 

permitting remittance transfer providers 

to base estimates on reasonably 

available information, adopting a 

reasonably accurate standard, or 

adopting a safe harbor for good faith 

estimates within a specified tolerance. 

The Bureau generally concurs with the 

Board’s reasoning in the May 2011 

Proposed Rule that providing a list of 

approaches for calculating estimates 

would be more helpful to remittance 

transfer providers and consumers than a 

less specific standard for calculating 

estimates. The Bureau believes that 

requiring estimates be provided based 

on an approach listed in the regulation 

will facilitate compliance with the final 

rule. However, in response to comments 

received, the Bureau is clarifying 

proposed § 205.32(c). The safe harbor in 

proposed § 205.32(c) was intended to 

provide greater flexibility and to 

facilitate compliance for remittance 

transfer providers that may base an 

estimate on an approach that is not 

listed in the rule. However, the Bureau 

notes that under the proposal, the 

provider would have been required to 

compare any estimate based on its own 

approach with an estimate based on a 

listed approach in order to determine 

whether the sender would be harmed by 

such use. The Bureau believes that this 

comparison would unnecessarily 

increase the burden of using an unlisted 

approach and render the safe harbor 

meaningless. Therefore, the Bureau 

revises proposed § 205.32(c) to state that 

if a provider bases an estimate on an 

approach not listed in the rule, the 

provider is deemed to be in compliance 

with the rule so long as the designated 

recipient receives the same, or greater, 

amount of funds than the remittance 

transfer provider disclosed as required 

under § 1005.31(b)(1)(vii). The Bureau 

believes that this clarification also 

ensures that the sender is not harmed 

because the amount of funds received 

by the designated recipient will be the 

same or greater than the estimated total 

amount received as required to be 

disclosed under § 1005.32(b)(1)(vii). 

Accordingly, the Bureau is adopting 

proposed § 205.32(c) as § 1005.32(c) 

with amendment. 

32(c)(1) Exchange Rate 

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

approaches that a remittance transfer 

provider may use as the basis of an 

estimate of the exchange rate required to 

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

The final rule adopts the proposed rule 

as § 1005.32(c)(1), with modifications 

and additional commentary to address 

issues raised in comments. 

The approach in proposed 

§ 205.32(c)(1)(i) stated that for 

remittance transfers qualifying for the 

§ 1005.32(b)(1)(ii) exception, the 

estimate must be based on the most 

recent exchange rate set by the recipient 

country’s central bank and reported by 

a Federal Reserve Bank. Proposed 

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

the exchange rate for a remittance 

transfer sent via international ACH that 

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


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exception is set the following business 

day, the most recent exchange rate 

available for a transfer will be the 

exchange rate set for the day that the 

disclosure is provided, i.e., the current 

business day’s exchange rate. Consumer 

group commenters generally supported 

proposed § 205.32(c)(1)(i) and its 

commentary. Other commenters 

believed that the application of the 

proposed § 205.32(b)(2) exception 

should be broadened generally, as 

discussed above. Accordingly, proposed 

§ 205.32(c)(1)(i) is adopted as proposed 

in renumbered § 1005.32(c)(1)(i). 

Comment 32(c)(1)(i)–1 is adopted 

substantially as proposed, but 

renumbered as comment 32(c)(1)–1 for 

organizational purposes. 

The approach in proposed 

§ 205.32(c)(1)(ii) provided that, for other 

transfers, the estimate must be based on 

the most recent publicly available 

wholesale exchange rate. Industry 

commenters argued that the wholesale 

interbank exchange rate would not be 

the rate actually applied to a consumer’s 

remittance transfer, so using the 

wholesale exchange rate as an estimate 

would be misleading to consumers. For 

instance, basing an estimate on only the 

wholesale rate could consistently 

overestimate the amount of currency 

received by a recipient because the 

wholesale rate does not account for any 

spread applied to the rate for a sender’s 

remittance transfer to a particular 

country. One commenter noted that 

estimates of exchange rates may be 

based on information from foreign 

exchange dealers as well as rates 

available in the marketplace. 

Based on comments received and 

upon further analysis, the Bureau is 

adopting a revised basis for estimates in 

renumbered § 1005.32(c)(1)(ii) and its 

related commentary to address concerns 

regarding the proposed use of a 

wholesale exchange rate. Specifically, 

§ 1005.32(c)(1)(ii) provides that, in 

disclosing the exchange rate as required 

under § 1005.31(b)(1)(iv), an estimate 

must be based on the most recent 

publicly available wholesale rate and, if 

applicable, the spread typically applied 

to such a rate by the remittance transfer 

provider or its correspondent to the 

wholesale rate for remittance transfers 

for a particular currency. The Bureau 

believes the revised subsection will 

result in an estimated exchange rate that 

better approximates the ‘‘retail’’ rate that 

will apply to a sender’s remittance 

transfer. 

New comment 32(c)(1)–3 provides 

guidance on applying any spread to the 

estimate of an exchange rate based on 

the wholesale exchange rate. If a 

remittance transfer provider uses the 

most recent wholesale exchange rate as 

a basis for an estimate of an exchange 

rate, the exchange rate estimate must 

also reflect any spread that is typically 

applied to such a rate for remittance 

transfers for a particular currency. For 

example, assume a remittance transfer 

provider (or its correspondent) typically 

applies a spread, such as a fixed 

percentage, to a wholesale rate in order 

to determine the exchange rate offered 

to a sender for remittance transfers for 

a particular currency. If the provider 

must estimate an exchange rate for 

another remittance transfer for the same 

currency, the remittance transfer 

provider must estimate the exchange 

rate by applying the same spread (i.e., 

fixed percentage) to the most recent 

publicly available wholesale rate. 

Proposed comment 32(c)(1)(ii)–1 

provided that publicly available sources 

of information containing the most 

recent wholesale exchange rate for a 

currency include, for example, U.S. 

news services, such as Bloomberg, the 

Wall Street Journal, and the New York 

Times; a recipient country’s national 

news service; and a recipient country’s 

central bank or other government 

agency. The Bureau did not receive any 

comments on this aspect of the 

proposal. One industry commenter, 

however, noted that for currency 

exchange rates not listed by a U.S. news 

service, remittance transfer providers 

could rely on the basis for estimates 

provided under proposed 

§ 205.32(c)(1)(iii). Accordingly, 

proposed comment 32(c)(1)(ii)–1 is 

adopted substantially as proposed, but 

renumbered as comment 32(c)(1)–2 for 

organizational purposes. 

Industry commenters, however, stated 

that it was unclear which most recent 

publicly available wholesale exchange 

rate should apply because rates may 

fluctuate throughout the day and may be 

published on a Web site in addition to 

the rate that may be available in a news 

service publication. Based on these 

comments, the Bureau is adopting new 

comment 32(c)(1)–4 to provide guidance 

when an exchange rate for a currency is 

published or provided multiple times 

within a day. Specifically, comment 

32(c)(1)–4 clarifies that if the exchange 

rate for a currency is published or 

provided multiple times throughout the 

day because the exchange rate fluctuates 

throughout the day, a remittance 

transfer provider may use any exchange 

rate available on that day for the 

purposes of determining the ‘‘most 

recent’’ exchange rate. 

The approach in proposed 

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

the most recent exchange rate offered by 

the person making funds available 

directly to the designated recipient as 

the basis for providing an estimate. 

However, in some instances the 

exchange rate used for a transfer may be 

set by other institutions, such as a 

foreign ACH counterpart or an 

intermediary institution in a transmittal 

route that is not a correspondent 

institution. For example, the first 

intermediary institution in the 

transmittal route that is in the recipient 

country may set the exchange rate and 

conduct the currency exchange before 

transmitting the remittance transfer to 

the recipient institution, which then 

makes the funds available to the 

designated recipient. Therefore, upon 

further consideration, proposed 

§ 205.32(c)(1)(iii), in renumbered 

§ 1005.32(c)(1)(iii), is revised to state 

that an estimate may be also based on 

the most recent exchange rate offered or 

used by the person in the transmittal 

route setting the exchange rate. The 

Bureau notes that § 1005.32(c)(1)(iii), as 

revised, addresses circumstances in 

which the local currency is infrequently 

traded or when wholesale exchange 

rates would not have been publicly 

available. 

32(c)(2) Transfer Amount in the 

Currency Made Available to the 

Designated Recipient 

Proposed § 205.32(c)(2) stated that, in 

disclosing the transfer amount in the 

currency made available to the 

designated recipient, as required under 

§ 1005.31(b)(1)(v), an estimate must be 

based upon the estimated exchange rate 

provided in accordance with 

§ 1005.32(c)(1). The Bureau did not 

receive comment on proposed 

§ 205.32(c)(2), which is adopted with 

revision for consistency with 

§ 1005.31(b)(1)(v) in renumbered 

§ 1005.32(c)(2). 

32(c)(3) Other Fees 

Proposed § 205.32(c)(3) provided that 

one of two approaches must be used to 

estimate the fees imposed by 

intermediary institutions in connection 

with an international wire transfer 

required to be disclosed under 

§ 1005.31(b)(1)(vi). Under the first 

approach, an estimate must be based on 

the remittance transfer provider’s most 

recent transfer to an account at the 

designated recipient’s institution. Under 

the second approach, an estimate must 

be based on the representations of the 

intermediary institutions along a 

representative route identified by the 

remittance transfer provider that the 

requested transfer could travel. 

Proposed comment 32(c)(3)(ii)–1 

clarified that a remittance transfer from 

a sender’s account at an insured 


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institution to the designated recipient’s 

institution may take several routes, 

depending on the correspondent 

relationships each institution in the 

transmittal route has with other 

institutions. Proposed comment 

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

providing an estimate of the fees 

required to be disclosed under proposed 

§ 205.31(b)(1)(vi) pursuant to the 

temporary exception, an insured 

institution may rely upon the 

representations of the institutions that 

act as intermediaries in any one of the 

potential transmittal routes that it 

reasonably believes a requested 

remittance transfer may travel. 

Industry commenters argued that 

insured institutions do not know what 

other fees an intermediary institution or 

the designated recipient’s institution 

may charge. For example, a remittance 

transfer provider may not know the fees 

a receiving institution may charge its 

own customers for receiving a 

remittance transfer. Another commenter 

suggested that some small insured 

institutions may be unaware of the 

number of intermediary institutions 

involved in the transmittal route. 

Commenters also argued that it would 

be difficult to obtain sufficient 

information to be able to disclose any 

estimates, and that the requirement 

would impose operational burden on 

insured institutions, particularly on 

insured institutions that do not send 

international wire transfers frequently 

or are unable to obtain representations 

of intermediary institutions. 

As discussed above, the Bureau 

believes that, consistent with the 

statute, it is appropriate to require 

remittance transfer providers to disclose 

fees imposed by intermediary 

institutions or the designated recipient’s 

institution in order to determine the 

amount of currency received by the 

recipient. The Bureau further believes 

that the rule provides sufficient 

flexibility to facilitate compliance and 

that representative transmittal routes are 

readily determinable. In addition, the 

Bureau notes that a remittance transfer 

provider may be required to estimate 

other fees as required by 

§ 1005.32(b)(1)(vi) in other 

circumstances. For example, if a 

remittance transfer provider estimates 

the exchange rate under the § 1005.32(b) 

permanent exception, a provider may be 

required to estimate other fees that are 

imposed as a percentage of the amount 

transferred to the designated recipient. 

Therefore, the Bureau believes it is 

appropriate to provide additional 

clarification. Accordingly, the Bureau is 

adopting a new § 1005.32(c)(3)(i) to 

provide that for other fees that are 

imposed as a percentage of the amount 

transferred to the designated recipient, 

an estimate must be based on the 

estimated exchange rate provided in 

accordance with § 1005.32(c)(1), prior to 

any rounding of the estimated exchange 

rate. Furthermore, the Bureau is 

adopting proposed § 205.32(c)(3) with a 

technical revision in renumbered 

§ 1005.32(c)(3)(ii). Comment 

32(c)(3)(ii)–1 is adopted substantially as 

proposed, but is renumbered as 

comment 32(c)(3)–1 for organizational 

purposes. 

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

Recipient Country 

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

disclosing taxes imposed in the 

recipient country as required under 

§ 1005.31(b)(1)(vi) that are a percentage 

of the amount transferred to the 

designated recipient, an estimate must 

be based on the estimated exchange rate 

provided in accordance with 

§ 1005.32(c)(1) and the estimated fees 

imposed by institutions that act as 

intermediaries in connection with an 

international wire transfer provided in 

accordance with § 1005.32(c)(3). 

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

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

provider to give an estimate only when 

the taxes imposed in a recipient country 

are a percentage of the amount 

transferred to the designated recipient. 

In other contexts where taxes may be 

imposed, a remittance transfer provider 

can determine the exact amount, such as 

in the case of a tax of a specific amount. 

The Bureau did not receive comments 

on this aspect of the proposal. 

Accordingly, proposed § 205.32(c)(4) is 

adopted in renumbered § 1005.32(c)(4) 

with revisions for consistency with 

amended §§ 1005.31(b)(1)(vi) and 

1005.32(c)(3). The Bureau is revising 

comment 32(c)(4)–1 to clarify that a 

remittance transfer provider can 

determine the exact amount of other 

taxes that are a percentage of the 

amount transferred if the provider can 

determine the exchange rate and the 

exact amount of other fees imposed on 

the remittance transfer. Accordingly, 

comment 32(c)(4)–1 is adopted with 

clarification. 

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

be Received by the Designated Recipient 

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

disclosing the amount of currency that 

will be received by the designated 

recipient as required under 

§ 1005.31(b)(1)(vii), an estimate must be 

based on the estimates provided in 

accordance with § 1005.32(c)(1), (c)(3), 

and (c)(4), as applicable. The Bureau did 

not receive significant comment on 

proposed § 205.32(c)(5); however, the 

Bureau clarifies that in disclosing an 

amount under § 1005.31(b)(1)(vii), an 

estimate must be based on estimates 

provided in accordance with 

§ 1005.32(c)(1) through (4). Accordingly, 

proposed § 205.32(c)(5) is adopted in 

renumbered § 1005.32(c)(5) with this 

clarification. 

Section 1005.33 Procedures for 

Resolving Errors 

EFTA section 919(d) addresses 

procedures for resolving errors in 

connection with remittance transfers, 

and allows a sender to provide notice of 

an error within 180 days of the 

promised date of delivery of a 

remittance transfer. The sender’s notice 

triggers a remittance transfer provider’s 

duty to investigate the claim and correct 

any error within 90 days of receiving the 

notice. The statue generally does not 

define what types of transfers and 

inquiries constitute errors and gives the 

Bureau the authority to define ‘‘error.’’ 

The Board proposed § 205.33 to 

implement the new error resolution 

requirements for remittance transfers 

that adapted many of the same error 

resolution procedures that currently 

apply to a financial institution under 

§ 1005.11. The Bureau adopts proposed 

§ 205.33 as § 1005.33 with several 

changes based on recommendations 

from commenters, as discussed in detail 

below. 

33(a) Definition of Error 

Definition of Error Generally 

Proposed § 205.33(a)(1) defined the 

term ‘‘error’’ for purposes of the 

remittance transfer error resolution 

provisions. Proposed § 205.33(a)(2) 

listed types of transfers or inquiries that 

do not constitute errors. The proposed 

commentary provided additional 

guidance illustrating errors under the 

rule. 

Many industry commenters generally 

believed the proposed error definitions 

were overly broad because they would 

subject a remittance transfer provider to 

liability for errors caused by parties 

outside the control of the provider. 

Some of these commenters suggested 

that requiring providers to assume 

responsibility for errors when the 

provider has not erred nor controlled 

the circumstances that caused the error 

would undermine the safety and 

soundness of these transfer systems and 

could lead some financial institutions to 

eliminate remittance transfer services. 

Other industry commenters predicted 

that the financial impact of losses 

experienced as a result of errors caused 


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by another party could be significant 

enough for providers to exit the market. 

The Bureau is amending certain error 

definitions in response to these 

comments, as discussed below. In 

general, under a number of financial 

consumer protection laws, the regulated 

entity has the responsibility to 

investigate errors asserted by consumers 

and generally assumes much of the 

liability when an error has occurred 

even where neither the regulated entity 

nor the consumer are at fault. See, e.g., 

15 U.S.C. 1693f and 1693g; 15 U.S.C. 

1643; 12 CFR 1005.11; and 12 CFR 

1026.13. Thus, consistent with other 

error resolution procedures in Federal 

financial consumer protection laws, the 

Bureau believes that where neither a 

sender nor a remittance transfer 

provider are necessarily at fault, a 

provider generally is in a better position 

than a sender to identify, and possibly 

recover from, the party at fault. 

Furthermore, placing liability with 

the remittance transfer provider in these 

instances aligns the remittance transfer 

provider’s incentives with those of the 

sender. Remittance transfer providers 

are likely better able to work with 

parties in the remittance transfer system 

or government entities to reduce errors 

to remittance transfers overall. Placing 

responsibility on providers increases the 

incentives of providers to develop such 

policies, procedures, and controls. As a 

result, the Bureau does not believe that 

whether a particular circumstance 

constitutes an error should necessarily 

depend on whether a provider is at 

fault. The Bureau further notes that this 

is similar to the approach taken in 

defining ‘‘errors’’ under § 1005.11 for 

EFTs where something may be 

considered an ‘‘error’’ even if the 

financial institution did not cause the 

error. 

33(a)(1) Types of Transfers or Inquiries 

Covered 

Proposed § 205.33(a)(1) listed the 

types of transfers or inquiries that 

would constitute ‘‘errors.’’ Each type of 

transfer or inquiry that constitutes an 

‘‘error’’ is discussed below. 

33(a)(1)(i) Incorrect Amount Paid by 

Sender 

Proposed § 205.33(a)(1)(i) defined 

‘‘error’’ to include an incorrect amount 

paid by a sender in connection with a 

remittance transfer. This element of the 

definition is similar to the error 

described in § 1005.11(a)(1)(ii) of an 

incorrect EFT to or from a consumer’s 

account. The Board also proposed 

comment 33(a)–1 to clarify that 

proposed § 205.33(a)(1)(i) was intended 

to cover circumstances in which the 

amount paid by the sender differs from 

the total amount of the transaction 

stated in the receipt or the combined 

disclosure. Proposed comment 33(a)–1 

also stated that an error under 

§ 205.33(a)(1)(i) covered incorrect 

amounts paid by a sender regardless of 

the form or method of payment tendered 

by the sender for the transfer, including 

when a debit, credit, or prepaid card is 

used to pay an amount in excess of the 

amount of the transfer requested by the 

sender plus applicable fees. 

Commenters did not specifically 

address proposed § 205.33(a)(1)(i) or 

proposed comment 33(a)–1. The Bureau 

adopts proposed § 205.33(a)(1)(i) 

substantially as proposed in 

renumbered § 1005.33(a)(1)(i). The 

Bureau also adopts comment 33(a)–1 

substantially as proposed. 

33(a)(1)(ii) Computational or 

Bookkeeping Error 

Under proposed § 205.33(a)(1)(ii), an 

‘‘error’’ also included ‘‘a computational 

or bookkeeping error made by a 

remittance transfer provider relating to 

a remittance transfer.’’ This provision is 

similar to an existing computational or 

bookkeeping error provision for EFTs in 

§ 1005.11(a)(iv). In implementing this 

provision of Regulation E, the Board 

noted that § 1005.11(a)(iv) (formerly 

§ 205.11(a)(iv)) is intended to include 

‘‘arithmetical errors, posting errors, 

errors in printing figures, and figures 

that were jumbled due to mechanical or 

electronic malfunction.’’ See 44 FR 

59480 (Oct. 15, 1979). Proposed 

§ 205.33(a)(1)(ii) was meant to cover 

similar types of errors with respect to 

remittance transfers, such as 

circumstances in which a remittance 

transfer provider fails to reflect all fees 

that will be imposed in connection with 

the transfer or misapplies the applicable 

exchange rate in calculating the amount 

of currency that will be received by the 

designated recipient. As noted in the 

May 2011 Proposed Rule, 

notwithstanding that the designated 

recipient may receive the amount of 

currency stated on the receipt or 

combined disclosure, an error could be 

asserted because the provider 

incorrectly calculated the amount that 

should have been received. The Bureau 

did not receive any comments on 

proposed § 205.33(a)(1)(ii). The Bureau 

adopts this provision as proposed in 

renumbered § 1005.33(a)(1)(ii). 

33(a)(1)(iii) Incorrect Amount Received 

by the Designated Recipient 

The Board proposed § 205.33(a)(1)(iii) 

to provide that an ‘‘error’’ generally 

included the failure by a remittance 

transfer provider to make available to a 

designated recipient the amount of 

currency identified in the receipt or 

combined disclosure given to the 

sender, unless the disclosure provided 

an estimate made in accordance with 

proposed § 205.32 (adopted as § 1005.32 

above). The Board also proposed 

guidance in comment 33(a)–2 regarding 

the scope of the error under proposed 

§ 205.33(a)(1)(iii). Furthermore, 

proposed comment 33(a)–3 provided 

examples illustrating circumstances in 

which an incorrect amount of currency 

may be received by a designated 

recipient. 

One industry commenter 

recommended that the exclusion of 

estimated disclosures made pursuant to 

§ 1005.32 from the definition of ‘‘error’’ 

under renumbered § 1005.33(a)(1)(iii) 

should be applied to other errors listed 

in § 1005.33(a)(1). The Bureau notes, 

however, that none of the other errors in 

§ 1005.33(a)(1) rely on the difference 

between what may be disclosed as an 

estimate and the actual amount. For 

example, suppose a remittance transfer 

is permitted to estimate disclosures 

under § 1005.32. If the remittance 

transfer provider fails to deliver any 

funds to the designated recipient, the 

sender should be able to assert an error 

even though the provider disclosed an 

estimate. As a result, the Bureau 

declines to make the requested change, 

and the exclusion of estimated 

disclosures made pursuant to § 1005.32 

is adopted as renumbered 

§ 1005.33(a)(1)(iii)(A). 

In addition, the Bureau has added 

language to clarify that the exception in 

§ 1005.33(a)(1)(iii)(A) from the 

definition of ‘‘error’’ applies if the 

difference results from application of 

the actual exchange rate, fees, and taxes, 

rather than any estimated amounts. This 

clarification prevents a remittance 

transfer provider from relying on the 

exception for estimates if it makes 

available to the designated recipient an 

amount that is completely unrelated to 

the amount calculated using the actual 

exchange rate, fees, and taxes. For 

example, if the remittance transfer 

provider estimated the amount to be 

received pursuant to § 1005.32 as 1,200 

pesos in the receipt or combined 

disclosure, and the amount calculated 

using the applicable actual exchange 

rate, fees, and taxes is 1,150 pesos, the 

provider cannot use the 

§ 1005.33(a)(1)(iii)(A) exception to claim 

that there is no error if it made only 100 

pesos available to the designated 

recipient. 

As discussed in more detail below, 

several industry commenters requested 

expansion of the exception to the error 

defined in § 1005.33(a)(1)(iv) for 


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extraordinary circumstances outside the 

remittance transfer provider’s control 

that could not have been reasonably 

anticipated. The Bureau believes that it 

is appropriate to provide this exception 

for an error involving an incorrect 

amount received by the designated 

recipient. For example, suppose a 

foreign government in the country 

where a remittance transfer is to be 

delivered imposes an emergency tax on 

the transfer that was not in effect nor 

could have been reasonably anticipated 

at the time the provider was required to 

give the sender the receipt or combined 

disclosure. The failure to make available 

to the designated recipient the amount 

of currency identified in the receipt or 

combined disclosure given to the 

sender, which did not reflect the 

emergency tax, should not constitute an 

error if the designated recipient received 

the disclosed amount of currency less 

the emergency tax. 

As a result, new § 1005.33(a)(1)(iii)(B) 

provides that the failure to make the 

amount of currency stated in the receipt 

or combined disclosure is not an error 

if the failure resulted from extraordinary 

circumstances outside the remittance 

transfer provider’s control that could 

not have been reasonably anticipated. 

Furthermore, the Bureau adopts new 

comment 33(a)–4 to provide guidance 

on what types of extraordinary 

circumstances outside the remittance 

transfer provider’s control that could 

not have been reasonably anticipated 

qualify for the exception. The comment 

is similar to the comment adopted as 

comment 33(a)–6 below, which 

describes extraordinary circumstances 

outside the remittance transfer 

provider’s control that could not have 

been reasonably anticipated for 

purposes of the error for failure to make 

funds available by the disclosed date of 

availability in § 1005.33(a)(1)(iv). 

Proposed comment 33(a)–2 is adopted 

with a change to clarify that if a 

provider rounds the exchange rate used 

to calculate the amount received 

consistent with § 1005.31(b)(1)(iv) and 

comment 31(b)(1)(iv)–2 for the disclosed 

rate, there is no error if the designated 

recipient receives an amount of 

currency that results from applying the 

exchange rate used, prior to any 

rounding of the exchange rate, to 

calculate fees, taxes, and the amount 

received rather than the disclosed rate. 

The change is intended to be consistent 

with the Bureau’s general approach to 

rounding exchange rates as described 

above in the supplementary information 

to comment 31(b)(1)(iv)–2. Proposed 

comment 33(a)–3 is adopted 

substantially as proposed. 

33(a)(1)(iv) Failure To Make Funds 

Available by Date of Availability 

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

defined an ‘‘error’’ to include a 

remittance transfer provider’s failure to 

make funds in connection with a 

remittance transfer available to the 

designated recipient by the date of 

availability stated on the receipt or 

combined disclosure, subject to two 

specified exceptions, discussed below. 

The Board proposed comment 33(a)-4 to 

provide examples of the circumstances 

that would have been considered errors 

under proposed § 205.33(a)(1)(iv). These 

circumstances included: (i) The late 

delivery of a remittance transfer after 

the stated date of availability or nondelivery of the transfer; (ii) the deposit 

of a remittance transfer to the wrong 

account; (iii) retention of the transferred 

funds by a recipient agent or institution 

after the stated date of availability, 

rather than making the funds available 

to the designated recipient; and (iv) the 

fraudulent pick-up of a remittance 

transfer in a foreign country by a person 

other than the person identified by the 

sender as the designated recipient of the 

transfer. Fraudulent pick-up, however, 

did not include circumstances in which 

a designated recipient picks up a 

remittance transfer from the provider’s 

agent as authorized, but subsequently 

the funds are stolen from the recipient. 

Several industry commenters objected 

to the inclusion of fraudulent pick-up as 

an error. These commenters suggested 

that the remittance transfer provider 

should not be responsible for fraud that 

results in the pick-up of a remittance 

transfer by a person other than the 

designated recipient where the provider 

is unlikely to know or have control over 

all the intermediary institutions 

involved in the transfer or the final 

institution that will make the funds 

available to the designated recipient. 

Other commenters, including the OCC, 

suggested that this error might result in 

‘‘friendly fraud’’ where a sender claims 

the amount was not an authorized pickup when the pick-up was actually 

legitimate. The OCC was also concerned 

that the exposure to remittance transfer 

providers for this error may be 

aggravated in situations involving large 

dollar remittances and because of the 

long period of time that a sender could 

assert this error. 

One industry commenter noted that 

while there may be certain instances 

when fraudulent pick-up should be 

considered an error, there may be other 

circumstances when fraudulent pick-up 

should not be an error. In particular, 

this commenter suggested that where 

the name of the person picking up the 

funds does not match the name of the 

designated recipient set forth in the 

receipt, the sender should be able to 

assert an error. However, if an 

individual presents fake identification 

in the name of the designated recipient, 

this commenter stated that this 

fraudulent pick-up is outside of the 

remittance transfer provider’s control 

and therefore, should not be considered 

an error. Industry commenters also 

believed that a remittance transfer 

provider should not be liable for a 

fraudulent pick-up when a provider and 

its agent has complied with fraud and 

risk management policies and 

procedures. 

As the Board noted in the May 2011 

Proposed Rule, treating fraudulent pickup of a remittance transfer as an error 

is consistent with the scope of 

unauthorized EFTs under § 1005.2(m), 

which includes unauthorized EFTs 

initiated through fraudulent means. See 

comment 2(m)-3. Although identity 

theft can present a challenge to 

remittance transfer providers, financial 

institutions face similar challenges with 

respect to unauthorized EFTs and bear 

most of the risk. Moreover, similar to 

remittance transfers, the entity in the 

best position to verify the identity of the 

person initiating the EFT (for example, 

the merchant at a store who initiates an 

EFT using a debit card) may not be 

known or controlled by the financial 

institution, though such entities may 

have agreed to abide by system rules 

(e.g., payment card network rules, ACH 

system rules). However, under current 

laws governing EFTs, whether the 

financial institution knows or has 

control over that entity (e.g., a 

merchant) does not affect whether an 

EFT could be an unauthorized EFT. 

Similarly, the Bureau believes that 

whether a fraudulent pick-up should be 

considered an error should not be 

affected by the relationship between the 

remittance transfer provider and the 

entity distributing the remittance 

transfer to the designated recipient. 

Furthermore, the Bureau agrees with 

the Board’s reasoning in the May 2011 

Proposed Rule that it is appropriate to 

treat these circumstances as errors 

because the remittance transfer 

provider, rather than the sender, is in 

the best position to ensure that a 

remittance transfer is picked up only by 

the person designated by the sender. For 

example, in some models, remittance 

transfer providers could require or 

contract with the entity distributing the 

funds, if it is not the remittance transfer 

provider itself, to request and examine 

identification from the person picking 

up the funds. The Bureau believes that 

including fraudulent pick-up as an error 


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would better align the remittance 

transfer provider’s incentives to prevent 

this occurrence with the interests of the 

sender. 

One industry commenter suggested 

that a sender be required to inform the 

remittance transfer provider if the 

confirmation number or receipt is lost or 

stolen. For some remittance transfer 

providers, a designated recipient is 

required to give the confirmation 

number, which is generally printed on 

the receipt, in order to obtain access to 

the funds in a remittance transfer. The 

commenter suggested that this approach 

would be similar to the approach taken 

with respect to a lost or stolen access 

device in § 1005.6(b) with respect to 

unauthorized EFTs, where a consumer’s 

liability for unauthorized EFTs is 

dependent on how quickly the 

consumer reports the lost or stolen 

access device to the account-holder 

financial institution. 

The Bureau notes, however, the risk 

for a lost or stolen confirmation number 

is not the same as for a lost or stolen 

access device for EFTs. A lost or stolen 

access device could potentially be used 

to initiate an EFT by a person who is not 

the account holder immediately without 

an accomplice and without 

identification matching the name 

associated with the access device. By 

contrast, where a confirmation number 

given to the sender is lost or stolen, an 

unauthorized person who gains access 

to the number would not be able to take 

advantage of it unless he or she were 

located or had an accomplice in the 

recipient country. Furthermore, because 

access to funds sent by a remittance 

transfer provider is often limited to 

those with identification matching the 

designated recipient on the receipt, an 

unauthorized person who gains access 

to a lost or stolen confirmation number 

may be deterred from taking advantage 

of it. Consequently, the Bureau does not 

believe that a sender’s liability should 

depend on whether he or she reports a 

confirmation number or receipt as lost 

or stolen. 

Moreover, under § 1005.6(b), a 

consumer’s liability for unauthorized 

EFTs is dependent on how quickly the 

consumer reports the lost or stolen 

access device because the speed with 

which a consumer reports the lost or 

stolen access device may be critical to 

preventing further unauthorized EFTs 

and further losses, and the possibility of 

increased liability provides incentives 

for a consumer to report quickly. In 

contrast, a lost or stolen confirmation 

number would not result in losses other 

than the specific remittance transfer in 

question. Therefore, the Bureau also 

does not believe that a sender’s liability 

should depend on how quickly a sender 

reports a lost or stolen confirmation 

number. 

The Bureau is adopting comment 

33(a)–4, renumbered as comment 33(a)– 

5, generally as proposed. Specifically, 

the Bureau is including a statement to 

clarify that if only a portion of the funds 

were made available by the disclosed 

date of availability, then 

§ 1005.33(a)(1)(iv) does not apply, but 

§ 1005.33(a)(1)(iii) may apply instead. 

Exceptions to the Failure To Make 

Funds Available by Date of Availability 

As noted above, the proposed rule 

provided two exceptions to the 

definition of ‘‘error’’ in proposed 

§ 205.33(a)(1)(iv). Under proposed 

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

funds from a remittance transfer 

available by the stated date of 

availability did not constitute an error if 

the failure resulted from circumstances 

outside the remittance transfer 

provider’s control. Under proposed 

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

funds from a remittance transfer 

available on the stated date of 

availability did not constitute an error if 

it was caused by the sender providing 

incorrect information in connection 

with the remittance transfer to the 

provider, so long as the provider gives 

the sender the opportunity to correct the 

information and resend the transfer at 

no additional cost. The Bureau adopts 

one of these two exceptions with 

changes to respond to commenters’ 

concerns, as discussed below. The other 

exception has been moved to the 

remedies section under § 1005.33(c)(2) 

for the reasons discussed below. The 

Bureau is also adopting two additional 

exceptions to the definition of ‘‘error’’ in 

proposed § 205.33(a)(1)(iv). 

Exception for Extraordinary 

Circumstances Outside of the 

Remittance Transfer Provider’s Control 

Proposed § 205.33(a)(1)(iv)(A) 

provided that the failure to make funds 

from a remittance transfer available by 

the stated date of availability did not 

constitute an error if the failure resulted 

from circumstances outside the 

remittance transfer provider’s control. 

Proposed comment 33(a)-5 clarified that 

the exception was limited to 

circumstances that are generally referred 

to under contract law as force majeure, 

or uncontrollable or extraordinary 

circumstances that cannot be reasonably 

anticipated by the remittance transfer 

provider and that prevent the provider 

from delivering a remittance transfer, 

such as war, civil unrest, or a natural 

disaster. The proposed comment also 

provided that the exception for 

circumstances beyond a provider’s 

control covered government actions or 

other restrictions that occur after the 

transfer has been sent but that could not 

have been reasonably anticipated by the 

remittance transfer provider, such as the 

imposition of foreign currency controls 

or the garnishment or attachment of 

funds. 

Many industry commenters stated 

that the proposed comment limiting the 

circumstances beyond the provider’s 

control to instances of force majeure or 

to other uncontrollable or extraordinary 

circumstances was too narrow. Several 

industry commenters recommended that 

the exception should be more broadly 

interpreted to exclude errors caused by 

acts of a third party beyond a remittance 

transfer provider’s control. Consumer 

group commenters believed the 

approach in the proposed rule was a 

reasonable limitation and recommended 

that the commentary specifically state 

that mistakes by a recipient institution 

do not fall under the exception to the 

error to deliver funds by the date of 

delivery. Other consumer group 

commenters suggested that the final rule 

limit the circumstances even further to 

only include acts of war or terrorism or 

natural disaster. 

As discussed above, the Bureau does 

not believe that whether a particular 

circumstance constitutes an error or not 

should necessarily depend on whether a 

provider is at fault. Even if the error is 

caused by a third party beyond the 

remittance transfer provider’s control, 

the Bureau believes that the remittance 

transfer provider is often in a better 

position to identify and recover the loss 

from the third party than a sender, 

especially when there are multiple 

intermediary institutions involved in a 

transfer. Accordingly, the Bureau 

believes that with respect to third-party 

errors, the circumstances in proposed 

§ 205.33(a)(1)(iv)(A) should include 

only a narrow category of third-party 

errors caused by uncontrollable or 

extraordinary circumstances that cannot 

be reasonably anticipated by the 

remittance transfer provider and that 

prevent the provider from delivering a 

remittance transfer. 

Furthermore, the Bureau believes the 

proposed comment is appropriately 

narrow in interpreting the limited set of 

circumstances for which the failure to 

make funds available by the disclosed 

date of delivery should not be an error. 

Therefore, proposed comment 33(a)–5 is 

adopted substantially as proposed in 

comment 33(a)–6. The Bureau is 

adopting proposed § 205.33(a)(1)(iv)(A) 

generally as proposed in renumbered 

§ 1005.33(a)(1)(iv)(A). However, the 

Bureau is adding language to 


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6252 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

§ 1005.33(a)(1)(iv)(A) to more accurately 

reflect the descriptions of the types of 

circumstances listed in comment 33(a)– 

6. Specifically, § 1005.33(a)(1)(iv)(A) 

provides that a failure to make funds 

available by the disclosed date of 

delivery is not an error if the failure 

resulted from extraordinary 

circumstances outside the remittance 

transfer provider’s control that could 

not have been reasonably anticipated. 

Exception for Sender Providing 

Incorrect or Insufficient Information 

Proposed § 205.33(a)(1)(iv)(B) 

provided that the failure to make funds 

from a remittance transfer available on 

the stated date of availability did not 

constitute an error if it was caused by 

the sender providing incorrect 

information in connection with the 

remittance transfer to the provider, so 

long as the provider gives the sender the 

opportunity to correct the information 

and resend the transfer at no additional 

cost. Proposed comment 33(a)–6 

clarified that if the failure to make funds 

from a transfer available by the stated 

date of availability occurred due to the 

provider’s miscommunication of 

information necessary for the designated 

recipient to pick up the transfer, such as 

providing the incorrect location where 

the transfer may be picked up or 

providing the wrong confirmation 

number or code for the transfer, such 

failure would have been treated as an 

error under proposed § 205.33(a)(1)(iv). 

Many industry commenters objected 

to the requirement that the remittance 

transfer provider absorb the costs of 

amending and resending a transfer 

when the sender is at fault. These 

commenters noted that modifying 

transfers can be expensive and that the 

proposed rule would, in effect, require 

the remittance transfer provider and 

other senders, through higher fees, to 

bear the responsibility for a sender’s 

mistake. 

The Bureau agrees with commenters 

that a sender’s mistake should not 

obligate a remittance transfer provider 

to bear all the costs for resending the 

remittance transfer. However, the 

Bureau believes that while the 

remittance transfer provider should not 

bear all the costs in these circumstances, 

the failure should still be considered an 

error such that the error resolution 

procedures apply. Therefore, the Bureau 

is moving the concept in proposed 

§ 205.33(a)(1)(iv)(B) to a new 

§ 1005.33(c)(2)(ii)(A)(2), and proposed 

comment 33(a)–6 to renumbered 

comment 33(c)–2, as discussed further 

below. 

Additional Exceptions 

In the final rule, the Bureau is adding 

two additional exceptions to the 

definition of ‘‘error’’ in 

§ 1005.33(a)(1)(iv) based on a 

consideration of comments received. 

New § 1005.33(a)(1)(iv)(B) provides that 

delays in making funds available to a 

designated recipient that are related to 

a provider’s fraud screening procedures 

or in accordance with the Bank Secrecy 

Act (BSA), 31 U.S.C. 5311 et seq., Office 

of Foreign Assets Control (OFAC) 

requirements, or similar laws or 

requirements would not constitute an 

error. Several industry commenters and 

the OCC noted that for fraud screening, 

BSA, or OFAC purposes, a remittance 

transfer provider may have further 

communications with the sender to 

ensure the legitimacy or the legality of 

a remittance transfer. This, in turn, may 

cause delays in making the funds 

available to a designated recipient. The 

Bureau believes it is appropriate to 

exclude these situations from the 

definition of ‘‘error’’ in order to 

encourage remittance transfer providers 

to continue to engage in activities that 

benefit the safety of the transfer system 

as a whole. The Bureau understands 

that under current procedures, these 

types of delays are generally infrequent, 

relative to the number of remittance 

transfers typically conducted by 

remittance transfer providers. 

The Bureau is also adopting a new 

§ 1005.33(a)(1)(iv)(C) in response to 

industry commenters’ and the OCC’s 

concerns about ‘‘friendly fraud.’’ 

Consequently, consistent with the 

definition of ‘‘unauthorized electronic 

fund transfer’’ under § 1005.2(m), and as 

suggested by the OCC to address its 

concerns regarding the error of 

fraudulent pick-up, 

§ 1005.33(a)(1)(iv)(C) provides an 

exception to the ‘‘error’’ definition for 

remittance transfers made with 

fraudulent intent by the sender or any 

person in concert with the sender. 

Therefore, if a sender is involved in a 

scheme to defraud the remittance 

transfer provider, for example, by 

fraudulently claiming that the 

designated recipient did not pick up 

funds that the designated recipient in 

fact did pick up, such action would not 

be considered an ‘‘error’’ under 

§ 1005.33(a)(1)(iv)(C). 

33(a)(1)(v) Sender’s Request for 

Documentation 

Finally, under proposed 

§ 205.33(a)(1)(v), an error included a 

sender’s request for documentation 

provided in connection with a 

remittance transfer or additional 

information or clarification concerning a 

remittance transfer. This provision is 

similar to an existing provision in 

§ 1005.11(a)(1)(vii) for EFTs. As the 

Board noted in the May 2011 Proposed 

Rule, an error under proposed 

§ 205.33(a)(1)(v) would also cover a 

sender’s request for information to 

determine whether an error exists. The 

Bureau did not receive any comments 

on proposed § 205.33(a)(1)(v). The 

Bureau adopts proposed 

§ 205.33(a)(1)(v) substantially as 

proposed in renumbered 

§ 1005.33(a)(1)(v). 

33(a)(2) Types of Inquiries and Transfers 

Not Covered 

Proposed § 205.33(a)(2) listed 

circumstances that would not constitute 

errors. In particular, proposed 

§ 205.33(a)(2)(i) provided that an 

inquiry about a transfer of $15 or less 

does not constitute an error, since these 

small-value transfers do not fall within 

the scope of the definition of 

‘‘remittance transfer.’’ See 

§ 1005.30(e)(2), discussed above. Under 

proposed § 205.33(a)(2)(ii), an inquiry 

about the status of a remittance 

transfer—for example, if the sender calls 

to ask whether the funds have been 

made available in the foreign country— 

would also not be an error (unless the 

funds have not been made available by 

the disclosed date of availability). 

Finally, similar to § 1005.11(a)(2)(ii) for 

EFTs, a sender’s request for information 

for tax or other recordkeeping purposes 

would not constitute an error under 

proposed § 205.33(a)(2)(iii). 

The Bureau notes that because 

transfers of $15 or less are not 

‘‘remittance transfers’’ under 

§ 1005.30(e)(2), such transfers are not 

covered under the remittance transfer 

provisions in subpart B. Therefore, the 

Bureau believes it is not necessary to 

state that an inquiry involving a transfer 

of $15 or less is not an error, and is not 

adopting proposed § 205.33(a)(2)(i). A 

Federal Reserve Bank commenter noted 

that for certain assertions of error that 

exceed the $15 threshold, providers may 

still not have the ability to investigate 

the assertion because they are less than 

the minimum amount traceable in a 

foreign country. In order to ensure that 

senders are protected with respect to 

errors related to remittance transfers 

other than truly de minimis amounts, 

however, the Bureau is not inclined to 

create another threshold amount above 

the $15 coverage threshold for which an 

inquiry is not an error. The Bureau did 

not receive comments on proposed 

§ 205.33(a)(2)(ii) or (iii). These 

provisions are adopted as proposed in 


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81See § 1005.11(b). Although a financial 

institution may request that a consumer assert the 

error in writing, a consumer’s failure to do so does 

not cancel the error resolution process, but gives the 

financial institution 45 days to investigate the error 

without having to provide provisional credit. See 

§ 1005.11(b)(2) and (c)(2). 

renumbered § 1005.33(a)(2)(i) and (ii), 

respectively. 

In the final rule, the Bureau is 

adopting provisions describing two 

other circumstances that do not 

constitute errors in response to 

comments received. Section 

1005.33(a)(2)(iii) provides that a change 

requested by the designated recipient is 

not an error. Comment 33(a)–7 clarifies 

new § 1005.33(a)(2)(iii) by providing 

that the exception is available only if 

the change is made solely because the 

designated recipient requested the 

change. The comment also includes an 

illustrative example. The example 

explains that if a sender requests a 

remittance transfer provider to send 

US$100 to a designated recipient at a 

designated location, but the designated 

recipient requests the amount in a 

different currency (either at the senderdesignated location or another location 

requested by the recipient) and the 

remittance transfer provider 

accommodates the recipient’s request, 

the change does not constitute an error. 

The Bureau understands that as a 

service to the recipient, a remittance 

transfer provider may offer to provide 

the remittance transfer in a different 

currency or permit the transfer to be 

picked up at a location different than 

originally requested by the sender. In 

such cases, the Bureau believes that this 

type of customer service should be 

preserved. The Bureau, however, is 

concerned that remittance transfer 

providers may try to provide the 

remittance transfer to the designated 

recipient in a different currency simply 

because the provider or its agent do not 

have sufficient amounts of the senderrequested currency on hand. Therefore, 

the Bureau believes that this exception 

should only be available if the change 

is made solely because the designated 

recipient requested the change. 

Section 1005.33(a)(2)(iv) is also new 

and provides that an error does not 

include a change in the amount or type 

of currency received by the designated 

recipient from the amount or type of 

currency stated in the disclosure 

provided to the sender under 

§ 1005.31(b)(2) or (3) if the remittance 

transfer provider relied on information 

provided by the sender as permitted by 

the commentary accompanying 

§ 1005.31 in making such disclosure. As 

discussed above, a remittance transfer 

provider may rely on the sender’s 

representations in making certain 

disclosures. For example, a remittance 

transfer provider can rely on the 

representations of the sender regarding 

the currency that can be provided in the 

remittance transfer. 

New comment 33(a)–8 elaborates on 

the exclusion by providing two 

illustrative examples. Under one 

example, a sender requests U.S. dollars 

to be deposited into an account of the 

designated recipient and represents that 

the account is U.S. dollar-denominated. 

If the designated recipient’s account is 

actually denominated in local currency 

and the recipient account-holding 

institution must convert the remittance 

transfer into local currency in order to 

deposit the funds and complete the 

transfer, the change in currency does 

not constitute an error pursuant to 

§ 1005.33(a)(2)(iv). Similarly, if the 

remittance transfer provider relies on 

the sender’s representations regarding 

variables that affect the amount of taxes 

imposed by a person other than the 

provider for purposes of determining 

these taxes, the change in the amount of 

currency the designated recipient 

actually receives due to the taxes 

actually imposed does not constitute an 

error pursuant to § 1005.33(a)(2)(iv). 

33(b) Notice of Error From Sender 

Proposed § 205.33(b) set forth the 

timing and content requirements for a 

notice of error provided by a sender in 

connection with a remittance transfer. 

Consistent with EFTA section 

919(d)(1)(A), proposed § 205.33(b)(1)(i) 

stated that a sender must provide a 

notice of error orally or in writing to the 

remittance transfer provider no later 

than 180 days after the date of 

availability of the remittance transfer 

stated in the receipt or combined 

disclosure. Under proposed 

§ 205.33(b)(1)(ii), such notice of error 

must enable the remittance transfer 

provider to identify: the sender’s name 

and telephone number or address; the 

recipient’s name, and if known, the 

telephone number or address of the 

recipient; and the remittance transfer to 

which the notice of error applies. 

Proposed § 205.33(b)(1)(iii) stated that 

the notice must also indicate why the 

sender believes the error exists and 

include to the extent possible the type, 

date, and amount of the error, except in 

the case of requests for documentation, 

additional information, or clarification 

under proposed § 205.33(a)(1)(v). 

Several industry commenters 

suggested that the time period for 

senders to assert an error is too long. 

Some industry commenters 

recommended that the time period be 

shortened to 60 days, similar to the time 

period that consumers have to assert 

errors for EFTs. See § 1005.11(b)(3). 

Other industry commenters suggested 

30 days. The Bureau notes that the 180- 

day time period for senders to assert an 

error is expressly stated in the statute. 

Given the international nature of 

remittance transfers, the additional time 

a sender may need to communicate with 

persons abroad, and the lack of 

information about problems associated 

with this time period, the Bureau does 

not believe that using its authority 

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

change this time period is currently 

warranted. 

Industry commenters also requested 

that the sender be required to assert an 

error in writing at a centralized address. 

