Vol. 78 Wednesday, 

No. 99 May 22, 2013 

Part III 

Bureau of Consumer Financial Protection 

12 CFR Part 1005 

Electronic Fund Transfers (Regulation E); Final Rule 


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30662 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

1The Bureau published a technical correction to 

the February Final Rule on July 10, 2012. 77 FR 

40459. For simplicity, that technical correction is 

incorporated into the term ‘‘February Final Rule.’’ 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1005 

[Docket No. CFPB–2012–0050] 

RIN 3170–AA33 

Electronic Fund Transfers (Regulation 

E) 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

amending its regulation which 

implements the Electronic Fund 

Transfer Act, and the official 

interpretation to the regulation. This 

final rule (the 2013 Final Rule) modifies 

the final rules issued by the Bureau in 

February, July, and August 2012 

(collectively the 2012 Final Rule) that 

implement section 1073 of the DoddFrank Wall Street Reform and Consumer 

Protection Act regarding remittance 

transfers. The amendments address 

three specific issues. First, the 2013 

Final Rule modifies the 2012 Final Rule 

to make optional, in certain 

circumstances, the requirement to 

disclose fees imposed by a designated 

recipient’s institution. Second and 

relatedly, the 2013 Final Rule also 

makes optional the requirement to 

disclose taxes collected by a person 

other than the remittance transfer 

provider. In place of these two former 

requirements, the 2013 Final Rule 

requires disclaimers to be added to the 

rule’s disclosures indicating that the 

recipient may receive less than the 

disclosed total due to the fees and taxes 

for which disclosure is now optional. 

Finally, the 2013 Final Rule revises the 

error resolution provisions that apply 

when a remittance transfer is not 

delivered to a designated recipient 

because the sender provided incorrect 

or insufficient information, and, in 

particular, when a sender provides an 

incorrect account number or recipient 

institution identifier that results in the 

transferred funds being deposited in the 

wrong account. 

DATES: This rule is effective October 28, 

2013. The effective date of the rules 

published February 7, 2012 (77 FR 

6194), July 10, 2012 (77 FR 40459), and 

August 20, 2012 (77 FR 50244), which 

were delayed on January 29, 2013 (78 

FR 6025), is October 28, 2013. 

FOR FURTHER INFORMATION CONTACT: Eric 

Goldberg, Ebunoluwa Taiwo or Lauren 

Weldon, Counsels; Division of Research, 

Markets & Regulations, Bureau of 

Consumer Financial Protection, 1700 G 

Street NW., Washington, DC 20552, at 

(202) 435–7700 or CFPB_Remittance

Rule@consumerfinance.gov. Please also 

visit the following Web site for 

additional information: http:// 

www.consumerfinance.gov/regulations/ 

final-remittance-rule-amendmentregulation-e/. 

SUPPLEMENTARY INFORMATION:

I. Summary of the Final Rule 

This final rule (the 2013 Final Rule) 

revises the amendments to Regulation E 

published on February 7, 2012 (77 FR 

6194) (February Final Rule) 1 and 

August 20, 2012 (77 FR 50244) (August 

Final Rule and collectively with the 

February Final Rule, the 2012 Final 

Rule). The 2012 Final Rule, summarized 

below, implements section 1073 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act), 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. 

The 2013 Final Rule amends the 2012 

Final Rule by addressing three specific 

issues. First, the 2013 Final Rule 

modifies the 2012 Final Rule to make 

optional, in certain circumstances, the 

requirement to disclose fees imposed by 

a designated recipient’s institution for 

transfers to the designated recipient’s 

account. Second and relatedly, the 2013 

Final Rule also makes optional the 

requirement to disclose taxes collected 

by a person other than the remittance 

transfer provider. In place of these two 

former requirements, the 2013 Final 

Rule requires providers to include 

disclaimers on the disclosure forms 

provided to senders of remittance 

transfers indicating that the recipient 

may receive less than the disclosed total 

due to certain recipient institution fees 

and taxes collected by a person other 

than the provider. In addition, the 2013 

Final Rule permits providers to disclose 

these fees and taxes, or a reasonable 

estimate of these figures, as part of the 

new required disclaimer. 

The 2013 Final Rule also creates an 

exception from the 2012 Final Rule’s 

error provisions for certain situations in 

which a sender provides an incorrect 

account number or recipient institution 

identifier and that mistake results in the 

transfer being deposited in the account 

of someone other than the designated 

recipient. For this exception to apply, a 

remittance transfer provider must satisfy 

a number of conditions including 

providing notice to the sender prior to 

the transfer that the transfer amount 

could be lost, implementing reasonable 

verification measures to verify the 

accuracy of a recipient institution 

identifier, and making reasonable efforts 

to retrieve the mis-deposited funds. The 

2013 Final Rule also streamlines error 

resolution procedures in other 

situations where a sender’s provision of 

incorrect or incomplete information 

results in an error under the rule. 

Finally, the 2013 Final Rule will go 

into effect on October 28, 2013. 

II. Background 

A. Section 1073 of the Dodd-Frank Act 

Section 1073 of the Dodd-Frank Act 

amended the Electronic Fund Transfer 

Act (EFTA) to create a new 

comprehensive consumer protection 

regime for remittance transfers sent by 

consumers in the United States to 

individuals and businesses in foreign 

countries. For covered transactions sent 

by remittance transfer providers, section 

1073 creates a new EFTA section 919, 

and generally requires: (i) The provision 

of disclosures prior to and at the time 

of payment by the sender for the 

transfer; (ii) cancellation and refund 

rights; (iii) the investigation and remedy 

of errors by providers; and (iv) liability 

standards for providers for the acts of 

their agents. 

B. Types of Remittance Transfers 

As discussed in more detail in the 

February Final Rule, consumers can 

choose among several methods of 

transferring money to foreign countries. 

The various methods of remittance 

transfers can generally be categorized as 

involving either closed network or open 

network systems, although hybrids 

between open and closed networks also 

exist. Consistent with EFTA section 919, 

the 2013 Final Rule generally applies to 

all remittance transfer providers, 

whether transfers are sent through 

closed network or open network 

systems, or some hybrid of the two. 

Closed Networks and Money 

Transmitters 

In a closed network, a principal 

provider offers a service entirely 

through its own operations, or through 

a network of agents or other partners 

that help collect funds in the United 

States and disburse them 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 


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2On January 29, 2013, the Bureau temporarily 

delayed the February 7, 2013 effective date 

(Temporary Delay Rule). 

transfer from end-to-end, including over 

fees and other terms of service. 

In general, closed networks can be 

used to send transfers that can be 

received in a variety of forms. But, they 

are most frequently used to send 

transfers that are not received in 

accounts held by depository institutions 

and credit unions. Additionally, closed 

networks are most frequently used by 

non-depository institutions called 

money transmitters, though depository 

institutions and credit unions may also 

provide (or operate as part of) closed 

networks. Similarly, the Bureau believes 

that many money transmitters operate 

exclusively or primarily through closed 

network systems. 

Open Networks and Wire Transfers 

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. Funds 

may pass from sending institutions 

through intermediary institutions to 

recipient institutions, any of which may 

deduct fees from the principal amount 

or set the exchange rate that applies to 

the transfer, depending on the 

circumstances. Institutions involved in 

open network transfers may learn about 

each other’s practices regarding fees or 

other matters through any direct 

contractual or other relationships that 

do exist, through experience in sending 

wire transfers over time, through 

reference materials, or through 

information provided by the consumer. 

However, at least until the time of the 

February Final Rule, in open networks, 

there has not generally been a uniform 

global method for or practice of 

communication by all intermediary and 

recipient institutions with originating 

entities regarding the fees and exchange 

rates that intermediary or recipient 

institutions might apply to transfers. 

Unlike closed networks, open 

networks are typically used to send 

funds to accounts at depository 

institutions or credit unions. Though 

they may be used by money 

transmitters, open networks are 

primarily used by depository 

institutions, credit unions and brokerdealers for sending money abroad. The 

most common form of open network 

remittance transfer is a wire transfer, a 

certain type of electronically 

transmitted order that directs a 

receiving institution to pay an identified 

beneficiary. Unlike closed network 

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 can 

reach most banks (or other institutions) 

worldwide through national payment 

systems that are connected through 

correspondent and other intermediary 

bank relationships. 

Information on the volume of 

remittance transfers sent via certain 

methods is very limited. However, the 

Bureau believes that closed network 

transactions by money transmitters and 

wire transfers sent by depository 

institutions and credit unions make up 

the great majority of the remittance 

transfer market. Furthermore, the 

Bureau believes that, collectively, 

money transmitters send far more 

remittance transfers each year than 

depository institutions and credit 

unions combined. 

III. Summary of the Rulemaking 

Process 

The Bureau published three rules in 

2012 to implement section 1073 of the 

Dodd-Frank Act. The Bureau then 

published a proposal on December 31, 

2012, which would have modified those 

published rules in three distinct areas. 

77 FR 77188 (the December Proposal). 

These three final rules and the 

December Proposal are summarized 

below. 

A. The 2012 Final Rule 

On May 31, 2011, the Board of 

Governors for the Federal Reserve 

System (Board) first proposed to amend 

Regulation E to implement the 

remittance transfer provisions in section 

1073 of the Dodd-Frank Act. See 76 FR 

29902 (May 23, 2011). Authority to 

implement the new Dodd-Frank Act 

provisions amending the EFTA 

transferred from the Board to the Bureau 

on July 21, 2011. See 12 U.S.C. 

5581(a)(1); 12 U.S.C. 5481(12) (defining 

‘‘enumerated consumer laws’’ to include 

the EFTA). On February 7, 2012, the 

Bureau finalized the Board’s proposal in 

the February Final Rule. On August 20, 

2012, the Bureau published the August 

Final Rule adopting a safe harbor for 

determining which persons are not 

remittance transfer providers subject to 

the February Final Rule because they do 

not provide remittance transfers in the 

normal course of business, and 

modifying several aspects of the 

February Final Rule regarding 

remittance transfers that are scheduled 

before the date of transfer. The 2012 

Final Rule had an effective date of 

February 7, 2013.2

The 2012 Final Rule adopts 

provisions that govern certain electronic 

transfers of funds sent by consumers in 

the United States to designated 

recipients in other countries and, for 

covered transactions, imposes a number 

of requirements on remittance transfer 

providers. In particular, the 2012 Final 

Rule implements disclosure 

requirements in EFTA sections 

919(a)(2)(A) and (B). The 2012 Final 

Rule includes provisions that generally 

require a provider to provide to a sender 

a written pre-payment disclosure 

containing detailed information about 

the transfer requested by the sender, 

specifically including the exchange rate, 

applicable fees and taxes, and the 

amount to be received by the designated 

recipient. In addition to the prepayment disclosure, pursuant to the 

2012 Final Rule, the provider also must 

furnish to a sender a written receipt 

when payment is made for the transfer. 

The receipt must include the 

information provided on the prepayment disclosure, as well as 

additional information such as the date 

of availability of the funds, the 

designated recipient’s contact 

information, and information regarding 

the sender’s error resolution and 

cancellation rights. 

Though the 2012 Final Rule’s 

provisions permit remittance transfer 

providers to provide estimates in three 

specific circumstances, the 2012 Final 

Rule generally requires that disclosures 

state the actual exchange rate that will 

apply to a remittance transfer and the 

actual amount that will be received by 

the designated recipient of a remittance 

transfer. One of the exceptions 

permitting estimates includes a 

temporary exception for certain 

transfers provided by insured 

institutions. Pursuant to this exception, 

if the remittance transfer provider is an 

insured depository institution or credit 

union, the transfer is sent from the 

sender’s account with the institution, 

and the provider cannot determine exact 

amounts for reasons beyond its control, 

the provider can estimate the exchange 

rate, any fees imposed on the remittance 

transfer by a person other than the 

provider, and, in more limited 

circumstances, taxes imposed by a 

person other than the provider. The 

2012 Final Rule also includes two 

permanent exceptions permitting 

estimates, one for transfers to certain 

countries and the other for transfers that 

are scheduled five or more business 

days before the date of transfer. 

As noted above, the EFTA, as 

amended by the Dodd-Frank Act, 

requires the disclosure of the amount to 

be received by the designated recipient. 

Because fees imposed and taxes 

collected on a remittance transfer by 

persons other than the remittance 


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transfer provider can affect the amount 

received by the designated recipient, the 

2012 Final Rule’s provisions require 

that providers take such fees and taxes 

into account when calculating the 

disclosure of the amount to be received 

under § 1005.31(b)(1)(vii), and that such 

fees and taxes be disclosed under 

§ 1005.31(b)(1)(vi). Comment 31(b)(1)–ii 

to the 2012 Final Rule explains that a 

provider must disclose any fees and 

taxes imposed on the remittance transfer 

by a person other than the provider that 

specifically relate to the remittance 

transfer, including fees charged by a 

recipient institution or agent. Foreign 

taxes that must be disclosed include 

regional, provincial, state, or other local 

taxes, as well as taxes imposed by a 

country’s central government. 

In the February Final Rule in response 

to comments received on the Board’s 

proposal, the Bureau noted that 

commenters had argued that fees 

imposed and taxes collected on the 

remittance transfer by a person other 

than the remittance transfer provider 

may not be known at the time the 

sender authorizes the remittance 

transfer and that this lack of knowledge 

could result in the provider disclosing 

misleading information to the sender. 

The Bureau also acknowledged that 

smaller institutions might not have the 

resources to obtain or monitor 

information about foreign tax laws or 

fees charged by unrelated financial 

institutions and that providers might 

not know whether a recipient had 

agreed to pay such fees or how much 

the recipient may have agreed to pay. 

Nevertheless, the Bureau stated that the 

Dodd-Frank Act specifically requires 

providers to disclose the amount to be 

received, and that fees imposed and 

taxes collected on the remittance 

transfer by a person other than the 

provider are a necessary component of 

this amount. The Bureau further stated 

that it was necessary and proper to 

exercise its authority under EFTA 

sections 904(a) and (c) to adopt 

§ 1005.31(b)(1)(vi) to require the 

itemized disclosure of fees and taxes 

imposed on the remittance transfer by 

persons other than the provider to help 

senders understand the calculation of 

the amount received, which would aid 

comparison shopping and the 

identification of errors, and thus 

effectuate the purposes of the EFTA. 

The 2012 Final Rule also implements 

EFTA sections 919(d) and (f), which 

direct the Bureau to promulgate error 

resolution standards and rules regarding 

appropriate cancellation and refund 

policies, as well as standards of liability 

for remittance transfer providers. The 

2012 Final Rule thus defines in 

§ 1005.33 what constitutes an error with 

respect to a remittance transfer, as well 

as what remedies are available when an 

error occurs. Of relevance to the 2013 

Final Rule, the 2012 Final Rule provides 

in §§ 1005.33(a)(1)(iii) and (a)(1)(iv) 

that, subject to specified exceptions, an 

error includes the failure to make 

available to a designated recipient the 

amount of currency stated in the 

disclosure provided to the sender, as 

well as the failure to make funds 

available to a designated recipient by 

the date of availability stated in the 

disclosure. Where the error is the result 

of the sender providing insufficient or 

incorrect information, § 1005.33(c)(2)(ii) 

in the 2012 Final Rule specifies the 

available remedies: The provider must 

either refund the funds provided by the 

sender in connection with the 

remittance transfer (or the amount 

appropriate to correct the error) or 

resend the transfer at no cost to the 

sender, except that the provider may 

collect third-party fees imposed for 

resending the transfer. If the transfer is 

resent, comment 33(c)–2 to the 2012 

Final Rule explains that a request to 

resend is a request for a remittance 

transfer, and thus the provider must 

provide the disclosures required by 

§ 1005.31. Under § 1005.33(c)(2) of the 

2012 Final Rule, even if the provider 

cannot retrieve the funds once they are 

sent, the provider still must provide the 

stated remedies if an error occurred. 

B. The December Proposal 

In the February Final Rule, the Bureau 

stated that it would continue to monitor 

implementation of the new statutory 

and regulatory requirements. The 

Bureau subsequently engaged in 

dialogue with both industry and 

consumer groups regarding 

implementation efforts and compliance 

concerns. Most frequently, industry 

participants expressed concern about 

the costs and compliance challenges to 

remittance transfer providers of: (1) The 

requirement to disclose certain fees 

imposed by recipient institutions on 

remittance transfers; (2) the requirement 

to disclose taxes imposed by a person 

other than the provider, including taxes 

charged by foreign regional, provincial, 

state, or other local governments; and 

(3) the requirement to treat as an error, 

and thus resend or refund a remittance 

transfer, where the failure to deliver a 

transfer to the designated recipient 

occurs because the sender provided an 

incorrect account number to the 

provider. As a result, the Bureau 

proposed to refine these specific aspects 

of the 2012 Final Rule in the December 

Proposal. 