The Bureau believes that requiring 

senders to assert an error in writing 

would have a chilling effect on the error 

resolution process, especially given that 

some senders may not feel comfortable 

writing in English. Although in some 

cases, a sender may have the ability to 

assert the error in a foreign language and 

be assured a response in that language, 

that ability may depend on the foreign 

languages used at the office of the 

remittance transfer provider where the 

error is asserted to advertise, solicit, or 

market remittance transfers under 

§ 1005.31(g), as discussed above. 

Moreover, the current error resolution 

process for EFTs does not require a 

consumer to assert an error in writing.81

Therefore, the Bureau declines to make 

the requested change, and proposed 

§ 205.33(b)(1) is adopted substantially as 

proposed in renumbered § 1005.33(b)(1). 

Proposed § 205.33(b)(2) provided that 

when a notice of error was based on 

documentation, additional information, 

or clarification that the sender had 

previously requested under 

§ 1005.33(a)(1)(v), the sender’s notice of 

error would be timely if it were received 

by the provider no later than 60 days 

after the provider sends the requested 

documentation, information, or 

clarification. As the Board explained in 

the May 2011 Proposed Rule, the 

proposed 60-day time frame for the 

sender to provide a new notice of error 

following the sender’s receipt of 

documentation, information, or 

clarification from the remittance transfer 

provider is consistent with the 60-day 

time frame established for similar 

circumstances under the general error 

resolution provisions in Regulation E, 

§ 1005.11(b)(3). 

The Bureau agrees with the Board’s 

reasoning that under these 

circumstances, 60 days, rather than the 

180-day error resolution time frame 

generally applicable to remittance 


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6254 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

82See also EFTA section 919(g)(1) (providing that 

a designated recipient ‘‘shall not be deemed to be 

a consumer for purposes of this Act’’). 

transfers, provides sufficient time for a 

sender to review the additional 

information provided by the remittance 

transfer provider and determine 

whether an error occurred in connection 

with a transfer. The Bureau did not 

receive any comments on this issue. 

However, the Bureau believes it is 

appropriate to clarify that a sender 

always has the original 180 days after 

the disclosed date of availability to 

assert an error. Consequently, the 

Bureau is amending proposed 

§ 205.33(b)(2), renumbered as 

§ 1005.33(b)(2), to provide that when a 

notice of error is based on 

documentation, additional information, 

or clarification that the sender had 

previously requested under 

§ 1005.33(a)(1)(v), the sender’s notice of 

error is timely if received by the 

remittance transfer provider the later of 

180 days after the disclosed date of 

availability of the remittance transfer or 

60 days after the provider sent the 

documentation, information, or 

clarification requested. 

The Board proposed commentary to 

clarify proposed § 205.33(b). Proposed 

comment 33(b)–1 clarified that the error 

resolution procedures for remittance 

transfers apply only when a notice of 

error is received from the sender of the 

transfer. Thus, a notice of error provided 

by the designated recipient would not 

trigger the remittance transfer provider’s 

error resolution obligations. As the 

Board explained in the May 2011 

Proposed Rule, this interpretation is 

consistent with EFTA section 

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

resolution obligations for a remittance 

transfer provider only when a notice is 

received from the sender.82 Proposed 

comment 33(b)–1 also clarified that the 

error resolution provisions do not apply 

when the remittance transfer provider 

itself discovers and corrects an error. 

The Bureau did not receive any 

comments on the proposed comment, 

which the Bureau adopts as proposed. 

The Board proposed comment 33(b)– 

2 to provide that a notice of error is 

effective so long as the remittance 

transfer provider is able to identify the 

remittance transfer in question. As 

explained in the May 2011 Proposed 

Rule, a sender could provide in the 

notice of error the confirmation number 

or code given to the sender for the pickup of a remittance transfer to identify 

the particular transfer in their tracking 

systems and records, or any other 

identification number or code supplied 

by the provider in connection with the 

remittance transfer, if such number or 

code is sufficient to enable the provider 

to identify the transfer. 

One industry commenter requested 

that, for an account-based remittance 

transfer, the final rule require senders to 

include the account number in the 

notice of error. The Bureau notes that 

under comment 11(b)(1)–1 for EFTs, 

consumers are not required to provide 

their account numbers and need only 

provide sufficient information to enable 

the financial institution to identify the 

account. Similarly, the Bureau believes 

that a sender need not provide the 

account number, but must provide 

enough information such that the 

remittance transfer provider can identify 

the account and the transfer in question. 

The Bureau adopts comment 33(b)–2 

with this clarification, and also makes 

other clarifying changes to comment 

33(b)–2 to make the comment consistent 

with § 1005.33(b)(1). 

Proposed comment 33(b)–3 provided 

that a remittance transfer provider may 

request, or the sender may provide, an 

email address of the sender or the 

designated recipient, as applicable, 

instead of a physical address if the 

email address would be sufficient to 

enable the provider to identify the 

remittance transfer to which the notice 

applies. Proposed comment 33(b)–4 

provided that if the sender fails to 

provide a timely notice of error within 

180 days from the stated date of 

delivery, the remittance transfer 

provider would not be required to 

comply with the error resolution 

requirements set forth in the rule. As the 

Board noted in the May 2011 Proposed 

Rule, proposed comment 33(b)–4 is 

similar to comment 11(b)(1)–7 for EFTs. 

The Bureau did not receive any 

comments on these proposed comments. 

Therefore, the Bureau adopts comment 

33(b)–3 substantially as proposed. 

However, given that a sender may 

provide a second notice of error based 

on documentation, additional 

information, or clarification that the 

sender requested pursuant to 

§ 1005.33(b)(2), as discussed above, the 

Bureau is revising comment 33(b)–4 to 

include the time periods relevant to 

§ 1005.33(b)(2). Consequently, comment 

33(b)–4 provides that, if applicable, a 

remittance transfer provider is not 

required to comply with the error 

resolution requirements for any notice 

of error from a sender that is received 

by the provider more than 60 days after 

a provider sent documentation, 

additional information, or clarification 

requested by the sender, provided such 

date is later than 180 days after the 

disclosed date of availability. 

The Board proposed comment 33(b)– 

5 to provide that a notice of error from 

a sender received by a remittance 

transfer provider’s agent is deemed to be 

received by the provider for purposes of 

the 180-day time frame for reporting 

errors under § 1005.33(b)(1)(i). Some 

industry commenters suggested that 

senders should only be permitted to 

assert an error at a centralized address 

or telephone number. These 

commenters noted that because 

remittance transfers are not the primary 

business for most or all of the agents of 

a remittance transfer provider, relying 

on an agent to properly forward 

disputes and relevant supporting 

documents to the remittance transfer 

provider would impose unnecessary 

costs on agents. Commenters also 

argued that introducing agents into the 

error resolution process would increase 

the likelihood that disputes would not 

be handled and resolved in a timely 

way. 

As the Board noted in the May 2011 

Proposed Rule, a sender that has a 

problem or issue with a particular 

remittance transfer may contact the 

agent location that the sender used to 

send the transfer to resolve the problem 

or issue, rather than notifying the 

provider directly. The Bureau agrees 

with the Board that because in many 

cases, for transfers sent through money 

transmitters, it will be the agent with 

whom the sender has a direct 

relationship, and not the provider, it is 

appropriate to treat a notice of error 

given to the agent as notice to the 

provider. This approach also ensures 

that a sender does not lose his or her 

error resolution rights merely because 

the sender was unaware of a need to 

directly notify the provider. This is 

consistent with the approach the Bureau 

is taking with respect to a sender 

asserting his or her right to cancel, as 

discussed in further detail below in 

comment 34(a)–4. Moreover, the Bureau 

notes that the comment does not require 

the agent to perform the error resolution 

procedures. Remittance transfer 

providers may require their agents to 

pass on any error notice they receive to 

the remittance transfer providers, who 

can then fulfill the requirements of 

§ 1005.33. Therefore, the Bureau adopts 

proposed comment 33(b)–5 

substantially as proposed. 

Finally, proposed comment 33(b)–6 

cross-referenced the disclosure 

requirements in § 205.31 to reiterate that 

a remittance transfer provider must 

include an abbreviated notice of the 

consumer’s error resolution rights on 

the receipt under § 205.31(b)(2) or 

combined disclosure under 

§ 205.31(b)(3), as applicable. In 


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addition, the proposed comment 

provided that the remittance transfer 

provider must make available to a 

sender upon request, a notice providing 

a full description of error resolution 

rights that is substantially similar to the 

model error resolution and cancellation 

notice set forth in Appendix A of this 

regulation (Model Form A–36). The 

Bureau did not receive any comments 

on the proposed comment. The Bureau 

adopts comment 33(b)–6 substantially 

as proposed. 

33(c) Time Limits and Extent of 

Investigation 

The Board proposed § 205.33(c) to 

implement the statutory time frame for 

investigating errors and set forth the 

procedures for resolving an error, 

including the applicable remedies. The 

Bureau is adopting proposed § 205.33(c) 

in renumbered § 1005.33(c) with the 

changes discussed below. 

33(c)(1) Time Limits for Investigation 

and Report to Consumer of Error 

Consistent with EFTA section 

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

provided that a remittance transfer 

provider must promptly investigate a 

notice of error to determine whether an 

error occurred within 90 days of 

receiving the sender’s notice. Some 

industry commenters suggested that the 

time to investigate a notice of error 

should be extended. One industry trade 

association commenter stated that for 

one of its member banks, while 

international wire ‘‘exceptions’’ 

(including non-timely delivery) 

averaged less than 1% of its 

international wire transfers, more than 

15% of these exceptions took longer 

than 90 days to resolve. 

The Bureau notes that the 90-day time 

period is set by the statute. Furthermore, 

compared to the time period to resolve 

errors for EFTs (including those a 

consumer may have initiated abroad), 

which can be either 10 business days or 

45 calendar days, 90 days is twice the 

length of the longest allowable time 

period. See § 1005.11(c). Although a 

longer period than the one available for 

EFTs may be justified given the 

international nature of these 

transactions, the Bureau believes that 

senders should have errors resolved in 

a timely manner. Consequently, the 

Bureau does not believe use of its 

authority under EFTA sections 904(a) 

and (c) to extend the statutorilyimposed 90-day period is warranted. 

To effectuate the purposes of the 

EFTA, the Board also proposed to 

include in proposed § 205.33(c)(1) a 

requirement that the remittance transfer 

provider report the results to the sender 

within three business days after 

completing its investigation. As the 

Board explained in the May 2011 

Proposed Rule, this timing is consistent 

with the time frame for reporting the 

results of an error investigation under 

Regulation E, § 1005.11(c)(2)(iv). In 

addition, under proposed § 205.33(c)(1), 

the report or notice of results would 

have to alert the sender of any remedies 

available for correcting any error that 

the provider determines has occurred. 

EFTA section 919(d)(1) does not 

expressly require a notice to be 

provided to the sender when the 

provider determines that an error has 

occurred. However, the Board proposed 

to require that a notice be given in these 

circumstances to alert the sender of the 

results of the investigation, as well as to 

inform the sender of available remedies. 

In proposing this requirement, the 

Board did not propose that the notice to 

a sender that an error occurred as 

asserted had to be in writing because 

such a requirement could unnecessarily 

delay a sender’s ability to receive an 

appropriate remedy. Accordingly, the 

Board proposed comment 33(c)–1 to 

clarify that if the error occurred as 

described by the sender, the provider 

may inform the sender of its findings 

either orally or in writing. If the error 

did not occur as described, however, the 

remittance transfer provider would have 

to provide a written notice of its 

findings under § 1005.33(d), as 

discussed below. The Bureau agrees 

with the Board’s reasoning in proposing 

both § 205.33(c)(1) and comment 33(c)– 

1. Accordingly, to effectuate 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 these provisions 

substantially as proposed in 

renumbered § 1005.33(c)(1) and 

comment 33(c)–1, respectively. 

Consumer group commenters also 

requested that the Bureau specify that 

the burden of proof should be on the 

remittance transfer provider so that if a 

sender presents evidence that there has 

been an error, the burden should 

unequivocally shift to the remittance 

transfer provider to show that there was 

not an error. The Bureau notes that the 

EFTA establishes various burdens of 

proof. For example, under EFTA section 

909(b), in any action involving a 

consumer’s liability for an unauthorized 

EFT, the burden of proof is upon the 

financial institution to show that the 

EFT was authorized. However, under 

EFTA section 910(b), a financial 

institution is not liable for an incorrect 

or delayed EFT if it can show by a 

preponderance of the evidence that its 

action or failure to act resulted from an 

act of God or other circumstance beyond 

its control or a technical malfunction 

known to the consumer at the time the 

consumer attempted to initiate the EFT. 

Section 1073 of the Dodd-Frank Act did 

not amend the EFTA to adopt a specific 

burden of proof for errors related to 

remittance transfers that are not EFTs. 

Therefore, the Bureau does not believe 

it is appropriate to address this issue. 

33(c)(2) Remedies 

The Board proposed § 205.33(c)(2) to 

establish the procedures and remedies 

for correcting an error. Proposed 

§ 205.33(c)(2)(i) and (ii) included the 

two remedies that are specified in EFTA 

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

§ 205.33(c)(2), the sender may designate 

the preferred remedy in the event of an 

error, consistent with EFTA section 

919(d)(1)(B). Thus, under proposed 

§ 205.33(c)(2)(i), the sender could 

choose to obtain a refund of the amount 

tendered in connection with the 

remittance transfer that was not 

properly transmitted, or an amount 

appropriate to resolve the error. 

Alternatively, under proposed 

§ 205.33(c)(2)(ii), the sender could 

choose to have the remittance transfer 

provider send to the designated 

recipient the amount appropriate to 

resolve the error, at no additional cost 

to the sender or the designated 

recipient. The Bureau did not receive 

any comments objecting to these 

remedies. Therefore, the statutory 

remedies set forth in proposed 

§ 205.33(c)(2)(i) and (ii) are adopted 

substantially as proposed in 

renumbered § 1005.33(c)(2)(i)(A) and 

(B), respectively, for errors under 

§ 1005.33(a)(1)(i) through (a)(1)(iii), and 

§ 1005.33(c)(2)(ii)(A)(1) and (2), 

respectively, for an error under 

§ 1005.33(a)(1)(iv). Thus, the final rule 

clarifies that these remedies do not 

apply to a sender’s request for 

documentation or for additional 

information or clarification under 

§ 1005.33(a)(1)(v), where the appropriate 

remedy is the requested documentation, 

information, or clarification. See 

§ 1005.33(c)(2)(iii) as discussed below. 

However, as discussed above with 

respect to proposed § 205.33(a)(1)(iv)(B), 

the Bureau believes that if the failure to 

make funds from a remittance transfer 

available on the disclosed date of 

availability is caused by the sender 

providing incorrect information in 

connection with the remittance transfer 

to the provider, the sender’s mistake 

should not obligate a remittance transfer 

provider to bear all the costs for 

resending the remittance transfer. As 

noted above, many industry 

commenters objected to the requirement 


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that the remittance transfer provider 

absorb the costs of amending and 

resending a transfer when the sender is 

at fault because doing so would require 

the remittance transfer provider and 

other senders, through higher fees, to 

bear the responsibility for a sender’s 

mistake. 

Therefore, § 1005.33(c)(2)(ii)(A)(2) 

does not require that providers send to 

the designated recipient the amount 

appropriate to resolve the error at no 

additional cost to the sender or the 

designated recipient if the sender 

provided incorrect information in 

connection with the remittance transfer 

to the provider. Instead, 

§ 1005.33(c)(2)(ii)(A)(2) provides that if 

the sender provided incorrect 

information to the remittance transfer 

provider in connection with the 

remittance transfer, third party fees may 

be imposed for resending the remittance 

transfer with the corrected information. 

Section 1005.33(c)(2)(ii)(A)(2) permits 

third party fees and taxes that were 

actually incurred in the earlier 

transmission attempt to be imposed for 

the resend, but does not permit 

remittance transfer providers to charge 

senders a second time for the provider’s 

own fees. 

The Bureau is making this distinction 

in order to apply the rule without 

requiring complicated individualized 

analyses and allocations of the expenses 

actually incurred in connection with a 

failed transaction. The Bureau believes 

this approach strikes a more appropriate 

balance between the interests of 

providers and senders than the 

proposed rule of not permitting any fees 

to be imposed for the resend, given that 

third party fees and taxes are not 

controlled by the provider and are 

simply being passed on from other 

actors. Furthermore, the Bureau believes 

that affiliates of remittance transfer 

providers, like providers themselves, 

should not assess fees for resending a 

remittance transfer with corrected 

information. 

The Bureau also believes that if a 

sender provides insufficient information 

to enable the remittance transfer 

provider to complete the transfer as 

requested, third party fees should be 

permitted to be imposed for resending 

the remittance transfer with the 

additional information. For example, a 

sender may only provide a partial name 

for the designated recipient such that 

the entity distributing the funds cannot 

determine whether the person picking 

up the funds or the name associated 

with the account is the intended 

designated recipient. Therefore, 

§ 1005.33(c)(2)(ii)(A)(2) provides that if 

the sender provided insufficient 

information to the remittance transfer 

provider in connection with the 

remittance transfer, third party fees may 

be imposed for resending the remittance 

transfer with the additional information. 

The Bureau is also adopting a new 

comment 33(c)–2 to clarify 

§ 1005.33(c)(2)(ii)(A)(2). The comment 

generally incorporates proposed 

comment 33(a)–6 to clarify that if the 

failure to make funds from a transfer 

available by the disclosed date of 

availability occurred due to the 

provider’s miscommunication of 

information necessary for the designated 

recipient to pick up the transfer, such as 

providing the incorrect location where 

the transfer may be picked up or 

providing the wrong confirmation 

number or code for the transfer, such 

failure would not be treated as a failure 

caused by the sender providing 

incorrect or insufficient information in 

connection with the remittance transfer 

to the provider. The comment also 

clarifies that while third party fees may 

be imposed for resending the remittance 

transfer with the corrected or additional 

information, the remittance transfer 

provider may not require the sender to 

provide the principal transfer amount 

again. 

Furthermore, if funds were not 

exchanged in the first unsuccessful 

attempt of the remittance transfer, the 

provider must use the exchange rate it 

is using for such transfers on the date of 

the resend. The Bureau recognizes that 

this approach is different from the 

approach adopted for other errors, 

where the provider must apply the 

exchange rate stated in the receipt or 

combined disclosure. See comment 

33(c)–3, discussed below. For errors 

where the failure was not caused by the 

sender providing incorrect or 

insufficient information, the Bureau 

believes that it is appropriate for the 

remedy to reflect what was promised to 

the sender. In contrast, when the failure 

is caused by the sender providing 

incorrect or insufficient information, the 

Bureau believes it is appropriate to 

generally put the provider and the 

sender in the same position as if the first 

unsuccessful attempt of the remittance 

transfer had never occurred. 

For example, if a sender instructs a 

remittance transfer provider to send 

US$100 to a designated recipient in a 

foreign country in local currency, for 

which the remittance transfer provider 

charges a transfer fee of US$10, and the 

sender provided incorrect or insufficient 

information that resulted in nondelivery of the remittance transfer, the 

remittance transfer provider may not 

require the sender to provide another 

US$100 to the remittance transfer 

provider to send or charge the sender 

another US$10 transfer fee. If the funds 

were not exchanged in the first 

unsuccessful attempt of the remittance 

transfer, the provider must use the 

exchange rate it is using for such 

transfers on the date of the resend. 

Based on this rule, if a remittance 

transfer is deposited in an account that 

does not belong to the designated 

recipient named in the receipt because 

the sender provided the wrong account 

number for the designated recipient, the 

provider may charge the sender for 

resending the remittance transfer, but 

may not have the sender provide the 

principal transfer amount again in the 

event that the remittance transfer 

provider is unable to have the funds 

extracted from the wrong account. The 

Bureau believes that this approach will 

encourage providers and other parties 

involved in the remittance transfer to 

develop security procedures to limit the 

risk of funds being deposited in an 

account when the name of the 

designated recipient named in the 

receipt does not match the name 

associated with the account number. 

The Bureau notes that remittance 

transfer providers will be supplied with 

both the name, and if provided by the 

sender, the telephone number and/or 

address of the designated recipient, 

which the provider must disclose on the 

receipt under § 1005.31(b)(2)(iii). 

New comment 33(c)–2 clarifies that 

although third party fees may be 

imposed on the sender for resending the 

remittance transfer with the corrected or 

additional information, third party fees 

that were not incurred during the first 

unsuccessful remittance transfer attempt 

may not be imposed again for resending 

the remittance transfer. For example, 

suppose a sender instructed the 

remittance transfer provider to send 

US$100 to a designated recipient in a 

foreign country, for which a remittance 

transfer provider charges a transfer fee 

of US$10 and an intermediary 

institution charges a lifting fee of US$5, 

such that the designated recipient is 

expected to receive only US$95, as 

indicated in the receipt. If the sender 

provided incorrect or insufficient 

information that resulted in nondelivery of the remittance transfer and 

the US$5 lifting fee was incurred in the 

first attempt, the sender may choose to 

provide an additional amount to offset 

the US$5 lifting fee deducted in the first 

unsuccessful remittance transfer attempt 

and ensure that the designated recipient 

receives US$95 or may choose to resend 

the US$95 amount with the 

understanding that another fee may be 

deducted by the intermediary 

institution, as indicated in the receipt. 


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Otherwise, if the US$5 lifting fee was 

not incurred in the first attempt, then 

the remittance transfer provider must 

send the original US$100 for the resend, 

and the sender may expect a US$5 

lifting fee to be imposed by the 

intermediary institution, as indicated in 

the receipt. Comment 33(c)–2 also 

reminds providers that a request to 

resend a remittance transfer is a request 

to send a remittance transfer. Therefore, 

a provider must provide the disclosures 

required by § 1005.31 for a resend of a 

remittance transfer. 

In addition, the Board proposed to 

add a separate, cumulative remedy that 

would apply if the transfer was not 

made available to the designated 

recipient by the disclosed date of 

availability under § 1005.33(a)(1)(iv). 

This additional remedy was proposed 

pursuant to the Board’s authority under 

EFTA section 919(d)(1)(B) to provide 

‘‘such other remedy’’ as the Board 

determines appropriate ‘‘for the 

protection of senders.’’ Under proposed 

§ 205.33(c)(2)(iii), if the remittance 

transfer was not sent or delivered to the 

designated recipient by the stated date 

of availability, the remittance transfer 

provider would be required to refund all 

fees charged or imposed in connection 

with the transfer, even if the consumer 

asks the provider to send the remittance 

transfer to the designated recipient as 

the preferred remedy. If the funds have 

already been delivered to the recipient, 

however, even if on an untimely basis, 

the sole remedy in such case would be 

the refund of fees. 

Several industry commenters objected 

to the remedy to refund all fees 

associated with the remittance transfer. 

As the Board explained in the May 2011 

Proposed Rule, requiring the provider to 

refund all fees imposed in connection 

with the remittance transfer, including 

the transfer fee, is appropriate under 

such circumstances because the sender 

did not receive the contracted service, 

specifically the availability of funds in 

connection with the transfer by the 

disclosed date. Furthermore, the Board 

noted that in some cases, the sender 

may have paid an additional fee for 

expedited delivery of funds. 

Based on some industry comments, 

the Bureau believes there may be some 

confusion regarding when the proposed 

remedy of refunding fees associated 

with the remittance transfer may be 

available. As stated in proposed 

§ 205(c)(2)(iii), the remedy is only 

available in the case of an error asserted 

under proposed § 205.33(a)(1)(iv) 

(adopted as § 1005.33(a)(1)(iv) above). 

Accordingly, if the remittance transfer 

provider finds that the error that 

occurred is, for example, an incorrect 

amount paid by a sender in connection 

with a remittance transfer under 

proposed § 205.33(a)(1)(i) (adopted as 

§ 1005.33(a)(1)(i) above), the provider 

would be under no obligation to refund 

the fees associated with the remittance 

transfer to a sender. Instead, the only 

remedies required to be available to a 

sender would be a refund of the amount 

appropriate to resolve the error under 

proposed § 205(c)(2)(i) (adopted as 

§ 1005(c)(2)(i)(A) above) or to have the 

amount appropriate to resolve the error 

sent to the designated recipient, at no 

additional cost to the sender or the 

designated recipient under proposed 

§ 205.33(c)(2)(ii) (adopted as 

§ 1005(c)(2)(i)(B) above). 

The Bureau agrees with the Board that 

the remedy of refunding all fees 

imposed for the remittance transfer is 

appropriate if the remittance transfer 

was not made available to the 

designated recipient by the disclosed 

date of availability. 

Furthermore, the Bureau believes that 

taxes should also be refunded. One 

industry commenter noted that for 

certain jurisdictions, the remittance 

transfer provider may be prohibited by 

law from refunding taxes. Therefore, the 

Bureau adopts proposed 

§ 205.33(c)(2)(iii) in renumbered 

§ 1005.33(c)(2)(ii)(B) with the additional 

requirement to refund taxes to the 

extent not prohibited by law. 

Moreover, consistent with 

§ 1005.33(c)(2)(ii)(A)(2), which provides 

that third party fees may be imposed for 

resending the remittance transfer if the 

sender provided incorrect or insufficient 

information to the remittance transfer 

provider in connection with the 

remittance transfer, § 1005.33(c)(2)(ii)(B) 

provides that the provider need not 

refund fees imposed for the remittance 

transfer if the sender provided incorrect 

or insufficient information to the 

remittance transfer provider in 

connection with the remittance transfer. 

The Bureau is also adopting new 

§ 1005.33(c)(2)(iii) to clarify that in the 

case of an error asserted under 

§ 1005.33(a)(1)(v), which is a request for 

documentation, additional information 

or clarification concerning a remittance 

transfer, the appropriate remedy is 

providing the requested documentation, 

information, or clarification. 

Proposed § 205.33(c)(2) also provided 

that the remittance transfer provider 

must correct the error within one 

business day of, or as soon as reasonably 

practicable after, receiving the sender’s 

instructions regarding the appropriate 

remedy. The Board explained that the 

proposed rule would provide additional 

flexibility to address the limited 

circumstances where the particular 

method of sending a remittance transfer 

may present practical impediments to a 

provider’s ability to correct an error 

within one business day. For example, 

it may not be practicable for a wire 

transfer that goes through several 

intermediary institutions before 

reaching the designated recipient to 

make the amount in error available to 

the recipient within one business day in 

accordance with a sender’s request. The 

Bureau agrees with the Board’s rationale 

in requiring the remittance transfer 

provider to correct the error within one 

business day of, or as soon as reasonably 

practicable after, receiving the sender’s 

instructions regarding the appropriate 

remedy. The Bureau retains this aspect 

of proposed § 205.33(c)(2) in 

renumbered § 1005.33(c)(2) and also 

includes other clarifying, nonsubstantive changes. 

Proposed comment 33(c)–2 clarified 

that the remittance transfer provider 

may request that the sender designate 

the preferred remedy at the time the 

sender provides notice of error. As the 

Board explained in the May 2011 

Proposed Rule, permitting such requests 

may enable providers to process error 

claims more expeditiously without 

waiting for the sender’s subsequent 

instructions after notifying the sender of 

the results of the investigation. If the 

sender does not indicate the desired 

remedy at the time of providing notice 

of error, the proposed comment 

provided that the remittance transfer 

provider must notify the sender of any 

available remedies in the report 

provided under proposed § 205.33(c)(1) 

(adopted as § 1005(c)(1) above) after 

determining an error occurred. Proposed 

comment 33(c)–2 is adopted as 

comment 33(c)–3. 

However, the Board recognized in the 

May 2011 Proposed Rule that by giving 

the sender the ability to choose the 

remedy, the statute, and thus the rule, 

may make it impossible for a remittance 

transfer provider to promptly correct an 

error if the consumer fails to designate 

an appropriate remedy either at the time 

of providing the notice of error or in 

response to the provider’s notice 

informing the consumer of its error 

determination and available remedies. 

The Board therefore requested comment 

on whether remittance transfer 

providers should be permitted to select 

a default method of correcting errors. 

Both industry and consumer group 

commenters agreed that there should be 

a default method of correcting errors. 

Industry commenters suggested that the 

remittance transfer provider should be 

permitted to select the default remedy. 

Consumer group commenters, however, 

recommended that the Bureau should 


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6258 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

set the default remedy of refunding to 

the sender the appropriate amount. 

Based on the comments received, the 

Bureau adopts a new comment 33(c)–4 

to permit a remittance transfer provider 

to select a default remedy that the 

provider will use if the sender does not 

designate a remedy within a reasonable 

time after the sender receives the report 

provided under § 1005.33(c)(1). The 

Bureau believes that providing for a 

default remedy after a sender has had a 

reasonable opportunity to choose a 

remedy would balance the statute’s aim 

to provide a sender the chance to choose 

his or her preferred remedy with the 

goal of promptly resolving the sender’s 

outstanding error claim. Furthermore, 

allowing remittance transfer providers 

to select the default remedy reduces 

burden on providers without consumer 

harm because providers have the ability 

to provide a preferred remedy without 

compromising a sender’s opportunity to 

choose. 

In addition, new comment 33(c)–4 

provides a safe harbor for the amount of 

time that would be considered 

reasonable after the report under 

§ 1005.33(c)(1) is provided. Specifically, 

comment 33(c)–4 states that a provider 

that permits a sender to designate a 

remedy within 10 days after the 

provider has sent the report provided 

under § 1005.33(c)(1) before selecting 

the default remedy is deemed to have 

provided the sender with a reasonable 

time to designate a remedy. In selecting 

the 10-day time frame as a safe harbor, 

the Bureau notes the existence of a 

similar provision under Regulation Z. 

Under the commentary to 12 CFR 

1026.5(b)(1)(i), a creditor that provides 

an account-opening disclosure in 

connection with a balance transfer may 

effectuate the balance transfer if the 

consumer has not withdrawn the 

balance transfer request within 10 days 

after the creditor has sent the accountopening disclosure. See comment 

5(b)(1)(i)–5 under Regulation Z. New 

comment 33(c)–4 also clarifies that in 

the case a default remedy is provided, 

the remittance transfer provider must 

correct the error within one business 

day, or as soon as reasonably 

practicable, after the reasonable time for 

the sender to designate the remedy has 

passed. 

Consumer group commenters also 

suggested that the Bureau adopt 

guidance on how to handle cases where 

a sender cannot be contacted after an 

error is discovered by the provider, 

sender, or recipient. These commenters 

recommended that three phone calls or 

emails should constitute a good faith 

effort to contact the sender. The Bureau 

notes that the error resolution 

procedures only apply if the sender 

asserts an error. See comment 33(b)–1 

adopted above. A notice of error from a 

sender must contain information to 

enable the provider to identify the 

sender’s name and telephone number or 

address. See § 1005.33(b)(1)(ii)(A) 

adopted above. Therefore, the Bureau 

believes that remittance transfer 

providers will have valid contact 

information from the sender when the 

sender asserts the error and that 

remittance transfer providers will make 

a reasonable effort to contact senders to 

fulfill their error resolution 

requirements. 

Some industry commenters requested 

that the final rule clarify the meaning of 

‘‘amount appropriate to resolve the 

error.’’ The Bureau agrees that 

clarification of this term would be 

helpful. New comment 33(c)–5 provides 

that for the purposes of the remedies set 

forth in § 1005.33(c)(2)(i)(A), (c)(2)(i)(B), 

(c)(2)(ii)(A)(1), and (c)(2)(ii)(A)(2), the 

amount appropriate to resolve the error 

is the specific amount of transferred 

funds that should have been received if 

the remittance transfer had been 

effected without error. New comment 

33(c)–5 further clarifies that the amount 

appropriate to resolve the error does not 

include consequential damages. 

Consumer group commenters 

requested further guidance on the form 

a refund may take. In particular, 

commenters were concerned that 

remittance transfer providers not be 

permitted to provide store credit in the 

refund amount. The Bureau agrees that 

the form of any refund provided under 

§ 1005.33(c)(2)(i)(A) should generally be 

the same as the form of payment for the 

remittance transfer. The Bureau also 

believes that a provider should also be 

permitted to provide a refund in cash. 

Therefore, the Bureau adopts new 

comment 33(c)–6 to clarify that a 

remittance transfer provider may, at its 

discretion, issue a refund either in cash 

or in the same form of payment that was 

initially provided by the sender for the 

remittance transfer. The comment is 

similar to comment 34(b)–1, discussed 

below, regarding the form of refund after 

a cancellation. 

The Bureau is, however, amending 

comment 34(b)–1 in one respect, which 

is also reflected in new comment 33(c)– 

6. Specifically, the Bureau recognizes 

that if a sender provided cash to the 

remittance transfer provider for the 

remittance transfer, there may be 

instances when a cash refund may not 

be possible or convenient to the sender. 

Generally, it is undesirable for a 

provider to mail cash, and agents may 

be prohibited from providing cash to 

consumers. Even if agents were 

permitted to provide cash refunds, it 

may be inconvenient to the sender to 

return to the remittance transfer 

provider or agent location to pick up the 

cash refund. Consequently, comments 

33(c)–6 and 34(b)–1 state that a provider 

may issue a refund by check if a sender 

initially provided cash for the 

remittance transfer. For example, if the 

sender originally provided cash as 

payment for the transfer, the provider 

may mail a check to the sender in the 

amount of the payment. 

Consumer group commenters also 

suggested that the Bureau consider 

emphasizing that remittance transfer 

providers should comply with 

applicable State escheat laws if the 

sender cannot be contacted to receive a 

refund. The Bureau believes that such 

clarification is unnecessary. 

Furthermore, the Bureau is concerned 

that an explicit reference to State 

escheat laws in this instance may imply 

that other State laws (for example, State 

disclosure requirements for money 

transmitters) do not apply. 

Consequently, the Bureau declines to 

adopt this suggestion. 

Proposed comment 33(c)–3 provided 

additional guidance regarding the 

appropriate remedies where the sender 

has paid an excess amount to send a 

remittance transfer. Under that 

circumstance, the sender may request a 

refund of the amount paid in excess or 

may request that the remittance transfer 

provider make that excess amount 

available to the designated recipient at 

no additional cost. The Bureau did not 

receive any comments on the proposed 

comment. The Bureau adopts proposed 

comment 33(c)–3 substantially as 

proposed in comment 33(c)–7. 

Under proposed comment 33(c)–4, 

fees that must be refunded to a sender 

for a failure to make funds from a 

remittance transfer available by the 

stated date of availability under 

§ 1005.33(a)(1)(iv) include all fees 

imposed for the transfer, regardless of 

the party that imposed the fee, and are 

not limited to fees imposed by the 

provider. Some industry commenters 

objected to having to refund fees not 

imposed by the remittance transfer 

provider. As explained above, however, 

the Bureau believes that refunding all 

fees is appropriate if the remittance 

transfer service was not provided as 

contracted because the funds were not 

made available by the disclosed date of 

availability. 

The Bureau is revising proposed 

comment 33(c)–4, however, to respond 

to a request from a Federal Reserve Bank 

commenter to resolve ambiguities in the 

relationship between the remedies in 

§ 1005.33(c)(2)(ii)(A)(1) and (2) and the 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6259 

remedy in § 1005.33(c)(2)(ii)(B). 

Specifically, the Bureau has revised 

proposed comment 33(c)–4, renumbered 

as comment 33(c)–8, to clarify that the 

remittance transfer provider must 

correct the error in accordance with 

§ 1005.33(c)(2)(ii)(A), as applicable. 

Therefore, if the remittance transfer was 

made available to the designated 

recipient, but on an untimely basis, the 

remedies under § 1005.33(c)(2)(ii)(A) 

would not be applicable. In that 

circumstance, the ‘‘amount appropriate 

to resolve the error’’ would be zero since 

the entire transfer amount was made 

available to the designated recipient. 

The sender’s only remedy in this case 

would be the refund of fees under 

§ 1005.33(c)(2)(ii)(B). If, however, the 

funds were never made available to the 

designated recipient, then the sender 

would have one of the remedies 

available under § 1005.33(c)(2)(ii)(A)(1) 

or (2) in addition to the remedy of the 

fee refund under § 1005.33(c)(2)(ii)(B). 

The Bureau also believes the 

renumbering in § 1005.33(c)(2) should 

make this clear. 

Proposed comment 33(c)–5 clarified 

that if an error occurred, whether as 

alleged or in a different amount or 

manner, a remittance transfer provider 

may not impose any charges related to 

any aspect of the error resolution 

process, including any charges for 

documentation or investigation. As 

discussed in the May 2011 Proposed 

Rule, the Board expressed concern that 

such fees or charges might have a 

chilling effect on a sender’s good faith 

assertion of errors and noted that the 

proposed comment is similar to 

comment 11(c)–3 for EFTs. Proposed 

33(c)–5, however, also stated that 

nothing would prohibit a remittance 

transfer provider from imposing a fee for 

making copies of documentation for 

non-error-resolution-related purposes, 

such as for tax documentation purposes 

under § 1005.33(a)(2)(iii). The Bureau 

did not receive any comments on the 

proposed comment. Therefore, the 

Bureau adopts proposed comment 

33(c)–5 as proposed in comment 33(c)– 

9. 

Finally, under proposed comment 

33(c)–6, a remittance transfer provider 

may correct an error, without further 

investigation, in the amount or manner 

alleged by the sender to be in error. This 

is similar to comment 11(c)–4 for EFTs. 

As with comment 11(c)–4, the provider 

must otherwise comply with all other 

applicable requirements of the error 

resolution procedures, including 

providing notice of the resolution of the 

error. Commenters did not address this 

proposed comment. Therefore, the 

Bureau adopts proposed comment 

33(c)–6 substantially as proposed in 

comment 33(c)–10. 

33(d) Procedures if Remittance Transfer 

Provider Determines No Error or 

Different Error Occurred 

The Board proposed § 205.33(d) to 

establish procedures in the event that a 

remittance transfer provider determines 

that no error or a different error 

occurred from that described by the 

sender. Specifically, proposed 

§ 205.33(d)(1) stated that the remittance 

transfer provider must provide a written 

explanation of the provider’s finding 

that there was no error or that a different 

error occurred, consistent with EFTA 

section 919(d)(1)(B)(iv). Such 

explanation would have to respond to 

the sender’s specific complaint and note 

the sender’s right to request the 

documents that the provider relied on in 

making its determination. Furthermore, 

under proposed § 205.33(d)(2), the 

remittance transfer provider would be 

required to promptly provide copies of 

such documentation upon the sender’s 

request. 

Under proposed comment 33(d)–1, if 

a remittance transfer provider 

determined that an error occurred in a 

manner or amount different from that 

described by the sender, the provider 

would be required to comply with 

applicable provisions of both 

§ 1005.33(c) and (d) (proposed as 

§ 205.33(c) and (d)). Similar to comment 

11(d)–1 with respect to error 

investigations involving EFTs, the 

provider may choose to give the notice 

of correction of error under 

§ 1005.33(c)(1) (proposed as 

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

a different error occurred under 

§ 1005.33(d) (proposed as § 205.33(d)) 

separately or in a combined form. The 

Bureau did not receive any comments 

on the procedures set forth in proposed 

§ 205.33(d) or comment 33(d)–1. The 

Bureau adopts these provisions 

substantially as proposed in 

renumbered § 1005.33(d) and comment 

33(d)–1. 

33(e) Reassertion of Error 

As discussed in the May 2011 

Proposed Rule, under proposed 

§ 205.33(e), a remittance transfer 

provider that has fully complied with 

the error resolution requirements with 

respect to a particular notice of error 

would have no further responsibilities 

in the event the sender later reasserts 

the same error, except in the case of an 

error asserted following the sender’s 

receipt of information provided under 

§ 1005.33(a)(1)(v). Furthermore, 

proposed comment 33(e)–1 explained 

that the remittance transfer provider 

would have no further error resolution 

responsibilities if the sender voluntarily 

withdraws the notice alleging an error. 

In such case, however, the sender would 

retain the right to reassert the allegation 

within the original 180-day period from 

the disclosed date of availability unless 

the remittance transfer provider had 

already complied with all of the error 

resolution requirements before the 

allegation was withdrawn. As noted in 

the May 2011 Proposed Rule, the 

proposed provision and comment were 

modeled on similar provisions under 

§ 1005.11(e). The Board requested 

comment on whether additional 

guidance is necessary regarding the 

circumstances in which a sender has 

‘‘voluntarily withdrawn’’ a notice of 

error. 

Commenters did not generally address 

proposed § 205.33(e) or proposed 

comment 33(e)–1. However, one 

industry commenter suggested that the 

error resolution process under proposed 

§ 205.33 should be the exclusive remedy 

for the enumerated errors. EFTA section 

916 provides that there is no civil 

liability for an error resolved in 

accordance with the error resolution 

procedures set forth in EFTA section 

908, which are the error resolution 

procedures implemented in § 1005.11. 

The Bureau notes that EFTA section 916 

was not amended to include the error 

resolution procedures for remittance 

transfers set forth in EFTA section 

919(d). As such, under EFTA section 

916, a court could find that there is civil 

liability even for an error that has been 

resolved in accordance with the error 

resolution procedures in § 1005.33. 

Accordingly, the Bureau adopts 

proposed § 205.33(e) as proposed in 

renumbered § 1005.33(e) . The Bureau 

adopts comment 33(e)–1 with one 

change to include the time period 

relevant to an error asserted pursuant to 

§ 1005.33(b)(2) after a sender receives 

requested documentation, additional 

information or clarification from the 

remittance transfer provider. 

33(f) Relation to Other Laws 

As the Board noted in the May 2011 

Proposed Rule, the error resolution 

rights for remittance transfers exist 

independently from other rights that a 

consumer may have under other 

existing Federal law. Proposed 

§ 205.33(f) contains guidance regarding 

the interplay between the error 

resolution provisions for remittance 

transfers and error resolution rights that 

may exist under other applicable 

consumer financial protection laws. 

The Board proposed § 205.33(f)(1) to 

implement the provision in EFTA 

section 919(e)(1) regarding the 


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6260 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

applicability of the remittance transfer 

error resolution provisions to EFTs. The 

proposed rule provided that if an 

alleged error in connection with a 

remittance transfer involved an 

incorrect EFT to a sender’s account and 

the account was also held by the 

remittance transfer provider, then the 

requirements of proposed § 205.33, and 

its applicable time frames and 

procedures, governed the error 

resolution process. If the notice of error 

was asserted with an account-holding 

institution that was not the same entity 

as the remittance transfer provider, 

however, proposed § 205.33(f)(1) 

provided that the error resolution 

procedures under § 205.11 (currently 

§ 1005.11), and not those under 

§ 205.33, would apply to the accountholding institution’s investigation of the 

alleged error. 

An electronic fund transfer from a 

consumer’s account may also be a 

remittance transfer. But, as the Board 

explained in the May 2011 Proposed 

Rule, an account-holding institution 

would likely be unable to identify a 

particular EFT as a remittance transfer 

unless it was also the remittance 

transfer provider. In the absence of 

direct knowledge that a particular EFT 

was used to fund a remittance transfer, 

the account-holding institution would 

face significant compliance risk if the 

error resolution requirements under 

proposed § 205.33 were deemed to 

apply to the error. 

The Bureau agrees with the Board that 

such an outcome would be undesirable. 

Accordingly, the Bureau is adopting 

proposed § 205.33(f)(1) in renumbered 

§ 1005.33(f)(1) to permit an accountholding institution to comply with the 

error resolution requirements of 

§ 1005.11 when the institution is not 

also the remittance transfer provider for 

the transaction in question. In such a 

case, the sender will also have 

independent error resolution rights 

against the remittance transfer provider 

itself under § 1005.33. 

Some industry commenters thought 

the proposed guidance was confusing 

and would apply more than one error 

resolution procedure to a remittance 

transfer provider. Although certain 

remittance transfer providers may have 

multiple error resolution obligations, 

these provisions are meant to resolve 

conflicts and provide greater certainty 

about which error resolution provisions 

apply in certain situations. Therefore, 

the Bureau is revising comment 33(f)–1 

to provide such clarification. 

Revised comment 33(f)–1 provides 

that a financial institution that is also 

the remittance transfer provider may 

have error obligations under both 

§§ 1005.11 and 1005.33. The comment 

provides examples to illustrate when 

certain error resolution procedures 

apply to a remittance transfer provider 

that is also the account-holding 

institution from which the transfer is 

funded. In the first example, a sender 

asserts an error under § 1005.11 with a 

remittance transfer provider that holds 

the sender’s account, and the error is 

not also an error under § 1005.33, such 

as an omission of an EFT from a 

periodic statement. In this case, the 

error-resolution provisions of § 1005.11 

exclusively apply to the error. In the 

second example, a sender asserts an 

error under § 1005.33 with a remittance 

transfer provider that holds the sender’s 

account, and the error is also an error 

under § 1005.11, such as when the 

amount the sender requested to be 

deducted from the sender’s account and 

sent for the remittance transfer differs 

from the amount that was actually 

deducted from the account and sent. In 

this case, the error-resolution provisions 

of § 1005.33 exclusively apply to the 

error. 

Proposed § 205.33(f)(2) addressed the 

scenario where the consumer provides a 

notice of error to the creditor that issued 

the credit card with respect to an 

alleged error involving an incorrect 

extension of credit in connection with a 

remittance transfer, such as when a 

consumer provides a credit card to pay 

for a remittance transfer. Proposed 

§ 205.33(f)(2) provided that, in such a 

case, the error resolution provisions of 

Regulation Z, 12 CFR 1026.13, would 

apply to the creditor, rather than the 

requirements under proposed § 205.33. 

Proposed § 205.33(f)(2) also stated that if 

the sender instead provides a notice of 

error asserting an incorrect payment 

amount involving the use of a credit 

card to the remittance transfer provider, 

then the error resolution provisions of 

proposed § 205.33 would apply to the 

remittance transfer provider. 

A creditor of a credit card or other 

credit account may also act as a 

remittance transfer provider in certain 

circumstances, such as when a 

cardholder sends funds from his or her 

credit card through a service offered by 

the creditor to a recipient in a foreign 

country. In this case, an error could 

potentially be asserted under either 

Regulation Z or the error resolution 

provisions applicable to remittance 

transfers in the case of an incorrect 

extension of credit in connection with 

the transfer. The Board proposed that 

under these circumstances, the error 

resolution provisions under Regulation 

Z § 1026.13 would apply to the alleged 

error, but solicited comment on the 

proposed approach. 

One commenter suggested that if a 

remittance transfer provider is serving 

multiple roles, such as a creditor that is 

also a remittance transfer provider, the 

remittance transfer provider should 

have the ability to choose which error 

resolution procedure to follow. The 

Bureau does not believe that remittance 

transfer providers should be permitted 

to choose the error resolution procedure 

to apply because providers and senders 

would benefit from the application of 

consistent procedures in similar 

situations. 

The Bureau agrees with the Board that 

it is reasonable to apply the Regulation 

Z error resolution provisions under 

circumstances where the remittance 

transfer provider is also the creditor 

because Regulation Z, 12 CFR 

1026.13(d)(1) permits a consumer to 

withhold disputed amounts while an 

error is being investigated. However, the 

Bureau believes that the additional time 

afforded to a sender to assert an error 

under § 1005.33 may also be of value. 

Therefore, for a remittance transfer 

provider that is also the creditor, the 

Bureau is requiring that the time period 

to assert an error under § 1005.33(b) 

should apply instead of the time period 

under 12 CFR 1026.13(b). This will also 

ensure that the error resolution notice 

required under § 1005.31(b)(2)(iv) is 

consistent. Otherwise, disclosing to a 

sender that the time period to assert an 

error may in some instances be 60 days 

from the periodic statement reflecting 

the error and in other instances may be 

180 days from the disclosed date of 

availability on the remittance transfer 

receipt could be confusing. 

The Bureau also believes further 

clarification is warranted for errors 

other than incorrect extensions of credit 

in connection with the remittance 

transfer. For example, an error involving 

an incorrect amount of currency 

received under § 1005.33(a)(1)(iii) or the 

failure to make funds available by the 

disclosed date of availability under 

§ 1005.33(a)(1)(iv) may be asserted as an 

error involving goods or services that 

have not been delivered as agreed under 

§ 1026.13(a)(3). Accordingly, the Bureau 

is adding these references to the final 

rule to resolve any potential conflicts. 