First, the Bureau proposed to exercise 

its exception authority under section 

904(c) of the EFTA to provide additional 

flexibility on how foreign taxes and 

recipient institution fees may be 

disclosed. If a remittance transfer 

provider did not have specific 

knowledge regarding variables that 

affect the amount of foreign taxes 

imposed on the transfer, the December 

Proposal would have permitted a 

provider to rely on a sender’s 

representations regarding these 

variables, as permitted under the 2012 

Final Rule. However, the December 

Proposal would have also permitted 

providers to estimate foreign taxes by 

disclosing the highest possible such tax 

that could be imposed with respect to 

any unknown variable. Similarly, if a 

provider did not have specific 

knowledge regarding variables that 

affect the amount of fees imposed on the 

remittance transfer by a recipient 

institution for receiving a remittance 

transfer in an account, the December 

Proposal would have permitted a 

provider to rely on a sender’s 

representations regarding these 

variables. Separately, the December 

Proposal would have also permitted the 

provider to estimate a fee imposed on 

the remittance transfer by a recipient 

institution for receiving a transfer into 

an account by disclosing the highest 

possible fee with respect to any 

unknown variable, as determined based 

on either fee schedules made available 

by the recipient institution or 

information ascertained from prior 

transfers to the same recipient 

institution. If the provider could not 

obtain such fee schedules or 

information from prior transfers, the 

December Proposal would have allowed 

a provider to rely on other reasonable 

sources of information. 

Second, the Bureau proposed to 

exercise its exception authority under 

section 904(c) of the EFTA to eliminate 

the requirement to disclose foreign taxes 

at the regional, state, provincial and 

local level. Thus, under the December 

Proposal, a remittance transfer 

provider’s obligation to disclose foreign 

taxes would have been limited to taxes 

imposed on the remittance transfer by a 

foreign country’s central government. 

Because the proposed changes regarding 

recipient institution fees and taxes, 

taken together, could have resulted in 

inexact disclosures, the December 

Proposal also solicited comment on 

whether the existing requirement in the 

2012 Final Rule to state that a disclosure 

is ‘‘Estimated’’ when estimates are 

provided under § 1005.32 should be 

extended to scenarios where disclosures 


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3As noted above, the Bureau published the 

Temporary Delay Rule on January 29, 2013, which 

temporarily delayed the February 7, 2013 effective 

date of the 2012 Final Rule. 

4Comments that solely addressed whether the 

Bureau should have delayed the February 7, 2013 

effective date were addressed in the Temporary 

Delay Rule and are not separately addressed herein. 

are not exact due to the proposed 

revisions. 

Third, the December Proposal would 

have revised the error resolution 

provisions that apply when a sender 

provides incorrect or insufficient 

information to the remittance transfer 

provider, and, in particular, when a 

remittance transfer is not delivered to a 

designated recipient because the sender 

provided an incorrect account number 

to the provider and the incorrect 

account number results in the funds 

being deposited in the wrong account. 

Under the December Proposal, in these 

circumstances, where the provider 

could demonstrate that the sender 

provided the incorrect account number 

and the sender had notice that the 

sender could lose the transfer amount, 

the provider would not have been 

required to return or refund misdeposited funds that could not be 

recovered, provided that the provider 

had made reasonable efforts to attempt 

to recover the funds. 

The December Proposal also would 

have revised the existing remedy 

procedures in situations where a sender 

provided incorrect or insufficient 

information, other than an incorrect 

account number, to allow remittance 

transfer providers additional flexibility 

when resending funds at a new 

exchange rate. Under proposed 

§ 1005.33(c)(3), providers would have 

been able to provide oral, streamlined 

disclosures and would not have been 

required to treat resends as entirely new 

remittance transfers. The Bureau also 

proposed to make conforming revisions 

in light of the proposed revisions 

regarding recipient institution fees and 

foreign taxes. 

Finally, the Bureau proposed to 

temporarily delay the effective date of 

the final rule and to extend the final 

rule’s effective date until 90 days after 

this final rule is published.3

C. Overview of Comments and Outreach 

The Bureau received more than 100 

comments on the December Proposal. 

The majority of comments were 

submitted by industry commenters, 

including depository institutions and 

money transmitters that provide 

remittance transfers, and industry trade 

associations. In addition, the Bureau 

received comment letters from 

consumer groups and several 

individuals.4

Most industry commenters supported, 

or did not oppose, the proposed 

additional flexibility regarding the 

disclosure of recipient institution fees. 

However, many of these commenters 

further urged the Bureau to eliminate 

altogether the requirement that 

remittance transfer providers disclose 

recipient institution fees for remittance 

transfers to an account. These 

commenters largely reemphasized and 

expanded upon arguments that 

commenters had asserted prior to the 

publication of the February Final Rule. 

Primarily, that for remittance transfers 

sent through open networks it is very 

difficult, and in some cases impossible, 

for providers to know or even to 

estimate—with any degree of accuracy— 

the fees imposed on remittance transfers 

by recipient institutions. Commenters 

also argued that for wire transfers sent 

over the open network, the number of 

recipient institutions that might receive 

transfers, and thus assess fees, posed a 

challenge for any one U.S. institution, 

even a large correspondent bank, 

attempting to learn and accurately 

disclose these fees. Relatedly, 

commenters noted that existing systems 

for sending wire transfers in open 

networks generally do not provide a 

sending institution any insight into the 

fees charged by the recipient institution. 

Some of these commenters contended 

that Congress did not intend to require 

the disclosure of recipient institution 

fees. 

In addition, industry commenters 

argued that the fees charged by recipient 

institutions for remittance transfers to 

an account are already transparent to 

the recipient (because the recipient 

typically has a preexisting relationship 

with the recipient institution), do not 

add transparency that benefits senders 

in any meaningful way, and may result 

in overpayment by the sender 

(particularly to the extent that the 

December Proposal permits estimates of 

the highest possible fee). These 

commenters also expressed concern that 

the additional flexibility proposed by 

the Bureau would not substantially 

reduce the burdens of compliance with 

the fee disclosure provisions because it 

would be difficult for remittance 

transfer providers to locate the materials 

needed—such as data from prior 

transactions, fee schedules, or industry 

surveys—to provide estimates of 

recipient institution fees under the 

proposed provisions. Relatedly, many 

industry commenters argued that the 

effort needed to compile this 

information would be of relatively little 

value to senders of remittance transfers 

when contrasted with the increased cost 

of providing the disclosures. 

Consumer groups expressed differing 

views regarding the Bureau’s proposal 

with respect to the disclosure of 

recipient institution fees. Some argued 

that senders of remittance transfers 

would be better served by disclosures 

that inform them only that recipient 

institutions may charge fees rather than 

with disclosures containing estimates of 

the fees. Others argued that Congress 

had intended for remittance transfer 

providers to arrange with recipient 

institutions to secure the information 

necessary to disclosure the relevant fee 

information and therefore maintained 

that the Bureau should make the 

proposed estimation provisions 

temporary in nature to allow and 

encourage providers to develop 

databases containing information that 

would eventually permit accurate 

disclosures of all fees imposed on 

remittance transfers, including recipient 

institutions fees. 

Comments received regarding the 

proposed adjustments to the disclosure 

of foreign taxes generally mirrored the 

comments received regarding recipient 

institution fees. Again, while industry 

commenters generally stated that they 

appreciated the Bureau’s proposal to 

eliminate the requirement to disclose 

subnational taxes as well as increase 

remittance transfer providers’ flexibility 

to estimate other applicable foreign 

taxes, most industry commenters also 

urged the Bureau to eliminate altogether 

the requirement to disclose taxes 

collected by a person other than the 

provider. Consumer groups expressed 

differing views as to whether the Bureau 

should adopt the proposed revisions. 

Based on the perceived difficulty of 

knowing foreign taxes, some consumer 

group commenters supported the 

proposed flexibility with respect to the 

disclosure of foreign taxes in general 

and the elimination of the requirement 

to disclose subnational taxes in 

particular and they also emphasized the 

difficulty of providing tax disclosures. 

Others commenters urged that the 

Bureau should maintain the 

requirement that providers disclose all 

taxes imposed on a remittance transfer 

by a person other than the provider 

because doing so is the only way for 

senders to know precisely the amount 

that designated recipients will receive. 

With respect to the Bureau’s proposal 

to create an exception to the definition 

of error in the 2012 Final Rule, industry 

commenters uniformly supported the 

proposed change. Commenters repeated 

much of the reasoning put forth by the 

Bureau in the December Proposal—that 


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in many instances remittance transfer 

providers are unable to verify the 

accuracy of account numbers and that 

providers should not have to bear the 

cost of a lost transfer. Commenters 

reiterated the fear that unscrupulous 

senders would abuse the 2012 Final 

Rule’s remedy provisions for their own 

benefit, and that the attendant risk of 

loss could be significant enough that 

many providers might either exit the 

remittance transfer business or severely 

curtail their offerings. In addition, many 

industry commenters requested that the 

Bureau expand the proposed exception 

to the definition of the term error to 

include all mistakes in information 

provided by senders that could lead to 

an error under the rule, rather than just 

incorrect account numbers. 

Consumer group commenters were 

divided on whether the Bureau should 

adopt the proposed exception to the 

definition of error. Two consumer 

groups argued that the proposed 

exception would properly calibrate the 

incentives for remittance transfer 

providers to prevent errors. These 

groups also agreed that remittance 

transfer providers should not have to 

bear the loss of a missing transfer when 

funds cannot be retrieved due to an 

error by the sender. Other consumer 

group commenters urged the Bureau not 

to adopt the proposed changes to the 

definition of the term error on the 

grounds that they are unnecessary 

because of existing error resolution 

procedures in subpart A of Regulation E, 

harmful to consumers who can ill afford 

to bear the loss of a missing transfer, 

and contrary to the intent of Congress. 

In addition to the comments received 

on the December Proposal, the Bureau 

staff conducted outreach with various 

parties about the issues raised by the 

December Proposal or raised in 

comments. Records of these outreach 

conversations are reflected in ex parte 

submissions included in the rulemaking 

record (accessible by searching by the 

docket number associated with this final 

rule at www.regulations.gov). 

IV. Legal Authority 

Section 1073 of the Dodd-Frank Act 

created a new section 919 of the EFTA 

that requires remittance transfer 

providers to provide disclosures to 

senders of remittance transfers, 

pursuant to rules prescribed by the 

Bureau. In particular, providers must 

give a sender a written pre-payment 

disclosure containing specified 

information applicable to the sender’s 

remittance transfer, including the 

amount to be received by the designated 

recipient. The provider must also 

provide to the sender a written receipt 

that includes the information provided 

on the pre-payment disclosure, as well 

as additional specified information. 

EFTA section 919(a). 

In addition, EFTA section 919(d) 

provides for specific error resolution 

procedures and directs the Bureau to 

promulgate rules regarding appropriate 

cancellation and refund policies. Except 

as described below, the final rule is 

issued under the authority provided to 

the Bureau in EFTA section 919, and as 

more specifically described in this 

SUPPLEMENTARY INFORMATION. 

In addition to the Dodd-Frank Act’s 

statutory mandates, EFTA section 904(a) 

authorizes the Bureau to prescribe 

regulations necessary to carry out the 

purposes of the title. The express 

purposes of the EFTA, as amended by 

the Dodd-Frank Act, are to establish 

‘‘the rights, liabilities, and 

responsibilities of participants in 

electronic fund and remittance transfer 

systems’’ and to provide ‘‘individual 

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

EFTA section 904(c) further provides 

that regulations prescribed by the 

Bureau may contain any classifications, 

differentiations, or other provisions, and 

may provide for such adjustments or 

exceptions for any class of electronic 

fund transfers or remittance transfers 

that the Bureau deems necessary or 

proper to effectuate the purposes of the 

title, to prevent circumvention or 

evasion, or to facilitate compliance. As 

described in more detail below, certain 

provisions of the 2013 Final Rule are 

adopted pursuant to the Bureau’s 

authority under EFTA sections 904 (a) 

and (c). 

V. Section-by-Section Analysis of the 

Final Rule 

Section 1005.30 Remittance Transfer 

Definitions 

Section 1005.30 incorporates certain 

definitions applicable to the remittance 

transfer provisions in subpart B of 

Regulation E. Under the 2012 Final 

Rule, the introductory language in 

§ 1005.30 states that ‘‘for purposes of 

this subpart, the following definitions 

apply.’’ The Bureau is revising in the 

2013 Final Rule this introductory 

language to clarify that, except as 

otherwise provided, for purposes of 

subpart B of Regulation E, the 

definitions in § 1005.30 apply. 

30(c) Designated Recipient 

Under the 2012 Final Rule, the term 

‘‘designated recipient’’ is defined to 

mean any person specified by the 

sender as the authorized recipient of a 

remittance transfer to be received at a 

location in a foreign country. Section 

1005.30(c). Comment 30(c)–1 further 

clarifies that a designated recipient can 

be either a natural person or an 

organization, such as a corporation. See 

§ 1005.2(j) (definition of person). 

Relatedly, § 1005.31(b)(2)(iii) requires a 

remittance transfer provider to disclose 

to a sender the name of the designated 

recipient. Thus, the provider must 

ascertain this name from the sender at 

or before the receipt or combined 

disclosure is provided to the sender. 

As discussed below in the section-bysection analysis of § 1005.33(a)(1)(iv), 

the Bureau is adopting certain revisions 

to 2012 Final Rule’s error resolution 

provisions in § 1005.33 where a transfer 

is delivered to someone other than the 

designated recipient. In particular, 

§ 1005.33(a)(1)(iv)(D) creates a new 

exception to the definition of error in 

§ 1005.33(a)(1)(iv) that applies when a 

sender provides an incorrect account 

number or recipient institution 

identifier, and the conditions in 

§ 1005.33(h) are met. Based on 

comments received regarding these 

proposed changes, and, in particular, 

concerning the specific mistakes by a 

sender that might result in an error 

under the 2012 Final Rule, the Bureau 

believes that it would be useful to 

provide further clarity on how the 

designated recipient is determined for 

purposes of determining whether an 

error has occurred or the new exception 

under § 1005.33(a)(1)(iv) applies. In 

particular, the Bureau believes it 

necessary to address situations in which 

the transfer is delivered to someone 

other than the designated recipient 

named by the sender at the time of the 

transfer. Therefore, the Bureau is 

clarifying in comment 30(c)–1 that the 

designated recipient is identified by the 

name of the person stated on the 

disclosure provided pursuant to 

§ 1005.31(b)(1)(iii). 

30(h) Third-Party Fees 

As discussed in detail below in the 

section-by-section analysis of § 1005.31, 

the Bureau is eliminating the 

requirement to disclose certain recipient 

institution fees and to include such fees 

in the calculation of the disclosed 

amount to be received by the designated 

recipient. In order to differentiate 

between fees that must be disclosed and 

included in the calculation of the 

amount to be received and those that are 

no longer required to be disclosed and 

included in such calculation, the 

Bureau is adopting definitions under 

§ 1005.30(h) for covered third-party fees, 

required to be calculated and disclosed 

under subpart B of Regulation E, and 

non-covered third-party fees, which are 

not required to be calculated and 


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disclosed. Section 1005.30(h)(1) defines 

the term ‘‘covered third-party fees’’ to 

mean any fee that is imposed on the 

remittance transfer by a person other 

than the remittance transfer provider, 

except for non-covered third-party fees 

as described in § 1005.30(h)(2). Section 

1005.30(h)(2) defines the term ‘‘noncovered third-party fees’’ to mean any 

fees imposed by the designated 

recipient’s institution for receiving a 

transfer into an account, except if the 

institution acts as an agent of the 

remittance transfer provider. The 

rationale underlying the distinctions 

made in these definitions is discussed 

further below in the discussion of 

§ 1005.31(b)(1)(vi). 

The 2013 Final Rule adds new 

commentary to 30(h) to explain the 

scope of these fees. Drawing from 

applicable examples of fees imposed by 

a person other than the remittance 

transfer provider that were in comment 

31(b)(1)–1.ii in the 2012 Final Rule, as 

well as proposed comments 31(b)(1)–iii 

and –iv which would have provided 

additional clarification on how to 

disclose recipient institution fees, 

comment 30(h)–1 explains that fees 

imposed on the remittance transfer by a 

person other than the provider include 

only those fees that are charged to the 

designated recipient and are specifically 

related to the remittance transfer. 

Comment 30(h)–1 additionally 

provides examples of fees that are or are 

not specifically related to the remittance 

transfer. 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 are not fees 

imposed on the remittance transfer 

because these charges are not 

specifically related to the remittance 

transfer. Comment 30(h)–1 further states 

that account fees are also not 

specifically related to a remittance 

transfer if such fees are merely assessed 

based on general account activity and 

not for receiving transfers. Comment 

30(h)–1 additionally clarifies that fees 

that banks charge one another for 

handling a remittance transfer or other 

fees that do not affect the total amount 

that will be received by the designated 

recipient are not fees imposed on the 

remittance transfer. Comment 30(h)–1 

also clarifies that fees that specifically 

relate to a remittance transfer may be 

structured on a flat per-transaction 

basis, or may be conditioned on other 

factors (such as account status or the 

quantity of remittance transfers 

received) in addition to the remittance 

transfer itself. 

In addition, the 2013 Final Rule adds 

new commentary to explain the 

difference between covered and noncovered third-party fees. Comment 

30(h)–2.i explains that under 

§ 1005.30(h)(1), a covered third-party fee 

means any fee that is imposed on the 

remittance transfer by a person other 

than the remittance transfer provider 

including fees imposed by a designated 

recipient’s institution for receiving a 

transfer into an account where such 

institution acts as an agent of the 

provider for the remittance transfer. As 

noted above, the rationale for this 

distinction is discussed further below in 

the section-by-section analysis of 

§ 1005.31(b)(1)(vi). Comment 30(h)–2.ii 

provides examples of covered thirdparty fees including fees imposed on a 

remittance transfer by intermediary 

institutions in connection with a wire 

transfer and fees imposed on a 

remittance transfer by an agent of the 

provider at pick-up for receiving the 

transfer. 