The Bureau adopts § 205.33(f)(2) in 

renumbered § 1005.33(f)(2) with these 

revisions and amendments to clarify 

that the provision applies to all credit 

accounts rather than only credit card 

accounts. 

In addition, the Bureau notes that in 

certain circumstances, a credit 

cardholder has a right to assert claims 

or defenses against a card issuer 

concerning property or services 

purchased with a credit card under 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6261 

Regulation Z, 12 CFR 1026.12(c)(1). 

These rights are independent of other 

billing error rights a cardholder may 

have. See comment 12(c)–1 to 12 CFR 

1026.12(c). Therefore, the Bureau is 

adopting a new comment 33(f)–2 to 

clarify that to the extent a credit 

cardholder has a right to assert claims 

and defenses against a card issuer under 

12 CFR 1026.12(c)(1), nothing in 

§ 1005.33 limits a sender’s right in this 

regard. 

The Board also proposed 

§ 205.33(f)(3) to provide guidance where 

an alleged error involves an 

unauthorized EFT or unauthorized use 

of a credit card to send a remittance 

transfer, such as when a stolen debit or 

credit card is used to send funds to a 

foreign country. Specifically, proposed 

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

would have rights under Regulation E 

§§ 1005.6 and 1005.11 in the case of an 

unauthorized EFT or Regulation Z 

§§ 1026.12(b) and 1026.13 in the case of 

an unauthorized use of a credit card. 

However, since the consumer holding 

the asset account or the credit card 

account is not the sender of the 

remittance transfer, proposed 

§ 205.33(f)(3) stated that the error 

resolution provisions for remittance 

transfers would not apply. See comment 

33(b)–1. The Bureau agrees with the 

Board’s proposal, and § 205.33(f)(3) is 

adopted substantially as proposed in 

renumbered § 1005.33(f)(3) with an 

amendment to clarify application of the 

provision to credit accounts generally as 

opposed to only credit card accounts. 

Some industry commenters suggested 

that the reasoning the Board used in 

applying Regulation E §§ 1005.6 and 

1005.11 in the case of an unauthorized 

EFT and Regulation Z §§ 1026.12(b) and 

1026.13 in the case of an unauthorized 

use of a credit card, should be used in 

applying UCC Article 4A provisions to 

an unauthorized wire transfer. As 

discussed above in the supplementary 

information to § 1005.30(e), UCC Article 

4A–108 provides that Article 4A does 

not apply ‘‘to a funds transfer, any part 

of which is governed by the [EFTA]’’ 

(emphasis added). Furthermore, as 

discussed above, the Bureau may only 

preempt State law to the extent that 

there is an inconsistency. Since the 

Bureau does not believe there is an 

inconsistency between the EFTA and 

UCC Article 4A–108, UCC Article 4A 

does not apply to wire transfers that are 

remittance transfers under § 1005.30(e). 

Therefore, the Bureau declines to 

implement commenters’ suggestion with 

respect to unauthorized wire transfers. 

Finally, the Board noted that in 

certain cases a consumer may be able to 

assert error resolution rights in 

connection with a remittance transfer 

with both the remittance transfer 

provider as well as the account-holding 

institution or credit card issuer or 

creditor. Proposed comment 33(f)–2 

addressed this situation by providing 

that if a sender receives credit to correct 

an error of an incorrect amount paid in 

connection with a remittance transfer 

from either the remittance transfer 

provider or the sender’s accountholding institution or creditor, and then 

subsequently asserts the same error with 

the other party, the other party would 

have no further responsibilities to 

investigate the error. The proposed 

comment also clarified that an accountholding institution or creditor may 

reverse amounts it has previously 

credited to correct an error if the 

consumer receives more than one credit 

to correct the same error and provided 

an example to illustrate this concept. 

One industry commenter noted that 

the provisions in § 1005.33(f) could 

provide a consumer with potentially 

different error resolution procedures 

depending on who the consumer 

decides to contact. This may be the case 

if the remittance transfer provider is not 

also the account-holding institution or 

creditor. However, proposed comment 

33(f)–2 explains that the second party 

has no error resolution obligations if the 

sender already received credit to correct 

an error of an incorrect amount paid in 

connection with a remittance transfer. 

This comment makes clear that a 

consumer may not receive a windfall by 

successfully asserting an error with both 

the provider and the account-holding 

institution and/or credit card issuer or 

creditor. 

Another industry commenter 

suggested that the remittance transfer 

provider should be permitted to delay 

providing a remedy until expiration of 

the card issuer’s chargeback right under 

network rules to prevent duplicate 

recoveries when remittances are funded 

by a debit card or a credit card. The 

Bureau believes that the delay would be 

disadvantageous for senders in getting a 

speedy resolution to an error and that 

proposed comment 33(f)–2 is a better 

method for dealing with the possibility 

of duplicate recoveries. The Bureau 

adopts this comment, renumbered as 

comment 33(f)–3, substantially as 

proposed. 

Lastly, the Bureau received comment 

from an industry commenter 

questioning which error resolution 

provisions apply when a sender has 

multiple funding sources for the 

remittance transfer. For example, a 

sender could fund a remittance transfer 

partly by a balance in the sender’s 

account held by the remittance transfer 

provider and partly by a credit card or 

an ACH transfer from the sender’s 

checking account. In such cases, the 

Bureau notes that which error resolution 

procedure will apply depends on the 

error that is asserted. For example, if the 

error asserted is the incorrect extension 

of credit in connection with the 

remittance transfer, then § 1005.33(f)(2) 

provides that § 1026.13 applies to the 

creditor while § 1005.33 applies to the 

remittance transfer provider, but only 

with respect to the amount of the 

remittance transfer funded by the credit 

card. However, if the remittance transfer 

provider is also the creditor, only 

§ 1026.13 applies to the remittance 

transfer provider with respect to the 

amount of the remittance transfer 

funded by the credit card. 

Similarly, if the error asserted is an 

incorrect EFT from a sender’s account, 

then § 1005.33(f)(1) provides that 

§ 1005.11 applies to the account-holding 

institution while § 1005.33 applies to 

the remittance transfer provider, but 

only with respect to the amount of the 

remittance transfer funded by the debit 

card or the ACH transfer from the 

sender’s account. However, if the 

remittance transfer provider is also the 

account-holding institution, only 

§ 1005.33 applies to the remittance 

transfer provider with respect to the 

amount of the remittance transfer 

funded by the debit card or the ACH 

transfer from the sender’s account. The 

Bureau believes the regulation and 

commentary as adopted provide 

sufficient guidance in this regard, and 

additional clarification is not necessary. 

33(g) Error Resolution Standards and 

Recordkeeping Requirements 

Pursuant to EFTA section 919(d)(2), 

the Bureau must establish clear and 

appropriate standards for remittance 

transfer providers with respect to error 

resolution relating to remittance 

transfers, to protect senders from such 

errors. EFTA section 919(d)(2) 

specifically provides that such 

standards must include appropriate 

standards regarding recordkeeping, 

including retention of certain errorresolution related documentation. The 

Board proposed § 205.33(g) to 

implement these error resolution 

standards and recordkeeping 

requirements. 

Specifically, proposed § 205.33(g)(1) 

provided that a remittance transfer 

provider must develop and maintain 

written policies and procedures that are 

designed to ensure compliance with 

respect to the error resolution 

requirements applicable to remittance 

transfers. The proposed rule also stated 

that remittance transfer providers must 


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take steps to ensure that whenever a 

provider uses an agent to perform any 

of the provider’s error resolution 

obligations, the agent conducts such 

activity in accordance with the 

provider’s policies and procedures. As 

noted in the May 2011 Proposed Rule, 

this approach is similar to one taken by 

the Federal banking agencies in other 

contexts. See, e.g., 12 CFR 1022.90(e) 

(requiring that an identity theft red flags 

program exercise appropriate and 

effective oversight of service-provider 

arrangements). 

One industry commenter suggested 

that the failure to maintain written 

policies and procedures should not be 

an independent cause of action. The 

Bureau believes that remittance transfer 

providers must develop written policies 

and procedures in order to demonstrate 

compliance to the appropriate regulator. 

Therefore, the Bureau does not believe 

the requirement to maintain written 

policies and procedures that the 

remittance transfer provider must follow 

imposes any additional burden. 

The Bureau is making one change to 

proposed § 205.33(g)(1). Specifically, 

the Bureau is deleting the provision in 

proposed § 205.33(g)(1) that requires 

remittance transfer providers to take 

steps to ensure that when a provider 

uses an agent to perform any of the 

provider’s error resolution obligations, 

the agent conducts such activity in 

accordance with the provider’s policies 

and procedures. The Bureau believes 

that this provision is no longer 

necessary in light of the decision under 

§ 1005.35, discussed below, to provide 

that a remittance transfer provider is 

liable for any violation of subpart B by 

an agent when such agent acts for the 

provider. Proposed § 205.33(g)(1), as 

revised, is adopted in renumbered 

§ 1005.33(g)(1). 

Under proposed § 205.33(g)(2) a 

remittance transfer provider’s policies 

and procedures concerning error 

resolution would be required to include 

provisions regarding the retention of 

documentation related to an error 

investigation. Such provisions would be 

required to ensure, at a minimum, the 

retention of any notices of error 

submitted by a sender, documentation 

provided by the sender to the provider 

with respect to the alleged error, and the 

findings of the remittance transfer 

provider regarding the investigation of 

the alleged error, which is consistent 

with EFTA section 919(d)(2). 

Proposed comment 33(g)–1 clarified 

that remittance transfer providers are 

subject to the record retention 

requirements under § 1005.13, which 

apply to any person subject to the 

EFTA. Accordingly, remittance transfer 

providers would be required to retain 

documentation, including 

documentation related to error 

investigations, for a period of not less 

than two years from the date a notice of 

error was submitted to the provider or 

action was required to be taken by the 

provider. Similar to comment 13–1, 

proposed comment 33(g)–1 provided 

that the record retention requirements 

do not require a remittance transfer 

provider to maintain records of 

individual disclosures of remittance 

transfers that it has provided to each 

sender. Instead, a provider need only 

retain records to ensure that it can 

comply with a sender’s request for 

documentation or other information 

relating to a particular remittance 

transfer, including a request for 

supporting documentation to enable the 

sender to determine whether an error 

exists with respect to that transfer. The 

Bureau did not receive any comments 

on proposed § 205.33(g)(2) or proposed 

comment 33(g)–1. The Bureau adopts 

proposed § 205.33(g)(2) substantially as 

proposed in renumbered § 1005.33(g)(2), 

but with an amendment to make clear 

that remittance transfer providers are 

subject to the record retention 

requirements under § 1005.13. The 

Bureau also adopts comment 33(g)–1 

with amendments to conform the 

comment to comment 13–1 and to the 

changes in § 1005.33(g)(2). 

Section 1005.34 Procedures for 

Cancellation and Refund of Remittance 

Transfers 

EFTA section 919(d)(3) directs the 

Bureau to issue final rules regarding 

appropriate remittance transfer 

cancellation and refund policies for 

senders within 18 months of the date of 

enactment of the Dodd-Frank Act. 

Proposed § 205.34 set forth new 

cancellation and refund rights for 

senders of remittance transfers, and they 

are finalized in renumbered § 1005.34 

with changes to the proposed rule, 

discussed below. 

34(a) Sender Right of Cancellation and 

Refund 

Proposed § 205.34(a) stated that a 

remittance transfer provider must 

comply with a sender’s oral or written 

request to cancel a remittance transfer 

received no later than one business day 

from when the sender makes payment 

in connection with the remittance 

transfer provider. In the proposal, the 

Board recognized that remittance 

transfers sent by ACH or wire transfer 

generally cannot be cancelled once the 

payment order has been accepted by the 

sending institution. See, e.g., UCC 

Article 4A–211 (providing that a 

payment order cannot be cancelled or 

amended once it has been accepted 

unless the receiving bank agrees or a 

funds-transfer system rule allows 

cancellation or amendment without 

agreement of the bank). The Board 

stated that it believed that under such 

circumstances, a bank or credit union 

making transfers by ACH or wire 

transfer would likely wait to execute the 

payment order until the cancellation 

period had passed, which could delay 

the receipt of the funds in the foreign 

country. The Board stated that one 

business day would provide a 

reasonable time frame for a sender to 

evaluate whether to cancel a remittance 

transfer after providing payment for the 

transfer, but requested comment 

regarding whether the proposed 

minimum time period should be longer 

or shorter than proposed. 

Many industry commenters objected 

to the proposed cancellation right. One 

industry commenter believed a 

cancellation right was unnecessary for 

remittance transfers because fees 

incurred by the sender for a remittance 

transfer were minimal. A Federal 

Reserve Bank commenter argued that a 

cancellation right would give senders 

less incentive to provide accurate 

information. One industry commenter 

believed senders could use the 

cancellation right to take advantage of 

more favorable exchange rates. The 

industry commenter believed remittance 

transfer providers would increase 

exchange rates to compensate for the 

risk of loss. 

Industry and trade group commenters 

agreed with the Board that the proposed 

cancellation period would delay 

processing routine remittance transfers 

because remittance transfers sent by 

ACH or wire transfer would likely be 

held until the cancellation period 

passed. Some industry commenters 

believed that the delay in processing 

would make it more difficult to 

determine an exchange rate. A member 

of Congress urged the Bureau to take 

into consideration senders’ expectation 

for timely execution of remittance 

transfers in determining the appropriate 

cancellation period. A Federal Reserve 

Bank commenter believed a sender 

would want to remit funds as quickly as 

possible, and that the proposed 

cancellation right could cause senders 

to make payments using remittance 

mechanisms that are not subject to 

Regulation E. 

Consumer group commenters believed 

that the Bureau should require a one 

business day cancellation period, but 

suggested that the Bureau study when 

cancellations typically occur. These 

commenters suggested that a study 


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83The 30-minute cancellation period is the same 

time period as the remittance transfer cancellation 

period under Texas law. See TX Admin. Code 

§ 278.052, which provides that a consumer may 

cancel a transfer for any reason within 30 minutes 

of initiating the transfer provided the customer has 

not left the premises. Unlike the Texas law, under 

§ 1005.34(a), a sender may cancel within 30 

minutes, regardless of whether the sender has left 

the premises. 

84As discussed in the proposal, such accounts 

need not be accounts held by a financial institution 

so long as the recipient may access the transferred 

funds without any restrictions regarding the use of 

such funds. For example, some Internet-based 

providers may track consumer funds in a virtual 

account or wallet and permit the holder of the 

account or wallet to make purchases or withdraw 

funds once funds are credited to the account or 

wallet. 

could help the Bureau determine that 

decreasing the cancellation period could 

adequately protect senders. Many 

industry commenters believed that if the 

Bureau required a cancellation period, 

the period should be shorter than one 

business day. The commenters 

suggested a variety of shorter 

cancellation periods that could be more 

appropriate. Some industry commenters 

believed the cancellation period should 

be shortened to the same day or an hour. 

Several industry commenters believed 

the right to cancel should end when the 

remittance transfer provider executes 

the payment instruction. Several 

industry commenters believed the 

cancellation period should be shortened 

to 30 minutes, noting that this time 

period would be consistent with Texas 

law. 

Some industry commenters suggested 

that institutions sending remittance 

transfers through ACH or wire transfer 

should be exempt from the cancellation 

rules. Other industry commenters 

suggested that a sender should have the 

right to opt out of the cancellation right 

to have the transfer sent immediately. 

Another industry commenter suggested 

that the provider should only be 

required to cancel if the provider has a 

reasonable opportunity to act upon the 

request. One industry commenter 

believed a right to refund remittance 

transfers that are unclaimed was a more 

appropriate cancellation policy. An 

industry commenter believed the 

provider should not be required to 

honor cancellation requests that are 

made for fraudulent purposes. 

Other industry commenters believed 

the cancellation rules should be 

disclosure-based. One industry 

commenter believed that instead of a 

cancellation right, the provider should 

disclose that once a sender signs the 

remittance transaction agreement, it 

cannot be cancelled and that a failure to 

carry out a sender’s cancellation request 

once a remittance agreement has been 

signed is not an error. Another industry 

commenter believed that if a provider 

had a cancellation policy, that the 

Bureau should require that it be 

properly disclosed. 

The Bureau believes that a 

cancellation right could be helpful to 

senders of remittance transfers. The 

Bureau also believes, however, that 

providers sending remittance transfers 

through ACH or wire transfer likely will 

delay transactions for the length of the 

cancellation period because such 

transfers are often difficult to retract 

once they are sent. A cancellation 

period of one business day thus could 

prevent a sender from sending a 

remittance transfer quickly. In addition, 

a long cancellation period could create 

an unfair competitive advantage for 

closed network money transmitters, 

who are less likely to delay sending a 

remittance transfer until the end of the 

cancellation period. Therefore, the 

Bureau believes a cancellation period 

shorter than one business day is 

appropriate. 

The final rule requires a 30-minute 

cancellation period.83 A 30-minute 

cancellation period provides the sender 

the opportunity to review both the prepayment disclosure and the receipt to 

ensure that the transfer was sent as the 

sender intended. However, the 30- 

minute cancellation period should not 

substantially delay transactions for 

senders who want to send funds 

quickly. The Bureau notes that 30 

minutes is the minimum time that a 

provider must allow senders to cancel 

transactions, but providers may choose 

to permit senders to cancel transactions 

after the 30 minute period has passed. 

Moreover, even after the cancellation 

period has passed, senders may still 

assert their rights under § 1005.33 and 

obtain a refund or other remedy for 

transactions where an error occurred. 

As discussed above, the final rule sets 

forth new cancellation requirements in 

a new § 1005.36 with respect to certain 

remittance transfers that a sender 

schedules in advance, including 

preauthorized remittance transfers. As 

discussed below, the Bureau believes 

that when a sender schedules a 

remittance transfer more than three days 

in advance of when the remittance 

transfer is made, a cancellation period 

tied to when the transfer is made, rather 

than when the transfer is authorized, is 

more beneficial to a sender. In those 

circumstances, the Bureau believes a 

sender should have the flexibility to 

cancel the transfer more than 30 

minutes after scheduling the transfer to 

be made, given the potentially 

significant delay between when the 

sender authorizes the remittance 

transfer and when the sender schedules 

the remittance transfer to be made. 

Circumstances could change in the 

intervening period that would negate 

the purpose of the transfer. At the same 

time, allowing the sender to cancel 

certain remittance transfers that a 

sender schedules in advance for up to 

30 minutes after the transfer is made 

could be burdensome to both senders 

and providers. A sender may not know 

the precise time of day that the transfer 

is scheduled, and such a rule would 

extend the period of uncertainty for 

providers, who may delay a transfer 

until the cancellation period has 

expired. Consequently, the 30-minute 

cancellation period described in 

§ 1005.34(a) does not apply to 

remittance transfers scheduled at least 

three business days before the date of 

the transfer, and a remittance transfer 

provider must instead comply with the 

cancellation requirements in 

§ 1005.36(c). 

Section 1005.34(a) of the final rule 

provides that, except as provided in 

§ 1005.36(c), a remittance transfer 

provider shall comply with the 

requirements of § 1005.34 with respect 

to any oral or written request to cancel 

a remittance transfer from the sender 

that is received by the provider no later 

than 30 minutes after the sender makes 

payment in connection with the 

remittance transfer, if the following two 

conditions are met. 

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

valid request to cancel a remittance 

transfer must enable the provider to 

identify the sender’s name and address 

or telephone number and the particular 

transfer to be cancelled. Proposed 

comment 34(a)–1 clarified that the 

request to cancel a remittance transfer is 

valid so long as the remittance transfer 

provider is able to identify the 

remittance transfer in question. For 

example, the sender could provide the 

confirmation number or code that 

would be used by the designated 

recipient to pick up the transfer, or 

other identification number or code 

supplied by the provider in connection 

with the transfer. The proposed 

comment also permitted the provider to 

request, or the sender to provide, the 

sender’s email address instead of a 

physical address, so long as the provider 

can identify the transfer to which the 

cancellation request applies. 

Second, proposed § 205.34(a)(2) 

provided that a sender’s timely request 

to cancel a remittance transfer is 

effective so long as the transferred funds 

have not been picked up by the 

designated recipient or deposited into 

an account held by the recipient.84


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6264 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

Proposed comment 34(a)–2 reiterated 

that a remittance transfer provider must 

include an abbreviated notice of the 

sender’s right to cancel a remittance 

transfer in the receipt or combined 

notice, as applicable. In addition, the 

proposed comment clarified that the 

remittance transfer provider must make 

available to a sender upon request, a 

notice providing a full description of the 

right to cancel a remittance transfer. 

The Bureau did not receive comment 

on the two conditions on the right to 

cancel. The final rule adopts the two 

conditions as proposed in renumbered 

§ 1005.34(a)(1) and (a)(2). In addition, 

the Bureau adopts comments 34(a)–1 

and 34(a)–2 substantially as proposed. 

The Bureau is also adding comment 

34(a)–3 to explain how a remittance 

transfer provider could comply with the 

cancellation and refund requirements of 

§ 1005.34 if the cancellation request is 

received by the provider no later than 

30 minutes after the sender makes 

payment. The comment states that a 

provider may, at its option, provide a 

longer time period for cancellation. The 

comment clarifies that a provider must 

provide the 30-minute cancellation right 

regardless of the provider’s normal 

business hours. For example, if an agent 

closes less than 30 minutes after the 

sender makes payment, the provider 

could opt to take cancellation requests 

through the telephone number disclosed 

on the receipt. The provider could also 

set a cutoff time after which the 

provider will not accept requests to 

send a remittance transfer. For example, 

a financial institution that closes at 5:00 

p.m. could stop accepting payment for 

remittance transfers after 4:30 p.m. 

One industry commenter believed 

that the Bureau should require a sender 

to contact the remittance transfer 

provider directly in order to cancel a 

transaction. The commenter believed 

that agents should not be required to 

handle cancellation requests, noting that 

under certain State laws, the agent does 

not have a right to the funds paid for a 

remittance transfer and therefore could 

not make a refund. 

The Bureau believes that a sender’s 

cancellation request should be valid if 

the sender contacts the agent. Many 

participants in consumer testing 

indicated that they would contact an 

agent first if they encountered a problem 

with their remittance transfer. The 

Bureau also believes that requiring a 

sender to contact a remittance transfer 

provider by, for example, calling the 

telephone number listed on the receipt 

could frustrate the sender’s ability to 

cancel within the 30-minute 

cancellation period. Consequently, the 

Bureau clarifies in comment 34(a)–4 

that a cancellation request provided by 

a sender to an agent of the remittance 

transfer provider is deemed to be 

received by the provider under 

§ 1005.34(a) when received by the agent. 

The Bureau understands, however, that 

an agent may not be able to provide a 

sender with the refund for legal or 

operational reasons, and, as discussed 

below, the final rule does not require an 

agent to provide a refund if the agent is 

unable to do so. 

Finally, the Bureau is adding a 

comment to clarify when a sender 

makes a payment for a remittance 

transfer, for purposes of determining 

when the 30-minute cancellation period 

has passed. Comment 34(a)–5 clarifies 

that, for purposes of subpart B, payment 

is made, for example, when a sender 

provides cash to the remittance transfer 

provider or when payment is 

authorized. 

34(b) Time Limits and Refund 

Requirements 

Proposed § 205.34(b) established the 

time frames and refund requirements 

applicable to remittance transfer 

cancellation requests. The proposed rule 

stated that a remittance transfer 

provider must refund, at no additional 

cost to the sender, the total amount of 

funds tendered by the sender in 

connection with the remittance transfer, 

including any fees imposed in 

connection with the requested transfer, 

within three business days of receiving 

the sender’s valid cancellation request. 

Many industry commenters objected 

to the requirement in the May 2011 

Proposed Rule to refund the total 

amount of funds to the sender. Industry 

commenters believed that requiring a 

refund of the total amount of funds 

raised significant safety and soundness 

concerns for institutions sending wire 

transfers because some remittance 

transfer providers would be unable to 

recover the funds from subsequent 

institutions in a transfer chain. One 

money transmitter commenter stated 

that once a transfer is booked at an agent 

location, the provider is obligated to pay 

the agent its portion of the transfer fees 

for the transaction. If a sender cancels 

the transaction after settlement, the 

provider would be required to negotiate 

the return of the fee from the agent or 

bear the total loss of the fee. Similarly, 

the commenter noted that it acted as an 

agent of international billers and is 

obligated to the billers for the funds 

when it sends data to the biller. Several 

industry commenters believed requiring 

a remittance transfer provider to refund 

all fees could increase costs for senders, 

since providers may increase fees to 

account for losses due to refund. A 

money transmitter commenter also 

argued that refunding a third party fee 

or tax could be impermissible under 

local law. 

Industry commenters suggested that 

the Bureau permit a remittance transfer 

provider to charge reasonable fees, even 

if the sender cancels the transaction. 

Some of the commenters noted that this 

was consistent with a bank’s ability to 

charge fees in connection with a stop 

payment order on a check to cover the 

bank’s costs. An industry trade 

association believed providers should 

be permitted to charge a $45 fee to stop 

the transaction. Another industry 

commenter suggested that if the 

exchange rate changes between the time 

the order is placed and the refund is 

requested such that the amount of local 

currency originally promised would be 

equivalent to less U.S. dollars, the 

refund of the principal should be at the 

new exchange rate. 

Some commenters believed a 

remittance transfer provider should not 

be required to provide a refund in 

certain circumstances. One industry 

commenter believed a provider should 

not be required to refund fees charged 

by intermediaries. Another industry 

commenter suggested that a provider 

should not have to refund the portion of 

any fees that are not attributable to costs 

incurred by them prior to receiving a 

cancellation request. A trade association 

believed a provider should not be 

required to refund fees when the 

provider has not made any errors. 

The Bureau believes it is appropriate 

to require a provider to refund the total 

amount of funds provided by the sender 

in connection with the remittance 

transfer. The Bureau believes senders 

could be discouraged from exercising 

their cancellation rights if they could 

not recover the cost of the remittance 

transfer. Although the Bureau 

recognizes that a provider may not be 

able to recover some fees or taxes 

charged for a transfer, the Bureau 

believes that the shorter cancellation 

period adopted in the final rule helps 

address these concerns. Under the final 

rule, a provider can mitigate some of the 

risk of losing fees or taxes charged for 

a transfer by sending a transfer after the 

30-minute cancellation period ends. 

Therefore, the Bureau is requiring the 

total amount of funds provided by the 

sender to be refunded in the final rule 

in § 1005.34(b) with the additional 

clarification that refunding the total 

amount of funds provided by the sender 

in connection with a remittance transfer 

requires a provider to refund taxes on 

the remittance transfer. However, as 

noted by one industry commenter, for 

certain jurisdictions, the remittance 


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85See also § 1005.30(a), which defines the term 

‘‘agent’’ for purposes of the rule. 86 12 CFR 1005.18. 

transfer provider may be prohibited by 

law from refunding taxes. Consequently, 

the requirement in § 1005.34(b) to 

refund taxes is only to the extent such 

refund is not prohibited by law. In the 

final rule, § 1005.34(b) provides that a 

remittance transfer provider shall 

refund, at no additional cost to the 

sender, the total amount of funds 

provided by the sender in connection 

with a remittance transfer, including 

any fees and, to the extent not 

prohibited by law, taxes imposed in 

connection with the remittance transfer, 

within three business days of receiving 

a sender’s request to cancel the 

remittance transfer. 

Proposed comment 34(b)–1 addressed 

the permissible ways in which a 

provider could provide a refund. The 

proposed comment clarified that a 

remittance transfer provider may, at the 

provider’s discretion, issue a refund in 

cash or in the same form of payment 

that was initially tendered by the sender 

for the remittance transfer. For example, 

if the sender originally provided a credit 

card as payment for the transfer, the 

remittance transfer provider may issue a 

credit to the sender’s credit card 

account in the amount of the payment. 

The Bureau did not receive comment 

on proposed comment 34(b)–1. 

However, as discussed above regarding 

comment 33(c)–6, the Bureau is 

amending comment 34(b)–1 with 

respect to refunds if a sender initially 

provided cash for the remittance 

transfer. Specifically, comment 34(b)–1 

states that a provider may issue a refund 

by check if a sender initially provided 

cash for the remittance transfer. For 

example, if the sender originally 

provided cash as payment for the 

transfer, the provider may mail a check 

to the sender in the amount of the 

payment. 

The Bureau is also finalizing 

comment 34(b)–2, which addresses 

costs that must be refunded upon a 

sender’s timely request to cancel a 

remittance transfer. The comment is 

adopted substantially as proposed, with 

amendments clarifying that all funds 

provided by the sender in connection 

with the remittance transfer would 

include taxes that are assessed by a 

State or other governmental body, to the 

extent not prohibited by law. Therefore, 

the final comment states that if a sender 

provides a timely request to cancel a 

remittance transfer, a remittance transfer 

provider must refund all funds provided 

by the sender in connection with the 

remittance transfer, including any fees 

and, to the extent not prohibited by law, 

taxes that have been imposed for the 

transfer, whether the fee or tax was 

assessed by the provider or a third 

party, such as an intermediary 

institution, the agent or bank in the 

recipient country, or a State or other 

governmental body. 

Finally, industry commenters 

suggested amendments to the 

requirement in the proposal to provide 

a refund within three business days of 

receiving a sender’s request to cancel 

the remittance transfer. One industry 

commenter believed the refund rule 

should not require the refund to be 

delivered to the sender within three 

business days. The commenter cited 

examples of when it could be difficult 

to deliver the funds to the sender in 

three days, such as when the provider 

mails a refund check and the check 

takes several days to be delivered to the 

sender; when the refund is available at 

an agent location, but the sender takes 

several days to pick-up the refund; and 

when the provider issues a chargeback 

to the sender’s credit or debit card 

account, but the credit takes several 

days to appear due to card processing 

systems. The Bureau notes that the 

requirement to refund funds to a sender 

does not require a provider to ensure 

that a refund is delivered to a sender 

within three business days after 

receiving the sender’s request to cancel 

the remittance transfer. 

Section 1005.35 Acts of Agents 

In most cases, remittance transfers are 

sent through an agent of the remittance 

transfer provider, such as a convenience 

store that has contracted with the 

provider to offer remittance transfer 

services at that location. EFTA section 

919(f)(1) generally makes remittance 

transfer providers liable for any 

violation of EFTA section 919 by an 

agent, authorized delegate, or person 

affiliated with such provider, when 

such agent, authorized delegate, or 

affiliate acts for that remittance transfer 

provider. EFTA section 919(f)(2) 

requires the Bureau to prescribe rules to 

implement appropriate standards or 

conditions of liability of a remittance 

transfer provider, including one that 

acts through its agent or authorized 

delegate.85

The Board proposed two alternatives 

to implement EFTA section 919(f) with 

respect to acts of agents. Under the first 

alternative (proposed Alternative A), a 

remittance transfer provider would be 

strictly liable for violations of subpart B 

by an agent when such agent acts for the 

provider. Under the second alternative 

(proposed Alternative B), a remittance 

transfer provider would be liable under 

the EFTA for violations by an agent 

acting for the provider, unless the 

provider establishes and maintains 

policies and procedures for agent 

compliance, including appropriate 

oversight measures, and the provider 

corrects any violation, to the extent 

appropriate. 

Consumer groups, State regulators, 

and a Federal Reserve Bank supported 

proposed Alternative A. These 

commenters stated that Alternative A 

would provide the greatest incentives 

for remittance transfer providers to 

avoid errors and to oversee and audit 

their agents. Some argued that proposed 

Alternative A would be consistent with 

many State laws, and that adopting 

proposed Alternative B could disrupt 

efforts to hold providers to stricter 

liability standards under State law. 

In contrast, industry commenters 

supported the liability standard set forth 

in proposed Alternative B. These 

commenters argued that proposed 

Alternative B would more appropriately 

address the unique position of agents in 

the market, while providing protection 

for consumers by making them whole 

for the cost of the remittance transfer. 

These commenters also stated that 

proposed Alternative B would create an 

incentive for providers to take an active 

role in developing compliance policies 

and procedures and engaging in agent 

oversight. These commenters also 

expressed concern about the liability 

risks associated with proposed 

Alternative A for the misconduct or a 

single agent or isolated violations, and 

that proposed Alternative A could 

discourage the use of agents. 

Based on comments received and the 

Bureau’s further analysis, the final rule 

adopts proposed Alternative A in 

renumbered § 1005.35. The Bureau 

believes that the approach taken in 

proposed Alternative A is more 

consistent with the approach generally 

taken in other Bureau regulations, 

including Regulation E. For example, 

under Regulation E’s payroll card rules, 

a financial institution is required to 

provide initial payroll card disclosures 

to a payroll account holder. If, by 

contractual agreement with the 

institution, a third-party service 

provider or the employer agrees to 

deliver these disclosures on the 

institution’s behalf and fails to do so, 

the issuing financial institution is 

nonetheless liable for the violation.86

Similarly, if an agent at a retail 

establishment fails to provide the 

disclosures required by § 1005.31, the 

remittance transfer provider would be 

liable. The Bureau also believes that 

proposed Alternative A provides a 


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87Some foreign exchange rates are set by 

monetary authorities. There are a variety of 

business models that providers use to fund transfers 

that are received in foreign currency. The timing of 

when foreign currency is purchased, the role of the 

provider in such a purchase, and the role of other 

intermediaries, partners, agents, and other parties 

can vary. 

greater incentive for providers to 

monitor their agents’ activities and to 

exercise appropriate supervision and 

oversight than proposed Alternative B. 

One commenter suggested that 

proposed Alternative A could exculpate 

an agent from responsibility from its 

own conduct. However, nothing in the 

rule shields agents from liability, nor 

does it prevent providers from requiring 

specific agent conduct in their contracts 

or negotiating other contractual liability 

or indemnification clauses. 

With respect to commenters’ concerns 

about liability risk, EFTA section 

919(f)(2) states that enforcement 

agencies may consider, in any action or 

other proceeding against a remittance 

transfer provider, the extent to which 

the provider had established and 

maintained policies or procedures for 

compliance, including policies, 

procedures, or other appropriate 

oversight measures designed to assure 

compliance by an agent or authorized 

delegate acting for such provider. Thus, 

enforcement agencies are permitted to 

tailor any remedies in light of single 

agent non-compliance or isolated 

violations. 

Several commenters requested further 

guidance on what it means for an agent 

to act for a provider. As discussed in the 

proposal, some agents have a nonexclusive arrangement with several 

remittance transfer providers, so that a 

sender may choose from among the 

remittance transfer providers at that 

agent location. If a sender chooses to use 

Provider A to send funds at the agent 

location, then Provider B would not be 

liable for the agent’s actions in 

connection with that transaction, 

because the agent would be acting for 

Provider A. As noted above regarding 

the definition of ‘‘agent’’ under 

§ 1005.30(a), the Bureau believes that it 

is appropriate to defer to State or other 

applicable law with respect to the 

relationship between an agent and 

Provider A. 

The final rule also adopts proposed 

Alternative A’s comment 35–1 

substantially as proposed. Comment 35– 

1 explains that remittance transfer 

providers remain fully responsible for 

complying with the requirements of this 

subpart, including, but not limited to, 

providing the disclosures set forth in 

§ 1005.31 and remedying any errors as 

set forth in § 1005.33. This is the case 

even if a remittance transfer provider 

performs its functions through an agent, 

and regardless of whether the provider 

has an agreement with a third party that 

transfers or otherwise makes funds 

available to a designated recipient. 

Section 1005.36 Transfers Scheduled in 

Advance 

As discussed above in connection 

with the § 1005.30(e) definition of 

‘‘remittance transfer,’’ the Board 

requested comment on whether the rule 

should exclude from coverage online 

bill payments, including preauthorized 

transfers. As noted above, most industry 

commenters argued that these transfers 

should be excluded from the final rule. 

These commenters argued that the 

provider would not be in a position to 

know, at the time disclosures are 

required, the applicable exchange rate 

for transfers that are scheduled to be 

sent at a later date. 

For the reasons discussed above in the 

supplementary information to 

§ 1005.30(e), the final rule does not 

exclude online bill payments from the 

definition of ‘‘remittance transfer,’’ nor 

does it exclude certain other remittance 

transfers that a sender schedules in 

advance, including preauthorized 

remittance transfers. Thus, the final rule 

generally requires that disclosures be 

provided in accordance with the timing 

and accuracy rules set forth in 

§ 1005.31, both with respect to the 

required pre-payment disclosure and 

the required receipt. Estimates may be 

disclosed, to the extent permitted by 

§ 1005.32. 

However, the Bureau believes that 

preauthorized remittance transfers, 

whether for bill payments or for other 

reasons, raise issues relating to the 

practical aspects of compliance, and 

potential consumer confusion issues. As 

discussed above, § 1005.31(e) links the 

timing requirements for providing prepayment disclosures and receipts to 

senders to the time when the transfer is 

requested and payment is made by the 

sender. Similarly, the disclosure 

accuracy rule in § 1005.31(f) relates to 

when the sender’s payment is made. For 

purposes of subpart B, payment is made 

when payment is authorized. See 

comments 31(e)–2 and 34(a)–5. 

Accordingly, if all preauthorized 

remittance transfers were subject to 

§ 1005.31, providers would have to 

provide both pre-payment disclosures 

and receipts at the time the 

preauthorized remittance transfers are 

requested and authorized by the sender. 

Moreover, these disclosures would need 

to be accurate for the first and all 

subsequent transfers scheduled in the 

future (except to the extent estimates are 

permitted by § 1005.32). 

The Bureau believes that in some 

circumstances, it is impracticable for 

providers to provide accurate 

disclosures for subsequent transfers at 

the time preauthorized remittance 

transfers are authorized. For example, 

while a provider may be able to know 

or to hedge for a specified exchange rate 

with respect to the first transfer, the 

provider or the institution involved in 

the remittance transfer that sets the 

exchange rate may be reluctant to set a 

specified exchange rate applicable to all 

subsequent transfers that are scheduled 

to be made into the future. This 

reluctance could arise due to the risk 

associated with participating in foreign 

exchange markets, and the manners in 

which providers and their partners 

manage such risk. Many wholesale 

exchange rates are set largely through 

currency markets in which rates can 

fluctuate frequently.87 As a result, 

whenever there are time lags in between 

the time when the retail rate applied to 

a transfer is set, the time when the 

relevant foreign currency is purchased, 

and the time when funds are delivered, 

a provider (and/or its business partner) 

may face losses due to unexpected 

changes in the value of the relevant 

foreign currency. 

Providers and/or their partners 

generally use a variety of pricing, 

business processes, or hedging 

techniques to manage or minimize this 

exchange rate risk. For some, and 

perhaps many providers (or their 

partners), the task of managing or 

minimizing exchange risk may become 

more complicated or more costly if the 

amount of time between when the rate 

is set for a customer and when the 

transfer is sent increases. Setting the 

retail rate that applies to a transfer far 

in advance of when that transfer is sent 

may require the provider or other 

parties involved in processing the 

remittance transfer to use additional or 

more sophisticated risk management 

tools. 

Some preauthorized remittance 

transfers may be set up to vary in 

amount (for example, based on the 

amount of a utilities bill). In such cases, 

while the remittance transfer provider 

may know the amount to be transferred 

in the first payment, the provider may 

not know, at the time the sender 

authorizes the preauthorized remittance 

transfer, the amounts that will be 

transferred in subsequent months. 

Moreover, even if the scheduled 

amounts to be transferred were fixed, 

and a provider were permitted to 

disclose an estimated exchange rate for 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6267 

future payments, providing estimated 

exchange rates at the time of the initial 

request for transfers beyond the first 

transfer may not be useful to senders— 

and could even be misleading—because 

currency fluctuations over several 

months could cause the actual rate 

applied to particular transfers to vary 

substantially. The Bureau recognizes 

that the market for preauthorized 

remittance transfers is still developing. 

Consequently, the Bureau is concerned 

that if providers were required to 

provide accurate disclosures for 

subsequent preauthorized remittance 

transfers at the time those transfers are 

authorized, in many cases providers 

would not be able to offer preauthorized 

remittance transfer products, which 

could limit consumer access to a 

potentially valuable product. 

The Bureau also believes that the right 

to cancel a remittance transfer no later 

than 30 minutes after the sender makes 

payment as provided in § 1005.34(a) is 

not appropriate when applied to certain 

remittance transfers that a sender 

schedules in advance, including 

preauthorized remittance transfers. 

When a sender schedules a remittance 

transfer many days—or even months— 

in advance of when the transfer is to be 

made, a sender should have the 

flexibility to cancel the transfer more 

than 30 minutes after requesting the 

transfer, given the delay between when 

the sender authorizes the remittance 

transfer and when the sender schedules 

the remittance transfer to be made. In 

such circumstances, the Bureau believes 

that remittance transfer providers can 

accommodate a longer cancellation 

period without the risk that a sender’s 

cancellation would delay the remittance 

transfer. Thus, the Bureau believes that 

a cancellation period tied to when the 

transfer is made, rather than when the 

transfer is authorized, is more beneficial 

to senders. 

Therefore, to effectuate the purposes 

of the EFTA and to facilitate 

compliance, the Bureau believes it is 

necessary and proper to exercise its 

authority under EFTA sections 904(a) 

and (c) to adopt a new § 1005.36, which 

sets forth disclosure requirements 

specifically applicable to preauthorized 

remittance transfers, as well as specific 

cancellation requirements for any 

remittance transfer scheduled by the 

sender at least three business days 

before the date of the transfer. Section 

1005.36(a) and (b) address specific 

requirements for the timing and 

accuracy of disclosures for 

preauthorized remittance transfers. 

Section 1005.36(c) addresses the 

cancellation requirements applicable to 

any remittance transfer scheduled by 

the sender at least three business days 

before the date of the transfer, including 

preauthorized remittance transfers. 

Because § 1005.36 only addresses 

timing, accuracy, and cancellation 

requirements, the other requirements of 

subpart B, such as content and 

formatting requirements and the foreign 

language requirements, continue to 

apply to remittance transfers subject to 

§ 1005.36. See comment 36–1. 

In addition, the Bureau’s January 2012 

Proposed Rule, published elsewhere in 

the Federal Register today, solicits 

comment on alternative disclosure and 

cancellation requirements with respect 

to remittance transfers subject to 

§ 1005.36. 

36(a) Timing 

Section 1005.36(a) sets forth the 

disclosure timing requirements for 

disclosures relating to preauthorized 

remittance transfers. Under 

§ 1005.36(a)(1), for the first scheduled 

transfer, the provider is required to 

provide both the pre-payment 

disclosure described in § 1005.31(b)(1) 

and the receipt described in 

§ 1005.31(b)(2) in accordance with the 

timing rules set forth in § 1005.31(e) that 

generally apply to remittance transfers. 

In effect, under the final rule, the first 

scheduled transfer of a preauthorized 

remittance transfer is treated the same 

as other individual transfer requests by 

a sender. 

However, under § 1005.36(a)(2), 

different timing requirements apply to 

disclosures relating to subsequent 

scheduled transfers. Under 

§ 1005.36(a)(2)(i), the provider must 

mail or deliver a pre-payment 

disclosure, as described in 

§ 1005.31(b)(1), within a reasonable time 

prior to the scheduled date of each 

subsequent transfer. If the general 

timing rule in § 1005.31(e) applied, the 

provider would be required to provide 

a pre-payment disclosure at the time the 

scheduled payments are authorized. By 

requiring a pre-payment disclosure at 

this alternative time for each subsequent 

transfer, senders will receive 

information about their transfers in 

closer proximity to the scheduled 

transfer date, and the provider should 

be in a better position to make the 

required disclosures. This approach also 

reminds senders about the pending 

transfer, which will enable them to 

confirm that sufficient funds are 

available for the transfer. In the January 

2012 Proposed Rule published 

elsewhere in today’s Federal Register, 

the Bureau is also soliciting comment 

on a safe harbor with respect to the 

reasonable time requirement. 

In addition, under § 1005.36(a)(2)(ii), 

the provider must provide the receipt 

described in § 1005.31(b)(2) for each 

subsequent transfer. As with prepayment disclosures, the Bureau does 

not believe a receipt given at the time 

payment for the transfer is authorized 

would be as useful to senders as a 

receipt received closer in time to the 

actual transfer that contains more 

relevant information about the 

particular scheduled transfer. The final 

rule requires the receipt to be mailed or 

delivered to the sender no later than one 

business day after the date on which the 

transfer is made. However, if the 

transfer involves the transfer of funds 

from the sender’s account held by the 

provider, the receipt may be provided 

on or with the next regularly scheduled 

periodic statement for that account or 

within 30 days after payment is made 

for the remittance transfer if a periodic 

statement is not provided. Section 

1005.36(a)(2)(ii) closely tracks the 

receipt timing rule for receipts in 

transactions conducted entirely by 

telephone under § 1005.31(e)(2). 

The Bureau believes that these special 

timing rules for pre-payment disclosures 

and receipts for subsequent 

preauthorized remittance transfers will 

result in more meaningful disclosures to 

senders than if providers were required 

to provide these disclosures at the time 

the transfers were authorized. 

36(b) Accuracy 

Section 1005.36(b) sets forth 

requirements for the accuracy of 

disclosures for preauthorized remittance 

transfers. For the first scheduled 

transfer, the disclosure requirements 

follow the accuracy rule set forth in 

§ 1005.31(f) that generally applies to 

remittance transfers. See § 1005.36(b)(1). 

Thus, except as permitted by § 1005.32, 

the pre-payment disclosure and receipt 

provided for the first scheduled transfer 

must be accurate when payment is 

made; that is, at the time the transfer is 

authorized. 

However, for subsequent scheduled 

transfers, the disclosures described in 

§ 1005.36(a)(2) must be accurate when 

the transfer is made. See § 1005.36(b)(2). 

Thus, for subsequent preauthorized 

remittance transfers, the final rule 

provides that senders must receive an 

accurate pre-payment disclosure shortly 

before the transfer is made, and then an 

accurate receipt shortly after the transfer 

is made. Providers may continue to 

disclose estimates to the extent 

permitted by § 1005.32. 

As discussed above, the Bureau 

believes that it would be problematic to 

apply the general rule about accuracy in 

§ 1005.31(f) to subsequent preauthorized 


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6268 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

remittance transfers. For example, some 

preauthorized remittance transfers are 

set up to vary in amount, so the 

provider cannot predict, at the time 

such transfers are authorized, the 

amount to be transferred in subsequent 

months. Therefore, the provider could 

not provide an accurate pre-payment 

disclosure and receipt at the time the 

preauthorized remittance transfers, and 

payment for the transfers, are 

authorized. The accuracy requirement 

in § 1005.31(f) also would present a 

challenge to determining an applicable 

exchange rate for subsequent transfers, 

in that the provider may not know the 

exchange rate that will apply to 

subsequent transfers at the time of 

authorization. Accordingly, to effectuate 

the purposes of the Act and to facilitate 

compliance, the Bureau believes it is 

necessary and proper to exercise its 

authority under EFTA sections 904(a) 

and (c) to adopt special requirements for 

accurate disclosures about subsequent 

scheduled transfers in § 1005.36(b). In 

the January 2012 Proposed Rule 

published elsewhere in today’s Federal 

Register, the Bureau is also soliciting 

comment on the use of estimates for 

certain disclosures with respect to the 

first scheduled transfer. 

36(c) Cancellation 

Under § 1005.34(a), senders are 

permitted to cancel a remittance transfer 

if the request to cancel the remittance 

transfer is received by the provider no 

later than 30 minutes after the sender 

makes payment in connection with the 

remittance transfer, if certain conditions 

are met. As noted above, for purposes of 

subpart B, payment is made when 

payment is authorized. The Bureau 

believes that requiring a sender to 

cancel a transaction no later than 30 

minutes after payment is authorized 

would not be appropriate for certain 

remittance transfers that a sender 

schedules in advance, including 

preauthorized remittance transfers. 

Such a rule would permit cancellation 

only for a short time after the transfers 

are authorized, even though the 

remittance transfer may not occur for 

many days, weeks, or months. For 

example, if on March 1 a sender 

scheduled a remittance transfer for 

March 23, under the general 

cancellation rule, the sender would be 

required to cancel 30 minutes after the 

transfer was authorized on March 1, 

despite the fact that the transfer is not 

being made until March 23. The Bureau 

believes it is appropriate to adopt a 

different cancellation period in these 

circumstances because payment is 

authorized well before the transfer is to 

be made. 

Consequently, the Bureau is adopting 

a special cancellation rule in 

§ 1005.36(c) that it believes is more 

appropriate for these types of transfers. 

Section 1005.36(c) states that, for any 

remittance transfer scheduled by the 

sender at least three business days 

before the date of the transfer, a 

remittance transfer provider shall 

comply with any oral or written request 

to cancel the remittance transfer from 

the sender if the request to cancel: (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 by the 

provider at least three business days 

before the scheduled date of the 

remittance transfer. 

The Bureau believes that this time 

period is more beneficial to senders 

because it generally provides them more 

time to decide whether to go through 

with a scheduled transfer. Senders will 

have the opportunity to change their 

minds about sending a transfer if, for 

example, circumstances change between 

when the transfer is authorized and 

when the transfer is to be made. At the 

same time, the Bureau believes that 

requiring a sender to cancel at least 

three days before a transfer is made 

gives providers sufficient time to 

process any cancellation requests before 

a transfer is made. Many financial 

institutions that permit senders to 

schedule remittance transfers at least 

three business days before the date of 

the transfer are already subject to the 

stop payment provisions in Regulation E 

for preauthorized transfers that are 

EFTs, which require consumers to 

notify the institution at least three 

business days before the scheduled date 

of a preauthorized EFT. See 

§ 1005.10(c). 

The cancellation provisions in both 

§§ 1005.34(a) and 1005.36(c) permit a 

sender to cancel a remittance transfer 

after the transfer has been authorized. 

Under both provisions, a cancellation 

period may expire before the transfer 

itself is made. As noted above, the 

Bureau expects financial institutions 

making transfers by ACH or wire 

transfer may decide to wait to execute 

the payment order until the cancellation 

period has passed because these types of 

remittance transfers generally cannot 

easily be cancelled once the payment 

order has been accepted by the sending 

institution. For the same reason, the 

Bureau believes it is appropriate to 

require a sender to cancel before a 

transfer is made in § 1005.36(c). 

Under § 1005.36(c), a transfer must be 

cancelled only if the request to cancel 

is received by the provider at least three 

business days before the scheduled date 

of the remittance transfer, so that a 

provider has sufficient time to prevent 

the transfer from taking place on the 

scheduled date. Therefore, under the 

final rule, only transfers scheduled by 

the sender at least three business days 

before the date of the transfer are subject 

to the cancellation requirements in 

§ 1005.36(c). Remittance transfers that 

are scheduled less than three business 

days before the date of the transfer are 

subject to the cancellation requirements 

in § 1005.34(a). For example, if a sender 

on March 1 requests a remittance 

transfer provider to send a wire transfer 

to pay a bill in a foreign country on 

March 3, the sender may cancel up to 

30 minutes after scheduling the 

payment on March 1. Thus, in every 

case, a sender has an opportunity to 

cancel a remittance transfer. 

The Bureau is adopting commentary 

to provide further guidance on the 

application of § 1005.36(c). Comment 

36(c)–1 clarifies that a remittance 

transfer is scheduled if it will require no 

further action by the sender to send the 

transfer after the sender requests the 

transfer. For example, a remittance 

transfer is scheduled at least three 

business days before the date of the 

transfer, and § 1005.36(c) applies, where 

a sender on March 1 requests a 

remittance transfer provider to send a 

wire transfer to pay a bill in a foreign 

country on March 15, if it will require 

no further action by the sender to send 

the transfer after the sender requests the 

transfer. 

Comment 36(c)–1 also clarifies three 

circumstances where the provisions of 

§ 1005.36(c) do not apply, such that a 

provider should instead comply with 

the 30-minute cancellation rule in 

§ 1005.34. For example, § 1005.36(c) 

does not apply when a sender on March 

1 requests a remittance transfer provider 

to send a wire transfer to pay a bill in 

a foreign country on March 3. In this 

instance, § 1005.36(c) does not apply 

because the transfer is scheduled less 

than three business days before the date 

of the transfer. Section 1005.36(c) also 

does not apply when a sender on March 

1 requests that a remittance transfer 

provider send a remittance transfer on 

March 15, but the provider requires the 

sender to confirm the request on March 

14 in order to send the transfer. In this 

example, § 1005.36(c) does not apply 

because the transfer requires further 

action by the sender to send the transfer 

after the sender requests the transfer. 

The other example in comment 36(c)– 

1 demonstrates situations where 

§ 1005.36(c) does not apply because a 

transfer occurs more than three days 

after the date the sender requests the 

transfer solely due to the provider’s 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6269 

88Proposed Model Forms A–33 through A–35 and 

proposed Model Form A–37 were variations of the 

forms that were developed in consumer testing. 

Proposed Model Forms A–38 through A–40 were 

Spanish translations of proposed Model Forms A– 

30 through A–32. The language in the long form 

error resolution and cancellation notice in proposed 

Model Form A–36, and its Spanish translation in 

Model Form A–41, were based on the model form 

for error resolution in Regulation E. See 12 CFR part 

1005, Appendix A to part 1005, Form A–3. 

processing time and not because a 

sender schedules the transfer at least 

three business days before the date of 

the transfer. For example, § 1005.36(c) 

does not apply when a sender on March 

1 requests that a remittance transfer 

provider send an ACH transfer, and that 

transfer is sent on March 2, but due to 

the time required for processing, funds 

are not deducted from the sender’s 

account until March 5. 

Comment 36(c)–2 clarifies how a 

remittance transfer provider should treat 

requests to cancel preauthorized 

remittance transfers in a manner 

consistent with the stop payment 

provisions of Regulation E. See 

§ 1005.10(c) and comment 10(c)–2. The 

comment clarifies that for preauthorized 

remittance transfers, the provider must 

assume the request to cancel applies to 

all future preauthorized remittance 

transfers, unless the sender specifically 

indicates that it should apply only to 

the next scheduled remittance transfer. 

Finally, comment 36(c)–3 clarifies 

that a financial institution that is also a 

remittance transfer provider may have 

both stop payment obligations under 

§ 1005.10 and cancellation obligations 

under § 1005.36. If a sender cancels a 

remittance transfer under § 1005.36 with 

a remittance transfer provider that holds 

the sender’s account, and the transfer is 

a preauthorized transfer under 

§ 1005.10, then the cancellation 

provisions of § 1005.36 exclusively 

apply. The Bureau notes that in these 

circumstances, a provider would not be 

permitted to require the sender to give 

written confirmation of a cancellation 

within 14 days of an oral notification, as 

is permitted for stop payment orders in 

§ 1005.10(c)(2). The Bureau believes that 

a sender should be able to orally cancel 

any remittance transfer, including a 

remittance transfer that is scheduled at 

least three business days before the date 

of the transfer, without the additional 

burden of providing written 

confirmation of the cancellation. 

In the January 2012 Proposed Rule 

published elsewhere in today’s Federal 

Register, the Bureau is also soliciting 

comment on the cancellation period for 

a remittance transfer scheduled by the 

sender at least three business days 

before the date of the transfer. 

Appendix A—Model Disclosure Clauses 

and Forms 

The Board proposed in Appendix A 

twelve model forms that a remittance 

transfer provider could use in 

connection with remittance transfers. 

The disclosures were proposed as model 

forms pursuant to EFTA section 904(a), 

rather than model clauses pursuant to 

EFTA section 904(b), in order to clearly 

demonstrate the general form and 

specific format requirements of 

proposed § 205.31(a) and (c). Proposed 

Model Forms A–30 through A–32 were 

developed in consumer testing and 

reflect a format in which the flow and 

organization of information effectively 

communicates the remittance 

disclosures to most consumers. 

Proposed Model Forms A–30 through 

A–41 were intended to demonstrate 

several formats a remittance transfer 

provider may use to comply with the 

disclosure requirements of proposed 

§ 205.31.88

The Board proposed to amend 

instruction 2 to Appendix A regarding 

the use of model forms and added 

instruction 4 to Appendix A to describe 

how a remittance transfer provider may 

properly use and alter the model forms. 

Specifically, the Board proposed to 

amend instruction 2 to Appendix A to 

include references to remittance transfer 

providers and remittance transfers and 

updated the numbering of the liability 

provisions of the EFTA as sections 916 

and 917. The proposed instruction 

therefore clarified that the use of the 

proposed model forms in making 

disclosures would protect a remittance 

transfer provider from liability under 

sections 916 and 917 of the EFTA if they 

accurately reflected the provider’s 

remittance transfer services. The Bureau 

did not receive comments on proposed 

instruction 2, and it is adopted 

substantially as proposed, with an 

addition to reference § 1005.36 that was 

added in the final rule. 

The Bureau also did not receive any 

comments on proposed instruction 4 to 

Appendix A, and it is adopted 

substantially as proposed. The 

instruction includes one change to 

address the Bureau’s role in reviewing 

and approving disclosure forms. The 

instruction also contains modifications 

to address the addition of § 1005.36 in 

the final rule. Accordingly, instruction 4 

to Appendix A states that the Bureau 

will not review or approve disclosure 

forms for remittance transfer providers, 

but that the appendix contains 12 model 

forms for use in connection with 

remittance transfers. The instruction 

explains that Model Forms A–30 

through A–32 demonstrate how a 

provider can provide the required 

disclosures for a remittance transfer 

exchanged into local currency. Model 

Forms A–33 through A–35 demonstrate 

how a provider can provide the required 

disclosures for U.S. dollar-to-U.S. dollar 

remittance transfers. These forms also 

demonstrate disclosure of the required 

content, in accordance with the 

grouping and proximity requirements of 

§ 1005.31(c)(1) and (2), in both a register 

receipt format and an 8.5 inch by 11 

inch format. Model Form A–36 provides 

long form model error resolution and 

cancellation disclosures required by 

§ 1005.31(b)(4), and Model Form A–37 

provides short form model error 

resolution and cancellation disclosures 

required by § 1005.31(b)(2)(iv) and (vi). 

Instruction 4 to Appendix A also 

explains that a remittance transfer 

provider may use the language and 

formatting provided in Forms A–38 

through A–41 for disclosures that are 

required to be provided in Spanish, 

pursuant to the requirements of 

§ 1005.31(g). It also clarifies that the 

model forms may contain certain 

information that is not required by 

subpart B, such as a confirmation code 

and the sender’s name and contact 

information. This information is 

included on the model forms to 

demonstrate one way of displaying this 

information in compliance with 

§ 1005.31(c)(4). Any additional 

information must be presented 

consistent with a remittance transfer 

provider’s obligation to provide 

required disclosures in a clear and 

conspicuous manner. 

Instruction 4 to Appendix A further 

clarifies that use of the model forms is 

optional. A remittance transfer provider 

may change the forms by rearranging the 

format or by making modifications to 

the language of the forms, without 

modifying the substance of the 

disclosures. The instruction clarifies 

that rearrangement or modification of 

the format of the model forms is 

permissible, as long as it is consistent 

with the form, grouping, proximity, and 

other requirements of § 1005.31(a) and 

(c). Providers making revisions that do 

not comply with this section will lose 

the benefit of the safe harbor for 

appropriate use of Model Forms A–30 to 

A–41. 

Instruction 4 to Appendix A also 

provides examples of permissible 

changes a remittance transfer provider 

may make to the language and format of 

the model forms without losing the 

benefit of the safe harbor. For example, 

a remittance transfer provider may 

substitute the information contained in 

the model forms that is intended to 

demonstrate how to complete the 

information in the model forms—such 


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6270 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

89As noted above, this cancellation language may 

be amended to the extent § 1005.36(c) applies. 

90These changes were also made to Model Forms 

A–31, A–32, A–34, and A–35 where the language 

in Model Form A–37 is used. The changes are also 

reflected in the Spanish language disclosures. 

as names, addresses, and Web sites; 

dates; numbers; and State-specific 

contact information—with information 

applicable to the remittance transfer. A 

remittance transfer provider may also 

eliminate disclosures that are not 

applicable to the transfer, as permitted 

under § 1005.31(b), or provide the 

required disclosures on a paper size that 

is different from a register receipt and 

8.5 inch by 11 inch formats. A 

remittance transfer provider may correct 

or update telephone numbers, mailing 

addresses, or Web site addresses that 

may change over time. This example 

applies to all telephone numbers and 

addresses on a model form, including 

the contact information of the provider, 

the State agency, and the Consumer 

Financial Protection Bureau. The 

instruction clarifies that adding the term 

‘‘Estimated’’ or a substantially similar 

term and in close proximity to the 

estimated term or terms, as required 

under § 1005.31(d), is a permissible 

change to the model forms. A provider 

may provide the required disclosures in 

a foreign language, or multiple foreign 

languages, subject to the requirements of 

§ 1005.31(g), without losing the benefit 

of the safe harbor. 

Instruction 4 to Appendix A includes 

an additional example of a permissible 

change a remittance transfer provider 

may make to the language and format of 

the model forms without losing the 

benefit of the safe harbor to reflect the 

addition of § 1005.36 in the final rule. 

The instruction clarifies that a 

remittance transfer provider may 

substitute cancellation language to 

reflect the right to a cancellation made 

pursuant to the requirements of 

§ 1005.36(c). For example, for 

disclosures provided for a preauthorized 

remittance transfer, a provider could 

replace the statement that a sender can 

cancel the remittance transfer within 30 

minutes with a statement that a sender 

may cancel up to three business days 

before the date of each transfer. Finally, 

instruction 4 to Appendix A also 

clarifies that adding language to a form 

that is not segregated from the required 

disclosures is impermissible, other than 

as permitted by § 1005.31(c)(4). 

Although the Bureau did not receive 

comments on the instructions to Model 

Forms A–30 through A–41, the Bureau 

did receive suggested changes to the 

terminology used in and the formatting 

of the model forms. For example, 

consumer group commenters believed 

that the amount of the cost of the 

transaction expressed as ‘‘Total’’ in the 

proposal should be labeled in bold as 

‘‘Total cost to you of this transfer’’ and 

that ‘‘Total to recipient’’ should be 

labeled in bold as ‘‘Total amount 

recipient should receive.’’ The 

commenters also believed the term 

‘‘Total Amount’’ was too generic and 

instead should be ‘‘Amount 

Transferred.’’ An industry commenter 

believed that fees and taxes charged by 

entities other than the remittance 

transfer provided should be labeled as 

‘‘Receive’’ or ‘‘Payout’’ fees and taxes, 

rather than ‘‘Other’’ fees and taxes. 

The Bureau believes that the proposed 

terms sufficiently describe the amounts 

disclosed on the model forms. The 

proposed terms were used in consumer 

testing, and nearly all participants 

understood the amounts that were 

disclosed. Moreover, the Bureau 

believes that requiring bolding or 

similar font requirements could pose 

compliance difficulties for remittance 

transfer providers that print the 

disclosures on a register or other 

printing device that does not permit 

such font changes, and participants in 

consumer testing did not have difficulty 

finding this information on the forms. 

Thus, the Bureau is adopting the terms 

and format as proposed. 

Consumer group commenters asserted 

that the content of the long form error 

resolution and cancellation notice in 

Model Form A–36 was misleading and 

not consumer friendly. The commenters 

provided edits to the disclosure that the 

commenter believed would be more 

helpful to a sender. The long form error 

resolution and cancellation disclosure is 

based on the model form for error 

resolution in Regulation E. See 31 CFR 

part 1005, Appendix A to part 1005, 

Form A–3. The Bureau believes that any 

changes to this model form should be 

made in conjunction with the 

corresponding changes to existing 

Regulation E model forms and that such 

changes should be subject to consumer 

testing. Therefore, the Bureau is 

adopting the content of Model Form A– 

36 as proposed. 

Other commenters suggested 

substantive changes that, if adopted, 

would result in changes to the model 

forms. For example, some industry 

commenters suggested that the Bureau 

eliminate the requirement to disclose 

fees and taxes charged by a person other 

than the remittance transfer provider 

and that the model forms should instead 

indicate generally that other fees and 

charges may apply. Similarly, industry 

commenters suggested the exchange rate 

and funds availability date should be 

permitted to be estimated and, therefore, 

the model forms should state that these 

disclosures are subject to change. As 

discussed above, the Bureau is not 

adopting these substantive changes in 

the final rule. Consequently, the Bureau 

is not adopting the corresponding 

changes to the model forms. 

Finally, a consumer advocate 

suggested that a fraud warning should 

be added to the model forms. Such a 

warning is not required in the statute, 

and the Bureau believes that the 

disclosures should be limited to 

information relating to cost, error 

resolution, and cancellation. Adding 

more information and warnings to forms 

could overwhelm a sender and result in 

the sender not reading any of the 

information on the form. Therefore, the 

Bureau is not adding such a fraud 

warning to the model disclosures. 

The Bureau is, however, making two 

changes to the model forms that reflect 

changes from the proposal to the final 

rule, as discussed above. First, the 

Bureau is requiring that fees and taxes 

must be disclosed separately. See 

comment 31(b)(1)–1. As such, the model 

forms have been amended to 

demonstrate how a remittance transfer 

provider would disclose fees separately 

from taxes. Second, the final rule 

provides that a sender may cancel a 

transaction within thirty minutes of 

making payment, rather than within one 

business day, as proposed, and the 

model forms have been amended to 

reflect this change.89

The Bureau is making additional 

changes to Model Form A–37 in the 

final rule. The Bureau is removing 

sample phone number, Web site, and 

remittance transfer company name that 

was included in the proposed form. 

Unlike the model pre-payment 

disclosures, receipts, and combined 

disclosures, sample information is not 

necessary to demonstrate how the short 

form error resolution and cancellation 

disclosures should be completed. Thus, 

in the final rule, Model Form A–37 

includes brackets indicating where this 

information should be entered by a 

provider. The forward slash used in the 

proposal to indicate that funds may be 

picked up or deposited is also replaced 

with the word ‘‘or.’’ The Bureau is also 

amending the abbreviated statement 

about senders’ error resolution rights on 

Model Form A–37 to include a more 

explicit statement informing senders 

that they have such rights.90

The Bureau is also making minor 

technical changes in some of the model 

forms in the final rule for clarity. Plus 

signs are added to some forms to 

indicate where fees and taxes will be 

added to a transfer amount to better 


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91See, Model Forms A–30 through A–35 and A– 

38 through A–40. 

92See, Model Forms A–31, A–32, A–34, A–35, A– 

39, and A–40. 

93See, Model Forms A–31, A–32, A–34, A–35, A– 

39, and A–40. 

94One of the stylistic changes made to the 

Spanish language model forms was to change the 

format for the dates to eliminate possible consumer 

confusion as to the day, the month, and the year. 

Similar changes have been made to the English 

language model forms for consistency. 

demonstrate the calculation of the total 

amount paid by the sender.91 The 

internet address for the sample State 

regulatory agency is also amended on 

some forms with the suffix ‘‘.gov’’ rather 

than ‘‘.com.’’ 92 The toll-free telephone 

numbers for the Bureau have also been 

added to some forms.93

As discussed above, Model Forms A– 

38 through A–41 may be used when 

disclosures are required to be disclosed 

in Spanish, pursuant to the 

requirements in § 1005.31(g). The Board 

proposed model disclosures in Spanish 

to facilitate compliance with this foreign 

language requirement and requested 

comment on the disclosures. One 

commenter submitted spelling, grammar 

and verb tense revisions to the Spanish 

language disclosures. The commenter 

believed the Spanish language 

disclosures, as proposed, did not 

adequately communicate the intent of 

the language used in the English 

disclosures. 

Certain commenter-suggested 

revisions have been made in Model 

Forms A–38 through A–41 to correct 

inaccuracies in the proposed Spanish 

language disclosures. However, in other 

instances, the suggested revisions have 

not been made. Although the proposed 

language and the commenter-suggested 

revisions reflected stylistic variations, 

both contained accurate translations of 

the English language model forms. 

Therefore, the technical corrections are 

included in Model Forms A–38 through 

A–41 in the final rule. The Bureau also 

made stylistic changes to the Spanish 

language model forms that it believes 

better tracks the language in the English 

language disclosures.94

Effective Date 

The Dodd-Frank Act requires the 

Bureau to issue final rules on certain 

provisions of EFTA section 919 within 

18 months from the date of enactment. 

However, the statute does not specify an 

effective date for these provisions. The 

Board solicited comment in the May 

2011 Proposed Rule on whether an 

effective date of one year from the date 

the final rule is published, or an 

alternative effective date would be 

appropriate. 

One industry commenter agreed that 

12 months would be an appropriate 

time period to implement the remittance 

transfer provisions. However, several 

other industry commenters 

recommended that the effective date of 

the final rule be set 18 to 24 months 

from the date that the final rule is 

issued. In suggesting this time period, 

money transmitter commenters stated 

that they would need time to change 

hardware printers and software. Agents 

of remittance transfer providers would 

also need time to integrate software 

from the remittance transfer provider 

with their point of sale systems. 

Industry commenters also requested 

time to deplete their existing form stock, 

develop and implement proper training 

programs, and amend contracts with 

agent locations worldwide. 

Financial institution commenters 

cited the need for messaging, settlement, 

and payment systems, such as the ACH 

network and SWIFT, to evaluate and 

possibly amend operating rules, 

message formats, contracts, and 

participant agreements. These 

commenters also stated they would 

need time to: Complete processing 

system modifications; develop 

disclosures, operating procedures, 

marketing and employee training 

materials; and make modifications to 

agreements with correspondents and 

other intermediaries. They further 

requested that the Bureau take into 

account other regulatory requirement set 

forth in the Dodd-Frank Act that 

financial institutions must implement in 

addition to the remittance transfer 

provisions. 

Given the time period set for 

compliance with other consumer 

financial protection regulations, the 

Bureau believes it is appropriate to set 

an effective date one year from the date 

of publication of the final rule in the 

Federal Register. In setting this effective 

date, the Bureau believes that this time 

frame best balances the significant 

consumer protection interests addressed 

by this rule against industry’s need to 

make systems changes to comply with 

the final rule. Therefore, the disclosure 

requirements in § 1005.31 will apply to 

remittance transfers that are requested 

by a sender on or after the effective date. 

Only remittance transfers for which a 

sender made payment on or after the 

effective date will be eligible for the 

error resolution and refund and 

cancellation requirements of §§ 1005.33 

and 1005.34. For preauthorized 

remittance transfers, the disclosure 

requirements in § 1005.36(a) and (b) will 

apply to preauthorized remittance 

transfers authorized by a sender on or 

after the effective date. For transactions 

subject to § 1005.36(c), the error 

resolution and refund requirements of 

§§ 1005.33 and 1005.34 and the 

cancellation requirements of 

§ 1005.36(c) will apply to transfers 

authorized by a sender on or after the 

effective date. 

VII. Section 1022 Analysis 

A. Overview 

Section 1022(b)(2)(A) of the DoddFrank Act calls for the Bureau to 

consider the potential costs, benefits, 

and impacts of its regulations. 

Specifically, the Bureau is to consider 

the potential benefits and costs of 

regulation to consumers and covered 

persons, including the potential 

reduction of access by consumers to 

consumer financial products and 

services; the impact of proposed rules 

on insured depository institutions and 

insured credit unions with less than $10 

billion in total assets as described in 

section 1026 of the Dodd-Frank Act; and 

the impact on consumers in rural areas. 

The final rule implements section 

1073 of the Dodd-Frank Act, which 

creates a comprehensive system of 

consumer protections for consumers 

who electronically transfer funds to 

recipients in foreign countries. 

Specifically, as discussed above, the 

statute: (i) Mandates disclosure of the 

exchange rate and the amount to be 

received by the remittance recipient, 

prior to and at the time of payment by 

the consumer for the transfer; (ii) 

provides for Federal rights on consumer 

cancellation and refund policies; (iii) 

requires remittance transfer providers to 

investigate disputes and remedy errors 

regarding remittance transfers; and (iv) 

establishes standards for the liability of 

remittance transfer providers for acts of 

their agents and authorized delegates. 

Prior to the Dodd-Frank Act 

amendments, international money 

transfers fell largely outside the scope of 

Federal consumer protections. In the 

absence of a consistent Federal regime, 

legal requirements and practices 

regarding disclosure have varied. 

Congressional hearings prior to 

enactment of the Dodd-Frank Act 

focused on the need for standardized 

and reliable pre-payment disclosures, 

suggesting that disclosure of the amount 

of money to be received by the 

designated recipient is particularly 

critical. 

The analysis below considers the 

benefits, costs, and impacts of the key 

provisions of the final rule: the 

provisions regarding disclosures and 

estimates, error resolution, cancellation 

and refund, and agent liability. With 

respect to each provision, the analysis 


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95Costs incurred by providers may, in practice, be 

shared among providers’ business partners, such as 

agents or foreign exchange providers. To the extent 

that any of these business partners are covered 

persons, the rule may impose some cost on them 

as well. 

considers the benefits to consumers and 

the costs to providers, as well as 

possible implications of these costs for 

consumers.95 The analysis also 

considers certain alternative provisions 

that were considered by the Bureau in 

the development of the rule. 

The analysis examines the benefits, 

costs, and impacts of the key provisions 

of the final rule against a pre-statutory 

baseline (i.e., the benefits, costs, and 

impacts of the statute and the regulation 

combined). The Bureau has discretion 

in future rulemakings to choose the 

most appropriate baseline for that 

particular rulemaking. 

The Bureau notes at the outset that 

there is a limited amount of data that is 

publicly available and representative of 

the full universe or population of 

remittance transfers with which to 

quantify the potential benefits, costs, 

and impacts of the rule. Specifically, 

though some surveys have measured the 

characteristics of certain types of 

remittance consumers or certain types of 

remittance transfers, there is little 

publicly available data that represents 

the entire remittance transfer market 

and that links the characteristics of 

consumers who send remittance 

transfers to the frequency, size and cost 

of the transfers and the specific services 

and channels used. There is also limited 

data on remittance consumer shopping, 

error resolution, and purchase behavior 

from which to estimate how new 

protections might change consumer 

behavior and the amount consumers pay 

for remittance transfers. This data 

would be essential for quantifying the 

benefits to consumers of the provisions 

of the rule. 

Regarding costs to providers of 

complying with the rule, there is no 

representative and publicly available 

data on the current provision, accuracy, 

and completeness of pre-payment 

disclosures and receipts across the 

remittance transfer market, the 

frequency and treatment of 

cancellations and errors, or the 

frequency of practices by agents for 

which providers would become liable 

under the regulation. Additionally, 

industry commenters did not provide 

precise or comprehensive information 

from which to estimate such figures. 

Such data would provide the starting 

point for quantifying the cost to 

providers of complying with the rule. 

To measure such costs fully would also 

require quantifying the cost of closing 

the gap between current practices and 

those provided for by the rule, including 

the costs of providing disclosures or 

addressing errors. Industry commenters 

did not provide the Bureau with any 

quantitative data regarding such costs. 

In light of the lack of data, this 

analysis generally provides a qualitative 

discussion of the benefits, costs, and 

impacts of the final rule. General 

economic principles, together with the 

limited data that is available, provides 

considerable insight into these benefits, 

costs and impacts but they do not 

support a quantitative analysis. 

As discussed above, the May 2011 

Proposed Rule was issued by the Board 

prior to the transfer of rulemaking 

authority to the Bureau. The May 2011 

Proposed Rule therefore did not contain 

a proposed Dodd-Frank Act section 

1022 analysis, and although the Board 

did generally request comment on 

projected implementation and 

compliance costs, commenters provided 

little data in response. Furthermore, 

because of the short time period for 

publication of the final rule imposed by 

the statutory deadline, the Bureau’s 

ability to gather additional information 

or develop new data sources after it 

assumed rulemaking authority was 

constrained. 

B. Potential Benefits and Costs to 

Consumers and Covered Persons 

Disclosure of Accurate Exchange Rates, 

Fees, and Taxes 

The final rule generally requires 

remittance transfer providers to provide 

to senders a pre-payment disclosure 

with accurate information about, among 

other things, the exchange rate, fees, and 

taxes applicable to the transaction, and 

the amount to be provided to the 

designated recipient. In addition, the 

provider must generally give the sender 

a receipt that contains, among other 

things, the date of availability of funds 

to the designated recipient, as well as 

the information contained in the prepayment disclosure. 

The disclosures required by the DoddFrank Act and the final rule provide 

many benefits to consumers. Consumers 

who have reliable information about 

how much they must spend in order to 

deliver a specific amount of foreign 

currency to a recipient are better able to 

manage all of their household income 

than are consumers who lack this 

information. This may be particularly 

important for low-income immigrants 

who are trying both to manage their 

personal budgets in the United States 

and support friends or family abroad. 

Disclosing the amount of currency to 

be provided to the recipient enables 

consumers to engage in comparison 

shopping, since it accounts for both the 

exchange rate used by the remittance 

transfer provider and fees and taxes that 

are deducted from the amount 

transferred. Consumers also benefit, 

however, from having reliable 

information about the individual 

components of remittance transfer 

pricing (i.e., exchange rates, fees, and 

taxes). If the amount the provider 

commits to deliver is different from the 

amount the consumer is expecting, the 

information about the components will 

help the consumer identify the reason 

for the difference. The consumer can 

then better determine the benefits to 

additional comparison shopping. 

Consumers may also be less susceptible 

to deceptive and unfair business 

practices, and those practices may be 

less common, when the exchange rate, 

fees, and taxes are all clearly and 

reliably disclosed and the consumer 

knows (and can communicate to the 

recipient) the amount that the recipient 

should expect to receive. 

Finally, consumers who shop for 

remittance transfers place competitive 

pressure on providers, who may lower 

their prices in response. This benefits 

all consumers who send remittance 

transfers, by either allowing them to 

send more money abroad for the same 

price, or by allowing them to save on 

the amount they spend on such 

transfers. 

By requiring remittance transfer 

providers to provide accurate 

disclosures to consumers, the DoddFrank Act and the final rule thus require 

providers to lock in their prices (at the 

time of the transaction, except when 

estimates are allowed). As discussed 

below, providers that operate through 

closed network systems will face 

different costs of making this 

commitment than will providers that 

operate through open network systems. 

Providers that use closed network 

systems are generally money 

transmitters, though some depository 

institutions and credit unions may also 

offer remittance transfers through closed 

networks. Insofar as they use the closed 

network system, money transmitters or 

other providers often have contractual 

relationships with agents in the United 

States through which consumers initiate 

transfers, as well as agents abroad, 

which may be used to distribute 

transfers in cash to recipients. 

Alternatively, these providers may 

instead have direct relationships with 

intermediaries that, in turn, contract 

with and manage individual agents. 

Providers that use closed network 

systems, through the terms of their 

contractual relationships, usually have 


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96More precisely, the discussion applies to 

entities that use open network systems to direct and 

make payment to a beneficiary. This is in contrast 

to entities that may direct and effectuate payment 

to the recipient through a closed network system 

but use wire transfers to facilitate settlement among 

the various parties. 

97The Board reported in July 2011 that only 

around 410 U.S. depository institutions had 

enrolled in the FedGlobal ACH service; that only 

about a third of those institutions sent transfers in 

a typical month; and that some of the enrolled 

institutions do not offer the FedGlobal ACH 

services to consumer customers. Board ACH Report 

at 12 & n.53. 

some ability and authority to obtain the 

information needed for the disclosures 

from their agents or other network 

partners. Nevertheless, the disclosure 

requirements will likely impose some 

costs on closed network providers (and 

potentially some of their business 

partners), to the extent that such 

institutions need to update systems, 

revise contracts, change communication 

protocols and business practices in 

order to receive the necessary 

information and comply with the 

disclosure requirements. Furthermore, 

closed network providers that currently 

offer ‘‘floating rate’’ products will need 

to adjust their business processes and 

relationships for setting exchange rates, 

and change the way they manage foreign 

exchange rate risk. 

On the other hand, providers that 

operate through open network systems 

are in a different situation. This group 

primarily includes depository 

institutions and credit unions, although 

comments from industry stated that 

some institutions that are not 

depositories or credit unions (including 

some money transmitters) also use open 

network systems for certain 

transactions. Providers that operate 

through open networks generally do not 

have direct relationships with all 

disbursing entities. In some cases, 

intermediary institutions and recipient 

institutions may charge fees in 

connection with the transaction; often 

these fees are deducted from the 

principal amount transferred, although 

some fees may be charged to the sending 

institution instead. With regard to open 

networks today, there is no global 

practice of communications by 

intermediary and recipient institutions 

that do not have direct relationships 

with a sending institution regarding fees 

deducted from the principal amount or 

charged to the recipient, exchange rates 

that are set by the intermediary or 

recipient institution, or compliance 

practices. Similar challenges exist for 

some types of international ACH 

transactions. Thus, to the extent 

providers that use open networks are 

required to disclose information about 

fees or taxes, they may find it difficult 

to obtain information that must be 

provided in the disclosures. 

These considerations are relevant for 

all open network providers, but 

§ 1005.32(a) of the final rule provides 

insured depositories and credit unions 

with an exception to the requirements to 

provide accurate disclosures under 

certain circumstances until July 21, 

2015. Thus, to the extent applicable, 

insured depository institutions and 

credit unions are in a separate category 

for purposes of this analysis and are 

discussed in the next section below. The 

discussion that follows applies to 

money transmitters or other institutions 

that are not insured depository 

institutions or insured credit unions 

that send remittance transfers through 

open network systems.96 Comments on 

the proposed rule did not provide the 

Bureau with data on the volume of 

transactions done by such entities. 

Comments on the proposed rule did 

not provide data on the number of 

entities that use open network systems 

(besides insured depository institutions 

and credit unions), how costly it may be 

for them to obtain the required 

information, or how difficult it may be 

for them to change practices so the 

information is not required. These costs 

may not be knowable until some 

providers attempt to meet the new 

requirements in the year before the 

implementation date. The required 

changes may be extensive, however. It is 

possible that money transmitters or 

other institutions using open network 

systems may increase prices on the 

products that use open network systems 

or stop providing those products 

altogether. 

Disclosure of Estimated Exchange Rates, 

Fees, and Taxes 

Section 1005.32 of the final rule 

implements two statutory exceptions 

that permit remittance transfer 

providers to disclose ‘‘reasonably 

accurate estimates’’ of the amount of 

currency to be received, rather than the 

actual amount, under certain narrow 

circumstances. The first exception, 

which sunsets on July 21, 2015 unless 

the Bureau makes a finding to support 

an extension for up to five additional 

years, permits estimates where an 

insured depository institution or 

insured credit union is unable for 

reasons beyond its control to know the 

actual amount of currency to be 

received at the time that a consumer 

requests a transfer to be conducted 

through an account held with the 

provider. The second exception enables 

remittance transfer providers of all types 

to provide estimates where foreign 

countries’ laws or methods of transfer to 

a country prevent the providers from 

knowing the amount to be received. 

Section 1005.32(c) of the final rule 

prescribes methods that may be used to 

provide the estimates permitted by the 

exceptions. Providers may also use any 

other method to disclose estimates as 

long as the amount of funds the 

recipient actually receives is the same as 

or greater than the disclosed estimate of 

the amount of funds to be received. 

First Exception 

The first exception applies when an 

insured depository institution or 

insured credit union is unable for 

reasons beyond its control to know the 

actual amount of currency to be 

received at the time that a consumer 

requests a transfer to be conducted 

through an account held with the 

provider. The Bureau assumes that the 

exception will most frequently apply to 

wire transfers by insured depository 

institutions and credit unions, though it 

may also apply, for example, to some 

transactions sent through the FedGlobal 

ACH system, or other mechanisms.97

Data from the Federal Deposit 

Insurance Corporation and the National 

Credit Union Administration indicate 

that there are about 7,445 insured 

depository institutions and 7,325 

insured credit unions that may be 

eligible for the exception. Regulatory 

filings by insured depository 

institutions, however, do not contain 

information about the number that send 

consumer international wire transfers. 

Data from the National Credit Union 

Administration indicate that there are 

approximately 7,325 insured credit 

unions in the United States as of 

September 2011. About half offer 

international wire transfers. 

Additionally, regulatory filings by 

insured credit unions contain an 

indicator for ‘‘low cost wire transfers.’’ 

These are wire transfers offered to 

members for less than $20 per transfer, 

and about half of insured credit unions 

offer low cost wire transfers. Though the 

Bureau does not have exact data on the 

number of credit unions that offer wire 

transfers to consumers, the Bureau 

assumes that a similar fraction offer 

consumer international wire transfers. 

The above discussion on the 

qualitative benefits to consumers from 

accurate disclosures also generally 

applies where estimates are used. 

Although disclosures with ‘‘reasonably 

accurate estimates’’ are somewhat less 

reliable than those with actual amounts, 

they still provide consumers with 

valuable information that they currently 

do not generally receive from insured 


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6274 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

98Consumers generally benefit from having 

access to both open network products like wire 

transfers and closed network products like those 

used offered by money transmitters, to the extent 

that both types of products meet any particular 

consumer’s needs. 

99Navy Federal Credit Union has about $45 

billion in assets. It states that it processed 19,248 

wire transfers in 2010 and charged $25 per transfer. 

It had total income of over $3 billion in 2010, so 

the wire income of about $500,000 was about two 

tenths of one percent of total income. United 

Nations Federal Credit Union did submit data 

indicating that wire transfers were about 2% of total 

income. However, UNFCU serves a distinctively 

international community. 

100For a discussion of how the design of 

disclosures can help consumers, see Bureau 2011 

Report. 

depository institutions or credit unions. 

The exception also benefits consumers 

by, as discussed below, reducing the 

costs on insured depository institutions 

and credit unions of providing 

disclosures, and therefore making it less 

likely that they will increase costs to 

consumers or decrease services.98 Thus, 

relative to accurate disclosures, 

estimated disclosures strike a different 

balance between accuracy and access, 

offering less accuracy but potentially 

preserving greater access. 

Comments on the proposed rule did 

not provide any data on how costly it 

may be for insured depositories and 

credit unions to use the allowed 

methods of estimation. The methods do 

not necessarily require that sending 

institutions obtain information from 

receiving institutions with which they 

have no contractual or control 

relationship. To calculate estimates, 

providers may choose to rely on 

information about typical or most recent 

fees charged by the recipient institution 

and intermediaries in the transmittal 

route to that institution (or other 

institutions that set exchange rates that 

apply to remittances). Information is 

also required about foreign tax rules and 

rates. Thus, as discussed below, the 

final rule may require revisions of 

contract arrangements and 

communication systems, to ensure that 

depository institutions can receive the 

information needed for estimates (when 

permitted) or exact disclosures (when 

required) and provide that information 

to customers at a branch or elsewhere at 

the appropriate time. Third parties may 

have some incentive to gather this 

information and deliver it to 

depositories and credit unions, in order 

to preserve the remittance transfer line 

of business. However, the costs of doing 

so may be high and potentially 

prohibitive for transfers to some 

countries. 

The rule also permits insured 

depositories and credit unions to use 

methods not specified in the rule to 

calculate estimates, provided the 

estimate for the amount of funds the 

recipient will receive proves to be less 

than or equal to the amount of funds the 

recipient actually receives. Insured 

depositories and credit unions will 

differ in their capacity and willingness 

to make these estimates and to manage 

the risk and error resolution expenses 

for estimates of currency to be received 

that are too high. For insured 

depositories and credit unions that 

undertake this approach, the incentive 

to attract consumers who comparison 

shop makes it likely that they will 

disclose reasonable estimates and that 

the estimates will improve over time. 

The costs of compliance will 

ultimately be shared among the 

consumers and businesses involved in 

remittance transfers in ways that are 

difficult to predict. One credit union 

submitted data showing that little 

revenue, as a share of total income, 

came from consumer international wire 

transfers.99 Other credit union and 

credit union trade association 

commenters indicated that consumer 

international wire transfer services are 

not a financially significant line of 

business for them. In some cases, 

commenters stated, the service is 

provided as a convenience to customers 

and prices just cover costs. This 

suggests that some credit unions may 

fold the costs of complying with the rule 

into the prices they charge consumers or 

stop offering the service. Depository 

institutions that provide consumer 

international wire transfer services 

similar to those provided by credit 

unions may face similar costs of 

compliance. 

The statutory exception for insured 

depository institutions and credit 

unions expires on July 21, 2015, unless 

the exception is extended by the Bureau 

as permitted by the statute. Once the 

exception expires, insured depository 

institutions and credit unions will need 

to provide accurate disclosures. At that 

time, the benefit to consumers from the 

expiration, in terms of increased 

accuracy, will be minimal if the 

estimated disclosures tend to be 

accurate but significant if the estimated 

disclosures tend to be inaccurate. The 

cost to providers from the expiration, 

and thus to consumers in terms of 

higher prices or reduced access, will 

depend on business practices by 

depository institutions and credit 

unions currently eligible for the 

exception at that time. The Bureau lacks 

data to predict such practices with 

reasonable confidence. 

Second Exception 

The second exception permanently 

permits use of reasonably accurate 

estimates where a foreign country’s laws 

or methods of transfer to a country 

prevent remittance transfer providers 

from determining the actual amount of 

currency to be received. The rule 

provides a safe harbor for reliance on a 

list of countries to be published and 

periodically updated by the Bureau. 

Consumers benefit from the exception 

since it reduces the chance that 

remittance transfer services to these 

countries will be discontinued or 

disrupted. Consumers will also benefit 

from the Bureau’s publication and 

periodic update of a safe harbor country 

list since such a list will reduce the 

chance that consumers will receive 

estimated disclosures when they should 

receive accurate ones. Likewise, transfer 

providers will benefit from the Bureau’s 

publication and periodic update of a list 

since this will reduce the burden on 

them of having to assess the laws of and 

transfer methodologies used in 

countries with which they do not 

conduct frequent transfers. 

Formatting, Retainability, and Language 

Requirements in Disclosures 

EFTA section 919(a)(3)(A) states that 

disclosures must be clear and 

conspicuous. The final rule incorporates 

this requirement and adds grouping, 

proximity, prominence, size and 

segregation requirements to ensure that 

it is satisfied. The grouping requirement 

ensures that the disclosures present, in 

logical order, the computations that lead 

from the amount of domestic currency 

paid by the sender to the amount of 

foreign currency received by the 

recipient. The other requirements 

ensure that senders see important 

information and are not overloaded or 

diverted by less critical information. 

The final rule provides model forms that 

meet these requirements. These forms 

were consumer-tested for 

effectiveness.100

The specific format requirements 

impose a one-time cost on certain 

providers, for programing or updating 

their systems to produce disclosures 

that comply with the requirements. The 

cost is mitigated by the fact that the rule 

provides model forms and permits 

providers to use any size paper. 

Furthermore, as discussed below, the 

final rule provides certain exceptions to 

certain of the formatting requirements 

for transactions conducted entirely by 

telephone orally or via mobile 

application or text message. For 

transactions that must comply with the 

formatting requirements, the cost 

depends on the systems in place and the 


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101Other errors are also defined in § 1005.33(a). 

extent to which providers already give 

disclosures that comply with the 

requirements. 

EFTA section 919(a)(2) and 

§ 1005.31(a)(2) generally require 

disclosures to be retainable. Retainable 

disclosures generally provide greater 

benefits to consumers than do nonretainable disclosures. For example, it is 

usually easier for consumers to track the 

costs of remittance transfers over time 

and across providers when disclosures 

are retainable. For transactions 

conducted entirely by telephone, 

however, providing a retainable prepayment disclosure may be 

inconvenient or impracticable. 

EFTA section 919(a)(5)(A) allows the 

Bureau to permit oral pre-payment 

disclosures for transactions conducted 

entirely by telephone. In addition to 

implementing this general statutory 

exception, the regulation provides an 

additional alternative for transfers 

conducted entirely by telephone via 

mobile application or text message. 

Specifically, § 1005.31(a)(5) of the final 

rule provides that for such transfers, the 

pre-payment disclosure may be 

provided orally or via mobile 

application or text message. Disclosure 

provided via such methods need not be 

retainable by the consumer. See 

§ 1005.31(a)(2). When used, this 

provision likely benefits consumers who 

initiate transfers via mobile application 

or text message. First, it allows the 

transaction to proceed more quickly 

using the tools that the consumer used 

to initiate the transaction (mobile 

application or text message). Second, 

while the disclosures may not be 

permanently retainable in this format as 

compared to an email or paper 

disclosure, may be able to be retained 

temporarily without further action by 

the consumer and thus may be more 

useful and convenient to consumers 

than oral disclosures. 

The final rule permits providers, at 

their option, to provide pre-payment 

disclosures orally or via mobile 

application or text message for 

transactions conducted entirely by 

telephone via mobile application or text 

message. Thus, this provision of the rule 

does not in itself impose additional 

costs on providers, and a provider 

determines whether to incur the cost of 

the alternative. Overall, this provision of 

the final rule benefits consumers and 

facilitates the development of additional 

modes of remittance transfer compared 

to the alternative in which the only nonretainable pre-payment disclosure is an 

oral disclosure. 

Finally, EFTA section 919(b) provides 

that disclosures required under EFTA 

section 919 must be made in English 

and in each of the foreign languages 

principally used by the remittance 

transfer provider, or any of its agents, to 

advertise, solicit, or market, either orally 

or in writing, at that office. The final 

rule incorporates and modifies the 

statutory provision in § 1005.31(g). In 

particular, § 1005.31(g)(1)(ii) reduces the 

number of foreign language disclosures 

that would otherwise be required to be 

disclosed by the statute. Under the 

statute, the provider must provide the 

sender with written disclosures in 

English and in each foreign language 

principally used by the provider to 

advertise, solicit, or market remittance 

transfers at a particular office. Section 

1005.31(g)(1)(ii) allows providers 

instead to provide written disclosures in 

English and in the one foreign language 

primarily used by the sender with the 

provider to conduct the transaction or 

assert the error, provided such foreign 

language is principally used by the 

provider to advertise, solicit or market 

remittance transfers at a particular 

office. The rule therefore provides a 

closer link between the disclosures and 

the language a sender uses with a 

provider to conduct a particular 

transaction or to assert an error. 

Consumers generally benefit from 

disclosures that effectively convey 

information that is relevant and accurate 

in a language that they can understand. 

A written disclosure that consists of 

information in languages the consumer 

does not understand provides a 

substantial amount of information that 

is not relevant to that individual 

consumer. Thus, relative to the statute, 

this provision of the final rule allows 

providers to offer consumers a more 

effective written disclosure that may be 

tailored to the language the sender uses 

with the provider to conduct a 

particular transaction or to assert an 

error. This provision of the final rule 

does not, however, require providers to 

offer different written disclosures from 

those required by the statute. Thus, this 

provision of the rule does not in itself 

impose costs on providers other than 

those required by the statute, and a 

provider determines, at its option, 

whether to incur the cost of the 

alternative. 

Error Resolution 

EFTA section 919(d) requires 

remittance transfer providers to 

investigate and resolve errors upon 

receiving oral or written notice from the 

sender within 180 days of the promised 

date of delivery. The obligation includes 

situations in which the recipient did not 

receive the amount of currency by the 

date of availability stated in the 

disclosures provided under other parts 

of the rule. The statute requires the 

Bureau to establish ‘‘clear and 

appropriate’’ standards for error 

resolution to protect senders from such 

errors, including recordkeeping 

standards relating to senders’ 

complaints and providers’ findings of 

investigation. As explained above, the 

Bureau has taken an approach that is 

generally similar to existing error 

resolution rights for electronic fund 

transfers under EFTA and Regulation E. 

An error may occur if the provider 

fails to deliver the promised amount of 

foreign currency to the recipient by the 

guaranteed date.101 There are generally 

three cases of this type of error. In one 

case, funds are delivered on time but the 

amount is less than the amount 

disclosed. As designated by the sender, 

the provider must either refund to the 

sender or transfer to the recipient the 

portion of the funds at no additional 

charge that were not received. In the 

second case, the funds are delivered late 

but the amount delivered is as correctly 

disclosed. In this case the provider must 

refund all of the fees, and to the extent 

not prohibited by law, taxes imposed on 

the transfer. In the final case, all of the 

funds are delivered late, and the amount 

is wrong or the funds are never 

delivered. In this case the consumer 

receives both remedies described 

above—the provider must either refund 

or transfer the funds that were not 

received at no additional charge (unless 

the sender provided incorrect or 

insufficient information) and the 

provider must refund all of the fees, and 

to the extent no prohibited by law, taxes 

imposed on the transfer (unless the 

sender provided incorrect or insufficient 

information). The discussion above 

refers to this refund provision as ‘‘a 

separate cumulative remedy.’’ 