With respect to non-covered thirdparty fees, comment 30(h)–3 explains 

that a non-covered third-party fee means 

any fee imposed by the designated 

recipient’s institution for receiving a 

transfer into an account, unless the 

institution is acting as an agent of the 

remittance transfer provider. It further 

provides as an example that a fee 

imposed by the designated recipient’s 

institution for receiving an incoming 

transfer could be a non-covered thirdparty fee provided such institution is 

not acting as the agent of the provider. 

In addition, comment 30(h)–3 explains 

that designated recipient’s account in 

§ 1005.30(h)(2) refers only to an asset 

account, regardless of whether it is a 

consumer asset account, established for 

any purpose and held by a bank, savings 

association, credit union, or equivalent 

institution. It does not, however, 

include a credit card, prepaid card, or 

a virtual account held by an Internetbased or mobile telephone company that 

is not a bank, savings association, credit 

union or equivalent institution. The 

rationale for this interpretation is also 

discussed further below in the sectionby-section analysis of 

§ 1005.31(b)(1)(vi). 

Section 1005.31 Disclosures 

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

require a remittance transfer provider to 

disclose, among other things, the 

amount to be received by the designated 

recipient in the currency in which it 

will be received. In the 2012 Final Rule 

under § 1005.31, the Bureau set forth the 

disclosure requirements for providers, 

including that providers disclose fees 

and taxes imposed by a person other 

than the provider. Pursuant to EFTA 

section 919(a)(4)(A), the Bureau adopted 

an exception in § 1005.32(a) to provide 

that for certain 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. 

As noted in the December Proposal, 

after the Bureau issued the February 

Final Rule, industry participants 

continued to express concerns 

previously raised in response to the 

Board’s proposed rule to implement 

EFTA section 919. The concerns 

regarded the feasibility of disclosing 

fees imposed by a designated recipient’s 

institution. 

For the subset of transfers sent over 

the open network, industry participants 

stated that where a designated 

recipient’s institution charges that 

recipient fees for receiving a transfer 

into an account, the remittance transfer 

provider would not typically know 

whether the recipient had agreed to pay 

such fees or how much the recipient 

had agreed to pay. Some industry 

participants also requested guidance on 

whether and how to disclose recipient 

institution fees that can vary based on 

the recipient’s status with the 

institution, quantity of transfers 

received, or other variables that are not 

easily knowable by the sender or the 

provider. 

Separately, after the release of the 

February 2012 Rule, industry expressed 

concern about the disclosure of foreign 

taxes. Industry participants argued first 

that it is significantly more burdensome 

to research and disclose subnational 

taxes, i.e., taxes imposed by regional, 

provincial, state, and other local 

governments than it is to research and 

disclose those taxes imposed by a 

country’s central government because 

there are substantially more 

jurisdictions that could impose these 

subnational taxes. Second, industry 

participants suggested that the guidance 

in the 2012 Final Rule under comment 

31(b)(1)(vi)–2, which would allow 

remittance transfer providers to rely on 

senders’ representations regarding 

variables that affect the amount of taxes 

imposed by a person other than the 

provider is insufficient where variables 

that influence the amount of taxes 

imposed by a person other than the 

provider are not easily knowable by the 

sender or the provider. 

With respect to both recipient 

institution fees and foreign taxes, 

industry stated that, to make the 

appropriate calculations and 

disclosures, remittance transfer 


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providers might need to ask numerous 

questions of senders that senders might 

not understand or might not be able to 

answer. With respect to fees, industry 

also stated that the calculations required 

to determine and disclose fees might 

vary with respect to each recipient 

institution because each of these 

institutions might have unique fee 

schedules that applied to particular 

accounts or different ways of imposing 

fees on remittance transfers. 

In response to these comments, in the 

December Proposal, the Bureau 

proposed to provide additional 

flexibility and guidance regarding the 

calculation and disclosure of fees 

imposed by a designated recipient’s 

institution for receiving a transfer into 

an account and taxes imposed by a 

person other than the remittance 

transfer provider. The Bureau also 

proposed to eliminate the requirement 

to disclose regional, provincial, state, 

and other local foreign taxes and to 

include this amount in the disclosed 

amount received by the designated 

recipient. The Bureau sought comment 

on whether these proposed changes 

achieved the goals stated in the 

December Proposal, or whether the 

existing rules or another alternative 

were preferable. 

The majority of comments on the 

proposed changes regarding recipient 

institution fee and tax disclosures came 

from industry participants, including 

large banks, community banks, credit 

unions, non-depository institutions, and 

trade associations. These commenters 

stated that they appreciated the 

Bureau’s attempts to facilitate 

compliance, particularly with respect to 

the proposal to eliminate the required 

disclosure of subnational taxes. 

However, many industry commenters 

argued that the proposed changes did 

not go far enough to ease compliance 

burden. These industry commenters 

asserted that the proposed flexibility 

would not effectively mitigate the 

difficulty of researching the information 

needed to provide the recipient 

institution fee and foreign tax 

disclosures to senders. Further, these 

industry commenters also expressed 

concern that the proposed estimation 

methods could increase consumer 

confusion due to discrepancies in the 

estimated amounts disclosed. Moreover, 

industry commenters expressed concern 

that, under the estimation methods 

described in the December Proposal, the 

sender would usually receive a 

disclosure that showed the highest 

possible fee or tax that could apply. As 

a result of this proposed highest 

estimation method, commenters stated 

that the disclosure could result in 

senders increasing the amount of money 

transferred more than was necessary to 

insure that a recipient received the 

expected amount. 

Some consumer groups also expressed 

skepticism about the proposed 

estimation methods for a different 

reason: they believed that any 

additional estimation, beyond that 

permitted in the 2012 Final Rule, would 

be detrimental to senders because they 

would not know the precise amount of 

the transfer that would be received. In 

contrast, other consumer groups 

supported the December Proposal and 

stated that it struck the proper balance 

of facilitating compliance, while also 

providing meaningful information to 

senders. 

The Bureau has carefully weighed 

these concerns and, for the reasons 

explained in detail below, the Bureau 

believes that it is appropriate to exercise 

its exception authority under EFTA 

section 904(c) to eliminate the 

requirement to include certain recipient 

institution fees and taxes collected by a 

person other than the remittance 

transfer provider in the calculation of 

the amount to be received by the 

designated recipient pursuant to 

§ 1005.31(b)(1)(vii). For the same 

reasons, the Bureau is eliminating the 

requirement to disclose these amounts 

under § 1005.31(b)(1)(vi). However, as 

noted above, the Bureau believes that a 

majority of remittance transfers are sent 

through closed networks whereby the 

recipient picks up the transfer from an 

agent. In these cases, all fees imposed 

on the remittance transfer would 

continue to be required to be disclosed. 

See § 1005.30(h)(1). 

For those minority of transfers where 

there may be non-covered third-party 

fees, the 2013 Final Rule requires that 

remittance transfer providers include, as 

applicable, a disclaimer on the prepayment disclosure and receipt, or 

combined disclosure, indicating that the 

recipient may receive less due to fees 

charged by the recipient’s bank. See 

§ 1005.31(b)(1)(viii). Similarly, if there 

may be taxes collected on the remittance 

transfer by a person other than the 

provider, the 2013 Final Rule requires 

that providers include a disclaimer 

indicating that the recipient may receive 

less due to foreign taxes. As part of 

these disclaimers, providers may choose 

to disclose an exact or estimated amount 

of these fees or taxes. See 

§ 1005.32(b)(3). 

As described in detail below, the 2013 

Final Rule’s Appendix and Model 

Forms have been amended to include 

samples of the new disclosures and 

disclaimers. The Bureau is also making 

conforming edits in several other 

provisions in § 1005.31 to reflect the 

changes in the required disclosures. 

These changes are described below. 

31(a) General Form of Disclosures 

31(a)(1) Clear and Conspicuous 

In the 2013 Final Rule, § 1005.31(a)(1) 

provides that disclosures required by 

subpart B of Regulation E must be clear 

and conspicuous. It also states that 

disclosures required by this subpart may 

contain commonly accepted or readily 

understandable abbreviations or 

symbols. 

As is explained in detail below, as 

part of the changes adopted in the 2013 

Final Rule, the Bureau is adding two 

optional disclosures. First, the Bureau is 

making optional the requirement to 

disclose non-covered third-party fees 

and taxes collected on the remittance 

transfer by a person other than the 

remittance transfer provider. See 

§ 1005.33(b)(1)(viii). Second, the Bureau 

is creating an exception to the definition 

of error for certain mistakes made by 

senders. See § 1005.33(a)(1)(iv)(D). If a 

provider wants to take advantage of this 

exception, it must provide a notice 

before the sender authorizes the 

remittance transfer consistent with 

§ 1005.33(h)(3). While these two 

disclosures are optional, the Bureau 

believes it is important to ensure that 

they are made in a manner that is clear 

and conspicuous. Thus, the Bureau is 

amending § 1005.31(a)(1) to state that 

disclosures required by subpart B of 

Regulation E or permitted by 

§ 1005.31(b)(1)(viii) or § 1005.33(h)(3) 

must be clear and conspicuous. 