The benefits to senders from the error 

resolution procedures specified in the 

rule are straightforward. When an error 

occurs, senders benefit from the 

provision that providers must complete 

the transaction at no additional charge 

or return undelivered funds. Senders 

may also benefit from knowing that the 

error resolution procedures exist since 

they make remittance transfers less 

risky. The magnitude of these benefits 

depends on the frequency of errors, the 

financial and other costs that senders 

currently bear when errors occur, and 

the risk aversion of senders. Senders 

may also benefit from the fact that 

providers are likely to be deterred from 

committing errors by having to complete 

the transaction at no additional charge 

or return undelivered funds and also 

refunding fees and, to the extent not 


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6276 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

102The Credit Union National Association reports 

error rate of less than 1% for international wire 

‘‘exceptions’’ (including non-timely delivery). Navy 

Federal Credit Union reports that 75% of its wire 

transfers are between $500 and $10,000 dollars. The 

full principal may rarely be lost when errors occur. 

However, assuming all of the principal is lost 10% 

of the time (or 10% of the principal is lost all of 

the time), the 1% error rate implies the expected 

loss to the transmitter is 50 cents on a $500 transfer 

and $10 on a $10,000 transfer. 

prohibited by law, taxes when none of 

the funds are delivered on time, 

provided the failure was not caused by 

the sender providing incorrect or 

insufficient information. The magnitude 

of this benefit depends on the extent to 

which providers are not already 

sufficiently deterred by reputational 

concerns, and the extent to which 

providers have sufficient control over 

the entities responsible for any errors 

such that they can reduce the incidence 

of any errors. Although these benefits 

cannot be quantified, errors can always 

occur and the error resolution 

provisions will therefore always provide 

benefits to senders. 

Providers will incur additional costs 

from the error resolution procedures. In 

some instances, providers may be 

required to refund funds or fees and 

taxes that have already been received by 

and which cannot easily be recouped 

from other institutions involved in a 

remittance transfer or government 

entities. Alternatively, in refunding or 

making available funds to a recipient to 

resolve an error, a provider may face 

additional exchange rate risk, due to 

changes in a foreign exchange market 

between the time of the transfer and the 

resolution of the error. Furthermore, 

providers (and their business partners) 

may need to adjust communication 

practices and business processes to 

comply with the error resolution 

requirements. 

The magnitude of these and other 

costs depends on the frequency of errors 

and the financial costs that providers 

incur. While providers cannot charge 

senders directly for error resolution 

activities, they may build the cost of 

these activities into their general fees. 

Industry commenters suggests that 

scenarios in which the entire amount 

transferred must be returned to the 

sender before the provider has 

recovered it from other institutions may 

be of particular concern. Since this type 

of error appears to be rare, the quantity 

of funds never recovered would have to 

be substantial for this particular error to 

have a significant impact on fees.102

The Bureau considered a number of 

alternatives in developing the error 

resolution procedures. In the final rule, 

if funds are not available by the date of 

availability because the sender provided 

incorrect or insufficient information and 

the sender chooses to have the transfer 

resent as a remedy for the error, the 

provider may re-charge third party fees 

actually incurred. The proposed rule, by 

contrast, did not permit the imposition 

of such third-party fees. The effect of 

this change is to reduce the costs for 

providers of correcting errors caused by 

the sender’s provision of inaccurate or 

incomplete information, and, 

conversely, to prevent such costs from 

being passed along to all senders, as 

opposed to keeping those costs with the 

senders at fault. 

On the other hand, the Bureau was 

asked to use its exception authority to 

reduce the 180-day statutory time 

period in which senders may assert an 

error to 60 or 30 days. Given the 

international nature of remittance 

transfers, the additional time a sender 

may need to communicate with persons 

abroad, and the lack of information 

about problems associated with this 

time period, the Bureau concluded that 

using its exception authority to reduce 

the statutory 180-day time period is not 

currently warranted. As noted above, 

errors are infrequent enough that the 

incremental cost to providers of the 180- 

day period is likely to be small. 

Cancellation and Refund 

EFTA section 919(d)(3) also requires 

the Bureau to establish appropriate 

remittance transfer cancellation and 

refund policies for consumers. The 

Board originally proposed a one 

business day cancellation period. The 

final rule instead requires providers to 

give consumers at least 30 minutes to 

cancel the transaction for a full refund, 

including fees, and to the extent not 

prohibited by law, taxes, if the 

transferred funds have not yet been 

picked up by the recipient. If they wish, 

providers can hold the funds until the 

cancellation period expires. 

The Bureau believes that a brief 

cancellation period may provide 

benefits to both consumers and 

providers by allowing and perhaps 

encouraging consumers to review 

disclosure documents one additional 

time to confirm that they wish to 

complete the transaction and to identify 

any scrivener’s errors on the receipt. For 

instance, the cancellation period affords 

consumers an opportunity to raise any 

discrepancies between the two 

documents or identify errors that might 

otherwise cause the funds not to be 

made available on the disclosed date. 

These actions in turn would allow 

remittance transfer providers to address 

and correct errors early in the process, 

when it may be faster and less 

expensive to remedy the problem. 

The Bureau considered a number of 

alternatives, including longer 

cancellation periods of. It is not clear 

that a longer cancellation period would 

provide much additional benefit to 

consumers given that the final rule 

already provides consumers opportunity 

to engage in cost comparison based on 

the detailed pre-payment disclosures. 

Conversely, a longer cancellation period 

may impose costs on consumers who 

want to send funds as quickly as 

possible if, as some commenters 

suggested, providers would delay the 

transmission of funds until the 

cancellation period expired. Given these 

conflicting factors, it does not seem 

likely that a longer cancellation period 

would provide consumers with 

substantial additional net benefits, 

though the exact difference in benefits 

provided is not known and may differ, 

depending on the consumer. If, as some 

commenters suggested, providers decide 

to delay transmission of funds until the 

cancellation period expires, under the 

final rule, they will likely only hold 

funds for 30 minutes. Compliance 

therefore likely imposes minimal costs 

on providers. 

Conditions of Agent Liability 

The final rule holds a remittance 

transfer provider liable for any violation 

by an agent when the agent acts for the 

provider. However, EFTA section 

919(f)(2) states that enforcement 

agencies may consider, in any action or 

other proceeding against a provider, the 

extent to which the provider has 

established and maintained policies or 

procedures for compliance. 

In States where the strict liability 

standard for acts of agents is already in 

place, consumers derive no additional 

benefit from this rule provision and 

providers incur no additional costs. In 

other States, consumers may benefit 

from the additional incentive the rule 

gives providers to oversee and police 

their agents. Providers are likely to 

incur some additional costs in these 

States, but the magnitude of such costs 

much cannot be determined. These 

costs are mitigated somewhat by the 

discretion that the statute grants 

enforcement agencies to consider the 

extent to which a provider has 

established and maintained policies or 

procedures for compliance. 

C. Impact of the Final Rule on 

Depository Institutions and Credit 

Unions With $10 Billion or Less in Total 

Assets, As Described in Section 1026 

Given the general lack of data on the 

frequency and other characteristics of 

remittance transfers by depository 

institutions and credit unions, it is not 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6277 

103Section 1022(b)(2)(B) of the Dodd-Frank Act 

requires the Bureau to conduct consultations with 

appropriate prudential regulators or other Federal 

agencies prior to proposing a rule and during the 

comment process regarding consistency with any 

prudential, market, or systemic objectives that may 

be administered by such agencies. In this case, the 

May 2011 Proposed Rule was developed by the 

Board, which is not subject to section 1022(b)(2)(B), 

prior to the transfer of rulemaking authority to the 

Bureau. Accordingly, the Bureau held its first 

consultation meeting after the closing of the 

comment period on the proposed rule. The Bureau 

also consulted with other agencies regarding the 

January 2012 Proposed Rule. 

104Although the OCC’s letter was not designated 

as a written objection pursuant to section 

1022(b)(2)(C), OCC staff orally confirmed that it was 

intended as such. The Bureau has asked that 

agencies designate objections under section 

1022(b)(2)(C) as such to distinguish them from other 

communications. 

possible for the Bureau to distinguish 

the impact of the final rule on 

depository institutions and credit 

unions with $10 billion or less in total 

assets as described in section 1026 of 

the Dodd-Frank Act from the impact on 

depository institutions and credit 

unions in general. Overall, the impact of 

the rule on depository institutions and 

credit unions depends on a number of 

factors, including whether they offer 

consumer international wire transfers or 

other remittance transfers, the 

importance of consumer wire transfer 

and other remittance transfers as a 

business line for the institution, how 

many institutions or countries they send 

to, and the cost of complying with the 

rule. The institution’s general asset size 

is not necessarily a good proxy for 

estimating impacts, since some small 

institutions which conduct frequent 

transfers particularly to specific 

countries may be better positioned to 

implement the new requirements than 

larger institutions that may conduct 

consumer remittance transfers to a 

larger number of countries on an 

infrequent basis. 

The impact of the rule on small 

depository institutions and credit 

unions is discussed in further detail in 

the Regulatory Flexibility Act analysis 

below. 

D. Impact of the Final Rule on 

Consumers in Rural Areas 

The Bureau consulted a number of 

sources for data with which to study 

consumers and providers of remittance 

transfers in rural areas and to consider 

the impact of the rule. The Bureau 

consulted research done by the Federal 

Reserve Bank of Kansas City, which 

specializes in research on agricultural 

and rural economies, and surveys done 

by Economic Research Service of the 

U.S. Department of Agriculture. The 

Bureau also consulted surveys done by 

the Census Bureau and reports 

published by the Government 

Accountability Office. The Bureau 

believes there is no data or body of 

research with which to study this 

subject at this time. 

There are likely to be concentrations 

of individuals in rural areas who want 

to send remittance transfers and who 

provide an attractive base of customers 

for a provider. For example, money 

transmitters could serve these 

individuals with agents that have other 

lines of business and that do not rely 

exclusively on sending international 

remittances. 

It is likely more difficult for 

consumers in rural areas than for 

consumers elsewhere to send large 

remittance transfers. Both demand and 

competition for this business is likely 

stronger outside rural areas. Large 

remittance transfers are more commonly 

sent through depository institutions and 

credit unions than through money 

transmitters. Insofar as the rule may 

cause insured depository institutions 

and credit unions to raise prices or 

reduce remittance transfer services, and 

insofar as there are fewer alternative 

providers in rural areas, consumers in 

rural areas may be more heavily affected 

by the rule than consumers outside rural 

areas. However, insofar as these factors 

are uncertain, it is not clear that rural 

consumers who use money transmitters 

would be more heavily affected by the 

rule than consumers elsewhere. 

The Bureau believes that the 

disclosures required by the rule are as 

beneficial to consumers in rural areas as 

they are to those residing in non-rural 

areas. These disclosures help them 

identify the lowest-cost providers 

among those they find on the internet 

and in-person. Similarly, the Bureau 

expects that the error resolution 

procedures and the other benefits of the 

rule are as beneficial to consumers in 

rural areas as they are to those residing 

in non-rural areas. 

E. Consultation With Federal Agencies 

In developing the final rule,103 the 

Bureau consulted or offered to consult 

the Board, Federal Deposit Insurance 

Corporation (FDIC), the Office of the 

Comptroller of the Currency (OCC), the 

National Credit Union Administration 

(NCUA), and the Federal Trade 

Commission (FTC), including with 

respect to consistency with any 

prudential, market, or systemic 

objectives that may be administered by 

such agencies. As discussed above, the 

Bureau also held discussions with 

FinCEN regarding the impact of 

extending the EFTA to regulate 

remittance transfers on application of 

regulations administered by that agency. 

In the course of the consultation, the 

OCC submitted written objections to the 

proposed rule pursuant to section 

1022(b)(2)(C) of the Dodd-Frank Act 104

urging modification of certain aspects of 

the proposed error resolution rules to 

address risk of fraud and the need for 

financial institutions to conduct 

monitoring pursuant to Office of Foreign 

Assets Control (OFAC) requirements. 

The OCC also urged extension of the 

temporary exception permitting 

depository institutions and credit 

unions to provide estimated disclosures 

as a means of mitigating impacts on 

community banks and consumers who 

may rely on them for remittance transfer 

services. Finally, the OCC urged the 

Bureau to mitigate the potential 

regulatory gaps created by Congress’s 

extension of the EFTA to regulate 

remittance transfers, given that Article 

4A of the Uniform Commercial Code 

and certain Bank Secrecy Act 

regulations currently exclude 

transactions subject to EFTA. 

As discussed in detail in the sectionby-section analysis, the Bureau takes 

seriously all of the concerns raised in 

the OCC letter, which were also 

generally raised during the comment 

period. The final rule adopts both of the 

error resolution changes advocated by 

the OCC, specifically, excluding from 

the definition of error instances of 

‘‘friendly fraud’’ by a sender or persons 

acting in concert with the sender and 

delays due to OFAC requirements or 

other similar monitoring activities. The 

Bureau believes that it is premature to 

extend the sunset date of the exception 

allowing estimates by depository 

institutions and credit unions, but is 

working in other ways to provide greater 

certainty to community banks and other 

small remittance transfer providers. For 

instance, the Bureau is working to 

develop safe harbors that will provide 

greater clarity as to what remittance 

transfer providers are excluded from the 

regulations because they do not provide 

transfers in the ‘‘normal course of 

business’’ and to publish a list of 

countries for which estimated 

disclosures may be used because the 

laws of the country or the method of 

transfer to a country prevents remittance 

transfer providers from determining the 

amount to be provided to the recipient. 

The Bureau will also develop a 

compliance guide for small remittance 

transfer providers and continue 

dialogue with industry regarding 

implementation issues. 

Finally, the Bureau shares concerns 

regarding the potential gaps in State law 

and Federal anti-money laundering 

regulation created by the expansion of 


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6278 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

the EFTA to regulate remittance transfer 

providers. The Bureau does not have 

authority to amend either State law or 

the Federal anti-money laundering 

regulations to override their exclusion 

of transfers regulated by EFTA, and as 

discussed above, does not believe that it 

can fill the gaps through operation of 

preemption or by incorporating these 

separate bodies of law into Regulation E. 

The Bureau is therefore working to 

coordinate with State governments and 

FinCEN to facilitate action. 

VIII. Final Regulatory Flexibility 

Analysis 

The Regulatory Flexibility Act (5 

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

requires an agency to publish an initial 

and final regulatory flexibility analysis 

on the impact a rule is expected to have 

on small entities. In the May 2011 

Proposed Rule, the Board conducted an 

initial regulatory flexibility analysis 

(IRFA) and concluded that the proposed 

rule could have a significant economic 

impact on small entities that are 

remittance transfer providers for 

international wire transfers. The Board 

solicited comment on the impact of the 

rule on small remittance transfer 

provides, and in particular, on 

remittance providers for consumer 

international wire transfers. The Board 

also solicited comment in its broader 

Notice of Proposed Rulemaking on a 

number of proposed provisions that 

could mitigate the impact on small 

entities, such as whether to adopt safe 

harbors and the length of the 

implementation period. 

The Bureau received a number of 

comments on the Board’s IRFA and the 

broader Notice of Proposed Rulemaking 

addressing the burden imposed by the 

proposed rule and potential mitigation 

measures and alternatives. These 

included comments by the Small 

Business Administration’s Office of 

Advocacy (SBA). Section 1601 of the 

Small Business Jobs Act of 2010 

generally requires Federal agencies to 

respond in a final rule to written 

comments submitted by the SBA on a 

proposed rule, unless the public interest 

is not served by doing so. As described 

further below, the Bureau carefully 

considered the comments received and 

performed its own independent analysis 

of the potential impacts of the rule on 

small entities and alternatives to the 

final rule. Based on the comments 

received and for the reasons stated 

below, the Bureau is not certifying that 

the final rule will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

the Bureau has prepared the following 

final regulatory flexibility analysis 

(FRFA) pursuant to section 604 of the 

RFA. 

Section 604(a)(2) of the RFA generally 

requires that the FRFA contain a 

summary of significant issues raised by 

public comments in response to the 

IRFA, the Bureau’s assessment of such 

issues, and a statement of any changes 

made in the proposed rule as a result of 

such comments. For organizational 

purposes, this FRFA generally addresses 

public comments received by the 

Bureau in the topical section that relates 

to the subject matter of the comment, 

i.e., Section 2 addresses comments 

relating to compliance and other 

requirements, Section 3 addresses 

comments relating to the number of 

small entities affected, and Section 5 

addresses other comments received. 

1. Statement of the need for, and 

objectives of, the final rule. The EFTA, 

as amended by the Dodd-Frank Act, was 

enacted to provide a basic framework 

establishing the rights, liabilities, and 

responsibilities of participants in 

electronic fund and remittance transfer 

systems. The primary objective of the 

EFTA is the provision of individual 

consumer rights. 15 U.S.C. 1693. The 

EFTA authorizes the Bureau to prescribe 

regulations to carry out the purpose and 

provisions of the statute. 15 U.S.C. 

1693b(a). The EFTA expressly states 

that the Bureau’s regulations may 

contain ‘‘such classifications, 

differentiations, or other provisions, and 

may provide for such adjustments or 

exceptions * * * as, in the judgment of 

the Bureau, are necessary or proper to 

effectuate the purposes of [the EFTA], to 

prevent circumvention or evasion [of 

the EFTA], or to facilitate compliance 

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

Section 1073 of the Dodd-Frank Act 

adds a new section 919 to the 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. 

Consumers transfer tens of billions of 

dollars from the United States each year, 

but these transactions previously were 

largely excluded from existing Federal 

consumer protection regulations in the 

United States. Congress concluded that 

there was a need to fill this gap. 

Specifically, the Dodd-Frank Act 

requires: (i) The provision of disclosures 

concerning, among others, the exchange 

rate and amount to be received by the 

remittance recipient, prior to and at the 

time of payment by the consumer for the 

transfer; (ii) Federal rights regarding 

transaction cancellation periods; (iii) 

investigation and remedy of errors by 

remittance transfer providers; and (iv) 

standards for the liability of remittance 

transfer providers for the acts of their 

agents. 

Furthermore, section 1073 of the 

Dodd-Frank Act specifically requires the 

Bureau to issue rules to effectuate these 

four requirements. The objective of the 

final rule is therefore to implement 

section 1073 of the Dodd-Frank Act 

consistent with congressional intent and 

the general purposes of the Bureau as 

specified in section 1021 of the DoddFrank Act. Accordingly, the final rule 

generally requires remittance transfer 

providers to provide the sender a prepayment disclosure containing 

information about the specific 

remittance transfer, such as the 

exchange rate, applicable fees and taxes, 

and the amount to be received by the 

designated recipient. The remittance 

transfer provider generally must also 

provide a written receipt for the 

remittance transfer that includes the 

above information, as well as additional 

information such as the date of 

availability and the recipient’s contact 

information. Alternatively, the final rule 

permits remittance transfer providers to 

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

information required on the receipt. 

As required by statute, the Bureau is 

also adopting provisions in the final 

rule which require remittance transfer 

providers to furnish the sender with a 

brief statement of the sender’s error 

resolution and cancellation rights, and 

require providers to comply with related 

recordkeeping, error resolution, 

cancellation, and refund policies. The 

final rule also implements standards of 

liability for remittance transfer 

providers that act through an agent. 

The Bureau believes that the revisions 

to Regulation E discussed above fulfill 

the statutory obligations and purposes 

of section 1073 of the Dodd-Frank Act, 

in a manner consistent with the EFTA 

and within Congress’s broad grant of 

authority to the Bureau to adopt 

provisions and to provide adjustments 

and exceptions that carry out the 

purposes of the EFTA. 

2. Description of the projected 

reporting, recordkeeping, and other 

compliance requirements of the rule. 

The final rule does not impose new 

reporting requirements. The final rule 

does, however, impose new 

recordkeeping and compliance 

requirements on certain small entities. 

For the most part, these requirements 

appear specifically in the statute. Thus, 

for the most part, the impacts discussed 

below are impacts of the statute, not of 

the regulation per se—that is, the 

Bureau discusses impacts against a prestatute baseline. The Bureau uses a prestatute baseline here to facilitate 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6279 

105The Bureau has discretion in future 

rulemaking to use a post-statute baseline when it 

applies Regulatory Flexibility Act analysis. 

comparison of this FRFA against the 

Board’s IRFA, which uses a pre-statute 

baseline.105

Compliance Requirements 

As discussed in detail in VI. Sectionby-Section Analysis above, the final rule 

imposes new compliance requirements 

on remittance transfer providers. For 

example, remittance transfer providers 

generally are required to implement 

new disclosure and related procedures 

or to review and potentially revise 

existing disclosures and procedures to 

ensure compliance with the content, 

format, timing, and foreign language 

requirements of the rule, as described 

above. Remittance transfer providers are 

also required to review and potentially 

update their error resolution and 

cancellation procedures to ensure 

compliance with the rule, also as 

described above. For remittance transfer 

providers that employ agents, 

remittance transfer providers are liable 

for any violations of the rule by their 

agents, which may require providers to 

revise agreements with agents or 

develop procedures for monitoring 

agents. 

Recordkeeping Requirements 

Because section 1073 of the DoddFrank Act incorporates the remittance 

transfer provisions in the EFTA, small 

remittance transfer providers that were 

not previously subject to the EFTA and 

Regulation E would now be subject to 

12 CFR 1005.13, which requires such 

entities to retain evidence of compliance 

with the requirements of EFTA and 

Regulation E for a period of not less 

than two years from the date disclosures 

are required to be made or action is 

required to be taken. Moreover, under 

section 1073, the Bureau must establish 

clear and appropriate standards for 

remittance transfer providers with 

respect to error resolution relating to 

remittance transfers, to protect senders 

from such errors. The statute 

specifically provides that such 

standards must include appropriate 

standards regarding recordkeeping, 

including retention of certain errorresolution related documentation. The 

Bureau adopted § 1005.33(g) to 

implement these error resolution 

standards and recordkeeping 

requirements. 

As discussed above in VI. Section-bySection Analysis, § 1005.33(g)(1) 

requires remittance transfer providers, 

including small remittance transfer 

providers, to develop and maintain 

written policies and procedures that are 

designed to ensure compliance with 

respect to the error resolution 

requirements applicable to remittance 

transfers. Furthermore, under 

§ 1005.33(g)(2), a remittance transfer 

provider’s policies and procedures 

concerning error resolution would be 

required to include provisions regarding 

the retention of documentation related 

to an error investigation. Such 

provisions would be required to ensure, 

at a minimum, the retention of any 

notices of error submitted by a sender, 

documentation provided by the sender 

to the provider with respect to the 

alleged error, and the findings of the 

remittance transfer provider regarding 

the investigation of the alleged error, 

which is consistent with EFTA section 

919(d)(2). 

Comments Received 

The IRFA conducted by the Board 

stated that the proposed rule could have 

a significant economic impact on small 

financial institutions that are remittance 

transfer providers for consumer 

international wire transfers. The Board 

solicited comment on the impact of the 

rule on small remittance transfer 

providers, and in particular, on 

remittance providers for consumer 

international wire transfers. Although 

the Bureau did not receive very specific 

comment on costs, as discussed in the 

SUPPLEMENTARY INFORMATION, depository 

institution and credit union commenters 

expressed concern about the burden and 

complexity associated with complying 

with the rule, and in particular 

providing the required disclosures for 

remittances that are sent by 

international wire transfer. Some 

commenters argued that the 

implementation and compliance costs 

would be prohibitive for depository 

institutions and credit unions that are 

small entities. Commenters also warned 

that the burden associated with the rule 

would force depository institutions and 

credit unions that are small entities out 

of the international wire and ACH 

business. The SBA also urged the 

Bureau to conduct more outreach to 

small providers to further assess the 

economic impacts of the compliance 

and recordkeeping requirements. 

The Bureau carefully considered these 

comments from the SBA and other 

commenters regarding impacts on small 

entities, and discusses the relative 

implementation burdens and impacts 

for different types of remittance transfer 

providers in this section and Section 3 

below. The Bureau conducted further 

outreach to industry trade associations, 

financial institutions, consumer groups, 

and nonbank money transmitters. The 

Bureau agrees as discussed elsewhere in 

the FRFA and SUPPLEMENTARY

INFORMATION that implementation is 

likely to be most challenging for 

depository institutions and credit 

unions that engage in open network 

wire transactions, though similar 

challenges may be associated with some 

types of international ACH transactions. 

For instance, the final rule may 

require revision of existing contract 

arrangements and improvement of 

communications systems and 

methodologies between contractual 

partners, as well as between 

headquarters and branches of financial 

institutions. Depository institutions and 

credit unions that provide transfers will 

need to obtain exchange rate and fee 

information from correspondent banks 

and other contractual partners, and 

possibly third parties, in order to 

provide required disclosures, and they 

will need mechanisms to ensure that 

such information can be provided at the 

appropriate time to the customer, who 

may be waiting at a branch, or 

transacting by phone or online. Current 

contracts, information technology 

systems, and practices may not provide 

for the exchange of such information in 

order to comply with the timing 

required by the final rule. Accordingly, 

modifications may be required, and 

remittance transfer providers that are 

small entities may incur 

implementation costs to comply with 

the rule. 

The final rule may also expose 

depository institutions and credit 

unions to new types of risk. In some 

cases, commenters have suggested, 

small depository institutions and credit 

unions may be required by 

§ 1005.33(c)(2) to refund funds or fees or 

taxes that were already received by 

other entities, and which they cannot 

easily recoup, due to the lack of 

contractual arrangements among the 

entities involved or an applicable 

comprehensive worldwide legal regime. 

The legal right of a depository 

institution or credit union to recoup 

previously transmitted funds or fees or 

taxes from other entities may depend on 

a number of factors, including the exact 

nature of the error involved, the source 

of the mistake, the payment systems 

involved in the error, and the 

relationships among the entities 

involved. In other cases, compliance 

with § 1005.33(c)(2) may expose small 

depository institutions and credit 

unions (as well as other providers) to 

additional exchange rate risk, due to 

changes in a foreign exchange market 

between the time of the transfer and the 

resolution of the error. 


srobinson on DSK4SPTVN1PROD with RULES2
6280 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

106 13 CFR 121.201; SBA, Table of Small Business 

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

sites/default/files/Size_Standards_Table.pdf). 

107Federal Deposit Insurance Corporation, http:// 

www2.fdic.gov/idasp/main_bankfind.asp. Data as of 

September 2011. 

108National Credit Union Administration, 

http://webapps.ncua.gov/customquery/. Data as of 

September 2011. 

109Only a small number of depository institutions 

and credit unions offer FedGlobal ACH or other 

international ACH services. In July 2011, the Board 

reported that smaller depository institutions and 

credit unions were the early adopters of the 

FedGlobal ACH service, but that only about 410 

such institutions offered the service, and that some 

enrolled institutions do not offer the service for 

consumer-initiated transfers. Furthermore, only a 

very small fraction of depository institutions and 

credit unions send any kind of international ACH 

transaction, and the Bureau does not know which 

of those are small entities. See Board ACH Report 

at 9, 12 & n.53. The Bureau assumes that any small 

depository institutions or credit unions that offer 

international ACH services to consumers also offer 

international wires to consumers, though the 

Bureau has not found any exact data. Similarly, the 

Bureau understands that some depository 

institutions offer remittance transfers through 

means other than wire or international ACH, but 

assumes that any such depository institutions also 

offer international wires to consumers. 

110Navy Federal Credit Union has about $45 

billion in assets. It states that it processed 19,248 

wire transfers in 2010 and charged $25 per transfer. 

It had total income of over $3 billion in 2010, so 

the wire income of about $500,000 was about two 

tenths of one percent of total income. 

111United Nations Federal Credit Union has 

about $3 billion in assets. It states that it processes 

over 120,000 consumer wire transfers every year. It 

charges between $20 and $35 per transfer and had 

total income of about $146 billion, so the wire 

income of $2.5 to $4.2 million was 2% to 3% of 

total income. 

112Notice of Proposed Rulemaking, Cross-Border 

Electronic Transmittal of Funds, 75 FR 60377, 

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

FinCEN’s February 2010 Money Service Business 

Registration List). 

113FinCEN, http://www.fincen.gov/financial_

institutions/msb/msbstateselector.html. 

114FinCEN, http://www.fincen.gov/forms/files/

fin107_msbreg.pdf. See also Money Services 

Business Registration Fact Sheet, http://www.

fincen.gov/financial_institutions/msb/pdf/FinCEN

factsheet.pdf. 

However, as discussed elsewhere, 

Congress crafted a very specific 

accommodation (i.e., a temporary 

exception) to address some of the 

challenges involved in collecting 

information required for disclosures, 

and the Bureau must implement the 

statutory regime consistent with the 

language and intent of section 1073 of 

the Dodd-Frank Act. Furthermore, as 

discussed above, the Bureau expects 

that the incidence of errors requiring 

investigation and resolution under 

§ 1005.33 will be small. The statutory 

requirements the regulation implements 

may prompt small depositories and 

credit unions to increase their prices or 

stop providing consumer international 

wire or ACH transfers altogether. 

3. Description of and an estimate of 

the number of small entities affected by 

the final rule. Under regulations issued 

by the Small Business Administration, 

banks and other depository institutions 

are considered ‘‘small’’ if they have 

$175 million or less in assets, and for 

other financial businesses, the threshold 

is average annual receipts that do not 

exceed $7 million.106 The initial 

regulatory flexibility analysis stated that 

the number of small entities that could 

be affected by the rule was unknown. 

That analysis stated that there were 

approximately 9,458 depository 

institutions (including credit unions) 

that could be considered small entities. 

The analysis also stated based on data 

from the Department of Treasury that 

there were approximately 19,000 

registered money transmitters, of which 

95% or 18,050 were small entities. The 

SBA comments urged the Bureau to 

reexamine the determination of the 

number of small money transmitters 

impacted by the rule, asserting based on 

a telephone conversation with a trade 

association that the number was 200,000 

to 300,000, including a large number of 

agents. The Bureau notes that this trade 

association did not assert this estimate 

in its comment letter nor was any 

evidence provided to support this 

estimate. In response to SBA’s 

comments, the Bureau has reviewed and 

updated these calculations for the final 

regulatory flexibility analysis, as 

discussed below. 

Depository Institutions and Credit 

Unions 

Of the 7,445 insured depository 

institutions, 3,989 are small entities.107

Of the 7,325 insured credit unions, 

6,386 are small entities.108 These 

institutions could offer remittance 

transfers through wire transfers, 

international ACH, or other means. 

Regulatory filings by insured 

depositories do not contain information 

about the number that send consumer 

international wire transfers. The Bureau 

believes that the number is substantial, 

and the analysis below assumes that all 

3,989 small depository institutions send 

consumer international wire transfers. 

Data from the National Credit Union 

Administration indicate that there are 

approximately 7,325 insured credit 

unions in the United States as of 

September 2011. About half offer 

international wire transfers. 

Additionally, regulatory filings by 

insured credit unions contain an 

indicator for ‘‘low cost wire transfers.’’ 

These are wire transfers offered to 

members for less than $20 per transfer. 

Also about half of insured credit unions 

offer low cost wire transfers. Though the 

Bureau does not have exact data on the 

number of credit unions that offer wire 

transfers to consumers, the Bureau 

assumes that a similar fraction offer 

consumer international wire transfers. 

Specifically, the Bureau assumes that 

half of the 6,386 credit unions that are 

small entities, or 3,193, offer consumer 

international wire transfer. 

Thus, in total, there are approximately 

7,182 depository institutions and credit 

unions that are small entities that could 

be affected by the statute.109

Regulatory filings by insured 

depositories and credit unions do not 

report the revenue these institutions 

earn from consumer international wire 

transfers, international ACH 

transactions, or other remittance 

transfers. One credit union that is not a 

small entity for purposes of RFA 

showed that little revenue, as a share of 

total income, came from this source.110

Another credit union that is not a small 

entity for purposes of RFA submitted 

data indicating that wire transfers were 

a noticeable share of gross income.111

The Bureau has no other data from 

commenters on the amount of revenue 

that small depository institutions and 

credit unions obtain from consumer 

international wire transfers. 

Non-Bank Money Transmitters and 

Agents 

In response to the SBA’s comments, 

the Bureau has reviewed the estimated 

number of money transmitters and 

agents, which may be affected by the 

statute. As stated above, the numbers in 

IRFA were originally reported by the 

Financial Crimes Enforcement Network 

(FinCEN).112 The Bureau understands 

that FinCEN derived its estimates using 

data from the registration database for 

money services businesses (MSBs).113

As the registration instructions for the 

database make clear, the estimated 

19,000 figure (of which 18,050 have less 

than $7 million in gross receipts 

annually) includes some, but not all, 

agents of remittance transfer providers. 

Businesses that are MSBs solely because 

they are agents of another MSB are not 

required to register. Businesses that are 

agents and also engage in MSB activities 

on their own behalf are required to 

register.114 Thus, the database would 

include a money transmitter that is an 

agent of a remittance transfer provider 

only if it also engages in MSB activities 

as a principal, such as cashing checks or 

selling money orders. 

The Bureau has searched for 

additional data with which to refine its 

estimate of the number of small 

remittance transfer providers and 

agents. No comments on the proposed 

rule provided administrative or survey 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6281 

115Commenters state that there may be other 

entities that serve as remittance transfer providers 

and that are not depository institutions, credit 

unions, or money transmitters, as traditionally 

defined. These entities could include, for example, 

brokerages that send remittance transfers. Though 

the Bureau does not have an estimate of the number 

of any such providers, the Bureau believes that they 

account for a number of entities that is significantly 

less than the sum of remittance transfer providers 

and agents of money transmitters. Similarly, the 

Bureau believes that the number of any such 

providers that is a small entity for purposes of RFA 

is much less than the sum of small remittance 

transfer providers and small agents of money 

transmitters. 

116 KPMG, 2005 Money Services Business 

Industry Survey Study, September 2005; Table 20. 

117The Bureau of Labor Statistics publishes data 

on Credit Intermediation and Related Activities 

(NAICS 5223), which encompasses electronic funds 

transfer services (NAICS 52232) and money 

transmission services (NAICS 52239).The 2010 

employment figure is 262,300, available at http://

www.bls.gov/oes/current/naics4_522300.htm; the 

2005 employment figure is 323,920, available at 

http://www.bls.gov/oes/2005/may/naics4_

522300.htm. 

118Ole Andreassen, Remittance service providers 

in the United States: how remittance firms operate 

and how they perceive their business environment, 

The World Bank, Financial Sector Discussion 

Series, June 2006, p. 15. 

119Since median revenue is far less than average 

revenue, a two-parameter exponential function 

provides a straightforward way to model the 

distribution of firm revenue. The parameters (a,b) 

in the exponential function y=b*exp(a*x) are 

calculated using two equations, where y is firm 

revenue and x is the rank of the firm when firms 

are ordered from smallest to largest by revenue. The 

equation 2,000,000=b*exp(a*250) formalizes the 

condition that the 250th largest firm (the median 

firm) has $2 million in revenue. The second 

equation formalizes the condition that the average 

firm has $10 million in revenue. To keep the 

analysis simple, firms are assumed to be identical 

in groups of 50, so firms 1–50 are the same, firms 

51–100 are the same, and so forth. The second 

equation is then 50*b*[exp(a*50) 

+exp(a*100)+* * *+exp(a*450)+exp(a*500)]/500 = 

10,000,000. Solving the two equations gives 

(.0126,85,340) for the parameters (a,b). These 

parameters in the equation y = b*exp(a*x) imply 

that if x = 350 then approximately y = 7,000,000. 

Thus, the firm ranked 350th has approximately $7 

million in revenue and the smallest 350 firms are 

small businesses for purposes of RFA. The function 

can also be used to compute the distribution of 

revenue over the industry and then the distribution 

of agents, all exclusive of two large providers, 

Moneygram and Western Union (which were not 

part of Andreassen’s analysis). For example, assume 

30,000 of the 66,500 agents work for Moneygram 

and Western Union. Allocating the remaining 

36,500 agents across firms by firm revenue implies 

that approximately 5,500 agents work for the 350 

small firms and the remaining 31,000 agents work 

for the 150 large firms. If instead 20,000 of the 

66,500 agents work for Moneygram and Western 

Union then about 7,000 agents work for the 350 

small firms; if 40,000, then the corresponding 

number is about 4,000 agents work for the 350 small 

firms. 

120Commenters also stated that some money 

transmitters, as well as some other entities that are 

not insured depository institutions or insured credit 

unions, offer open network transfers. To the extent 

that any such money transmitters are small entities, 

they may face costs that are similar to or more 

extensive than those faced by insured depository 

institutions or insured credit unions offering open 

network transfers. 

121Andreassen finds that median firm in his 

sample, which is a small business for purposes of 

RFA, has a 3% after-tax profit margin. The average 

firm in his sample, which is not a small business 

for purposes of RFA, has a 12% after-tax profit 

margin. See Andreassen, p. 15. 

data on the number of small providers, 

and this information cannot be 

constructed from public sources. The 

Bureau used other information, 

however, to construct useful lower and 

upper bounds on the number of 

nonbank money transmitters and 

agents.115

In 2005, one survey of the money 

services business industry estimated 

there were about 67,000 principal 

money transmitters and agents involved 

in international money transfers.116

From 2005 through 2010 employment in 

the broader sector to which money 

transmitters belong shrunk almost 

19%.117 The Bureau chooses to use the 

67,000 figure recognizing that it may 

overestimate the number of providers 

and agents, and that persons who act as 

agents on behalf of another provider 

generally will not be providers 

themselves unless they are engaged in 

activities on their own behalf that 

would otherwise qualify them as 

providers. In public comment, one trade 

association estimated there are about 

500 state-licensed principal money 

transmitters. Deducting 500 providers 

from the 67,000 estimate of total money 

transmitters and agents would suggest 

that there are currently approximately 

66,500 agents. 

To estimate how many of these money 

transmitters are small entities, the 

Bureau relied on survey research done 

by the World Bank in 2006 that found 

that the median money transmitter had 

$2 million in annual revenue while the 

average had $10 million.118 Fitting an 

exponential function to this revenue 

data suggests that about 350 of the 500 

providers had $7 million or less in 

revenue. By assuming that the agents are 

distributed across providers in 

proportion to revenue, the Bureau 

estimates that roughly 5,500 of the 

66,500 agents are working for small 

entity money transmitters and the 

remaining 61,000 agents are working for 

larger money transmitters.119

The Bureau has no way to estimate 

directly how many of the agents 

working for larger money transmitters 

are small entities. However, the Bureau 

expects that such small agents are not 

likely to bear a significant economic 

impact as a result of the rule. The 

Bureau believes that large money 

transmitters are likely to facilitate 

compliance for their agents, achieve 

substantial benefits to scale and widely 

leverage the systems and software 

investments required for compliance 

across a large base of agent locations. 

With regard to agents working for 

small entity money transmitters, the 

Bureau assumes that these agents are all 

small entities themselves. Thus, the 

Bureau estimates there are 

approximately 5,500 small agents 

working for approximately 350 small 

money transmitters. Sensitivity analysis 

suggests the actual figure of small agents 

lies between 4,000 and 7,000 giving a 

total of between 4,350 and 7,350 small 

entities. 

In general, money transmitters are 

likely to have significantly less burden 

in implementing the new regime than 

depository institutions and credit 

unions because they generally rely on 

closed networks.120 The parties to 

closed network transactions are 

interconnected by contractual 

agreements, making it easier to predict 

fees and taxes deducted over the course 

of a transaction, to obtain information 

about exchange rates and other matters, 

and to ensure compliance with 

procedures designed to reduce and 

resolve errors. Furthermore, because 

some small providers focus only on 

transfers to a few specific countries, 

they may have significant contacts and 

expertise that may facilitate determining 

information necessary to generate the 

disclosures. Nevertheless, small 

providers managing their own networks 

are less likely to have extensive legal 

and professional staffs to help minimize 

the costs of compliance for themselves 

and their agents. They may not maintain 

as sophisticated information technology 

systems to facilitate generation of 

receipts and communications necessary 

to exchange information with which to 

provide the required disclosures. 

Finally, some one-time investments that 

may not be significant for larger 

providers will be more significant for 

small providers, who must amortize 

them against a smaller base of revenues 

and agents.121 Finally, many of these 

providers may pass on significant costs 

to any agents, in part because the agents 

themselves may have particular 

customers and specialized knowledge 

that is useful in serving them. 

Conclusion 

Assuming that nearly all of the 

estimated 67,000 money transmitters 

and agents are small entities and adding 

that total to the number of depository 

institutions and credit unions that are 

small entities that may engage in wire 

transfers, the total number of small 

entities that could be affected by the 

rule is approximately 74,000. 


srobinson on DSK4SPTVN1PROD with RULES2
6282 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

122The statute and rule establish federal rights in 

connection with remittance transfers by consumers. 

The statute and rule do not apply to credit 

transactions or to commercial remittances. 

Therefore the Bureau does not expect the rule to 

increase the cost of credit for small businesses. The 

statute and rule impose compliance costs on 

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. In any case the Bureau has taken steps 

to reduce regulatory burdens associated with this 

rule in a manner consistent with the purposes of 

section 1073 of the Dodd-Frank Act, as described 

in Parts VI and VIII (including this subpart) of the 

SUPPLEMENTARY INFORMATION, and in the proposal 

issued concurrently with this rule. 

4. Steps to minimize the significant 

adverse economic impact on small 

entities and reasons for selecting the 

alternative adopted in the final rule. As 

discussed above in the SUPPLEMENTARY

INFORMATION, section 1073 of the DoddFrank Act imposes a comprehensive 

new consumer protection regime for 

remittance transfers and prescribes 

specific requirements for remittance 

transfer providers. The statute requires 

four major elements: (i) The provision of 

reliable disclosures concerning, among 

others, the exchange rate and amount to 

be received by the remittance recipient; 

(ii) consistent Federal rights regarding 

transaction cancellation periods; (iii) 

investigation and remedy of errors by 

remittance transfer providers; and (iv) 

standards for the liability of agents who 

work for remittance transfer providers. 

The statute also prescribes certain 

accommodations that will reduce 

potential adverse economic impacts. 

First, in order to address potential 

difficulties in implementing the 

disclosure requirements for open 

network transactions, section 1073 of 

the Dodd-Frank Act prescribes specific 

and limited accommodations which 

allow financial institutions to provide 

‘‘reasonably accurate estimates’’ of the 

amount received where the institutions 

are unable to know the actual numbers 

for reasons beyond their control. 

Second, the Dodd-Frank Act also 

prescribes an accommodation for 

remittance transfer providers to provide 

estimates of certain disclosures if a 

recipient nation does not legally allow 

remittance transfer providers to know 

the amount of currency to be received 

or the method by which transactions are 

conducted in the recipient nation 

prevents that determination as of the 

time that disclosures are required. 

Pursuant to this statutory 

accommodation, the Bureau expects to 

publish and maintain a list of affected 

countries as a safe harbor, which will 

significantly reduce compliance 

burdens for remittance transfer 

providers that are small entities. 

The specific and prescriptive nature 

of the Dodd-Frank Act requirements and 

accommodations works to constrain the 

range of possible alternatives to the final 

rule. For instance, as discussed above in 

VI. Section-by-Section Analysis, the 

Bureau believes that the plain language 

of the statute precludes interpretations 

urged by various commenters that 

would relieve remittance transfer 

providers from the general requirement 

of having to determine fees and taxes 

that may be deducted from the amount 

to be received by the designated 

recipient. In such instances, the Bureau 

believes it is not necessary or proper to 

exercise its authority under EFTA 

sections 904(a) and 904(c). 

The Bureau has sought to reduce the 

regulatory burden associated with the 

rule in a manner consistent with the 

purposes of section 1073 of the DoddFrank Act.122 For example, as discussed 

above in VI. Section-by-Section 

Analysis, the Bureau has provided 

model forms in order to ease 

compliance and operational burden on 

small entities. The rule offers flexibility 

that will mitigate its impact on 

remittance transfer providers that are 

small entities. For example, the rule 

gives remittance transfer providers some 

flexibility in drafting their disclosures, 

consistent with formatting requirements 

needed to ensure that senders notice 

and can understand the disclosures. In 

addition, disclosures may be provided 

on a register receipt or 8.5 inches by 11 

inches piece of paper, consistent with 

current practices in the industry. 

Additionally, EFTA section 919(a)(5) 

provides the Bureau with exemption 

authority with respect to several 

statutory requirements. The Bureau is 

exercising its exemption authority in the 

rule in order to reduce providers’ 

compliance burden. For instance, the 

Bureau is exercising its authority under 

EFTA Section 919(a)(5)(C) to permit 

remittance transfer providers to provide 

the sender a single written pre-payment 

disclosure under the conditions 

described above, instead of both prepayment and receipt disclosures. 

Similarly, consistent with EFTA section 

919(a)(5)(A), the rule permits remittance 

transfer providers to provide prepayment disclosures orally when the 

transaction is conducted entirely by 

telephone. The Bureau has also used its 

authority under section 919(a)(5)(A) and 

other provisions of EFTA to tailor the 

disclosure requirements to reduce 

potential burdens for transactions 

conducted by telephone via text 

message or mobile application and for 

preauthorized transactions. 

One commenter urged the Bureau to 

consider consolidating federal 

regulation of remittance transfer 

providers and money services 

businesses, citing FinCEN regulations 

covering money services businesses. 

The Bureau notes that those regulations 

implement the Bank Secrecy Act and 

effectuate other purposes, such as 

imposing anti-money laundering 

program requirements. The Bureau 

believes that alternative would be 

inconsistent with the statutory mandate 

in section 1073 of the Dodd-Frank Act 

to create a comprehensive new 

consumer protection regime for 

consumers who send remittance 

transfers. The suggested alternative 

would not effectuate the key protections 

under section 1073 of the Dodd-Frank 

Act, such as the requirement to provide 

reliable disclosures prior to and at 

payment by the consumer and the 

establishment of cancellation rights and 

error resolution procedures. 

Furthermore, the Bureau believes 

consolidating the requirements of two 

statutes would be impracticable under 

the respective authorities of two 

agencies. 

Other measures intended to provide 

flexibility to remittance transfer 

providers are discussed above in this 

SUPPLEMENTARY INFORMATION and in the 

Bureau’s Notice of Proposed 

Rulemaking that is being published 

elsewhere in today’s Federal Register. 

5. Summary of other significant issues 

raised by public comments in response 

to the IRFA, a summary of the 

assessment of the agency of such issues, 

and a statement of any changes made in 

the proposed rule as a result of such 

comments. In addition to the SBA’s 

comments discussed above regarding 

the number of small entities affected 

and various other substantive issues, the 

SBA’s comment letter urged the Bureau 

to publish a supplemental IRFA prior to 

issuing a final rule in order to determine 

the impact on small entities and to 

consider less burdensome alternatives. 

The Bureau has taken the substantive 

issues raised by the SBA into careful 

account in developing the FRFA. 

However, the Bureau concluded that 

publishing a supplemental IRFA prior to 

issuance of the rule was not required 

under the RFA and was not practicable 

in light of statutory deadlines. 

The IRFA described the types of small 

entities that would be affected by the 

rule (both depository institution/credit 

union and nonbank money transmitter), 

specifically acknowledged that the rule 

would impose implementation costs on 

such entities, described the nature of 

those implementation burdens, and 

noted ways in which the rule had been 

drafted to reduce some of those burdens. 

The IRFA also sought public comment 

on all aspects of its analysis, 


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123The Bureau assumes that any depository 

institutions or credit unions that offer international 

ACH services or other forms of remittance transfers 

to consumers also offer international wires to 

consumers. 

124KPMG Report at Table 20. 

125The Bureau of Labor Statistics publishes data 

on Credit Intermediation and Related Activities 

(NAICS 5223), which encompasses electronic funds 

transfer services (NAICS 52232) and money 

transmission services (NAICS 52239). The 2010 

employment figure is 262,300, available at: http:// 

www.bls.gov/oes/current/naics4_522300.htm; the 

2005 employment figure is 323,920, available at: 

http://www.bls.gov/oes/2005/may/naics4_

522300.htm. 

126Commenters state that there may be other 

entities that serve as remittance transfer providers 

and that are not depository institutions, credit 

unions, or money transmitters, as traditionally 

defined. These entities could include, for example, 

brokerages that send remittance transfers. Though 

the Bureau does not have an estimate of the number 

of any such providers, the Bureau believes that they 

account for a number of entities that is significantly 

less than the sum of money transmitters and their 

agents. 

particularly on the anticipated costs to 

small entities. Further, the Board in the 

proposed rule solicited comment on any 

alternatives that would reduce the 

regulatory burden on small entities 

associated with the rule. These 

specifically included the types of 

alternatives suggested for consideration 

by the Regulatory Flexibility Act, 

including the length of time that 

remittance transfer providers may need 

to implement the new requirements, 

whether to create certain limited 

exemptions under the new regime, 

whether to adopt certain safe harbors to 

reduce implementation burdens, 

whether particular standards could be 

less prescriptive, and alternative 

standards for agency liability. 

In light of these elements, the public’s 

opportunity to comment on the IRFA’s 

analysis, and the statutory deadlines set 

by Congress, the Bureau concluded that 

it would best serve small entities 

affected by this rule to focus its 

resources on development of the final 

rule, the FRFA, and the concurrent 

proposal being published elsewhere in 

today’s Federal Register. 

IX. Paperwork Reduction Act 

The Bureau’s information collection 

requirements contained in this final rule 

have been submitted to the Office of 

Management and Budget (OMB) in 

accordance with the requirements of the 

Paperwork Reduction Act (44 U.S.C. 

3507(d)) as an amendment to a 

previously approved collection under 

OMB control number 3170–0014. Under 

the Paperwork Reduction Act, 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. Upon receipt of 

OMB’s final action with respect to this 

information collection, the Bureau will 

publish a notice in the Federal Register. 

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 respondents/ 

recordkeepers are financial institutions 

and entities involved in the remittance 

transfer business, including small 

businesses. Respondents are required to 

retain records for 24 months, but this 

regulation does not specify types of 

records that must be retained. 

Any entities involved in the 

remittance transfer business potentially 

are affected by this collection of 

information because these entities will 

be required to provide disclosures 

containing information about 

consumers’ specific remittance 

transfers. Disclosures must be provided 

prior to and at the time of payment for 

a remittance transfer, or alternatively, in 

a single pre-transaction disclosure 

containing all required information. 

Remittance transfer providers also must 

make available a written explanation of 

a consumer’s error resolution, 

cancellation and refund rights upon 

request. Disclosures must be provided 

in English and in each foreign language 

principally used to advertise, solicit or 

market remittance transfers at an office. 

Entities subject to the rule will have 

to review and revise disclosures that are 

currently provided to ensure that they 

accurately reflect the disclosure 

requirements in this rule. Entities 

subject to the rule may need to develop 

new disclosures to meet the rule’s 

timing requirements. 

Data from the Federal Deposit 

Insurance Corporation indicate that 

there are approximately 7,445 insured 

depository institutions in the United 

States. Regulatory filings by insured 

depository institutions do not contain 

information about the number that offer 

consumer international wire transfers. 

The Bureau assumes that the 152 large 

insured depositories and the 

approximately 7,293 other insured 

depositories all send consumer 

international wire transfers. 

Data from the National Credit Union 

Administration indicate that there are 

approximately 7,325 insured credit 

unions in the United States as of 

September 2011. About half offer 

international wire transfers. 

Additionally, regulatory filings by 

insured credit unions contain an 

indicator for ‘‘low cost wire transfers.’’ 

These are wire transfers offered to 

members for less than $20 per transfer. 

Furthermore, about half of insured 

credit unions offer low cost wire 

transfers. Though the Bureau does not 

have exact data on the number of credit 

unions that offer wire transfers to 

consumers, the Bureau assumes that a 

similar fraction offer consumer 

international wire transfers. 

Specifically, the Bureau assumes that 

the three largest credit unions offer 

consumer international wire transfers 

and as do approximately 3,662 of the 

other federally insured credit unions. In 

summary, the Bureau has responsibility 

for purposes of the PRA for 155 

(=152+3) large depository institutions 

and credit unions (including their 

depository and credit union affiliates) 

that send consumer international wire 

transfers. The Bureau does not have 

responsibility for the approximately 

11,000 other insured depository 

institutions and credit unions that send 

consumer international wire 

transfers.123

In 2005, one survey of the money 

services business industry estimated 

there were about 67,000 money 

transmitters, including agents, sending 

international remittances.124 From 2005 

through 2010 employment in the 

broader sector to which money 

transmitters belong shrunk almost 

19%.125 The Bureau chooses to use the 

67,000 figure, recognizing that it may 

overestimate the number of providers 

and agents. All of these money 

transmitters are likely either to have 

direct responsibilities for compliance 

with the rule, or to be indirectly 

involved in assisting business partners 

in complying with the rule. Thus, the 

Bureau assumes that all 67,000 money 

transmitters will have ongoing annual 

burden to comply with the rule. Based 

on the Bureau’s estimate of the number 

of money transmitters as discussed 

above in Section VIII. Final Regulatory 

Flexibility Analysis, the Bureau 

estimates that the rule would also 

impose a one-time annual burden on 

6,000 money transmitters (500 network 

providers and 5,500 agents).126

The current annual burden to comply 

with the provisions of Regulation E is 

estimated to be 1,904,000 hours. This 

estimate represents the portion of the 

burden under Regulation E that 

transferred to the Bureau in light of the 

changes made by the Dodd-Frank Act. 

The estimates of the burden increase 

associated with each major section of 

the rule are set forth below and 

represents averages for the institutions 

described. The Bureau expects that the 

amount of time required to implement 

each of the changes for a given 

institution may vary based on the size 

and complexity of the institution. 


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6284 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

A. Insured Depository Institutions and 

Credit Unions 

Insured Depositories and Credit Unions 

Supervised by the Bureau 

The Bureau estimates that the 155 

large depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau would take, on average, 120 

hours (three business weeks) to update 

their systems to comply with the 

disclosure requirements addressed in 

§ 1005.31. This one-time revision would 

increase the burden by 18,600 hours. 

Several commenters believed that the 

compliance burden developed by the 

Board generally was underestimated. In 

particular, one commenter claimed that 

the one-time burden associated with 

compliance could be as much as 1000 

hours (25 business weeks). Although the 

Bureau understands that the number of 

hours to update systems may vary, the 

Bureau’s estimate of the one-time 

burden increase is based on the average 

hours the 155 respondents supervised 

by the Bureau would take to comply 

with the rule. Therefore, the Bureau 

believes its estimate of the one-time 

revision is appropriate. 

On a continuing basis the Bureau 

estimates that the 155 large depository 

institutions and credit unions 

(including their depository and credit 

union affiliates) supervised by the 

Bureau would take, on average, 8 hours 

(one business day) monthly to comply 

with the requirements under § 1005.31 

and would increase the ongoing burden 

by 14,880 hours. In an effort to 

minimize the compliance cost and 

burden, particularly for small entities, 

the rule contains model disclosures in 

appendix A (Model Forms A–30 

through A–41) that may be used to 

satisfy the statutory requirements. The 

Bureau received several comments with 

concerns and suggestions about the 

terminology and formatting of the model 

forms. These comments are addressed 

elsewhere in the SUPPLEMENTARY

INFORMATION. 

The Bureau estimates on average 

262,500 consumers would spend 5 

minutes in order to provide a notice of 

error as required under § 1005.33(b). 

This would increase the total annual 

burden for this information collection 

by approximately 21,875 hours. 

The Board estimated that 1,133 

respondents supervised by the Board 

would take, on average, 1.5 hours 

(monthly) to address a sender’s notice of 

error as required by § 1005.33(c)(1). One 

commenter estimated that the ongoing 

burden would take, on average, 15 hours 

(monthly). Based on the comment 

received and upon consideration, the 

Bureau estimates that the 155 large 

depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau would take, on average, 

approximately 12 hours (monthly) to 

address a sender’s notice of error as 

required by § 1005.33(c)(1). This would 

increase the total annual burden for this 

information collection by 21,875 hours. 

The Bureau estimates that the 155 

respondents supervised by the Bureau 

would take, on average, 40 hours (one 

business week) to develop written 

policies and procedures designed to 

ensure compliance with respect to the 

error resolution requirements applicable 

to remittance transfers under § 1005.33. 

This one-time revision would increase 

the burden by 6,200 hours. On a 

continuing basis the Bureau estimates 

that the 155 respondents would take, on 

average, 8 hours (one business day) 

annually to maintain the requirements 

under § 1005.33 and would increase the 

ongoing burden by 1,240 hours. 

The Bureau estimates that the 155 

respondents supervised by the Bureau 

would take, on average, 40 hours (one 

business week) to establish policies and 

procedures for agent compliance as 

addressed under § 1005.35. This onetime revision would increase the burden 

by 6,200 hours. On a continuing basis 

the Bureau estimates that 155 

respondents would take, on average, 8 

hours (one business day) annually to 

maintain the requirements under 

§ 1005.35 and would increase the 

ongoing burden by 1,240 hours. 

In summary, the rule would impose a 

one-time increase in the estimated 

annual burden on these institutions of 

approximately 31,000 hours. On a 

continuing basis the rule would increase 

the estimated annual burden by 

approximately 61,000 hours. 

Insured Depositories and Credit Unions 

Not Supervised by the Bureau 

Other Federal agencies are 

responsible for estimating and reporting 

to OMB the total paperwork burden for 

the entities for which they have 

administrative enforcement authority 

under this rule. They may, but are not 

required to, use the following Bureau 

estimates. The Bureau estimates that the 

11,000 insured depositories and credit 

unions not supervised by the Bureau 

would take, on average, 120 hours (three 

business weeks) to update their systems 

to comply with the disclosure 

requirements addressed in § 1005.31. 

This one-time revision would increase 

the burden by 1,320,000 hours. On a 

continuing basis the Bureau estimates 

that 11,000 institutions would take, on 

average, 8 hours (one business day) 

monthly to comply with the 

requirements under § 1005.31 and 

would increase the ongoing burden by 

1,056,000 hours. In an effort to 

minimize the compliance cost and 

burden, particularly for small entities, 

the rule contains model disclosures in 

appendix A (Model Forms A–30 

through A–41) that may be used to 

satisfy the statutory requirements. 

The Bureau estimates on average 

875,000 consumers would spend 5 

minutes in order to provide a notice of 

error as required under section 

1005.33(b). This would increase the 

total annual burden for this information 

collection by about 73,000 hours. The 

Bureau estimates that the 11,000 

institutions would take, on average, 

73,000 hours annually to address a 

sender’s notice of error as required by 

§ 1005.33(c)(1). 

The Bureau estimates that the 11,000 

institutions would take, on average, 40 

hours (one business week) to develop 

written policies and procedures 

designed to ensure compliance with 

respect to the error resolution 

requirements applicable to remittance 

transfers under § 1005.33. This one-time 

revision would increase the burden by 

440,000 hours. On a continuing basis 

the Bureau estimates that 11,000 

institutions would take, on average, 8 

hours (one business day) annually to 

maintain the requirements under 

§ 1005.33 and would increase the 

ongoing burden by 88,000 hours. 

The Bureau estimates that 11,000 

institutions would take, on average, 40 

hours (one business week) to establish 

policies and procedures for agent 

compliance as addressed under 

§ 1005.35. This one-time revision would 

increase the burden by 440,000 hours. 

On a continuing basis the Bureau 

estimates that 11,000 institutions would 

take, on average, 8 hours (one business 

day) annually to maintain the 

requirements under § 1005.35 and 

would increase the ongoing burden by 

88,000 hours. 

In summary, the rule would impose a 

one-time increase in the estimated 

annual burden of approximately 

2,200,000 hours. On a continuing basis 

the rule would increase the estimated 

annual burden by approximately 

1,378,000. 

B. Money Transmitters 

Based on the Bureau’s estimate of the 

number of money transmitters as 

discussed above in Section VIII. Final 

Regulatory Flexibility Analysis, the 

Bureau estimates that the rule would 

impose a one-time annual burden on 

6,000 money transmitters (500 networks 

and 5,500 agents) and an ongoing 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6285 

annual burden on all 67,000 money 

transmitters. The Bureau estimates the 

one-time annual burden of 200 hours 

and an ongoing annual burden of 42 

hours. The Bureau therefore estimates 

that the rule would impose a one-time 

annual burden of 1,200,000 hours and 

an annual burden of 2,814,000 hours. 

C. Summary 

In summary, the Bureau estimates that 

the total annual burden to comply with 

the new provisions of Regulation E is 

7,684,000 hours. The Bureau estimates 

that the total one-time annual burden of 

the rule is 3,431,000 hours. The Bureau 

estimates that the one-time annual 

burden of the rule includes 31,000 

hours for large depository institutions 

and credit unions (including their 

depository and credit union affiliates) 

supervised by the Bureau and 600,000 

hours for money transmitters supervised 

by the Bureau. The Bureau estimates 

that the total ongoing burden of the rule 

is 4,253,000 hours. The ongoing burden 

of the rule includes 61,000 hours for 

large depository institutions and credit 

unions (including their depository and 

credit union affiliates) supervised by the 

Bureau and 1,407,000 hours for money 

transmitters supervised by the Bureau. 

The Bureau is currently discussing 

appropriate methodologies and burden 

sharing arrangements with other Federal 

agencies that share administrative 

enforcement authority under this 

regulation and other regulations for 

which certain rulewriting and 

administrative enforcement transferred 

to the Bureau on July 21, 2011. The 

Bureau will publish a Federal Register 

notice upon conclusion of these 

discussions and receipt of OMB’s final 

action with respect to this collection. 

The notice will include any changes to 

the estimates discussed in this section. 

The Bureau has a continuing interest 

in the public’s opinion of the collection 

of information. Comments on the 

collection of information should be sent 

to: Chris Willey, Chief Information 

Officer, Bureau of Consumer Financial 

Protection, 1700 G Street NW., 

Washington, DC 20006, with copies of 

such comments sent to the Office of 

Management and Budget, Paperwork 

Reduction Project (3170–0014), 

Washington, DC 20503. 

List of Subjects in 12 CFR Part 1005 

Banking, Banks, Consumer protection, 

Credit unions, Electronic fund transfers, 

National banks, Remittance transfers, 

Reporting and recordkeeping 

requirements, Savings associations. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 12 CFR 

part 1005 and the Official 

Interpretations as follows: 

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; Pub. L. 111–203, 124 Stat. 1376 

(2010). 

Subpart A—General 

■ 2. Designate §§ 1005.1 through 

1005.20 as subpart A under the heading 

set forth above. 

■ 3. In § 1005.1, revise paragraph (b) to 

read as follows: 

§ 1005.1 Authority and purpose. 

* * * * * 

(b) Purpose. This part carries out the 

purposes of the Electronic Fund 

Transfer Act, which establishes the 

basic rights, liabilities, and 

responsibilities of consumers who use 

electronic fund transfer and remittance 

transfer services and of financial 

institutions or other persons that offer 

these services. The primary objective of 

the act and this part is the protection of 

individual consumers engaging in 

electronic fund transfers and remittance 

transfers. 

■ 4. In § 1005.2, revise the introductory 

text to read as follows: 

§ 1005.2 Definitions. 

Except as otherwise provided in 

subpart B, for purposes of this part, the 

following definitions apply: 

* * * * * 

■ 5. In § 1005.3, revise paragraph (a) to 

read as follows: 

§ 1005.3 Coverage. 

(a) General. This part applies to any 

electronic fund transfer that authorizes 

a financial institution to debit or credit 

a consumer’s account. Generally, this 

part applies to financial institutions. For 

purposes of §§ 1005.3(b)(2) and (3), 

1005.10(b), (d), and (e), and 1005.13, 

this part applies to any person. The 

requirements of subpart B apply to 

remittance transfer providers. 

* * * * * 

■ 6. Add subpart B to read as follows: 

Subpart B—Requirements for Remittance 

Transfers 

Sec. 

1005.30 Remittance transfer definitions. 

1005.31 Disclosures. 

1005.32 Estimates. 

1005.33 Procedures for resolving errors. 

1005.34 Procedures for cancellation and 

refund of remittance transfers. 

1005.35 Acts of agents. 

1005.36 Transfers scheduled in advance. 

Subpart B—Requirements for 

Remittance Transfers 

§ 1005.30 Remittance transfer definitions. 

For purposes of this subpart, the 

following definitions apply: 

(a) ‘‘Agent’’ means an agent, 

authorized delegate, or person affiliated 

with a remittance transfer provider, as 

defined under State or other applicable 

law, when such agent, authorized 

delegate, or affiliate acts for that 

remittance transfer provider. 

(b) ‘‘Business day’’ means any day on 

which the offices of a remittance 

transfer provider are open to the public 

for carrying on substantially all business 

functions. 

(c) ‘‘Designated recipient’’ means any 

person specified by the sender as the 

authorized recipient of a remittance 

transfer to be received at a location in 

a foreign country. 

(d) ‘‘Preauthorized remittance 

transfer’’ means a remittance transfer 

authorized in advance to recur at 

substantially regular intervals. 

(e) Remittance transfer—(1) General 

definition. A ‘‘remittance transfer’’ 

means the electronic transfer of funds 

requested by a sender to a designated 

recipient that is sent by a remittance 

transfer provider. The term applies 

regardless of whether the sender holds 

an account with the remittance transfer 

provider, and regardless of whether the 

transaction is also an electronic fund 

transfer, as defined in § 1005.3(b). 

(2) Exclusions from coverage. The 

term ‘‘remittance transfer’’ does not 

include: 

(i) Small value transactions. Transfer 

amounts, as described in 

§ 1005.31(b)(1)(i), of $15 or less. 

(ii) Securities and commodities 

transfers. Any transfer that is excluded 

from the definition of electronic fund 

transfer under § 1005.3(c)(4). 

(f) ‘‘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. 

(g) ‘‘Sender’’ means a consumer in a 

State who primarily for personal, 

family, or household purposes requests 

a remittance transfer provider to send a 

remittance transfer to a designated 

recipient. 


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6286 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

§ 1005.31 Disclosures. 

(a) General form of disclosures—(1) 

Clear and conspicuous. Disclosures 

required by this subpart must be clear 

and conspicuous. Disclosures required 

by this subpart may contain commonly 

accepted or readily understandable 

abbreviations or symbols. 

(2) Written and electronic disclosures. 

Disclosures required by this subpart 

generally must be provided to the 

sender in writing. Disclosures required 

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

be provided electronically, if the sender 

electronically requests the remittance 

transfer provider to send the remittance 

transfer. Written and electronic 

disclosures required by this subpart 

generally must be made in a retainable 

form. Disclosures provided via mobile 

application or text message, to the 

extent permitted by paragraph (a)(5) of 

this section, need not be retainable. 

(3) Disclosures for oral telephone 

transactions. The information required 

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

be disclosed orally if: 

(i) The transaction is conducted orally 

and entirely by telephone; 

(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section; and 

(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. 

(4) Oral disclosures for certain error 

resolution notices. The information 

required by § 1005.33(c)(1) may be 

disclosed orally if: 

(i) The remittance transfer provider 

determines that an error occurred as 

described by the sender; and 

(ii) The remittance transfer provider 

complies with the requirements of 

paragraph (g)(2) of this section. 

(5) Disclosures for mobile application 

or text message transactions. The 

information required by paragraph (b)(1) 

of this section may be disclosed 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 requirements of 

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

pursuant to the timing requirements in 

paragraph (e)(1) of this section. 

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

transfer provider must disclose to a 

sender, as applicable: 

(i) The amount that will be transferred 

to the designated recipient, in the 

currency in which the remittance 

transfer is funded, using the term 

‘‘Transfer Amount’’ or a substantially 

similar term; 

(ii) Any fees and taxes imposed on the 

remittance transfer by the provider, in 

the currency in which the remittance 

transfer is funded, using the terms 

‘‘Transfer Fees’’ for fees and ‘‘Transfer 

Taxes’’ for taxes, or substantially similar 

terms; 

(iii) The total amount of the 

transaction, which is the sum of 

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

section, in the currency in which the 

remittance transfer is funded, using the 

term ‘‘Total’’ or a substantially similar 

term; 

(iv) The exchange rate used by the 

provider for the remittance transfer, 

rounded consistently for each currency 

to no fewer than two decimal places and 

no more than four decimal places, using 

the term ‘‘Exchange Rate’’ or a 

substantially similar term; 

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

of this section, in the currency in which 

the funds will be received by the 

designated recipient, but only if fees or 

taxes are imposed under paragraph 

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

‘‘Transfer Amount’’ or a substantially 

similar term. The exchange rate used to 

calculate this amount is the exchange 

rate in paragraph (b)(1)(iv) of this 

section, including an estimated 

exchange rate to the extent permitted by 

§ 1005.32, prior to any rounding of the 

exchange rate; 

(vi) Any fees and taxes imposed on 

the remittance transfer by a person other 

than the provider, in the currency in 

which the funds will be received by the 

designated recipient, using the terms 

‘‘Other Fees’’ for fees and ‘‘Other Taxes’’ 

for taxes, or substantially similar terms. 

The exchange rate used to calculate 

these fees and taxes is the exchange rate 

in paragraph (b)(1)(iv) of this section, 

including an estimated exchange rate to 

the extent permitted by § 1005.32, prior 

to any rounding of the exchange rate; 

and 

(vii) The amount that will be received 

by the designated recipient, in the 

currency in which the funds will be 

received, using the term ‘‘Total to 

Recipient’’ or a substantially similar 

term. The exchange rate used to 

calculate this amount is the exchange 

rate in paragraph (b)(1)(iv) of this 

section, including an estimated 

exchange rate to the extent permitted by 

§ 1005.32, prior to any rounding of the 

exchange rate. 

(2) Receipt. A remittance transfer 

provider must disclose to a sender, as 

applicable: 

(i) The disclosures described in 

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

section; 

(ii) The date in the foreign country on 

which funds will be available to the 

designated recipient, using the term 

‘‘Date Available’’ or a substantially 

similar term. A provider may provide a 

statement that funds may be available to 

the designated recipient earlier than the 

date disclosed, using the term ‘‘may be 

available sooner’’ or a substantially 

similar term; 

(iii) The name and, if provided by the 

sender, the telephone number and/or 

address of the designated recipient, 

using the term ‘‘Recipient’’ or a 

substantially similar term; 

(iv) A statement about the rights of the 

sender regarding the resolution of errors 

and cancellation, using language set 

forth in Model Form A–37 of Appendix 

A to this part or substantially similar 

language. For any remittance transfer 

scheduled by the sender at least three 

business days before the date of the 

transfer, the statement about the rights 

of the sender regarding cancellation 

must instead reflect the requirements of 

§ 1005.36(c); 

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

and Web site of the remittance transfer 

provider; and 

(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. 

(3) Combined disclosure. As an 

alternative to providing the disclosures 

described in paragraphs (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. 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 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6287 

remittance transfer. The proof of 

payment must be clear and 

conspicuous, provided in writing or 

electronically, and provided in a 

retainable form. 

(4) Long form error resolution and 

cancellation notice. Upon the sender’s 

request, a remittance transfer provider 

must promptly provide to the sender a 

notice describing the sender’s error 

resolution and cancellation rights, using 

language set forth in Model Form A–36 

of Appendix A to this part or 

substantially similar language. For any 

remittance transfer scheduled by the 

sender at least three business days 

before the date of the transfer, the 

description of the rights of the sender 

regarding cancellation must instead 

reflect the requirements of § 1005.36(c). 

(c) Specific format requirements—(1) 

Grouping. The information required by 

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

section generally must be grouped 

together. The information required by 

paragraphs (b)(1)(v), (vi), and (vii) of 

this section generally must be grouped 

together. Disclosures provided via 

mobile application or text message, to 

the extent permitted by paragraph (a)(5) 

of this section, need not be grouped 

together. 

(2) Proximity. The information 

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

section generally must be disclosed in 

close proximity to the other information 

required by paragraph (b)(1) of this 

section. The information required by 

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

generally must be disclosed in close 

proximity to the other information 

required by paragraph (b)(2) of this 

section. Disclosures provided via mobile 

application or text message, to the 

extent permitted by paragraph (a)(5) of 

this section, need not comply with the 

proximity requirements of this 

paragraph. 

(3) Prominence and size. Written 

disclosures required by this subpart 

must be provided on the front of the 

page on which the disclosure is printed. 

Disclosures required by this subpart that 

are provided in writing or electronically 

must be in a minimum eight-point font, 

except for disclosures provided via 

mobile application or text message, to 

the extent permitted by paragraph (a)(5) 

of this section. Disclosures required by 

paragraph (b) of this section that are 

provided in writing or electronically 

must be in equal prominence to each 

other. 

(4) Segregation. Except for disclosures 

provided via mobile application or text 

message, to the extent permitted by 

paragraph (a)(5) of this section, 

disclosures required by this subpart that 

are provided in writing or electronically 

must be segregated from everything else 

and must contain only information that 

is directly related to the disclosures 

required under this subpart. 

(d) Estimates. Estimated disclosures 

may be provided to the extent permitted 

by § 1005.32. Estimated disclosures 

must be described using the term 

‘‘Estimated’’ or a substantially similar 

term in close proximity to the estimated 

term or terms. 

(e) Timing. (1) Except as provided in 

§ 1005.36(a), a pre-payment disclosure 

required by paragraph (b)(1) of this 

section or a combined disclosure 

required by paragraph (b)(3) of this 

section must be provided to the sender 

when the sender requests the remittance 

transfer, but prior to payment for the 

transfer. 

(2) Except as provided in § 1005.36(a), 

a receipt required by paragraph (b)(2) of 

this section generally must be provided 

to the sender when payment is made for 

the remittance transfer. If a transaction 

is conducted entirely by telephone, a 

receipt required by paragraph (b)(2) of 

this section may be mailed or delivered 

to the sender no later than one business 

day after the date on which payment is 

made for the remittance transfer. If a 

transaction is conducted entirely by 

telephone and involves the transfer of 

funds from the sender’s account held by 

the provider, the receipt required by 

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

provided on or with the next regularly 

scheduled periodic statement for that 

account or within 30 days after payment 

is made for the remittance transfer if a 

periodic statement is not provided. The 

statement about the rights of the sender 

regarding cancellation required by 

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

but need not, be disclosed pursuant to 

the timing requirements of this 

paragraph if a provider discloses this 

information pursuant to paragraphs 

(a)(3)(iii) or (a)(5)(iii) of this section. 

(f) Accurate when payment is made. 

Except as provided in § 1005.36(b), 

disclosures required by this section 

must be accurate when a sender makes 

payment for the remittance transfer, 

except to the extent estimates are 

permitted by § 1005.32. 

(g) Foreign language disclosures—(1) 

General. Except as provided in 

paragraph (g)(2) of this section, 

disclosures required by this subpart 

must be made in English and, if 

applicable, either in: 

(i) Each of the foreign languages 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfer services, 

either orally, in writing, or 

electronically, at the office in which a 

sender conducts a transaction or asserts 

an error; or 

(ii) The foreign language primarily 

used by the sender with the remittance 

transfer provider to conduct the 

transaction (or for written or electronic 

disclosures made pursuant to § 1005.33, 

in the foreign language primarily used 

by the sender with the remittance 

transfer provider to assert the error), 

provided that such foreign language is 

principally used by the remittance 

transfer provider to advertise, solicit, or 

market remittance transfer services, 

either orally, in writing, or 

electronically, at the office in which a 

sender conducts a transaction or asserts 

an error, respectively. 

(2) Oral, mobile application, or text 

message disclosures. Disclosures 

provided orally for transactions 

conducted orally and entirely by 

telephone under paragraph (a)(3) of this 

section or orally or via mobile 

application or text message for 

transactions conducted via mobile 

application or text message under 

paragraph (a)(5) of this section shall be 

made in the language primarily used by 

the sender with the remittance transfer 

provider to conduct the transaction. 

Disclosures provided orally under 

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

resolution purposes shall be made in the 

language primarily used by the sender 

with the remittance transfer provider to 

assert the error. 

§ 1005.32 Estimates. 

(a) Temporary exception for insured 

institutions—(1) General. For 

disclosures described in 

§§ 1005.31(b)(1) through (3) and 

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

provided in accordance with paragraph 

(c) of this section for the amounts 

required to be disclosed under 

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

(i) A remittance transfer provider 

cannot determine the exact amounts for 

reasons beyond its control; 

(ii) A remittance transfer provider is 

an insured institution; and 

(iii) The remittance transfer is sent 

from the sender’s account with the 

institution. 

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

this section expires on July 21, 2015. 

(3) Insured institution. For purposes 

of this section, the term ‘‘insured 

institution’’ means insured depository 

institutions (which includes uninsured 

U.S. branches and agencies of foreign 

depository institutions) as defined in 

section 3 of the Federal Deposit 

Insurance Act (12 U.S.C. 1813), and 

insured credit unions as defined in 

section 101 of the Federal Credit Union 

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


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6288 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

(b) Permanent exception for transfers 

to certain countries—(1) General. For 

disclosures described in 

§§ 1005.31(b)(1) through (3) and 

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

provided for transfers to certain 

countries in accordance with paragraph 

(c) of this section for the amounts 

required to be disclosed under 

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

remittance transfer provider cannot 

determine the exact amounts at the time 

the disclosure is required because: 

(i) The laws of the recipient country 

do not permit such a determination, or 

(ii) The method by which transactions 

are made in the recipient country does 

not permit such determination. 

(2) Safe harbor. A remittance transfer 

provider may rely on the list of 

countries published by the Bureau to 

determine whether estimates may be 

provided under paragraph (b)(1) of this 

section, unless the provider has 

information that a country’s laws or the 

method by which transactions are 

conducted in that country permits a 

determination of the exact disclosure 

amount. 

(c) Bases for estimates. Estimates 

provided pursuant to the exceptions in 

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

be based on the below-listed approach 

or approaches, 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). 

(1) Exchange rate. In disclosing the 

exchange rate as required under 

§ 1005.31(b)(1)(iv), an estimate must be 

based on one of the following: 

(i) For remittance transfers sent via 

international ACH that qualify for the 

exception in paragraph (b)(1)(ii) of this 

section, the most recent exchange rate 

set by the recipient country’s central 

bank or other governmental authority 

and reported by a Federal Reserve Bank; 

(ii) The most recent publicly available 

wholesale exchange rate and, if 

applicable, any spread that the 

remittance transfer provider or its 

correspondent typically applies to such 

a wholesale rate for remittance transfers 

for that currency; or 

(iii) The most recent exchange rate 

offered or used by the person making 

funds available directly to the 

designated recipient or by the person 

setting the exchange rate. 

(2) Transfer amount in the currency in 

which the funds will be received by the 

designated recipient. In disclosing the 

transfer amount in the currency in 

which the funds will be received by the 

designated recipient, as required under 

§ 1005.31(b)(1)(v), an estimate must be 

based on the estimated exchange rate 

provided in accordance with paragraph 

(c)(1) of this section, prior to any 

rounding of the estimated exchange rate. 

(3) Other fees. (i) Imposed as 

percentage of amount transferred. In 

disclosing other fees as required under 

§ 1005.31(b)(1)(vi) that are a percentage 

of the amount transferred to the 

designated recipient, an estimate must 

be based on the estimated exchange rate 

provided in accordance with paragraph 

(c)(1) of this section, prior to any 

rounding of the estimated exchange rate. 

(ii) Imposed by intermediary or final 

institution. In disclosing 

§ 1005.31(b)(1)(vi) fees imposed by 

institutions that act as intermediaries or 

by the designated recipient’s institution 

in connection with a remittance 

transfer, an estimate must be based on 

one of the following: 

(A) The remittance transfer provider’s 

most recent remittance transfer to the 

designated recipient’s institution, or 

(B) A representative transmittal route 

identified by the remittance transfer 

provider. 

(4) Other taxes imposed in the 

recipient country. In disclosing taxes 

imposed in the recipient country as 

required under § 1005.31(b)(1)(vi) that 

are a percentage of the amount 

transferred to the designated recipient, 

an estimate must be based on the 

estimated exchange rate provided in 

accordance with paragraph (c)(1) of this 

section, prior to any rounding of the 

estimated exchange rate, and the 

estimated fees provided in accordance 

with paragraph (c)(3) of this section. 

(5) Amount of currency that will be 

received by the designated recipient. In 

disclosing the amount of currency that 

will be received by the designated 

recipient as required under 

§ 1005.31(b)(1)(vii), an estimate must be 

based on the information provided in 

accordance with paragraphs (c)(1) 

through (4) of this section, as applicable. 

§ 1005.33 Procedures for resolving errors. 

(a) Definition of error. (1) Types of 

transfers or inquiries covered. For 

purposes of this section, the term error 

means: 

(i) An incorrect amount paid by a 

sender in connection with a remittance 

transfer; 

(ii) A computational or bookkeeping 

error made by the remittance transfer 

provider relating to a remittance 

transfer; 

(iii) The failure to make available to 

a designated recipient the amount of 

currency stated in the disclosure 

provided to the sender under 

§ 1005.31(b)(2) or (3) for the remittance 

transfer, unless: 

(A) The disclosure stated an estimate 

of the amount to be received in 

accordance with § 1005.32 and the 

difference results from application of 

the actual exchange rate, fees, and taxes, 

rather than any estimated amounts; or 

(B) The failure resulted from 

extraordinary circumstances outside the 

remittance transfer provider’s control 

that could not have been reasonably 

anticipated; 

(iv) The failure to make funds 

available to a designated recipient by 

the date of availability stated in the 

disclosure provided to the sender under 

§ 1005.31(b)(2) or (3) for the remittance 

transfer, unless the failure to make the 

funds available resulted from: 

(A) Extraordinary circumstances 

outside the remittance transfer 

provider’s control that could not have 

been reasonably anticipated; 

(B) Delays related to the remittance 

transfer provider’s fraud screening 

procedures or in accordance with the 

Bank Secrecy Act, 31 U.S.C. 5311 et 

seq., Office of Foreign Assets Control 

requirements, or similar laws or 

requirements; or 

(C) The remittance transfer being 

made with fraudulent intent by the 

sender or any person acting in concert 

with the sender; or 

(v) The sender’s request for 

documentation required by § 1005.31 or 

for additional information or 

clarification concerning a remittance 

transfer, including a request a sender 

makes to determine whether an error 

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

(iv) of this section. 

(2) Types of transfers or inquiries not 

covered. The term error does not 

include: 

(i) An inquiry about the status of a 

remittance transfer, except where the 

funds from the transfer were not made 

available to a designated recipient by 

the disclosed date of availability as 

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

section; 

(ii) A request for information for tax 

or other recordkeeping purposes; 

(iii) A change requested by the 

designated recipient; or 

(iv) A change in the amount or type 

of currency received by the designated 

recipient from the amount or type of 

currency stated in the disclosure 

provided to the sender under 

§ 1005.31(b)(2) or (3) if the remittance 

transfer provider relied on information 

provided by the sender as permitted 


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Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 6289 

under § 1005.31 in making such 

disclosure. 

(b) Notice of error from sender. (1) 

Timing; contents. A remittance transfer 

provider shall comply with the 

requirements of this section with 

respect to any oral or written notice of 

error from a sender that: 

(i) Is received by the remittance 

transfer provider no later than 180 days 

after the disclosed date of availability of 

the remittance transfer; 

(ii) Enables the provider to identify: 

(A) The sender’s name and telephone 

number or address; 

(B) The recipient’s name, and if 

known, the telephone number or 

address of the recipient; and 

(C) The remittance transfer to which 

the notice of error applies; and 

(iii) Indicates why the sender believes 

an error exists and includes to the 

extent possible the type, date, and 

amount of the error, except for requests 

for documentation, additional 

information, or clarification described 

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

(2) Request for documentation or 

clarification. When a notice of error is 

based on documentation, additional 

information, or clarification that the 

sender previously requested under 

paragraph (a)(1)(v) of this section, the 

sender’s notice of error is timely if 

received by the remittance transfer 

provider the later of 180 days after the 

disclosed date of availability of the 

remittance transfer or 60 days after the 

provider sent the documentation, 

information, or clarification that had 

been requested. 

(c) Time limits and extent of 

investigation. (1) Time limits for 

investigation and report to consumer of 

error. A remittance transfer provider 

shall investigate promptly and 

determine whether an error occurred 

within 90 days of receiving a notice of 

error. The remittance transfer provider 

shall report the results to the sender, 

including notice of any remedies 

available for correcting any error that 

the provider determines has occurred, 

within three business days after 

completing its investigation. 

(2) Remedies. If, following an 

assertion of an error by a sender, the 

remittance transfer provider determines 

an error occurred, the provider shall, 

within one business day of, or as soon 

as reasonably practicable after, receiving 

the sender’s instructions regarding the 

appropriate remedy, correct the error as 

designated by the sender by: 

(i) In the case of any error under 

paragraphs (a)(1)(i) through (iii) of this 

section, as applicable, either: 

(A) Refunding to the sender the 

amount of funds provided by the sender 

in connection with a remittance transfer 

which was not properly transmitted, or 

the amount appropriate to resolve the 

error; or 

(B) Making available to the designated 

recipient, without additional cost to the 

sender or to the designated recipient, 

the amount appropriate to resolve the 

error; 

(ii) In the case of an error under 

paragraph (a)(1)(iv) of this section: 

(A) As applicable, either: 

(1) Refunding to the sender the 

amount of funds provided by the sender 

in connection with a remittance transfer 

which was not properly transmitted, or 

the amount appropriate to resolve the 

error; or 

(2) Making available to the designated 

recipient the amount appropriate to 

resolve the error. Such amount must be 

made available to the designated 

recipient without additional cost to the 

sender or to the designated recipient 

unless the sender provided incorrect or 

insufficient information to the 

remittance transfer provider in 

connection with the remittance transfer, 

in which case, third party fees may be 

imposed for resending the remittance 

transfer with the corrected or additional 

information; and 

(B) Refunding to the sender any fees 

and, to the extent not prohibited by law, 

taxes imposed for the remittance 

transfer, unless the sender provided 

incorrect or insufficient information to 

the remittance transfer provider in 

connection with the remittance transfer; 

and 

(iii) In the case of a request under 

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

providing the requested documentation, 

information, or clarification. 

(d) Procedures if remittance transfer 

provider determines no error or different 

error occurred. In addition to following 

the procedures specified in paragraph 

(c) of this section, the remittance 

transfer provider shall follow the 

procedures set forth in this paragraph 

(d) if it determines that no error 

occurred or that an error occurred in a 

manner or amount different from that 

described by the sender. 

(1) Explanation of results of 

investigation. The remittance transfer 

provider’s report of the results of the 

investigation shall include a written 

explanation of the provider’s findings 

and shall note the sender’s right to 

request the documents on which the 

provider relied in making its 

determination. The explanation shall 

also address the specific complaint of 

the sender. 

(2) Copies of documentation. Upon 

the sender’s request, the remittance 

transfer provider shall promptly provide 

copies of the documents on which the 

provider relied in making its error 

determination. 

(e) Reassertion of error. A remittance 

transfer provider that has fully complied 

with the error resolution requirements 

of this section has no further 

responsibilities under this section 

should the sender later reassert the same 

error, except in the case of an error 

asserted by the sender following receipt 

of information provided under 

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

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

to Regulation E § 1005.11 for incorrect 

EFTs from a sender’s account. If an 

alleged error involves an incorrect 

electronic fund transfer from a sender’s 

account in connection with a remittance 

transfer, and the sender provides a 

notice of error to the account-holding 

institution, the account-holding 

institution shall comply with the 

requirements of § 1005.11 governing 

error resolution rather than the 

requirements of this section, provided 

that the account-holding institution is 

not also the remittance transfer 

provider. If the remittance transfer 

provider is also the financial institution 

that holds the consumer’s account, then 

the error-resolution provisions of this 

section apply when the sender provides 

such notice of error. 

(2) Relation to Truth in Lending Act 

and Regulation Z. If an alleged error 

involves an incorrect extension of credit 

in connection with a remittance 

transfer, an incorrect amount received 

by the designated recipient under 

paragraph (a)(1)(iii) of this section that 

is an extension of credit for property or 

services not delivered as agreed, or the 

failure to make funds available by the 

disclosed date of availability under 

paragraph (a)(1)(iv) of this section that 

is an extension of credit for property or 

services not delivered as agreed, and the 

sender provides a notice of error to the 

creditor extending the credit, the 

provisions of Regulation Z, 12 CFR 

1026.13, governing error resolution 

apply to the creditor, rather than the 

requirements of this section, even if the 

creditor is the remittance transfer 

provider. However, if the creditor is the 

remittance transfer provider, paragraph 

(b) of this section will apply instead of 

12 CFR 1026.13(b). If the sender instead 

provides a notice of error to the 

remittance transfer provider that is not 

also the creditor, then the errorresolution provisions of this section 

apply to the remittance transfer 

provider. 

(3) Unauthorized remittance transfers. 

If an alleged error involves an 

unauthorized electronic fund transfer 

for payment in connection with a 


srobinson on DSK4SPTVN1PROD with RULES2
6290 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

remittance transfer, §§ 1005.6 and 

1005.11 apply with respect to the 

account-holding institution. If an 

alleged error involves an unauthorized 

use of a credit account for payment in 

connection with a remittance transfer, 

the provisions of Regulation Z, 12 CFR 

1026.12(b), if applicable, and § 1026.13, 

apply with respect to the creditor. 

(g) Error resolution standards and 

recordkeeping requirements—(1) 

Compliance program. A remittance 

transfer provider shall develop and 

maintain written policies and 

procedures that are designed to ensure 

compliance with the error resolution 

requirements applicable to remittance 

transfers under this section. 

(2) Retention of error-related 

documentation. The remittance transfer 

provider’s policies and procedures 

required under paragraph (g)(1) of this 

section shall include policies and 

procedures regarding the retention of 

documentation related to error 

investigations. Such policies and 

procedures must ensure, at a minimum, 

the retention of any notices of error 

submitted by a sender, documentation 

provided by the sender to the provider 

with respect to the alleged error, and the 

findings of the remittance transfer 

provider regarding the investigation of 

the alleged error. Remittance transfer 

providers are subject to the record 

retention requirements under § 1005.13. 

§ 1005.34 Procedures for cancellation and 

refund of remittance transfers. 

(a) Sender right of cancellation and 

refund. Except as provided in 

§ 1005.36(c), a remittance transfer 

provider shall comply with the 

requirements of this section with 

respect to any oral or written request to 

cancel a remittance transfer from the 

sender that is received by the provider 

no later than 30 minutes after the sender 

makes payment in connection with the 

remittance transfer if: 

(1) The request to cancel enables the 

provider to identify the sender’s name 

and address or telephone number and 

the particular transfer to be cancelled; 

and 

(2) The transferred funds have not 

been picked up by the designated 

recipient or deposited into an account of 

the designated recipient. 

(b) Time limits and refund 

requirements. A remittance transfer 

provider shall refund, at no additional 

cost to the sender, the total amount of 

funds provided by the sender in 

connection with a remittance transfer, 

including any fees and, to the extent not 

prohibited by law, taxes imposed in 

connection with the remittance transfer, 

within three business days of receiving 

a sender’s request to cancel the 

remittance transfer. 

§ 1005.35 Acts of agents. 

A remittance transfer provider is 

liable for any violation of this subpart 

by an agent when such agent acts for the 

provider. 

§ 1005.36 Transfers scheduled in advance. 

(a) Timing. For preauthorized 

remittance transfers, the remittance 

transfer provider must: 

(1) For the first scheduled transfer, 

provide the pre-payment disclosure 

described in § 1005.31(b)(1) and the 

receipt described in § 1005.31(b)(2), in 

accordance with § 1005.31(e). 

(2) For subsequent scheduled 

transfers: 

(i) Provide a pre-payment disclosure 

as described in § 1005.31(b)(1) to the 

sender for each subsequent transfer. The 

pre-payment disclosure must be mailed 

or delivered within a reasonable time 

prior to the scheduled date of the 

subsequent transfer. 

(ii) Provide a receipt as described in 

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

subsequent transfer. The receipt must be 

mailed or delivered to the sender no 

later than one business day after the 

date on which the transfer is made. 

However, if the transfer involves the 

transfer of funds from the sender’s 

account held by the provider, the 

receipt may be provided on or with the 

next regularly scheduled periodic 

statement for that account or within 30 

days after payment is made for the 

remittance transfer if a periodic 

statement is not provided. 

(b) Accuracy. For preauthorized 

remittance transfers: 

(1) For the first scheduled transfer, the 

disclosures described in paragraph (a)(1) 

of this section must comply with 

§ 1005.31(f). 

(2) For subsequent scheduled 

transfers, the disclosures described in 

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

accurate when the transfer is made, 

except to the extent permitted by 

§ 1005.32. 

(c) Cancellation. For any remittance 

transfer scheduled by the sender at least 

three business days before the date of 

the transfer, a remittance transfer 

provider shall comply with any oral or 

written request to cancel the remittance 

transfer from the sender if the request to 

cancel: 

(1) Enables the provider to identify 

the sender’s name and address or 

telephone number and the particular 

transfer to be cancelled; and 

(2) Is received by the provider at least 

three business days before the 

scheduled date of the remittance 

transfer. 

■ 6. Amend Appendix A to part 1005 as 

follows: 

■ a. Add Titles A–30 through A–41, and 

add reserved A–10 through A–29 to the 

Table of Contents. 

■ b. Add Model Forms A–30 through A– 

41. 

The additions and revisions read as 

follows: 

Appendix A to Part 1005—Model 

Disclosure Clauses and Forms 

* * * * * 

A–10 through A–29 [Reserved] 

A–30—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency 

(§ 1005.31(b)(1)) 

A–31—Model Form for Receipts for 

Remittance Transfers Exchanged into Local 

Currency (§ 1005.31(b)(2)) 

A–32—Model Form for Combined 

Disclosures for Remittance Transfers 

Exchanged into Local Currency 

(§ 1005.31(b)(3)) 

A–33—Model Form for Pre-Payment 

Disclosures for Dollar-to-Dollar Remittance 

Transfers (§ 1005.31(b)(1)) 

A–34—Model Form for Receipts for Dollarto-Dollar Remittance Transfers 

(§ 1005.31(b)(2)) 

A–35—Model Form for Combined 

Disclosures for Dollar-to-Dollar Remittance 

Transfers (§ 1005.31(b)(3)) 

A–36—Model Form for Error Resolution and 

Cancellation Disclosures (Long) 

(§ 1005.31(b)(4)) 

A–37—Model Form for Error Resolution and 

Cancellation Disclosures (Short) 

(§ 1005.31(b)(2)(iv) and (b)(2)(vi)) 

A–38—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency—Spanish 

(§ 1005.31(b)(1)) 

A–39—Model Form for Receipts for 

Remittance Transfers Exchanged into Local 

Currency—Spanish (§ 1005.31(b)(2)) 

A–40—Model Form for Combined 

Disclosures for Remittance Transfers 

Exchanged into Local Currency—Spanish 

(§ 1005.31(b)(3)) 

A–41—Model Form for Error Resolution and 

Cancellation Disclosures (Long)—Spanish 

(§ 1005.31(b)(4)) 

* * * * * 

A–30—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged Into Local Currency 

(§ 1005.31(b)(1)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

NOT A RECEIPT 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Exchange Rate: US$1.00 = 12.27 MXN 


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Transfer Amount ................... 1,227.00 MXN 

Other Fees ............................ ¥30.00 MXN 

Other Taxes .......................... ¥10.00 MXN 

Total to Recipient .......... 1,187.00 MXN 

A–31—Model Form for Receipts for 

Remittance Transfers Exchanged Into 

Local Currency (§ 1005.31(b)(2)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

RECEIPT 

SENDER: 

Pat Jones 

100 Anywhere Street 

Anytown, Anywhere 54321 

222–555–1212 

RECIPIENT: 

Carlos Gomez 

123 Calle XXX 

Mexico City, Mexico 

PICK-UP LOCATION: 

ABC Company 

65 Avenida YYY 

Mexico City, Mexico 

Confirmation Code: ABC 123 DEF 456 

Date Available: March 4, 2013 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Exchange Rate: US$1.00 = 12.27 MXN 

Transfer Amount ................... 1,227.00 MXN 

Other Fees ............................ ¥30.00 MXN 

Other Taxes .......................... ¥10.00 MXN 

Total to Recipient .......... 1,187.00 MXN 

You have a right to dispute errors in your 

transaction. If you think there is an error, 

contact us within 180 days at 800–123–4567 

or www.abccompany.com. You can also 

contact us for a written explanation of your 

rights. 