Disclosures required by subpart B of 

Regulation E or permitted by 

§ 1005.31(b)(1)(viii) or § 1005.33(h)(3) 

may contain commonly accepted or 

readily understandable abbreviations or 

symbols. 

31(b) Disclosure Requirements 

Comment 31(b)–1 Disclosures 

Provided as Applicable 

Comment 31(b)–1 to the 2012 Final 

Rule provides examples of when certain 

disclosures may not be applicable and 

therefore need not be disclosed. Because 

of the changes that the Bureau is making 

with respect to the disclosure of noncovered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the remittance 

transfer provider, the 2013 Final Rule 

makes certain revisions to the 

commentary in the 2012 Final Rule for 

consistency and clarification. Comment 

31(b)–1 clarifies that for disclosures 

required by § 1005.31(b)(1)(i) through 

(vii), a provider may disclose a term and 

state that an amount or item is ‘‘not 


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5The Bureau has made conforming changes 

throughout the 2013 Final Rule. 

applicable,’’ ‘‘N/A,’’ or ‘‘None.’’ 

Consistent with the changes made in the 

2013 Final Rule regarding the disclosure 

of non-covered third-party fees and 

taxes collected on a remittance transfer 

by a person other than the provider, 

comment 31(b)–1 is revised to state that 

if fees are not imposed or taxes are not 

collected 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), the disclosures about 

covered third-party fees generally 

required by § 1005.31(b)(1)(vi), or the 

disclaimers about non-covered thirdparty fees and taxes collected on a 

remittance transfer by a person other 

than the provider generally required by 

§ 1005.31(b)(1)(viii). 

Comment 31(b)–2 Substantially 

Similar Terms, Language, and Notices 

As adopted by the 2012 Final Rule, 

comment 31(b)–2 states that terms used 

on the disclosures under 

§§ 1005.31(b)(1) and (2) may be more 

specific than the terms provided and 

notes, as an example, that 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.’’ In light of the 

changes discussed below regarding the 

disclosure of foreign taxes, the 2013 

Final Rule eliminates as an example the 

disclosure of a Colombian tax. Instead, 

the 2013 Final Rule provides as an 

example that a provider sending funds 

may describe fees imposed by an agent 

at pick-up as ‘‘Pick-up Fees’’ in lieu of 

describing them as ‘‘Other Fees.’’ In 

addition, in light of the new disclosures 

permitted by § 1005.31(b)(1)(viii) and 

§ 1005.33(h)(3), the comment makes 

conforming changes to note that the 

foreign language disclosures required 

under § 1005.31(g) must contain 

accurate translations of the terms, 

language, and notices required by 

§ 1005.31(b) or permitted by 

§ 1005.31(b)(1)(viii) and § 1005.33(h)(3). 

31(b)(1) Pre-Payment Disclosures 

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

Collected by the Provider 

Section 1005.31(b)(1)(ii) of the 2012 

Final Rule 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. Since the 

Board’s initial proposal, commenters 

have argued that because a tax is 

imposed by a government, and not by 

the provider, this provision may be 

confusing. The Bureau agrees that the 

original formulation may be inexact 

insofar as taxes are typically imposed by 

governments, even though they may be 

collected by providers. As a result, for 

clarity, the Bureau is revising this 

language to refer to taxes ‘‘collected’’ by 

the provider. This change is for 

clarification only and is not intended to 

change the meaning of the provision in 

the 2012 Final Rule. Consequently, 

§ 1005.31(b)(1)(ii) of the 2013 Final Rule 

is revised to state, more precisely, that 

a provider must disclose any fees 

imposed and any taxes collected on the 

remittance transfer by the provider.5

Comment 31(b)(1)–1 Fees and Taxes 

Comment 31(b)(1)–1 to the 2012 Final 

Rule provides general guidance on the 

disclosure of fees and taxes. Comment 

31(b)(1)–1.i explains that taxes imposed 

on the remittance transfer by the 

remittance transfer provider, which are 

required to be disclosed under 

§ 1005.31(b)(1)(ii), include taxes 

imposed on the remittance transfer by a 

State or other governmental body, and 

comment 31(b)(1)–1.ii focuses more 

specifically on how to disclose fees and 

taxes imposed on the remittance transfer 

by a person other than the provider as 

required by § 1005.31(b)(1)(vi). 

In the December Proposal, the Bureau 

proposed additional clarification on 

other types of recipient institution fees 

that are, or are not, specifically related 

to a remittance transfer. For 

organizational purposes, the December 

Proposal divided comment 31(b)(1)–1.ii 

into new proposed comment 31(b)(1)– 

1.ii through –1.v. Specifically, proposed 

comment 31(b)(1)–1.ii would have 

contrasted the fees and taxes required to 

be disclosed by § 1005.31(b)(1)(ii) and 

the fees and taxes required to be 

disclosed by § 1005.31(b)(1)(vi). 

Proposed comment 31(b)(1)–1.iii would 

have revised the reference to taxes 

imposed by a foreign government to 

taxes imposed by a foreign country’s 

central government, and the proposed 

commentary would have built on the 

existing guidance regarding applicable 

recipient institution fees to clarify that 

account fees are not specifically related 

to a remittance transfer if such fees are 

merely assessed based on general 

account activity and not for receiving 

transfers. Proposed comment 31(b)(1)– 

1.iv additionally would have explained 

that a fee that specifically relates to a 

remittance transfer may be structured on 

a flat per-transaction basis, or may be 

conditioned on other factors (such as 

account status or the quantity of 

remittance transfers received) in 

addition to on the remittance transfer 

itself. Proposed 31(b)(1)–1.v would have 

provided that 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. 

Insofar as the Bureau is eliminating 

the requirement to disclose non-covered 

third-party fees and taxes collected on 

the remittance transfer by a person other 

than the provider, the Bureau is not 

adopting the proposed revisions to 

comments 31(b)(1)–1.ii. Instead, 

applicable examples concerning the 

types of fees related to a remittance 

transfer that must be disclosed have 

been moved to the commentary to 

§ 1005.30(h), as discussed above. See 

comment 30(h)–1. The Bureau is, 

however, modifying certain aspects of 

the remaining commentary in light of 

the new definitions and the elimination 

of the requirement to disclose taxes 

collected on the remittance transfer by 

a person other than the provider. In 

comment 31(b)(1)–1.i of the 2013 Final 

Rule, the reference to § 1005.31(b)(1)(vi) 

is removed to focus on the scope of fees 

imposed or taxes collected on the 

remittance transfer by the provider that 

are required to be disclosed under 

§ 1005.31(b)(1)(ii). The Bureau is also 

revising comments 31(b)(1)–1.ii, 

31(b)(1)–2, and 31(b)(1)–3 of the 2013 

Final Rule commentary consistent with 

new scope of the required disclosures 

and the movement of certain 

commentary to 30(h). In addition, the 

2013 Final Rule divides existing 

commentary in 31(b)(1)–1.ii to create a 

new comment 31(b)(1)–1.iii for clarity. 

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

Section 1005.31(b)(1)(v) of the 2012 

Final Rule requires remittance transfer 

providers to disclose the transfer 

amount in the currency in which the 

funds will be received by the designated 

recipient. Under § 1005.31(b)(1)(v) of 

the 2012 Final Rule, providers are 

required to disclose the transfer amount 

only if applicable fees and taxes are 

imposed by persons other than the 

provider under § 1005.31(b)(1)(vi), in 

order to demonstrate to the sender how 

such fees reduce the amount received by 

the designated recipient. Insofar as 

§ 1005.31(b)(1)(vi) in the 2013 Final 

Rule will now only require disclosure of 

covered third-party fees, the Bureau has 

made conforming changes to the 

appropriate reference in 


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§ 1005.31(b)(1)(v) to clarify that the 

section implicates covered third-party 

fees only rather than all fees and taxes 

imposed on the remittance transfer by a 

person other than the provider. 

31(b)(1)(vi) Covered Third-Party Fees 

Section 1005.31(b)(1)(vi) of the 2012 

Final Rule requires remittance transfer 

providers to disclose any fees and taxes 

imposed on the remittance transfer by a 

person other than the provider, in the 

currency in which the funds will be 

received by the designated recipient. As 

discussed above, the Bureau is refining 

the 2012 Final Rule with respect to the 

disclosure of certain recipient 

institution fees and foreign taxes. The 

rationale for these changes is discussed 

below. 

Disclosure of Recipient Institution Fees 

Since the Board first proposed to 

amend Regulation E to implement the 

Dodd-Frank Act’s remittance transfer 

provisions, industry participants and 

representatives have argued that 

particularly for remittance transfers that 

take place over an open network, the 

requirement to disclose third-party fees 

is unduly burdensome, if not 

impossible, given the potential number 

of institutions involved in any one 

transfer and the fact that remittance 

transfer providers typically have no 

direct relationships with recipient 

institutions. In issuing the February 

Final Rule, the Bureau recognized the 

challenges for providers in disclosing 

fees imposed by third parties, but 

determined that the disclosure of thirdparty fees would provide senders with 

greater transparency regarding the cost 

of a remittance transfer consistent with 

the purposes of the EFTA. 

Consequently, § 1005.31(b)(1)(vi) of 

the 2012 Final Rule required providers 

to disclose fees imposed by persons 

other than the provider (including fees 

imposed by the designated recipient’s 

institution) and required that such fees 

be taken into account when calculating 

the disclosure of the amount to be 

received under § 1005.31(b)(1)(vii). In 

view of Congress’ recognition that these 

determinations would be difficult in the 

context of open network transactions by 

financial institutions, see EFTA section 

919(a)(4), § 1005.32(a) permitted insured 

institutions to estimate the amounts 

required to be disclosed pursuant to 

§§ 1005.31(b)(1)(vi) and (vii) for an 

interim period when such transfers are 

sent from a sender’s account with the 

institution and the remittance transfer 

cannot determine the exact amounts for 

reasons beyond its control. 

As noted above, after the Bureau 

published the February Final Rule, 

industry participants and 

representatives continued to express 

concern through comment letters and 

other fora that, where a designated 

recipient’s institution charges the 

recipient fees for receiving a transfer in 

an account, the remittance transfer 

provider would not reasonably know, or 

be able to estimate, the amount of fees 

that might apply because fees might 

vary based on agreements between the 

recipient and the recipient institution. 

Relatedly, industry participants and 

representatives requested clarification 

on whether and how to disclose 

recipient institution fees that can vary 

based on the recipient’s status with the 

institution, the account type, the 

quantity of transfers received, or other 

variables that are not easily knowable by 

the sender or the provider. 

In response to these concerns, in the 

December Proposal, the Bureau 

proposed to provide clarification 

relating to which recipient institution 

fees remittance transfer providers were 

required to disclose and additional 

flexibility and guidance on how 

recipient institution fees could be 

disclosed. Proposed comment 31(b)(1)– 

1.ii would have provided additional 

examples to distinguish between fees 

that are specifically related to the 

remittance transfer and therefore 

required to be disclosed under 

§ 1005.31(b)(1)(vi), including fees that 

are imposed by a recipient’s institution 

for receiving a wire transfer, and other 

types of recipient institution fees that 

are not specifically related to a 

remittance transfer, such as a monthly 

maintenance fee, and therefore not 

required to be disclosed. For example, 

the proposed comment would have 

noted that fees that specifically relate to 

a remittance transfer may be structured 

on a flat per-transaction basis, or may be 

conditioned on other factors (such as 

account status or the quantity of 

remittance transfers received) in 

addition to the remittance transfer itself. 

Moreover, similar to the treatment of 

taxes imposed by a person other than 

the remittance transfer provider under 

the 2012 Final Rule, the Bureau 

proposed to add comment 31(b)(1)(vi)– 

4 to clarify that a provider could rely on 

a sender’s representation regarding 

variables that affect the amount of fees 

imposed by the recipient’s institution 

for receiving a transfer in an account 

where the provider did not have specific 

knowledge regarding such variables. 

Additionally, the December Proposal 

proposed to allow all remittance transfer 

providers, not just insured institutions 

covered by the temporary exception, the 

flexibility to estimate on a permanent 

basis certain fees imposed by a 

designated recipient’s institution for 

receiving a transfer into an account. 

Specially, where a provider did not 

have specific knowledge regarding 

variables that affect the amount of fees 

imposed by a designated recipient’s 

institution for receiving a transfer in an 

account, proposed § 1005.32(b)(4)(i) 

would have permitted a provider to 

disclose the highest possible recipient 

institution fees that could be imposed 

on the remittance transfer with respect 

to any unknown variable, as determined 

based on either the recipient 

institution’s fee schedules or 

information ascertained from prior 

transfers to that same institution. 

The December Proposal additionally 

provided in proposed § 1005.32(b)(4)(ii) 

and its accompanying commentary that, 

if the remittance transfer provider could 

not obtain such fee schedules or did not 

have such information, the provider 

could rely on other reasonable sources 

of information, including fee schedules 

published by competitor institutions, 

surveys of financial institution fees, or 

information provided by the recipient 

institution’s regulator or central bank as 

long as the provider disclosed the 

highest fees identified through the 

relied-upon source. The Bureau sought 

comment on all aspects of this proposal. 

Although most industry commenters 

stated that they supported the Bureau’s 

efforts to provide additional flexibility 

to remittance transfer providers to 

determine applicable recipient 

institution fees, many industry 

commenters argued that the December 

Proposal would not significantly reduce 

the burden of disclosing recipient 

institution fees that are not already 

known. Describing providers’ efforts to 

come into compliance with the 2012 

Final Rule, industry commenters stated 

that efforts to obtain fee information had 

largely been hampered by the difficulty 

of obtaining information from recipient 

institutions with whom providers had 

no direct relationship, particularly in 

cases in which fees were governed by 

contracts between recipient institutions 

and recipients, i.e., those institutions’ 

customers. In additional outreach by the 

Bureau, one large bank provider and 

correspondent reported that it had 

attempted to survey recipient 

institutions with which it had regular 

contact, but that the vast majority of 

institutions had either not provided the 

requested fee information or failed to 

respond altogether. In comment letters, 

as well as outreach both before and after 

the publication of the December 

Proposal, industry participants stated 

that they had difficulty explaining to 

foreign institutions what was being 

requested and why the foreign 


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institutions should provide that 

information. Industry participants 

further stated that recipient institutions 

declined to provide the requested fee 

information, citing proprietary, 

competitive, and privacy concerns 

associated with releasing information 

about their fee schedules and their 

contractual relationships with their 

customers. 

Some industry participants stated that 

as a result of the difficulty in obtaining 

fee information from individual 

institutions, even with the flexibility 

that the December Proposal would have 

allowed, they anticipated that the 

challenges associated with obtaining fee 

schedules or conducting fee surveys 

might force them to limit services to 

countries where fee information was 

more readily obtainable or where the 

transfer volume was significant enough 

to warrant additional efforts to obtain 

fee information. Though the pertinent 

comment letters focused on the 

December Proposal, the arguments 

echoed concerns that industry 

participants had previously expressed 

prior to the 2012 Final Rule with regard 

to any requirement to disclose fees 

imposed by persons other than the 

remittance transfer provider. Industry 

commenters further opined more 

generally, as they had prior to the 2012 

Final Rule, that a significant number of 

providers might choose to exit the 

market altogether, even if the Bureau 

were to adopt the December Proposal, 

due to the difficulty of disclosing 

recipient institution fees. 

In addition, several industry 

commenters stated that compared to the 

2012 Final Rule, the proposed 

estimation methodologies would not 

improve and instead could diminish the 

quality of the disclosures received by 

senders or senders’ ability to 

comparison shop. With respect to the 

Bureau’s proposal to add commentary 

clarifying that remittance transfer 

providers could rely in certain 

circumstances on senders’ 

representations regarding the variables 

that affect the amount of fees to be 

imposed by a recipient’s financial 

institution (see proposed 

§ 1005.32(b)(4)), several industry 

commenters argued that if the sender 

knew the fees that applied to the 

recipient’s account, then it is likely the 

sender was getting such information 

from the recipient, and in such cases the 

disclosure of recipient institution fees 

would not provide additional 

transparency to the sender. By contrast, 

to the extent that the sender had not 

received information on the variables 

that affect fees from the designated 

recipient, industry commenters argued 

that relying on a sender’s representation 

would be unlikely to provide reliable 

information. Industry commenters 

repeated industry’s longstanding 

assertion that recipients are in the best 

position to know what fees their 

institutions impose on receiving 

transfers, and suggested that the Bureau 

reconsider its decision to mandate 

disclosure of such fees or provide a 

database of fees upon which providers 

could rely. 

Many industry commenters also 

expressed concern with respect to the 

Bureau’s proposal to allow remittance 

transfer providers to disclose an 

estimate of the highest possible 

recipient institution fee that could be 

imposed on the remittance transfer with 

respect to any unknown variable (see 

proposed § 1005.32(b)(4)), as 

determined based on either fee 

schedules made available by the 

recipient institution or information 

ascertained from prior transfers to the 

same recipient institution. Commenters 

stated that if each provider employed its 

own methodology based on its own 

research, the highest possible fee 

estimates would vary, sometimes 

widely, across institutions. Commenters 

argued that this could cause consumer 

confusion and undermine comparison 

shopping, as senders would have little 

insight into which estimation model 

was accurate. Although certain limited 

estimation is permitted under the 2012 

Final Rule for some transfers sent by 

insured institutions, see § 1005.32(a) 

and (b), commenters argued that using 

the additional estimation methodologies 

permitted under the December Proposal 

would lead to greater degrees of 

inaccuracy because of the requirement 

to disclose the highest estimate possible 

with respect to certain recipient 

institution fees where such fees might 

be unlikely apply. Furthermore, the 

proposed estimation methodology 

would have differed from the bases for 

estimates described in existing 

§ 1005.32(c), which permit a provider to 

base an estimate on an approach not 

listed in subpart B of Regulation E so 

long as the designated recipient receives 

the same, or greater, amount of funds 

than the provider disclosed pursuant to 

§ 1005.31(b)(1)(vii). 