You can cancel for a full refund within 30 

minutes of payment, unless the funds have 

been picked up or deposited. 

For questions or complaints about ABC 

Company, contact: 

State Regulatory Agency 

800–111–2222 

www.stateregulatoryagency.gov 

Consumer Financial Protection Bureau 

855–411–2372 

855–729–2372 (TTY/TDD) 

www.consumerfinance.gov 

A–32—Model Form for Combined 

Disclosures for Remittance Transfers 

Exchanged Into Local Currency 

(§ 1005.31(b)(3)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

SENDER: 

Pat Jones 

100 Anywhere Street 

Anytown, Anywhere 54321 

222–555–1212 

RECIPIENT: 

Carlos Gomez 

123 Calle XXX 

Mexico City 

Mexico 

PICK-UP LOCATION: 

ABC Company 

65 Avenida YYY 

Mexico City 

Mexico 

Confirmation Code: ABC 123 DEF 456 

Date Available: March 4, 2013 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Exchange Rate: US$1.00 = 12.27 MXN 

Transfer Amount ................... 1,227.00 MXN 

Other Fees ............................ ¥30.00 MXN 

Other Taxes .......................... ¥10.00 MXN 

Total to Recipient .......... 1,187.00 MXN 

You have a right to dispute errors in your 

transaction. If you think there is an error, 

contact us within 180 days at 800–123–4567 

or www.abccompany.com. You can also 

contact us for a written explanation of your 

rights. 

You can cancel for a full refund within 30 

minutes of payment, unless the funds have 

been picked up or deposited. 

For questions or complaints about ABC 

Company, contact: 

State Regulatory Agency 

800–111–2222 

www.stateregulatoryagency.gov 

Consumer Financial Protection Bureau 

855–411–2372 

855–729–2372 (TTY/TDD) 

www.consumerfinance.gov 

A–33—Model form for Pre-Payment 

Disclosures for Dollar-to-Dollar 

Remittance Transfers (§ 1005.31(b)(1)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

NOT A RECEIPT 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Transfer Amount ................... $100.00 

Other Fees ............................ ¥$4.00 

Other Taxes .......................... ¥$1.00 

Total to Recipient .......... $95.00 

A–34—Model Form for Receipts for 

Dollar-to-Dollar Remittance Transfers 

(§ 1005.31(b)(2)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

RECEIPT 

SENDER: 

Pat Jones 

100 Anywhere Street 

Anytown, Anywhere 54321 

301–555–1212 

RECIPIENT: 

Carlos Gomez 

106 Calle XXX 

Mexico City 

Mexico 

PICK–UP LOCATION: 

ABC Company 

65 Avenida YYY 

Mexico City 

Mexico 

Confirmation Code: ABC 123 DEF 456 

Date Available: March 4, 2013 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Transfer Amount ................... $100.00 

Other Fees ............................ ¥$4.00 

Other Taxes .......................... ¥$1.00 

Total to Recipient: ......... $95.00 

You have a right to dispute errors in your 

transaction. If you think there is an error, 

contact us within 180 days at 800–123–4567 

or www.abccompany.com. You can also 

contact us for a written explanation of your 

rights. 

You can cancel for a full refund within 30 

minutes of payment, unless the funds have 

been picked up or deposited. 

For questions or complaints about ABC 

Company, contact: 

State Regulatory Agency 

800–111–2222 

www.stateregulatoryagency.gov 

Consumer Financial Protection Bureau 

855–411–2372 

855–729–2372 (TTY/TDD) 

www.consumerfinance.gov 

A–35—Model Form for Combined 

Disclosures for Dollar-to-Dollar 

Remittance Transfers (§ 1005.31(b)(3)) 

ABC Company 

1000 XYZ Avenue 

Anytown, Anystate 12345 

Today’s Date: March 3, 2013 

SENDER: 

Pat Jones 

100 Anywhere Street 

Anytown, Anywhere 54321 

301–555–1212 

RECIPIENT: 

Carlos Gomez 

106 Calle XXX 

Mexico City 

Mexico 

PICK-UP LOCATION: 

ABC Company 

65 Avenida YYY 

Mexico City 

Mexico 


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Confirmation Code: ABC 123 DEF 456 

Date Available: March 4, 2013 

Transfer Amount ................... $100.00 

Transfer Fees ....................... +$7.00 

Transfer Taxes ..................... +$3.00 

Total ............................... $110.00 

Transfer Amount ................... $100.00 

Other Fees ............................ ¥$4.00 

Other Taxes .......................... ¥$1.00 

Total to Recipient .......... $95.00 

You have a right to dispute errors in your 

transaction. If you think there is an error, 

contact us within 180 days at 800–123–4567 

or www.abccompany.com. You can also 

contact us for a written explanation of your 

rights. 

You can cancel for a full refund within 30 

minutes of payment, unless the funds have 

been picked up or deposited. 

For questions or complaints about ABC 

Company, contact: 

State Regulatory Agency 

800–111–2222 

www.stateregulatoryagency.gov 

Consumer Financial Protection Bureau 

855–411–2372 

855–729–2372 (TTY/TDD) 

www.consumerfinance.gov 

A–36—Model Form for Error 

Resolution and Cancellation 

Disclosures (Long) (§ 1005.31(b)(4)) 

What to do if you think there has been an 

error or problem: 

If you think there has been an error or 

problem with your remittance transfer: 

• Call us at [insert telephone number][; or] 

• Write us at [insert address][; or] 

• [Email us at [insert electronic mail 

address]]. 

You must contact us within 180 days of the 

date we promised to you that funds would 

be made available to the recipient. When you 

do, please tell us: 

(1) Your name and address [or telephone 

number]; 

(2) The error or problem with the transfer, 

and why you believe it is an error or 

problem; 

(3) The name of the person receiving the 

funds, and if you know it, his or her 

telephone number or address; [and] 

(4) The dollar amount of the transfer; [and 

(5) The confirmation code or number of the 

transaction.] 

We will determine whether an error 

occurred within 90 days after you contact us 

and we will correct any error promptly. We 

will tell you the results within three business 

days after completing our investigation. If we 

decide that there was no error, we will send 

you a written explanation. You may ask for 

copies of any documents we used in our 

investigation. 

What to do if you want to cancel a 

remittance transfer: 

You have the right to cancel a remittance 

transfer and obtain a refund of all funds paid 

to us, including any fees. In order to cancel, 

you must contact us at the [phone number or 

email address] above within 30 minutes of 

payment for the transfer. 

When you contact us, you must provide us 

with information to help us identify the 

transfer you wish to cancel, including the 

amount and location where the funds were 

sent. We will refund your money within 

three business days of your request to cancel 

a transfer as long as the funds have not 

already been picked up or deposited into a 

recipient’s account. 

A–37—Model Form for Error 

Resolution and Cancellation 

Disclosures (Short) (§ 1005.31(b)(2)(iv) 

and (vi)) 

You have a right to dispute errors in your 

transaction. If you think there is an error, 

contact us within 180 days at [insert 

telephone number] or [insert Web site]. You 

can also contact us for a written explanation 

of your rights. 

You can cancel for a full refund within 30 

minutes of payment, unless the funds have 

been picked up or deposited. 

For questions or complaints about [insert 

name of remittance transfer provider], 

contact: 

BILLING CODE 4810–AM–P 


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BILLING CODE 4810–AM–C 

■ 7. In Supplement I to part 1005: 

■ a. Add new Commentary for 

§§ 1005.30, 1005.31, 1005.32, 1005.33, 

1005.34, 1005.35, and 1005.36. 

■ b. Under Subheading Appendix A, 

paragraph (2) Use of forms is revised 

and paragraph (4) is added. 

The revisions and additions read as 

follows: 

Supplement I to Part 1005—Official 

Interpretations 

* * * * * 


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Section 1005.30—Remittance Transfer 

Definitions 

1. Applicability of definitions in subpart A. 

Except as modified or limited by subpart B 

(which modifications or limitations apply 

only to subpart B), the definitions in § 1005.2 

apply to all of Regulation E, including 

subpart B. 

30(b) Business Day 

1. General. A business day, as defined in 

§ 1005.30(b), includes the entire 24-hour 

period ending at midnight, and a notice given 

pursuant to any section of subpart B is 

effective even if given outside of normal 

business hours. A remittance transfer 

provider is not required under subpart B to 

make telephone lines available on a 24-hour 

basis. 

2. Substantially all business functions. 

‘‘Substantially all business functions’’ 

include both the public and the back-office 

operations of the provider. For example, if 

the offices of a provider are open on 

Saturdays for customers to request remittance 

transfers, but not for performing internal 

functions (such as investigating errors), then 

Saturday is not a business day for that 

provider. In this case, Saturday does not 

count toward the business-day standard set 

by subpart B for resolving errors, processing 

refunds, etc. 

3. Short hours. A provider may determine, 

at its election, whether an abbreviated day is 

a business day. For example, if a provider 

engages in substantially all business 

functions until noon on Saturdays instead of 

its usual 3 p.m. closing, it may consider 

Saturday a business day. 

4. Telephone line. If a provider makes a 

telephone line available on Sundays for 

cancelling the transfer, but performs no other 

business functions, Sunday is not a business 

day under the ‘‘substantially all business 

functions’’ standard. 

30(c) Designated Recipient 

1. Person. A designated recipient can be 

either a natural person or an organization, 

such as a corporation. See § 1005.2(j) 

(definition of person). 

2. Location in a foreign country. i. A 

remittance transfer is received at a location 

in a foreign country if funds are to be 

received at a location physically outside of 

any State, as defined in § 1005.2(l). A specific 

pick-up location need not be designated for 

funds to be received at a location in a foreign 

country. If it is specified that the funds will 

be transferred to a foreign country to be 

picked up by the designated recipient, the 

transfer will be received at a location in a 

foreign country, even though a specific pickup location within that country has not been 

designated. 

ii. For transfers to a designated recipient’s 

account, whether funds are to be received at 

a location physically outside of any State 

depends on where the recipient’s account is 

located. If the account is located in a State, 

the funds will not be received at a location 

in a foreign country. 

iii. Where the sender does not specify 

information about a designated recipient’s 

account, but instead provides information 

about the recipient, a remittance transfer 

provider may make the determination of 

whether the funds will be received at a 

location in a foreign country on information 

that is provided by the sender, and other 

information the provider may have, at the 

time the transfer is requested. For example, 

if a consumer in a State gives a provider the 

recipient’s email address, and the provider 

has no other information about whether the 

funds will be received by the recipient at a 

location in a foreign country, then the 

provider may determine that funds are not to 

be received at a location in a foreign country. 

However, if the provider at the time the 

transfer is requested has additional 

information indicating that funds are to be 

received in a foreign country, such as if the 

recipient’s email address is already registered 

with the provider and associated with a 

foreign account, then the provider has 

sufficient information to conclude that the 

remittance transfer will be received at a 

location in a foreign country. Similarly, if a 

consumer in a State purchases a prepaid 

card, and the provider mails or delivers the 

card directly to the consumer, the provider 

may conclude that funds are not to be 

received in a foreign country, because the 

provider does not know whether the 

consumer will subsequently send the prepaid 

card to a recipient in a foreign country. In 

contrast, the provider has sufficient 

information to conclude that the funds are to 

be received in a foreign country if the 

remittance transfer provider sends a prepaid 

card to a specified recipient in a foreign 

country, even if a person located in a State, 

including the sender, retains the ability to 

access funds on the prepaid card. 

3. Sender as designated recipient. A 

‘‘sender,’’ as defined in § 1005.30(g), may 

also be a designated recipient if the sender 

meets the definition of ‘‘designated 

recipient’’ in § 1005.30(c). For example, a 

sender may request that a provider send an 

electronic transfer of funds from the sender’s 

checking account in a State to the sender’s 

checking account located in a foreign 

country. In this case, the sender would also 

be a designated recipient. 

30(d) Preauthorized Remittance Transfer 

1. Advance authorization. A preauthorized 

remittance transfer is a remittance transfer 

authorized in advance of a transfer that will 

take place on a recurring basis, at 

substantially regular intervals, and will 

require no further action by the consumer to 

initiate the transfer. In a bill-payment system, 

for example, if the consumer authorizes a 

remittance transfer provider to make monthly 

payments to a payee by means of a 

remittance transfer, and the payments take 

place without further action by the 

consumer, the payments are preauthorized 

remittance transfers. In contrast, if the 

consumer must take action each month to 

initiate a transfer (such as by entering 

instructions on a telephone or home 

computer), the payments are not 

preauthorized remittance transfers. 

30(e) Remittance Transfer 

1. Electronic transfer of funds. The 

definition of ‘‘remittance transfer’’ requires 

an electronic transfer of funds. The term 

electronic has the meaning given in section 

106(2) of the Electronic Signatures in Global 

and National Commerce Act. There may be 

an electronic transfer of funds if a provider 

makes an electronic book entry between 

different settlement accounts to effectuate the 

transfer. However, where a sender mails 

funds directly to a recipient, or provides 

funds to a courier for delivery to a foreign 

country, there is not an electronic transfer of 

funds. Similarly, generally, where a provider 

issues a check, draft, or other paper 

instrument to be mailed to a person abroad, 

there is not an electronic transfer of funds. 

Nonetheless, an electronic transfer of funds 

occurs for a payment made by a provider 

under a bill-payment service available to a 

consumer via computer or other electronic 

means, unless the terms of the bill-payment 

service explicitly state that all payments, or 

all payments to a particular payee or payees, 

will be solely by check, draft, or similar 

paper instrument drawn on the consumer’s 

account to be mailed abroad, and the payee 

or payees that will be paid in this manner are 

identified to the consumer. With respect to 

such a bill-payment service, if a provider 

provides a check, draft or similar paper 

instrument drawn on a consumer’s account 

to be mailed abroad for a payee that is not 

identified to the consumer as described 

above, this payment by check, draft or similar 

payment instrument will be an electronic 

transfer of funds. 

2. Sent by a remittance transfer provider. 

i. The definition of ‘‘remittance transfer’’ 

requires that a transfer be ‘‘sent by a 

remittance transfer provider.’’ This means 

that there must be an intermediary that is 

directly engaged with the sender to send an 

electronic transfer of funds on behalf of the 

sender to a designated recipient. 

ii. A payment card network or other third 

party payment service that is functionally 

similar to a payment card network does not 

send a remittance transfer when a consumer 

provides a debit, credit or prepaid card 

directly to a foreign merchant as payment for 

goods or services. In such a case, the 

payment card network or third party 

payment service is not directly engaged with 

the sender to send a transfer of funds to a 

person in a foreign country; rather, the 

network or third party payment service is 

merely providing contemporaneous thirdparty payment processing and settlement 

services on behalf of the merchant or the card 

issuer, rather than on behalf of the sender. In 

such a case, the card issuer also is not 

directly engaged with the sender to send an 

electronic transfer of funds to the foreign 

merchant when the card issuer provides 

payment to the merchant. Similarly, where a 

consumer provides a checking or other 

account number, or a debit, credit or prepaid 

card, directly to a foreign merchant as 

payment for goods or services, the merchant 

is not acting as an intermediary that sends a 

transfer of funds on behalf of the sender 

when it submits the payment information for 

processing. 

iii. However, a card issuer or a payment 

network may offer a service to a sender 

where the card issuer or a payment network 

is an intermediary that is directly engaged 

with the sender to obtain funds using the 


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sender’s debit, prepaid or credit card and to 

send those funds to a recipient’s checking 

account located in a foreign country. In this 

case, the card issuer or the payment network 

is an intermediary that is directly engaged 

with the sender to send an electronic transfer 

of funds on behalf of the sender, and this 

transfer of funds is a remittance transfer 

because it is made to a designated recipient. 

See comment 30(c)–2.ii. 

3. Examples of remittance transfers. 

i. Examples of remittance transfers include: 

A. Transfers where the sender provides 

cash or another method of payment to a 

money transmitter or financial institution 

and requests that funds be sent to a specified 

location or account in a foreign country. 

B. Consumer wire transfers, where a 

financial institution executes a payment 

order upon a sender’s request to wire money 

from the sender’s account to a designated 

recipient. 

C. An addition of funds to a prepaid card 

by a participant in a prepaid card program, 

such as a prepaid card issuer or its agent, that 

is directly engaged with the sender to add 

these funds, where the prepaid card is sent 

or was previously sent by a participant in the 

prepaid card program to a person in a foreign 

country, even if a person located in a State 

(including a sender) retains the ability to 

withdraw such funds. 

D. International ACH transactions sent by 

the sender’s financial institution at the 

sender’s request. 

E. Online bill payments and other 

electronic transfers that a sender schedules in 

advance, including preauthorized remittance 

transfers, made by the sender’s financial 

institution at the sender’s request to a 

designated recipient. 

ii. The term remittance transfer does not 

include, for example: 

A. A consumer’s provision of a debit, 

credit or prepaid card, directly to a foreign 

merchant as payment for goods or services 

because the issuer is not directly engaged 

with the sender to send an electronic transfer 

of funds to the foreign merchant when the 

issuer provides payment to the merchant. See 

comment 30(e)–2. 

B. A consumer’s deposit of funds to a 

checking or savings account located in a 

State, because there has not been a transfer 

of funds to a designated recipient. See 

comment 30(c)–2.ii. 

C. Online bill payments and other 

electronic transfers that senders can schedule 

in advance, including preauthorized 

transfers, made through the Web site of a 

merchant located in a foreign country and via 

direct provision of a checking account, credit 

card, debit card or prepaid card number to 

the merchant, because the financial 

institution is not directly engaged with the 

sender to send an electronic transfer of funds 

to the foreign merchant when the institution 

provides payment to the merchant. See 

comment 30(e)–2. 

30(f) Remittance Transfer Provider 

1. Agents. A person is not deemed to be 

acting as a remittance transfer provider when 

it performs activities as an agent on behalf of 

a remittance transfer provider. 

2. Normal course of business. Whether a 

person provides remittance transfers in the 

normal course of business depends on the 

facts and circumstances, including the total 

number and frequency of remittance transfers 

sent by the provider. For example, if a 

financial institution generally does not make 

international consumer wire transfers 

available to customers, but sends a couple of 

international consumer wire transfers in a 

given year as an accommodation for a 

customer, the institution does not provide 

remittance transfers in the normal course of 

business. In contrast, if a financial institution 

makes international consumer wire transfers 

generally available to customers (whether 

described in the institution’s deposit account 

agreement, or in practice) and makes 

transfers multiple times per month, the 

institution provides remittance transfers in 

the normal course of business. 

3. Multiple remittance transfer providers. If 

the remittance transfer involves more than 

one remittance transfer provider, only one set 

of disclosures must be given, and the 

remittance transfer providers must agree 

among themselves which provider must take 

the actions necessary to comply with the 

requirements that subpart B imposes on any 

or all of them. Even though the providers 

must designate one provider to take the 

actions necessary to comply with the 

requirements that subpart B imposes on any 

or all of them, all remittance transfer 

providers involved in the remittance transfer 

remain responsible for compliance with the 

applicable provisions of the EFTA and 

Regulation E. 

30(g) Sender 

1. Determining whether a consumer is 

located in a State. Under § 1005.30(g), the 

definition of ‘‘sender’’ means a consumer in 

a State who, primarily for personal, family, 

or household purposes, requests a remittance 

transfer provider to send a remittance 

transfer to a designated recipient. For 

transfers from a consumer’s account, whether 

a consumer is located in a State depends on 

where the consumer’s account is located. If 

the account is located in a State, the 

consumer will be located in a State for 

purposes of the definition of ‘‘sender’’ in 

§ 1005.30(g), notwithstanding comment 3(a)– 

3. Where a transfer is requested electronically 

or by telephone and the transfer is not from 

an account, the provider may make the 

determination of whether a consumer is 

located in a State based on information that 

is provided by the consumer and on any 

records associated with the consumer that 

the provider may have, such as an address 

provided by the consumer. 

Section 1005.31—Disclosures 

31(a) General Form of Disclosures 

31(a)(1) Clear and Conspicuous 

1. Clear and conspicuous standard. 

Disclosures are clear and conspicuous for 

purposes of subpart B if they are readily 

understandable and, in the case of written 

and electronic disclosures, the location and 

type size are readily noticeable to senders. 

Oral disclosures as permitted by 

§ 1005.31(a)(3), (4), and (5) are clear and 

conspicuous when they are given at a volume 

and speed sufficient for a sender to hear and 

comprehend them. 

2. Abbreviations and symbols. Disclosures 

may contain commonly accepted or readily 

understandable abbreviations or symbols, 

such as ‘‘USD’’ to indicate currency in U.S. 

dollars or ‘‘MXN’’ to indicate currency in 

Mexican pesos. 

31(a)(2) Written and Electronic Disclosures 

1. E–Sign Act requirements. If a sender 

electronically requests the remittance transfer 

provider to send a remittance transfer, the 

disclosures required by § 1005.31(b)(1) may 

be provided to the sender in electronic form 

without regard to the consumer consent and 

other applicable provisions of the Electronic 

Signatures in Global and National Commerce 

Act (E–Sign Act) (15 U.S.C. 7001 et seq.). If 

a sender electronically requests the provider 

to send a remittance transfer, the disclosures 

required by § 1005.31(b)(2) may be provided 

to the sender in electronic form, subject to 

compliance with the consumer consent and 

other applicable provisions of the E–Sign 

Act. See § 1005.4(a)(1). 

2. Paper size. Written disclosures may be 

provided on any size paper, as long as the 

disclosures are clear and conspicuous. For 

example, disclosures may be provided on a 

register receipt or on an 8.5 inch by 11 inch 

sheet of paper. 

3. Retainable electronic disclosures. A 

remittance transfer provider may satisfy the 

requirement to provide electronic disclosures 

in a retainable form if it provides an online 

disclosure in a format that is capable of being 

printed. Electronic disclosures may not be 

provided through a hyperlink or in another 

manner by which the sender can bypass the 

disclosure. A provider is not required to 

confirm that the sender has read the 

electronic disclosures. 

4. Pre-payment disclosures to a mobile 

telephone. Disclosures provided via mobile 

application or text message, to the extent 

permitted by § 1005.31(a)(5), need not be 

retainable. However, disclosures provided 

electronically to a mobile telephone that are 

not provided via mobile application or text 

message must be retainable. For example, 

disclosures provided via email must be 

retainable, even if a sender accesses them by 

mobile telephone. 

31(a)(3) Disclosures for Oral Telephone 

Transactions 

1. Transactions conducted partially by 

telephone. For transactions conducted 

partially by telephone, providing the 

information required by § 1005.31(b)(1) to a 

sender orally does not fulfill the requirement 

to provide the disclosures required by 

§ 1005.31(b)(1). For example, a sender may 

begin a remittance transfer at a remittance 

transfer provider’s dedicated telephone in a 

retail store, and then provide payment in 

person to a store clerk to complete the 

transaction. In such cases, all disclosures 

must be provided in writing. A provider 

complies with this requirement, for example, 

by providing the written pre-payment 

disclosure in person prior to the sender’s 

payment for the transaction, and the written 

receipt when the sender pays for the 

transaction. 

2. Oral Telephone Transactions. Section 

1005.31(a)(3) applies to transactions 


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conducted orally and entirely by telephone, 

such as transactions conducted orally on a 

landline or mobile telephone. 

31(a)(5) Disclosures for Mobile Application 

or Text Message Transactions 

1. Mobile application and text message 

transactions. A remittance transfer provider 

may provide the required pre-payment 

disclosures orally or via mobile application 

or text message if the transaction is 

conducted entirely by telephone via mobile 

application or text message, the remittance 

transfer provider complies with the 

requirements of § 1005.31(g)(2), and 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). For example, if a sender 

conducts a transaction via text message on a 

mobile telephone, the remittance transfer 

provider may call the sender and orally 

provide the required pre-payment 

disclosures. Alternatively, the provider may 

provide the required pre-payment disclosures 

via text message. Section 1005.31(a)(5) 

applies only to transactions conducted 

entirely by mobile telephone via mobile 

application or text message. 

31(b) Disclosure Requirements 

1. Disclosures provided as applicable. 

Disclosures required by § 1005.31(b) need 

only be provided to the extent applicable. A 

remittance transfer provider may choose to 

omit an item of information required by 

§ 1005.31(b) if it is inapplicable to a 

particular transaction. Alternatively, a 

provider may disclose a term and state that 

an amount or item is ‘‘not applicable, 

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

taxes are not imposed in connection with a 

particular transaction, the provider need not 

provide the disclosures about fees and taxes 

generally required by § 1005.31(b)(1)(ii) and 

(vi). Similarly, a web site need not be 

disclosed if the provider does not maintain 

a web site. A provider need not provide the 

exchange rate disclosure required by 

§ 1005.31(b)(1)(iv) if a recipient receives 

funds in the currency in which the 

remittance transfer is funded, or if funds are 

delivered into an account denominated in the 

currency in which the remittance transfer is 

funded. For example, if a sender in the 

United States sends funds from an account 

denominated in Euros to an account in 

France denominated in Euros, no exchange 

rate would need to be provided. Similarly, if 

a sender funds a remittance transfer in U.S. 

dollars and requests that a remittance transfer 

be delivered to the recipient in U.S. dollars, 

a provider need not disclose an exchange 

rate. 

2. Substantially similar terms, language, 

and notices. Certain disclosures required by 

§ 1005.31(b) must be described using the 

terms set forth in § 1005.31(b) or 

substantially similar terms. Terms may be 

more specific than those provided. For 

example, a remittance transfer provider 

sending funds to Colombia may describe a 

tax under § 1005.31(b)(1)(vi) as a ‘‘Colombian 

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

Taxes.’’ Foreign language disclosures 

required under § 1005.31(g) must contain 

accurate translations of the terms, language, 

and notices required by § 1005.31(b). 

31(b)(1) Pre-Payment Disclosures 

1. Fees and taxes. i. Taxes imposed on the 

remittance transfer by the remittance transfer 

provider include taxes imposed on the 

remittance transfer by a State or other 

governmental body. A provider need only 

disclose fees or taxes imposed on the 

remittance transfer by the provider in 

§ 1005.31(b)(1)(ii) and imposed on the 

remittance transfer by a person other than the 

provider in § 1005.31(b)(1)(vi), as applicable. 

For example, if no transfer taxes are imposed 

on a remittance transfer, a provider would 

only disclose applicable transfer fees. See 

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

imposed, the fees and taxes must be 

disclosed as separate, itemized disclosures. 

For example, a provider would disclose all 

transfer fees using the term ‘‘Transfer Fees’’ 

or a substantially similar term and would 

separately disclose all transfer taxes as 

‘‘Transfer Taxes’’ or a substantially similar 

term. 

ii. The fees and taxes required to be 

disclosed by § 1005.31(b)(1)(ii) include all 

fees and taxes imposed on the remittance 

transfer by the provider. For example, a 

provider must disclose a service fee and any 

State taxes imposed on the remittance 

transfer. In contrast, the fees and taxes 

required to be disclosed by § 1005.31(b)(1)(vi) 

include fees and taxes imposed on the 

remittance transfer by a person other than the 

provider. Fees and taxes imposed on the 

remittance transfer include only those fees 

and taxes that are charged to the sender or 

designated recipient and are specifically 

related to the remittance transfer. For 

example, a provider must disclose fees 

imposed on a remittance transfer by the 

receiving institution or agent at pick-up for 

receiving the transfer, fees imposed on a 

remittance transfer by intermediary 

institutions in connection with an 

international wire transfer, and taxes 

imposed on a remittance transfer by a foreign 

government. However, a provider need not 

disclose, for example, overdraft fees that are 

imposed by a recipient’s bank or funds that 

are garnished from the proceeds of a 

remittance transfer to satisfy an unrelated 

debt, because these charges are not 

specifically related to the remittance transfer. 

Similarly, fees that banks charge one another 

for handling a remittance transfer or other 

fees that do not affect the total amount of the 

transaction or the amount that will be 

received by the designated recipient are not 

charged to the sender or designated recipient. 

For example, an interchange fee that is 

charged to a provider when a sender uses a 

credit or debit card to pay for a remittance 

transfer need not be disclosed. The terms 

used to describe the fees and taxes imposed 

on the remittance transfer by the provider in 

§ 1005.31(b)(1)(ii) and imposed on the 

remittance transfer by a person other than the 

provider in § 1005.31(b)(1)(vi) must 

differentiate between such fees and taxes. For 

example, the terms used to describe fees 

disclosed under § 1005.31(b)(1)(ii) and (vi) 

may not both be described solely as ‘‘Fees.’’ 

2. Transfer amount. Section 

1005.31(b)(1)(i) and (v) require two transfer 

amount disclosures. First, under 

§ 1005.31(b)(1)(i), a provider must disclose 

the transfer amount in the currency in which 

the remittance transfer is funded to show the 

calculation of the total amount of the 

transaction. Typically, the remittance transfer 

is funded in U.S. dollars, so the transfer 

amount would be expressed in U.S. dollars. 

However, if the remittance transfer is funded, 

for example, from a Euro-denominated 

account, the transfer amount would be 

expressed in Euros. Second, under 

§ 1005.31(b)(1)(v), a provider must disclose 

the transfer amount in the currency in which 

the funds will be made available to the 

designated recipient. For example, if the 

funds will be picked up by the designated 

recipient in Japanese yen, the transfer 

amount would be expressed in Japanese yen. 

However, this second transfer amount need 

not be disclosed if fees and taxes are not 

imposed on the remittance transfer under 

§ 1005.31(b)(1)(vi). The terms used to 

describe each transfer amount should be the 

same. 

3. Exchange rate for calculation. The 

exchange rate used to calculate the transfer 

amount in § 1005.31(b)(1)(v), the fees and 

taxes imposed on the remittance transfer by 

a person other than the provider in 

§ 1005.31(b)(1)(vi), and the amount received 

in § 1005.31(b)(1)(vii) is the exchange rate in 

§ 1005.31(b)(1)(iv), including an estimated 

exchange rate to the extent permitted by 

§ 1005.32, prior to any rounding of the 

exchange rate. For example, if one U.S. dollar 

exchanges for 11.9483779 Mexican pesos, a 

provider must calculate these disclosures 

using this rate, even though the provider may 

disclose pursuant to § 1005.31(b)(1)(iv) that 

the U.S. dollar exchanges for 11.9484 

Mexican pesos. Similarly, if a provider 

estimates pursuant to § 1005.32 that one U.S. 

dollar exchanges for 11.9483 Mexican pesos, 

a provider must calculate these disclosures 

using this rate, even though the provider may 

disclose pursuant to § 1005.31(b)(1)(iv) that 

the U.S. dollar exchanges for 11.95 Mexican 

pesos (Estimated). If an exchange rate need 

not be rounded, a provider must use that 

exchange rate to calculate these disclosures. 

For example, if one U.S. dollar exchanges for 

exactly 11.9 Mexican pesos, a provider must 

calculate these disclosures using this 

exchange rate. 

31(b)(1)(iv) Exchange Rate 

1. Applicable exchange rate. If the 

designated recipient will receive funds in a 

currency other than the currency in which 

the remittance transfer is funded, a 

remittance transfer provider must disclose 

the exchange rate to be used by the provider 

for the remittance transfer. An exchange rate 

that is estimated must be disclosed pursuant 

to the requirements of § 1005.32. A 

remittance transfer provider may not 

disclose, for example, that an exchange rate 

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

determined.’’ If a provider does not have 

specific knowledge regarding the currency in 

which the funds will be received, the 

provider may rely on a sender’s 

representation as to the currency in which 


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funds will be received for purposes of 

determining whether an exchange rate is 

applied to the transfer. For example, if a 

sender requests that a remittance transfer be 

deposited into an account in U.S. dollars, the 

provider need not disclose an exchange rate, 

even if the account is actually denominated 

in Mexican pesos and the funds are 

converted prior to deposit into the account. 

If a sender does not know the currency in 

which funds will be received, the provider 

may assume that the currency in which funds 

will be received is the currency in which the 

remittance transfer is funded. 

2. Rounding. The exchange rate disclosed 

by the provider for the remittance transfer is 

required to be rounded. The provider may 

round to two, three, or four decimal places, 

at its option. For example, if one U.S. dollar 

exchanges for 11.9483779 Mexican pesos, a 

provider may disclose that the U.S. dollar 

exchanges for 11.9484 Mexican pesos. The 

provider may alternatively disclose, for 

example, that the U.S. dollar exchanges for 

11.948 pesos or 11.95 pesos. On the other 

hand, if one U.S. dollar exchanges for exactly 

11.9 Mexican pesos, the provider may 

disclose that ‘‘US$1 = 11.9 MXN’’ in lieu of, 

for example, ‘‘US$1 = 11.90 MXN.’’ The 

exchange rate disclosed for the remittance 

transfer must be rounded consistently for 

each currency. For example, a provider may 

not round to two decimal places for some 

transactions exchanged into Euros and round 

to four decimal places for other transactions 

exchanged into Euros. 

3. Exchange rate used. The exchange rate 

used by the provider for the remittance 

transfer need not be set by that provider. For 

example, an exchange rate set by an 

intermediary institution and applied to the 

remittance transfer would be the exchange 

rate used for the remittance transfer and must 

be disclosed by the provider. 

31(b)(1)(vi) Fees and Taxes Imposed by a 

Person Other Than the Provider 

1. Fees and taxes disclosed in the currency 

in which the funds will be received. Section 

1005.31(b)(1)(vi) requires the disclosure of 

fees and taxes in the currency in which the 

funds will be received by the designated 

recipient. A fee or tax described in 

§ 1005.31(b)(1)(vi) may be imposed in one 

currency, but the funds may be received by 

the designated recipient in another currency. 

In such cases, the remittance transfer 

provider must calculate the fee or tax to be 

disclosed using the exchange rate in 

§ 1005.31(b)(1)(iv), including an estimated 

exchange rate to the extent permitted by 

§ 1005.32, prior to any rounding of the 

exchange rate. For example, an intermediary 

institution in an international wire transfer 

may impose a fee in U.S. dollars, but funds 

are ultimately deposited in the recipient’s 

account in Euros. In this case, the provider 

would disclose the fee to the sender 

expressed in Euros, calculated using the 

exchange rate used by the provider for the 

remittance transfer. For purposes of 

§ 1005.31(b)(1)(v), (vi), and (vii), if a provider 

does not have specific knowledge regarding 

the currency in which the funds will be 

received, the provider may rely on a sender’s 

representation as to the currency in which 

funds will be received. For example, if a 

sender requests that a remittance transfer be 

deposited into an account in U.S. dollars, the 

provider may provide the disclosures 

required in § 1005.31(b)(1)(v), (vi), and (vii) 

in U.S. dollars, even if the account is actually 

denominated in Mexican pesos and the funds 

are subsequently converted prior to deposit 

into the account. If a sender does not know 

the currency in which funds will be received, 

the provider may assume that the currency in 

which funds will be received is the currency 

in which the remittance transfer is funded. 

2. Determining taxes. The amount of taxes 

imposed by a person other than the provider 

may depend on the tax status of the sender 

or recipient, the type of accounts or financial 

institutions involved in the transfer, or other 

variables. For example, the amount of tax 

may depend on whether the receiver is a 

resident of the country in which the funds 

are received or the type of account to which 

the funds are delivered. If a provider does not 

have specific knowledge regarding variables 

that affect the amount of taxes imposed by a 

person other than the provider for purposes 

of determining these taxes, the provider may 

rely on a sender’s representations regarding 

these variables. If a sender does not know the 

information relating to the variables that 

affect the amount of taxes imposed by a 

person other than the provider, the provider 

may disclose the highest possible tax that 

could be imposed for the remittance transfer 

with respect to any unknown variable. 

31(b)(1)(vii) Amount Received 

1. Amount received. The remittance 

transfer provider is required to disclose the 

amount that will be received by the 

designated recipient in the currency in which 

the funds will be received. The amount 

received must reflect all charges imposed on 

the remittance transfer that affect the amount 

received, including the exchange rate and all 

fees and taxes imposed on the remittance 

transfer by the remittance transfer provider, 

the receiving institution, or any other party 

in the transmittal route of a remittance 

transfer. The disclosed amount received must 

be reduced by the amount of any fee or tax 

that is imposed on the remittance transfer by 

any person, even if that amount is imposed 

or itemized separately from the transaction 

amount. 

31(b)(2) Receipt 

1. Date funds will be available. A 

remittance transfer provider does not comply 

with the requirements of § 1005.31(b)(2)(ii) if 

it provides a range of dates that the 

remittance transfer may be available or an 

estimate of the date on which funds will be 

available. If a provider does not know the 

exact date on which funds will be available, 

the provider may disclose the latest date on 

which the funds will be available. For 

example, if funds may be available on 

January 3, but are not certain to be available 

until January 10, then a provider complies 

with § 1005.31(b)(2)(ii) if it discloses January 

10 as the date funds will be available. 

However, a remittance transfer provider may 

also disclose that funds ‘‘may be available 

sooner’’ or use a substantially similar term to 

inform senders that funds may be available 

to the designated recipient on a date earlier 

than the date disclosed. For example, a 

provider may disclose ‘‘January 10 (may be 

available sooner).’’ 

2. Agencies required to be disclosed. A 

remittance transfer provider must only 

disclose information about a State agency 

that licenses or charters the remittance 

transfer provider with respect to the 

remittance transfer as applicable. For 

example, if a financial institution is solely 

regulated by a Federal agency, and not 

licensed or chartered by a State agency, then 

the institution need not disclose information 

about a State agency. A remittance transfer 

provider must disclose information about the 

Consumer Financial Protection Bureau, 

whether or not the Consumer Financial 

Protection Bureau is the provider’s primary 

Federal regulator. 

3. State agency that licenses or charters a 

provider. A remittance transfer provider must 

only disclose information about one State 

agency that licenses or charters the 

remittance transfer provider with respect to 

the remittance transfer, even if other State 

agencies also regulate the remittance transfer 

provider. For example, a provider may 

disclose information about the State agency 

which granted its license. If a provider is 

licensed in multiple States, and the State 

agency that licenses the provider with 

respect to the remittance transfer is 

determined by a sender’s location, a provider 

may make the determination as to the State 

in which the sender is located based on 

information that is provided by the sender 

and on any records associated with the 

sender. For example, if the State agency that 

licenses the provider with respect to an 

online remittance transfer is determined by a 

sender’s location, a provider could rely on 

the sender’s statement regarding the State in 

which the sender is located and disclose the 

State agency that licenses the provider in that 

State. A State-chartered bank must disclose 

information about the State agency that 

granted its charter, regardless of the location 

of the sender. 

31(b)(3) Combined Disclosure 

1. Proof of payment. If a sender initiating 

a remittance transfer receives a combined 

disclosure provided under § 1005.31(b)(3) 

and then completes the transaction, the 

remittance transfer provider must provide the 

sender with proof of payment. The proof of 

payment must be clear and conspicuous, 

provided in writing or electronically, and 

provided in a retainable form. The combined 

disclosure must be provided to the sender 

when the sender requests the remittance 

transfer, but prior to payment for the transfer, 

pursuant to § 1005.31(e)(1), and the proof of 

payment must be provided when payment is 

made for the remittance transfer. The proof 

of payment for the transaction may be 

provided on the same piece of paper as the 

combined disclosure or on a separate piece 

of paper. For example, a provider may feed 

a combined disclosure through a computer 

printer when payment is made to add the 

date and time of the transaction, a 

confirmation code, and an indication that the 

transfer was paid in full. A provider may also 

provide this additional information to a 


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6302 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

sender on a separate piece of paper when 

payment is made. A remittance transfer 

provider does not comply with the 

requirements of § 1005.31(b)(3) by providing 

a combined disclosure with no further 

indication that payment has been received. 

31(c) Specific Format Requirements 

31(c)(1) Grouping 

1. Grouping. Information is grouped 

together for purposes of subpart B if multiple 

disclosures are in close proximity to one 

another and a sender can reasonably 

calculate the total amount of the transaction 

and the amount that will be received by the 

designated recipient. Model Forms A–30 

through A–35 in Appendix A illustrate how 

information may be grouped to comply with 

the rule, but a remittance transfer provider 

may group the information in another 

manner. For example, a provider could 

provide the grouped information as a 

horizontal, rather than a vertical, calculation. 

31(c)(4) Segregation 

1. Segregation. Disclosures may be 

segregated from other information in a 

variety of ways. For example, the disclosures 

may appear on a separate sheet of paper or 

may appear on the front of a page where 

other information appears on the back of that 

page. The disclosures may be set off from 

other information on a notice by outlining 

them in a box or series of boxes, with bold 

print dividing lines or a different color 

background, or by using other means. 

2. Directly related. For purposes of 

§ 1005.31(c)(4), the following is directly 

related information: 

i. The date and time of the transaction; 

ii. The sender’s name and contact 

information; 

iii. The location at which the designated 

recipient may pick up the funds; 

iv. The confirmation or other identification 

code; 

v. A company name and logo; 

vi. An indication that a disclosure is or is 

not a receipt or other indicia of proof of 

payment; 

vii. A designated area for signatures or 

initials; 

viii. A statement that funds may be 

available sooner, as permitted by 

§ 1005.31(b)(2)(ii); 

ix. Instructions regarding the retrieval of 

funds, such as the number of days the funds 

will be available to the recipient before they 

are returned to the sender; and 

x. A statement that the provider makes 

money from foreign currency exchange. 

31(d) Estimates 

1. Terms. A remittance transfer provider 

may provide estimates of the amounts 

required by § 1005.31(b), to the extent 

permitted by § 1005.32. An estimate must be 

described using the term ‘‘Estimated’’ or a 

substantially similar term in close proximity 

to the term or terms described. For example, 

a remittance transfer provider could describe 

an estimated disclosure as ‘‘Estimated 

Transfer Amount,’’ ‘‘Other Estimated Fees 

and Taxes,’’ or ‘‘Total to Recipient (Est.).’’ 

31(e) Timing 

1. Request to send a remittance transfer. 

Except as provided in § 1005.36(a), prepayment and combined disclosures are 

required to be provided to the sender when 

the sender requests the remittance transfer, 

but prior to payment for the transfer. 

Whether a consumer has requested a 

remittance transfer depends on the facts and 

circumstances. A sender that asks a provider 

to send a remittance transfer, and provides 

transaction-specific information to the 

provider in order to send funds to a 

designated recipient, has requested a 

remittance transfer. For example, a sender 

who asks the provider to send money to a 

recipient in Mexico and provides the sender 

and recipient information to the provider has 

requested a remittance transfer. A consumer 

who solely inquires about that day’s rates 

and fees to send to Mexico, however, has not 

requested the provider to send a remittance 

transfer. 

2. When payment is made. Except as 

provided in § 1005.36(a), a receipt required 

by § 1005.31(b)(2) must be provided to the 

sender when payment is made for the 

remittance transfer. For example, a 

remittance transfer provider could give the 

sender the disclosures after the sender pays 

for the remittance transfer, but before the 

sender leaves the counter. A provider could 

also give the sender the disclosures 

immediately before the sender pays for the 

transaction. For purposes of subpart B, 

payment is made, for example, when a 

sender provides cash to the remittance 

transfer provider or when payment is 

authorized. 

3. Telephone transfer from an account. A 

sender may transfer funds from his or her 

account, as defined by § 1005.2(b), that is 

held by the remittance transfer provider. For 

example, a financial institution may send an 

international wire transfer for a sender using 

funds from the sender’s account with the 

institution. Except as provided in 

§ 1005.36(a), if the sender conducts such a 

transfer entirely by telephone, the institution 

may provide a receipt required by 

§ 1005.31(b)(2) on or with the sender’s next 

regularly scheduled periodic statement for 

that account or within 30 days after payment 

is made for the remittance transfer if a 

periodic statement is not provided. 

4. Mobile application and text message 

transactions. If a transaction is conducted 

entirely by telephone via mobile application 

or text message, a receipt required by 

§ 1005.31(b)(2) may be mailed or delivered to 

the sender pursuant to the timing 

requirements in § 1005.31(e)(2). For example, 

if a sender conducts a transfer entirely by 

telephone via mobile application, a 

remittance transfer provider may mail or 

deliver the disclosures to a sender pursuant 

to the timing requirements in § 1005.31(e)(2). 

5. Statement about cancellation rights. The 

statement about the rights of the sender 

regarding cancellation required by 

§ 1005.31(b)(2)(iv) may, but need not, be 

disclosed pursuant to the timing 

requirements of § 1005.31(e)(2) if a provider 

discloses this information pursuant to 

§ 1005.31(a)(3)(iii) or (a)(5)(iii). The statement 

about the rights of the sender regarding error 

resolution required by § 1005.31(b)(2)(iv), 

however, must be disclosed pursuant to the 

timing requirements of § 1005.31(e)(2). 

31(f) Accurate When Payment Is Made 

1. No guarantee of disclosures provided 

before payment. Except as provided in 

§ 1005.36(b), disclosures required by 

§ 1005.31(b) must be accurate when a sender 

makes payment for the remittance transfer. A 

remittance transfer provider is not required 

to guarantee the terms of the remittance 

transfer in the disclosures required by 

§ 1005.31(b) for any specific period of time. 

However, if any of the disclosures required 

by § 1005.31(b) are not accurate when a 

sender makes payment for the remittance 

transfer, a provider must give new 

disclosures before accepting payment. 

31(g) Foreign Language Disclosures 

1. Number of foreign languages used in 

written disclosure. Section 1005.31(g)(1) does 

not limit the number of languages that may 

be used on a single document, but such 

disclosures must be clear and conspicuous 

pursuant to § 1005.31(a)(1). Under 

§ 1005.31(g)(1), a remittance transfer provider 

may, but need not, provide the sender with 

a written or electronic disclosure that is in 

English and, if applicable, in each foreign 

language that the remittance transfer provider 

principally uses to advertise, solicit, or 

market either orally, in writing, or 

electronically, at the office in which a sender 

conducts a transaction or asserts an error, 

respectively. Alternatively, the remittance 

transfer provider may provide the disclosure 

solely in English and, if applicable, the 

foreign language primarily used by the 

sender with the remittance transfer provider 

to conduct the transaction or assert an error, 

provided such language is principally used 

by the remittance transfer provider to 

advertise, solicit, or market either orally, in 

writing, or electronically, at the office in 

which the sender conducts the transaction or 

asserts the error, respectively. If the 

remittance transfer provider chooses the 

alternative method, it may provide 

disclosures in a single document with both 

languages or in two separate documents with 

one document in English and the other 

document in the applicable foreign language. 

The following examples illustrate this 

concept. 

i. A remittance transfer provider 

principally uses only Spanish and 

Vietnamese to advertise, solicit, or market 

remittance transfer services at a particular 

office. The remittance transfer provider may 

provide all senders with disclosures in 

English, Spanish, and Vietnamese, regardless 

of the language the sender uses with the 

remittance transfer provider to conduct the 

transaction or assert an error. 

ii. Same facts as i. If a sender primarily 

uses Spanish with the remittance transfer 

provider to conduct a transaction or assert an 

error, the remittance transfer provider may 

provide a written or electronic disclosure in 

English and Spanish, whether in a single 

document or two separate documents. If the 

sender primarily uses English with the 

remittance transfer provider to conduct the 

transaction or assert an error, the remittance 


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transfer provider may provide a written or 

electronic disclosure solely in English. If the 

sender primarily uses a foreign language with 

the remittance transfer provider to conduct 

the transaction or assert an error that the 

remittance transfer provider does not use to 

advertise, solicit, or market either orally, in 

writing, or electronically, at the office in 

which the sender conducts the transaction or 

asserts the error, respectively, the remittance 

transfer provider may provide a written or 

electronic disclosure solely in English. 

2. Primarily used. The language primarily 

used by the sender with the remittance 

transfer provider to conduct the transaction 

is the primary language used by the sender 

with the remittance transfer provider to 

convey the information necessary to 

complete the transaction. Similarly, the 

language primarily used by the sender with 

the remittance transfer provider to assert the 

error is the primary language used by the 

sender with the remittance transfer provider 

to provide the information required by 

§ 1005.33(b) to assert an error. For example: 

i. A sender initiates a conversation with a 

remittance transfer provider with a greeting 

in English and expresses interest in sending 

a remittance transfer to Mexico in English. If 

the remittance transfer provider thereafter 

communicates with the sender in Spanish 

and the sender conveys the other information 

needed to complete the transaction, 

including the designated recipient’s 

information and the amount and funding 

source of the transfer, in Spanish, then 

Spanish is the language primarily used by the 

sender with the remittance transfer provider 

to conduct the transaction. 

ii. A sender initiates a conversation with 

the remittance transfer provider with a 

greeting in English and states in English that 

there was a problem with a prior remittance 

transfer to Vietnam. If the remittance transfer 

provider thereafter communicates with the 

sender in Vietnamese and the sender uses 

Vietnamese to convey the information 

required by § 1005.33(b) to assert an error, 

then Vietnamese is the language primarily 

used by the sender with the remittance 

transfer provider to assert the error. 

iii. A sender accesses the Web site of a 

remittance transfer provider that may be used 

by senders to conduct remittance transfers or 

assert errors. The Web site is offered in 

English and French. If the sender uses the 

French version of the Web site to conduct the 

remittance transfer, then French is the 

language primarily used by the sender with 

the remittance transfer provider to conduct 

the transaction. 

31(g)(1) General 

1. Principally used. i. All relevant facts and 

circumstances determine whether a foreign 

language is principally used by the 

remittance transfer provider to advertise, 

solicit, or market under § 1005.31(g)(1). 

Generally, whether a foreign language is 

considered to be principally used by the 

remittance transfer provider to advertise, 

solicit, or market is based on: 

A. The frequency with which the foreign 

language is used in advertising, soliciting, or 

marketing of remittance transfer services at 

that office; 

B. The prominence of the advertising, 

soliciting, or marketing of remittance transfer 

services in that foreign language at that 

office; and 

C. The specific foreign language terms used 

in the advertising soliciting, or marketing of 

remittance transfer service at that office. 

ii. For example, if a remittance transfer 

provider posts several prominent 

advertisements in a foreign language for 

remittance transfer services, including rate 

and fee information, on a consistent basis in 

an office, the provider is creating an 

expectation that a consumer could receive 

information on remittance transfer services in 

the foreign language used in the 

advertisements. The foreign language used in 

such advertisements would be considered to 

be principally used at that office based on the 

frequency and prominence of the advertising. 

In contrast, an advertisement for remittance 

transfer services, including rate and fee 

information, that is featured prominently at 

an office and is entirely in English, except for 

a greeting in a foreign language, does not 

create an expectation that a consumer could 

receive information on remittance transfer 

services in the foreign language used for such 

greeting. The foreign language used in such 

an advertisement is not considered to be 

principally used at that office based on the 

incidental specific foreign language term 

used. 

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

commercial message in a foreign language, 

appearing in any medium, that promotes 

directly or indirectly the availability of 

remittance transfer services constitutes 

advertising, soliciting, or marketing in such 

foreign language for purposes of 

§ 1005.31(g)(1). Examples illustrating when a 

foreign language is used to advertise, solicit, 

or market include: 

A. Messages in a foreign language in a 

leaflet or promotional flyer at an office. 

B. Announcements in a foreign language 

on a public address system at an office. 

C. On-line messages in a foreign language, 

such as on the internet. 

D. Printed material in a foreign language on 

any exterior or interior sign at an office. 

E. Point-of-sale displays in a foreign 

language at an office. 

F. Telephone solicitations in a foreign 

language. 

ii. Examples illustrating use of a foreign 

language for purposes other than to advertise, 

solicit, or market include: 

A. Communicating in a foreign language 

(whether by telephone, electronically, or 

otherwise) about remittance transfer services 

in response to a consumer-initiated inquiry. 

B. Making disclosures in a foreign language 

that are required by Federal or other 

applicable law. 

3. Office. An office includes any physical 

location, telephone number, or Web site of a 

remittance transfer provider where a sender 

may conduct a remittance transfer or assert 

an error for a remittance transfer. The 

location need not exclusively offer 

remittance transfer services. For example, if 

an agent of a remittance transfer provider is 

located in a grocery store, the grocery store 

is considered an office for purposes of 

§ 1005.31(g)(1). Because a consumer must be 

located in a State in order to be considered 

a ‘‘sender’’ under § 1005.30(g), a Web site is 

not an office for purposes of § 1005.31(g)(1), 

even if the Web site can be accessed by 

consumers that are located in the United 

States, unless a sender may conduct a 

remittance transfer on the Web site or may 

assert an error for a remittance transfer on the 

Web site. 

4. At the office. Any advertisement, 

solicitation, or marketing is considered to be 

made at the office in which a sender 

conducts a transaction or asserts an error if 

such advertisement, solicitation, or 

marketing is posted, provided, or made: at a 

physical office of a remittance transfer 

provider; on a Web site of a remittance 

transfer provider that may be used by senders 

to conduct remittance transfers or assert 

errors; during a telephone call with a 

remittance transfer provider that may be used 

by senders to conduct remittance transfers or 

assert errors; or via mobile application or text 

message by a remittance transfer provider if 

the mobile application or text message may 

be used by senders to conduct remittance 

transfers or assert errors. An advertisement, 

solicitation, or marketing that is considered 

to be made at an office does not include 

general advertisements, solicitations, or 

marketing that are not intended to be made 

at a particular office. For example, if an 

advertisement for remittance transfers in 

Chinese appears in a Chinese newspaper that 

is being distributed at a grocery store in 

which the agent of a remittance transfer 

provider is located, such advertisement 

would not be considered to be made at that 

office. For disclosures provided pursuant to 

§ 1005.31, the relevant office is the office in 

which the sender conducts the transaction. 

For disclosures provided pursuant to 

§ 1005.33 for error resolution purposes, the 

relevant office is the office in which the 

sender first asserts the error, not the office 

where the transaction was conducted. 

Section 1005.32—Estimates 

1. Disclosures where estimates can be used. 

Section 1005.32(a) and (b) 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), 

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 (2). 

32(a) Temporary Exception for Insured 

Institutions 

32(a)(1) General 

1. Control. For purposes of this section, an 

insured institution cannot determine exact 

amounts ‘‘for reasons beyond its control’’ 

when a person other than the insured 

institution or with which the insured 

institution has no correspondent relationship 

sets the exchange rate required to be 

disclosed under § 1005.31(b)(1)(iv) or 

imposes a fee required to be disclosed under 


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§ 1005.31(b)(1)(vi). For example, if an insured 

institution has a correspondent relationship 

with a financial institution in another 

country and that correspondent institution 

sets the exchange rate or imposes a fee for 

remittance transfers sent from the insured 

institution to the correspondent institution, 

then the insured institution must determine 

exact amounts for the disclosures required 

under § 1005.31(b)(1)(iv) or (vi) because the 

determination of those amounts are not 

beyond the insured institution’s control. 

2. Examples of scenarios that qualify for 

the temporary exception. The following 

examples illustrate when an insured 

institution cannot determine an exact amount 

‘‘for reasons beyond its control’’ and thus 

would qualify for the temporary exception. 

i. Exchange rate. An insured institution 

cannot determine the exact exchange rate to 

disclose under § 1005.31(b)(1)(iv) for an 

international wire transfer if the insured 

institution does not set the exchange rate, 

and the rate is set when the funds are 

deposited into the recipient’s account by the 

designated recipient’s institution with which 

the insured institution does not have a 

correspondent relationship. The insured 

institution will not know the exchange rate 

that the recipient institution will apply when 

the funds are deposited into the recipient’s 

account. 

ii. Other fees. An insured institution 

cannot determine the exact fees to disclose 

under § 1005.31(b)(1)(vi) if an intermediary 

institution or the designated recipient’s 

institution, with which the insured 

institution does not have a correspondent 

relationship, imposes a transfer or conversion 

fee. 

iii. Other taxes. An insured institution 

cannot determine the exact taxes to disclose 

under § 1005.31(b)(1)(vi) if the insured 

institution cannot determine the applicable 

exchange rate or fees as described in 

paragraphs i. and ii. above, and the recipient 

country imposes a tax that is a percentage of 

the amount transferred to the designated 

recipient, less any other fees. 

3. Examples of scenarios that do not 

qualify for the temporary exception. The 

following examples illustrate when an 

insured institution can determine exact 

amounts and thus would not qualify for the 

temporary exception. 

i. Exchange rate. An insured institution 

can determine the exact exchange rate 

required to be disclosed under 

§ 1005.31(b)(1)(iv) if it converts the funds 

into the local currency to be received by the 

designated recipient using an exchange rate 

that it sets. The determination of the 

exchange rate is in the insured institution’s 

control even if there is no correspondent 

relationship with an intermediary institution 

in the transmittal route or the designated 

recipient’s institution. 

ii. Other fees. An insured institution can 

determine the exact fees required to be 

disclosed under § 1005.31(b)(1)(vi) if it has 

agreed upon the specific fees with a 

correspondent institution, and this 

correspondent institution is the only 

institution in the transmittal route to the 

designated recipient’s institution, which 

itself does not impose fees. 

iii. Other taxes. An insured institution can 

determine the exact taxes required to be 

disclosed under § 1005.31(b)(1)(vi) if: 

A. The recipient country imposes a tax that 

is a percentage of the amount transferred to 

the designated recipient, less any other fees, 

and the insured institution can determine the 

exact amount of the applicable exchange rate 

and other fees; or 

B. The recipient country imposes a specific 

sum tax that is not tied to the amount 

transferred. 

32(b) Permanent Exception 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)(ii) methods exception if it 

sends a remittance transfer via international 

ACH on terms negotiated between the United 

States government and a private-sector entity 

or entities in the recipient country, under 

which the exchange rate is set by the 

institution acting as the entry point to the 

recipient country’s payments system on the 

next business day. However, a remittance 

transfer provider sending a remittance 

transfer using such a method may qualify for 

the § 1005.32(a) temporary exception. 

iii. A remittance transfer provider would 

not qualify for the § 1005.32(b)(1)(ii) methods 

exception if, for example, it sends a 

remittance transfer via international ACH on 

terms negotiated between the United States 

government and the recipient country’s 

government, under which the exchange rate 

is set by the recipient country’s central bank 

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)(2), a remittance transfer 

provider may provide estimates of the 

amounts to be disclosed under 

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

does not appear on the Bureau’s list, a 

remittance transfer provider may provide 

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

country does not appear on the list published 

by the Bureau. 

32(c) Bases for Estimates 

32(c)(1) Exchange Rate 

1. Most recent exchange rate for qualifying 

international ACH transfers. If the exchange 


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rate for a remittance transfer sent via 

international ACH that qualifies for the 

§ 1005.32(b)(1)(ii) exception is set the 

following business day, the most recent 

exchange rate available for a transfer is the 

exchange rate set for the day that the 

disclosure is provided, i.e. the current 

business day’s exchange rate. 

2. Publicly available. Examples of publicly 

available sources of information containing 

the most recent wholesale exchange rate for 

a currency include U.S. news services, such 

as Bloomberg, the Wall Street Journal, and 

the New York Times; a recipient country’s 

national news services, and a recipient 

country’s central bank or other government 

agency. 

3. Spread. An estimate for disclosing the 

exchange rate based on the most recent 

publicly available wholesale exchange rate 

must also reflect any spread the remittance 

transfer provider typically applies to the 

wholesale exchange rate for remittance 

transfers for a particular currency. 

4. Most recent. For the purposes of 

§ 1005.32(c)(1)(ii) and (iii), if the exchange 

rate with respect to a particular currency is 

published or provided multiple times 

throughout the day because the exchange rate 

fluctuates throughout the day, a remittance 

transfer provider may use any exchange rate 

available on that day to determine the most 

recent exchange rate. 

32(c)(3) Other Fees 

1. Potential transmittal routes. A 

remittance transfer from the sender’s account 

at an insured institution to the designated 

recipient’s institution may take several 

routes, depending on the correspondent 

relationships each institution in the 

transmittal route has with other institutions. 

In providing an estimate of the fees required 

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

pursuant to the § 1005.32(a) temporary 

exception, an insured institution may rely 

upon the representations of the designated 

recipient’s institution and the institutions 

that act as intermediaries in any one of the 

potential transmittal routes that it reasonably 

believes a requested remittance transfer may 

travel. 

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

Recipient Country 

1. Other taxes imposed in a recipient 

country that are a percentage. Section 

1005.32(c)(4) sets forth the basis for 

providing an estimate of only those taxes 

imposed in a recipient country that are a 

percentage of the amount transferred to the 

designated recipient because a remittance 

transfer provider can determine the exact 

amount of other taxes, such as a tax of a 

specific amount imposed without regard to 

the amount of the funds transferred or 

received. However, a remittance transfer 

provider can determine the exact amount of 

other taxes that are a percentage of the 

amount transferred if the provider can 

determine the exchange rate and the exact 

amount of other fees imposed on the 

remittance transfer. 

Section 1005.33—Procedures for Resolving 

Errors 

33(a) Definition of Error 

1. Incorrect amount of currency paid by 

sender. Section 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). Such error may 

be asserted by a sender regardless of the form 

or method of payment provided, including 

when a debit, credit, or prepaid card is used 

to fund the transfer and an excess amount is 

paid. For example, if a remittance transfer 

provider incorrectly charged a sender’s credit 

card account for US$150, and US$120 was 

sent, plus a transfer fee of US$10, the sender 

could assert an error with the remittance 

transfer provider for the incorrect charge 

under § 1005.33(a)(1)(i). 

2. Incorrect amount of currency received— 

coverage. Section 1005.33(a)(1)(iii) covers 

circumstances in which the designated 

recipient receives an amount of currency that 

differs from the amount of currency 

identified on the disclosures provided to the 

sender, except where the disclosure stated an 

estimate of the amount of currency to be 

received in accordance with § 1005.32 and 

the difference results from application of the 

actual exchange rate, fees, and taxes, rather 

than any estimated amounts, or the failure 

was caused by circumstances outside the 

remittance transfer provider’s control. A 

designated recipient may receive an amount 

of currency that differs from the amount of 

currency disclosed, for example, if an 

exchange rate other than the disclosed rate is 

applied to the remittance transfer, or if the 

provider fails to account for fees or taxes that 

may be imposed by the provider or a third 

party before the transfer is picked up by the 

designated recipient or deposited into the 

recipient’s account in the foreign country. 

However, if the provider rounds the 

exchange rate used to calculate the amount 

received consistent with § 1005.31(b)(1)(iv) 

and comment 31(b)(1)(iv)–2 for the disclosed 

rate, there is no error if the designated 

recipient receives an amount of currency that 

results from applying the exchange rate used, 

prior to any rounding of the exchange rate, 

to calculate fees, taxes, or the amount 

received rather than the disclosed rate. 

Section 1005.33(a)(1)(iii) also covers 

circumstances in which the remittance 

transfer provider transmits an amount that 

differs from the amount requested by the 

sender. 

3. Incorrect amount of currency received— 

examples. For purposes of the following 

examples illustrating the error for an 

incorrect amount of currency received under 

§ 1005.33(a)(1)(iii), assume that none of the 

circumstances permitting an estimate under 

§ 1005.32 apply (unless otherwise stated). 

i. A consumer requests to send funds to a 

relative in Mexico to be received in local 

currency. Upon receiving the sender’s 

payment, the remittance transfer provider 

provides a receipt indicating that the amount 

of currency that will be received by the 

designated recipient will be 1180 Mexican 

pesos, after fees and taxes are applied. 

However, when the relative picks up the 

transfer in Mexico a day later, he only 

receives 1150 Mexican pesos because the 

exchange rate applied by the recipient agent 

in Mexico was lower than the exchange rate 

used by the provider, prior to any rounding 

of the exchange rate, to disclose the amount 

of currency to be received by the designated 

recipient on the receipt. Because the 

designated recipient has received less than 

the amount of currency disclosed on the 

receipt, an error has occurred. 

ii. A consumer requests to send funds to 

a relative in Colombia to be received in local 

currency. The remittance transfer provider 

provides the sender a receipt stating an 

amount of currency that will be received by 

the designated recipient, which does not 

reflect additional foreign taxes that will be 

imposed in Colombia on the transfer. 

Because the designated recipient will receive 

less than the amount of currency disclosed 

on the receipt due to the additional foreign 

taxes, an error has occurred. 

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

receipt provided by the remittance transfer 

provider does not reflect additional fees that 

are imposed by the receiving agent in 

Colombia on the transfer. Because the 

designated recipient will receive less than 

the amount of currency disclosed on the 

receipt due to the additional fees, an error 

has occurred. 

iv. A consumer requests to send US$250 to 

a relative in India to a U.S. dollardenominated account held by the relative at 

an Indian bank. Instead of the US$250 

disclosed on the receipt as the amount to be 

sent, the remittance transfer provider sends 

US$200, resulting in a smaller deposit to the 

designated recipient’s account than was 

disclosed as the amount to be received after 

fees and taxes. Because the designated 

recipient received less than the amount of 

currency that was disclosed, an error has 

occurred. 

v. A consumer requests to send US$100 to 

a relative in a foreign country to be received 

in local currency. The remittance transfer 

provider provides the sender a receipt that 

discloses an estimated exchange rate, other 

taxes, and amount of currency that will be 

received due to the law in the foreign country 

requiring that the exchange rate be set by the 

foreign country’s central bank. When the 

relative picks up the remittance transfer, the 

relative receives less currency than the 

estimated amount disclosed to the sender on 

the receipt due to application of the actual 

exchange rate, fees, and taxes, rather than 

any estimated amounts. Because § 1005.32(b) 

permits the remittance transfer provider to 

disclose an estimate of the amount of 

currency to be received, no error has 

occurred unless the estimate was not based 

on an approach set forth under § 1005.32(c). 

4. Incorrect amount of currency received— 

extraordinary circumstances. Under 

§ 1005.33(a)(1)(iv)(B), a remittance transfer 

provider’s failure to deliver or transmit a 

remittance transfer by the disclosed date of 

availability is not an error if such failure was 

caused by extraordinary circumstances 

outside the remittance transfer provider’s 

control that could not have been reasonably 


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6306 Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / Rules and Regulations 

anticipated. Examples of extraordinary 

circumstances outside the remittance transfer 

provider’s control that could not have been 

reasonably anticipated under 

§ 1005.33(a)(1)(iv)(B) include circumstances 

such as war or civil unrest, natural disaster, 

garnishment or attachment of some of the 

funds after the transfer is sent, and 

government actions or restrictions that could 

not have been reasonably anticipated by the 

remittance transfer provider, such as the 

imposition of foreign currency controls or 

foreign taxes unknown at the time the receipt 

or combined disclosure is provided under 

§ 1005.31(b)(2) or (3). 

5. Failure to make funds available by 

disclosed date of availability—coverage. 

Section 1005.33(a)(1)(iv) generally covers 

disputes about the failure to make funds 

available in connection with a remittance 

transfer to a designated recipient by the 

disclosed date of availability. If only a 

portion of the funds were made available by 

the disclosed date of availability, then 

§ 1005.33(a)(1)(iv) does not apply, but 

§ 1005.33(a)(1)(iii) may apply instead. The 

following are examples of errors for failure to 

make funds available by the disclosed date of 

availability (assuming that none of the 

exceptions in § 1005.33(a)(1)(iv)(A), (B), or 

(C) apply). 

i. Late or non-delivery of a remittance 

transfer; 

ii. Delivery of funds to the wrong account; 

iii. The fraudulent pick-up of a remittance 

transfer in a foreign country by a person 

other than the designated recipient; 

iv. The recipient agent or institution’s 

retention of the remittance transfer, instead 

of making the funds available to the 

designated recipient. 

6. Failure to make funds available by 

disclosed date of availability—extraordinary 

circumstances. Under § 1005.33(a)(1)(iv)(A), 

a remittance transfer provider’s failure to 

deliver or transmit a remittance transfer by 

the disclosed date of availability is not an 

error if such failure was caused by 

extraordinary circumstances outside the 

remittance transfer provider’s control that 

could not have been reasonably anticipated. 

Examples of extraordinary circumstances 

outside the remittance transfer provider’s 

control that could not have been reasonably 

anticipated under § 1005.33(a)(1)(iv)(A) 

include circumstances such as war or civil 

unrest, natural disaster, garnishment or 

attachment of funds after the transfer is sent, 

and government actions or restrictions that 

could not have been reasonably anticipated 

by the remittance transfer provider, such as 

the imposition of foreign currency controls. 

7. Recipient-requested changes. Under 

§ 1005.33(a)(2)(iii), a change requested by the 

designated recipient that the remittance 

transfer provider or others involved in the 

remittance transfer decide to accommodate is 

not considered an error. The exception under 

§ 1005.33(a)(2)(iii) is available only if the 

change is made solely because the designated 

recipient requested the change. For example, 

if a sender requests to send US$100 to a 

designated recipient at a designated location, 

but the designated recipient requests the 

amount in a different currency (either at the 

sender-designated location or another 

location requested by the recipient) and the 

remittance transfer provider accommodates 

the recipient’s request, the change does not 

constitute an error. 

8. Change from disclosure made in reliance 

on sender information. Under the 

commentary accompanying § 1005.31, the 

remittance transfer provider may rely on the 

sender’s representations in making certain 

disclosures. See, e.g. comments 31(b)(1)(iv)– 

1, 31(b)(1)(vi)–1, and 31(b)(1)(vi)–2. For 

example, suppose a sender requests U.S. 

dollars to be deposited into an account of the 

designated recipient and represents that the 

account is U.S. dollar-denominated. If the 

designated recipient’s account is actually 

denominated in local currency and the 

recipient account-holding institution must 

convert the remittance transfer into local 

currency in order to deposit the funds and 

complete the transfer, the change in currency 

does not constitute an error pursuant to 

§ 1005.33(a)(2)(iv). Similarly, if the 

remittance transfer provider relies on the 

sender’s representations regarding variables 

that affect the amount of taxes imposed by a 

person other than the provider for purposes 

of determining these taxes, the change in the 

amount of currency the designated recipient 

actually receives due to the taxes actually 

imposed does not constitute an error 

pursuant to § 1005.33(a)(2)(iv). 

33(b) Notice of Error From Sender 

1. Person asserting or discovering error. 

The error resolution procedures of this 

section apply only when a notice of error is 

received from the sender, and not when a 

notice of error is received from the 

designated recipient or when the remittance 

transfer provider itself discovers and corrects 

an error. 

2. Content of error notice. The notice of 

error is effective so long as the remittance 

transfer provider is able to identify the 

elements in § 1005.33(b)(1)(ii). For example, 

the sender could provide the confirmation 

number or code that would be used by the 

designated recipient to pick up the transfer, 

or other identification number or code 

supplied by the remittance transfer provider 

in connection with the transfer, if such 

number or code is sufficient for the 

remittance transfer provider to identify the 

sender (and contact information), designated 

recipient, and the transfer in question. For an 

account-based remittance transfer, the notice 

of error is effective even if it does not contain 

the sender’s account number, so long as the 

remittance transfer provider is able to 

identify the account and the transfer in 

question. 

3. Address on notice of error. A remittance 

transfer provider may request, or a sender 

may provide, the sender’s or designated 

recipient’s email address, as applicable, 

instead of a physical address, on a notice of 

error. 

4. Effect of late notice. A remittance 

transfer provider is not required to comply 

with the requirements of this section for any 

notice of error from a sender that is received 

by the provider more than 180 days from the 

disclosed date of availability of the 

remittance transfer to which the notice of 

error applies or, if applicable, more than 60 

days after a provider sent documentation, 

additional information, or clarification 

requested by the sender, provided such date 

is later than 180 days after the disclosed date 

of availability. 

5. Notice of error provided to agent. A 

notice of error provided by a sender to an 

agent of the remittance transfer provider is 

deemed to be received by the provider under 

§ 1005.33(b)(1)(i) when received by the agent. 

6. Consumer notice of error resolution 

rights. Section 1005.31 requires a remittance 

transfer provider to include an abbreviated 

notice of the consumer’s error resolution 

rights on the receipt or combined notice 

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

addition, the remittance transfer provider 

must make available to a sender upon 

request, a notice providing a full description 

of the sender’s error resolution rights, using 

language set forth in Appendix A of this part 

(Model Form A–36) or substantially similar 

language. 

33(c) Time Limits and Extent of Investigation 

1. Notice to sender of finding of error. If the 

remittance transfer provider determines 

during its investigation that an error occurred 

as described by the sender, the remittance 

provider may inform the sender of its 

findings either orally or in writing. However, 

if the provider determines that no error or a 

different error occurred, the provider must 

provide a written explanation of its findings 

under § 1005.33(d)(1). 

2. Incorrect or insufficient information 

provided for transfer. Under 

§ 1005.33(c)(2)(ii)(A)(2), if a remittance 

transfer provider’s failure to make funds in 

connection with a remittance transfer 

available to a designated recipient by the 

disclosed date of availability occurred 

because the sender provided incorrect or 

insufficient information in connection with 

the transfer, such as by erroneously 

identifying the designated recipient or the 

recipient’s account number or by providing 

insufficient information to enable the entity 

distributing the funds to identify the correct 

designated recipient, the sender may choose 

to have the provider make funds available to 

the designated recipient and third party fees 

may be imposed for resending the remittance 

transfer with the corrected or additional 

information. The remittance transfer provider 

may not require the sender to provide the 

principal transfer amount again. Third party 

fees that were not incurred during the first 

unsuccessful remittance transfer attempt may 

not be imposed again for resending the 

remittance transfer. A request to resend is a 

request for a remittance transfer. Therefore, a 

provider must provide the disclosures 

required by § 1005.31 for a resend of a 

remittance transfer, and the provider must 

use the exchange rate it is using for such 

transfers on the date of the resend if funds 

were not already exchanged in the first 

unsuccessful remittance transfer attempt. A 

sender providing incorrect or insufficient 

information does not include a provider’s 

miscommunication of information necessary 

for the designated recipient to pick up the 

transfer. For example, a sender is not 

considered to have provided incorrect or 

insufficient information if the provider 


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discloses the incorrect location where the 

transfer may be picked up or gives the wrong 

confirmation number/code for the transfer. 

The following examples illustrate these 

concepts. 

i. A sender instructs a remittance transfer 

provider to send US$100 to a designated 

recipient in local currency, for which the 

remittance transfer provider charges a 

transfer fee of US$10, and the sender 

provided incorrect or insufficient 

information that resulted in non-delivery of 

the remittance transfer as requested. If the 

sender chooses the remedy to have the 

remittance transfer provider make the funds 

available to the designated recipient pursuant 

to § 1005.33(c)(2)(ii)(A)(2) and provides the 

corrected or additional information, the 

remittance transfer provider may not require 

the sender to provide another US$100 to 

send to the designated recipient or charge the 

sender the US$10 transfer fee to resend the 

remittance transfer with the corrected or 

additional information. If the funds were not 

already exchanged into the local currency 

during the first unsuccessful remittance 

transfer attempt, the provider must use the 

exchange rate it is using for such transfers on 

the date of the resend. 

ii. A sender instructs a remittance transfer 

provider to send US$100 to a designated 

recipient in a foreign country, for which a 

remittance transfer provider charges a 

transfer fee of US$10 and an intermediary 

institution charges a lifting fee of US$5, such 

that the designated recipient is expected to 

receive only US$95, as indicated in the 

receipt. If the sender provided incorrect or 

insufficient information that resulted in nondelivery of the remittance transfer as 

requested, an error has occurred. If the 

sender chooses the remedy to have the 

remittance transfer provider make the funds 

available to the designated recipient pursuant 

to § 1005.33(c)(2)(ii)(A)(2) and provides the 

corrected or additional information, the 

remittance transfer provider may not charge 

another transfer fee of US$10 to send the 

remittance transfer again with the corrected 

or additional information necessary to 

complete the transfer. If the intermediary 

institution charged a lifting fee of US$5 in 

the first unsuccessful remittance transfer 

attempt, the sender may choose to provide an 

additional amount to offset the US$5 lifting 

fee deducted in the first unsuccessful 

remittance transfer attempt and ensure that 

the designated recipient receives US$95 or 

may choose to resend the US$95 amount 

with the understanding that another US$5 fee 

will be deducted by the intermediary 

institution, as indicated in the receipt. 

Otherwise, if the intermediary institution did 

not charge a US$5 lifting fee in the first 

unsuccessful remittance transfer attempt, the 

provider must resend the original $100 

transfer amount, and a US$5 lifting fee may 

be imposed by the intermediary institution, 

as indicated in the receipt. 

3. Designation of requested remedy. Under 

§ 1005.33(c)(2), the sender may choose to 

obtain a refund of the amount of funds that 

was not properly transmitted or delivered to 

the designated recipient or request redelivery 

of the amount appropriate to correct the error 

at no additional cost. Upon receiving the 

sender’s request, the remittance transfer 

provider shall correct the error within one 

business day, or as soon as reasonably 

practicable, applying the same exchange rate, 

fees, and taxes stated in the disclosure 

provided under § 1005.31(b)(2) or (3), if the 

sender requests delivery of the amount 

appropriate to correct the error. The 

remittance transfer provider may also request 

that the sender indicate the preferred remedy 

at the time the sender provides notice of the 

error. However, if the sender does not 

indicate the desired remedy at the time of 

providing notice of error, the remittance 

transfer provider must notify the sender of 

any available remedies in the report provided 

under § 1005.33(c)(1) if the provider 

determines an error occurred. 

4. Default remedy. The provider may set a 

default remedy that the remittance transfer 

provider will provide if the sender does not 

designate a remedy within a reasonable time 

after the sender receives the report provided 

under § 1005.33(c)(1). A provider that 

permits a sender to designate a remedy 

within 10 days after the provider has sent the 

report provided under § 1005.33(c)(1) before 

imposing the default remedy is deemed to 

have provided the sender with a reasonable 

time to designate a remedy. In the case a 

default remedy is provided, the remittance 

transfer provider must correct the error 

within one business day, or as soon as 

reasonably practicable, after the reasonable 

time for the sender to designate the remedy 

has passed, consistent with § 1005.33(c)(2). 

5. Amount appropriate to resolve the error. 

For purposes of the remedies set forth in 

§ 1005.33(c)(2)(i)(A), (c)(2)(i)(B), 

(c)(2)(ii)(A)(1), and (c)(2)(i)(A)(2) the amount 

appropriate to resolve the error is the specific 

amount of transferred funds that should have 

been received if the remittance transfer had 

been effected without error. The amount 

appropriate to resolve the error does not 

include consequential damages. 

6. Form of refund. For a refund provided 

under § 1005.33(c)(2)(i)(A), (c)(2)(ii)(A)(1), or 

(c)(2)(ii)(B), a remittance transfer provider 

may generally, at its discretion, issue a 

refund either in cash or in the same form of 

payment that was initially provided by the 

sender for the remittance transfer. For 

example, if the sender originally provided a 

credit card as payment for the transfer, the 

remittance transfer provider may issue a 

credit to the sender’s credit card account in 

the appropriate amount. However, if a sender 

initially provided cash for the remittance 

transfer, a provider may issue a refund by 

check. For example, if the sender originally 

provided cash as payment for the transfer, 

the provider may mail a check to the sender 

in the amount of the payment. 

7. Remedies for incorrect amount paid. If 

an error under § 1005.33(a)(1)(i) occurred, the 

sender may request the remittance transfer 

provider refund the amount necessary to 

resolve the error under § 1005.33(c)(2)(i)(A) 

or that the remittance transfer provider make 

the amount necessary to resolve the error 

available to the designated recipient at no 

additional cost under § 1005.33(c)(2)(i)(B). 

8. Correction of an error if funds not 

available by disclosed date. If the remittance 

transfer provider determines an error of 

failure to make funds available by the 

disclosed date occurred under 

§ 1005.33(a)(1)(iv), it must correct the error in 

accordance with § 1005.33(c)(2)(ii)(A), as 

applicable, and refund any fees imposed for 

the transfer (unless the sender provided 

incorrect or insufficient information to the 

remittance transfer provider in connection 

with the remittance transfer), whether the fee 

was imposed by the provider or a third party 

involved in sending the transfer, such as an 

intermediary bank involved in sending a wire 

transfer or the institution from which the 

funds are picked up in accordance with 

§ 1005.33(c)(2)(ii)(B). 

9. Charges for error resolution. If an error 

occurred, whether as alleged or in a different 

amount or manner, the remittance transfer 

provider may not impose a charge related to 

any aspect of the error resolution process 

(including charges for documentation or 

investigation). 

10. Correction without investigation. A 

remittance transfer provider may correct an 

error, without investigation, in the amount or 

manner alleged by the sender, or otherwise 

determined, to be in error, but must comply 

with all other applicable requirements of 

§ 1005.33. 

33(d) Procedures if Remittance Transfer 

Provider Determines No Error or Different 

Error Occurred 

1. Error different from that alleged. When 

a remittance transfer provider determines 

that an error occurred in a manner or amount 

different from that described by the sender, 

it must comply with the requirements of both 

§ 1005.33(c) and (d), as applicable. The 

provider may give the notice of correction 

and the explanation separately or in a 

combined form. 

33(e) Reassertion of Error 

1. Withdrawal of error; right to reassert. 

The remittance transfer provider has no 

further error resolution responsibilities if the 

sender voluntarily withdraws the notice 

alleging an error. A sender who has 

withdrawn an allegation of error has the right 

to reassert the allegation unless the 

remittance transfer provider had already 

complied with all of the error resolution 

requirements before the allegation was 

withdrawn. The sender must do so, however, 

within the original 180-day period from the 

disclosed date of availability or, if applicable, 

the 60-day period for a notice of error 

asserted pursuant to § 1005.33(b)(2). 

33(f) Relation to Other Laws 

1. Concurrent error obligations. A financial 

institution that is also the remittance transfer 

provider may have error obligations under 

both §§ 1005.11 and 1005.33. For example, if 

a sender asserts an error under § 1005.11 

with a remittance transfer provider that holds 

the sender’s account, and the error is not also 

an error under § 1005.33 (such as the 

omission of an EFT on a periodic statement), 

then the error-resolution provisions of 

§ 1005.11 exclusively apply to the error. 

However, if a sender asserts an error under 

§ 1005.33 with a remittance transfer provider 

that holds the sender’s account, and the error 

is also an error under § 1005.11 (such as 

when the amount the sender requested to be 


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deducted from the sender’s account and sent 

for the remittance transfer differs from the 

amount that was actually deducted from the 

account and sent), then the error-resolution 

provisions of § 1005.33 exclusively apply to 

the error. 

2. Holder in due course. Nothing in this 

section limits a sender’s rights to assert 

claims and defenses against a card issuer 

concerning property or services purchased 

with a credit card under Regulation Z, 12 

CFR 1026.12(c)(1), as applicable. 

3. Assertion of same error with multiple 

parties. If a sender receives credit to correct 

an error of an incorrect amount paid in 

connection with a remittance transfer from 

either the remittance transfer provider or 

account-holding institution (or creditor), and 

subsequently asserts the same error with 

another party, that party has no further 

responsibilities to investigate the error if the 

error has been corrected. For example, 

assume that a sender initially asserts an error 

with a remittance transfer provider with 

respect to a remittance transfer alleging that 

US$130 was debited from his checking 

account, but the sender only requested a 

remittance transfer for US$100, plus a US$10 

transfer fee. If the remittance transfer 

provider refunds US$20 to the sender to 

correct the error, and the sender 

subsequently asserts the same error with his 

account-holding institution, the accountholding institution has no error resolution 

responsibilities under Regulation E because 

the error has been fully corrected. In 

addition, nothing in this section prevents an 

account-holding institution or creditor from 

reversing amounts it has previously credited 

to correct an error if a sender receives more 

than one credit to correct the same error. For 

example, assume that a sender concurrently 

asserts an error with his or her accountholding institution and remittance transfer 

provider for the same error, and the sender 

receives credit from the account-holding 

institution for the error within 45 days of the 

notice of error. If the remittance transfer 

provider subsequently provides a credit of 

the same amount to the sender for the same 

error, the account-holding institution may 

reverse the amounts it had previously 

credited to the consumer’s account, even 

after the 45-day error resolution period under 

§ 1005.11. 

33(g) Error Resolution Standards and 

Recordkeeping Requirements 

1. Record retention requirements. As noted 

in § 1005.31(g)(2), remittance transfer 

providers are subject to the record retention 

requirements under § 1005.13. Therefore, 

remittance transfer providers must retain 

documentation, including documentation 

related to error investigations, for a period of 

not less than two years from the date a notice 

of error was submitted to the provider or 

action was required to be taken by the 

provider. A remittance transfer provider need 

not maintain records of individual 

disclosures that it has provided to each 

sender; it need only retain evidence 

demonstrating that its procedures reasonably 

ensure the sender’s receipt of required 

disclosures and documentation. 

Section 1005.34—Procedures for 

Cancellation and Refund of Remittance 

Transfers 

34(a) Sender Right of Cancellation and 

Refund 

1. Content of cancellation request. A 

request to cancel a remittance transfer is 

valid so long as the remittance transfer 

provider is able to identify the remittance 

transfer in question. For example, the sender 

could provide the confirmation number or 

code that would be used by the designated 

recipient to pick up the transfer or other 

identification number or code supplied by 

the remittance transfer provider in 

connection with the transfer, if such number 

or code is sufficient for the remittance 

transfer provider to identify the transfer. A 

remittance transfer provider may also 

request, or the sender may provide, the 

sender’s email address instead of a physical 

address, so long as the remittance transfer 

provider is able to identify the transfer to 

which the request to cancel applies. 

2. Notice of cancellation right. Section 

1005.31 requires a remittance transfer 

provider to include an abbreviated notice of 

the sender’s right to cancel a remittance 

transfer on the receipt or combined 

disclosure given under § 1005.31(b)(2) or (3). 

In addition, the remittance transfer provider 

must make available to a sender upon 

request, a notice providing a full description 

of the right to cancel a remittance transfer 

using language that is set forth in Model 

Form A–36 of Appendix A to this part or 

substantially similar language. 

3. Thirty-minute cancellation right. A 

remittance transfer provider must comply 

with the cancellation and refund 

requirements of § 1005.34 if the cancellation 

request is received by the provider no later 

than 30 minutes after the sender makes 

payment. The provider may, at its option, 

provide a longer time period for cancellation. 

A provider must provide the 30-minute 

cancellation right regardless of the provider’s 

normal business hours. For example, if an 

agent closes less than 30 minutes after the 

sender makes payment, the provider could 

opt to take cancellation requests through the 

telephone number disclosed on the receipt. 

The provider could also set a cutoff time after 

which the provider will not accept requests 

to send a remittance transfer. For example, a 

financial institution that closes at 5:00 p.m. 

could stop accepting payment for remittance 

transfers after 4:30 p.m. 

4. Cancellation request provided to agent. 

A cancellation request provided by a sender 

to an agent of the remittance transfer 

provider is deemed to be received by the 

provider under § 1005.34(a) when received 

by the agent. 

5. Payment made. For purposes of subpart 

B, payment is made, for example, when a 

sender provides cash to the remittance 

transfer provider or when payment is 

authorized. 

34(b) Time Limits and Refund Requirements 

1. Form of refund. At its discretion, a 

remittance transfer provider generally may 

issue a refund either in cash or in the same 

form of payment that was initially provided 

by the sender for the remittance transfer. For 

example, if the sender originally provided a 

credit card as payment for the transfer, the 

remittance transfer provider may issue a 

credit to the sender’s credit card account in 

the amount of the payment. However, if a 

sender initially provided cash for the 

remittance transfer, a provider may issue a 

refund by check. For example, if the sender 

originally provided cash as payment for the 

transfer, the provider may mail a check to the 

sender in the amount of the payment. 

2. Fees and taxes refunded. If a sender 

provides a timely request to cancel a 

remittance transfer, a remittance transfer 

provider must refund all funds provided by 

the sender in connection with the remittance 

transfer, including any fees and, to the extent 

not prohibited by law, taxes that have been 

imposed for the transfer, whether the fee or 

tax was assessed by the provider or a third 

party, such as an intermediary institution, 

the agent or bank in the recipient country, or 

a State or other governmental body. 

Section 1005.35—Acts of Agents 

1. General. Remittance transfer providers 

must comply with the requirements of 

subpart B, including, but not limited to, 

providing the disclosures set forth in 

§ 1005.31 and providing any remedies as set 

forth in § 1005.33, even if an agent or other 

person performs functions for the remittance 

transfer provider, and regardless of whether 

the provider has an agreement with a third 

party that transfers or otherwise makes funds 

available to a designated recipient. 

Section 1005.36—Transfers Scheduled in 

Advance 

1. Applicability of subpart B. The 

requirements set forth in subpart B apply to 

remittance transfers subject to § 1005.36, to 

the extent that § 1005.36 does not modify 

those requirements. For example, the foreign 

language disclosure requirements in 

§ 1005.31(g) and related commentary 

continue to apply to disclosures provided in 

accordance with § 1005.36(a)(2). 

36(c) Cancellation 

1. Scheduled remittance transfer. Section 

1005.36(c) applies when a remittance transfer 

is scheduled by the sender at least three 

business days before the date of the transfer, 

whether the sender schedules a 

preauthorized remittance transfer or a onetime transfer. A remittance transfer is 

scheduled if it will require no further action 

by the sender to send the transfer after the 

sender requests the transfer. For example, a 

remittance transfer is scheduled at least three 

business days before the date of the transfer, 

and § 1005.36(c) applies, where a sender on 

March 1 requests a remittance transfer 

provider to send a wire transfer to pay a bill 

in a foreign country on March 15, if it will 

require no further action by the sender to 

send the transfer after the sender requests the 

transfer. A remittance transfer is not 

scheduled, and § 1005.36(c) does not apply, 

where a transfer occurs more than three days 

after the date the sender requests the transfer 

solely due to the provider’s processing time. 

The following are examples of when a sender 

has not scheduled a remittance transfer at 

least three business days before the date of 


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the remittance transfer, such that the 

cancellation rule in § 1005.34 applies. 

i. A sender on March 1 requests a 

remittance transfer provider to send a wire 

transfer to pay a bill in a foreign country on 

March 3. 

ii. A sender on March 1 requests that a 

remittance transfer provider send a 

remittance transfer on March 15, but the 

provider requires the sender to confirm the 

request on March 14 in order to send the 

transfer. 

iii. A sender on March 1 requests that a 

remittance transfer provider send an ACH 

transfer, and that transfer is sent on March 

2, but due to the time required for processing, 

funds will not be deducted from the sender’s 

account until March 5. 

2. Cancelled preauthorized remittance 

transfers. For preauthorized remittance 

transfers, the provider must assume the 

request to cancel applies to all future 

preauthorized remittance transfers, unless 

the sender specifically indicates that it 

should apply only to the next scheduled 

remittance transfer. 

3. Concurrent cancellation obligations. A 

financial institution that is also a remittance 

transfer provider may have both stop 

payment obligations under § 1005.10 and 

cancellation obligations under § 1005.36. If a 

sender cancels a remittance transfer under 

§ 1005.36 with a remittance transfer provider 

that holds the sender’s account, and the 

transfer is a preauthorized transfer under 

§ 1005.10, then the cancellation provisions of 

§ 1005.36 exclusively apply. 

Appendix A—Model Disclosure Clauses 

and Forms 

* * * * * 

2. Use of forms. The appendix contains 

model disclosure clauses for optional use by 

financial institutions and remittance transfer 

providers to facilitate compliance with the 

disclosure requirements of sections 

§§ 1005.5(b)(2) and (3), 1005.6(a), 1005.7, 

1005.8(b), 1005.14(b)(1)(ii), 1005.15(d)(1) and 

(2), 1005.18(c)(1) and (2), 1005.31, and 

1005.36. The use of appropriate clauses in 

making disclosures will protect a financial 

institution and a remittance transfer provider 

from liability under sections 916 and 917 of 

the act provided the clauses accurately reflect 

the institution’s EFT services and the 

provider’s remittance transfer services, 

respectively. 

* * * * * 

4. Model forms for remittance transfers. 

The Bureau will not review or approve 

disclosure forms for remittance transfer 

providers. However, this appendix contains 

12 model forms for use in connection with 

remittance transfers. These model forms are 

intended to demonstrate several formats a 

remittance transfer provider may use to 

comply with the requirements of 

§ 1005.31(b). Model Forms A–30 through A– 

32 demonstrate how a provider could 

provide the required disclosures for a 

remittance transfer exchanged into local 

currency. Model Forms A–33 through A–35 

demonstrate how a provider could provide 

the required disclosures for dollar-to-dollar 

remittance transfers. These forms also 

demonstrate disclosure of the required 

content, in accordance with the grouping and 

proximity requirements of § 1005.31(c)(1) 

and (2), in both a register receipt format and 

an 8.5 inch by 11 inch format. Model Form 

A–36 provides long form model error 

resolution and cancellation disclosures 

required by § 1005.31(b)(4), and Model Form 

A–37 provides short form model error 

resolution and cancellation disclosures 

required by § 1005.31(b)(2)(iv) and (vi). 

Model Forms A–38 through A–41 provide 

language for Spanish language disclosures. 

i. The model forms contain information 

that is not required by subpart B, such as a 

confirmation code and the sender’s name and 

contact information. Additional information 

not required by subpart B may be presented 

on the model forms as permitted by 

§ 1005.31(c)(4). Any additional information 

must be presented consistent with a 

remittance transfer provider’s obligation to 

provide required disclosures in a clear and 

conspicuous manner. 

ii. Use of the model forms is optional. A 

remittance transfer provider may change the 

forms by rearranging the format or by making 

modifications to the language of the forms, in 

each case without modifying the substance of 

the disclosures. Any rearrangement or 

modification of the format of the model forms 

must be consistent with the form, grouping, 

proximity, and other requirements of 

§ 1005.31(a) and (c). Providers making 

revisions that do not comply with this 

section will lose the benefit of the safe harbor 

for appropriate use of Model Forms A–30 to 

A–41. 

iii. Permissible changes to the language 

and format of the model forms include, for 

example: 

A. Substituting the information contained 

in the model forms that is intended to 

demonstrate how to complete the 

information in the model forms—such as 

names, addresses, and Web sites; dates; 

numbers; and State-specific contact 

information—with information applicable to 

the remittance transfer. 

B. Eliminating disclosures that are not 

applicable to the transfer, as permitted under 

§ 1005.31(b). 

C. Correcting or updating telephone 

numbers, mailing addresses, or Web site 

addresses that may change over time. 

D. Providing the disclosures on a paper 

size that is different from a register receipt 

and 8.5 inch by 11 inch formats. 

E. Adding a term substantially similar to 

‘‘estimated’’ in close proximity to the 

specified terms in § 1005.31(b)(1) and (2), as 

required under § 1005.31(d). 

F. Providing the disclosures in a foreign 

language, or multiple foreign languages, 

subject to the requirements of § 1005.31(g). 

G. Substituting cancellation language to 

reflect the right to a cancellation made 

pursuant to the requirements of § 1005.36(c). 

iv. Changes to the model forms that are not 

permissible include, for example, adding 

information that is not segregated from the 

required disclosures, other than as permitted 

by § 1005.31(c)(4). 

Dated: January 23, 2012. 

Richard Cordray, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2012–1728 Filed 1–30–12; 11:15 am] 

BILLING CODE 4810–AM–P 


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