Commenters also suggested that under 

either the 2012 Final Rule or the 

December Proposal, smaller institutions 

would be at a disadvantage, compared 

to their larger competitors, because they 

would have fewer resources to collect 

and maintain extensive data sets 

regarding account fees for every location 

to which they did or could send a 

remittance transfer. Several industry 

commenters further opined that 

remittance transfer providers that could 

provide lower estimates could have a 

competitive advantage over providers 

that provided higher (but potentially 

more accurate) estimates because the 

providers with lower estimates would 

appear to be providing designated 

recipients with more funds, even though 

the actual fee imposed by the recipient 

institution for the same designated 

recipient should generally be the same 

for transfers sent by the same sender to 

the same recipient institution. 

Finally, some industry commenters 

argued there was a significant risk that 

if the highest possible fee a recipient 

institution could impose on receiving a 

remittance transfer was disclosed, a 

sender might unnecessarily overfund a 

remittance transfer to ensure that the 

designated recipient received a certain 

amount. For example, a commenter 

explained, that a sender might want to 

send a remittance transfer to a merchant 

to pay for a purchase. The merchant, per 

its agreement with the receiving 

institution, might be charged an 

incoming wire transfer fee. Although the 

merchant would not expect the sender 

to pay this fee, as the merchant had 

incorporated such cost into its 

overhead, the sender might believe that 

he or she is responsible for covering this 

fee and might increase the amount 

transferred by the amount of the 

disclosed fee. 

Because of the limitations they 

perceived with estimates disclosed 

under the Bureau’s methodology 

described in the December Proposal, the 

majority of industry commenters 

requested that the Bureau eliminate the 

required disclosure of recipient 

institution fees altogether. Several of 

these industry commenters argued, as 

commenters had argued as part of the 

2012 rulemakings, that section 1073 of 

the Dodd-Frank Act did not expressly 

require disclosure of recipient 

institution fees and urged the Bureau to 

eliminate the required disclosure of 

recipient institution fees. A few 

commenters went further and suggested 

that the Bureau should eliminate the 

required disclosure of intermediary fees 

as well. Alternatively, industry 

commenters suggested that the Bureau 

delay the implementation date for the 

disclosure of recipient institution fees 

until resources for ascertaining such 

fees could be developed, although such 

commenters did not indicate that such 

resources were being developed or that 

they would soon be available. 

Consumer group commenters were 

divided in their reactions to the 

December Proposal’s provisions 

regarding the disclosure of recipient 

institution fees. Although some 


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consumer group commenters favored 

the Bureau’s approach in providing 

increased flexibility and guidance with 

respect to the disclosure of recipient 

institution fees, other consumer group 

commenters believed that the methods 

of estimation proposed by the Bureau 

would prove to be problematic for 

senders and suggested either that the 

allowance for such estimation be made 

temporary or that the required 

disclosure of recipient institution fees 

be eliminated. 

Among consumer group commenters 

who favored the disclosure of recipient 

institution fees, some opined that 

recipient institution fee information 

could become readily available given 

current technology, and they 

encouraged the Bureau to, at the very 

least, make any additional estimate 

provisions temporary in nature. This 

would, these commenters argued, 

provide strong incentives to industry to 

create databases with the necessary 

information for compliance. In addition, 

one comment letter argued that 

permitting ‘‘estimated’’ price 

disclosures essentially permits a 

continuation of the status quo that 

Congress intended to change by 

adopting section 1073 of the DoddFrank Act. The commenter further 

suggested that although a permanent 

exemption from any disclosure 

requirements would be premature, a 

delay in requiring disclosure of 

recipient institution fees may be needed 

to provide enough time and the proper 

incentives for some providers to update 

their information systems in order to 

capture this information. 

By contrast, other consumer group 

commenters maintained that it was 

appropriate to eliminate the obligation 

to disclose recipient institution fees 

given the difficulty remittance transfer 

providers (or their partners) face in 

determining these fees. These 

commenters argued that, given the 

inaccuracies inherent in estimating the 

applicable fees to be applied, senders 

would be better served by an alternative 

generic disclosure noting that recipient 

institutions may charge account fees, 

rather than requiring the specific 

disclosure of such fees. 

In light of information received 

through comment letters, additional 

outreach, and the Bureau’s independent 

monitoring of efforts to implement the 

2012 Final Rule, the Bureau believes 

that it is necessary and proper both to 

effectuate the purposes of the EFTA and 

to facilitate compliance to exercise its 

authority under EFTA section 904(c) to 

eliminate the requirement to disclose 

recipient institution fees for transfers 

into an account, except where the 

recipient institution is acting as an agent 

of the provider. 

As stated in the February Final Rule, 

the Bureau believes that disclosures 

regarding the fees imposed by persons 

other than the remittance transfer 

provider can benefit senders by making 

them aware of the impact of these fees, 

helping to decide how much money to 

send, facilitating comparison shopping, 

and aiding in error resolution. As 

described in the February Final Rule, in 

recent years, a number of concerns with 

regard to the clarity and reliability of 

information provided to consumers 

sending remittance transfers have been 

identified. 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. Research suggests that 

consumers place a high value on 

reliability to ensure that the promised 

amount is made available to recipients. 

See 77 FR 6199 (and sources cited 

therein). 

Despite the public interest in the 

disclosure of recipient interest fees, 

however, the Bureau believes that 

requiring disclosure of such fees in 

cases in which the recipient institution 

is not an agent of the provider would at 

this time either require a substantial 

delay in implementation of the overall 

Dodd-Frank Act regime for remittance 

transfers or produce a significant 

contraction in access to remittance 

transfers, particularly for less popular 

corridors. The Bureau believes that both 

of these results would substantially 

harm consumers and undermine the 

broader purposes of the statutory 

scheme. Accordingly, the Bureau has 

constructed the exception to relieve the 

obligation to disclose recipient 

institution fees absent an agency 

relationship between the remittance 

transfer provider and the recipient 

institution. 

The Bureau believes that, in practice, 

this adjustment of the 2012 Final Rule 

will affect a minority of remittance 

transfers. While information on the 

volume of open-network transfers is 

limited, the Bureau believes that closed 

network transfers sent through agents— 

i.e., transfers for which remittance 

transfer providers must continue to 

disclose all third-party fees in 

accordance with the 2012 Final Rule— 

account for the majority of remittance 

transfers. 

For the minority of transfers where 

the exception applies because there is 

no agency relationship between the 

remittance transfer provider and the 

recipient institution, the Bureau has 

concluded that finalizing the proposed 

exception in § 1005.32(b)(4) (which 

would have permitted estimates in 

certain circumstances) would have 

significant risks and disadvantages to 

senders of remittance transfers. First, 

despite the greater flexibility that the 

December Proposal would have 

provided concerning estimation 

methodologies, the Bureau is concerned 

that many remittance transfer providers 

still would have curtailed services 

particularly outside of heavily used 

corridors. Second, the Bureau is 

concerned that the resulting estimates 

would have varied so widely that their 

use to consumers in calibrating transfer 

amounts and comparison shopping 

would have been limited. 

The Bureau believes that given 

current limitations, it is appropriate to 

require use of a more generic disclaimer 

to warn consumers where recipient 

institution fees may apply and to change 

the model forms in a way that will 

reduce the risk of consumer confusion 

in attempting to make comparisons 

where estimates are provided. The 

Bureau also believes that it is important 

to encourage estimates and increasingly 

reliable methodologies over time, and 

will continue dialogue with interested 

stakeholders about how best to make 

progress toward this goal. 

The Bureau’s conclusion rests in large 

part on its understanding of the open 

network systems for sending remittance 

transfers. As described above, these 

networks allow remittance transfer 

providers to send to accounts at banks 

worldwide. However, providers have 

limited authority or ability to monitor or 

control the recipient institutions in such 

networks. Although the Bureau had 

expected that industry’s implementation 

efforts would result in the development 

of the compilation of reliable and 

current information concerning fees 

imposed by many recipient institutions 

for most corridors, the process has been 

slower and harder than expected and 

the lack of comprehensive information 

could lead providers to limit their 

offerings. Given the current 

environment, the Bureau believes that 

estimating, or in some cases, 

determining the actual recipient 

institution fees for transfers to accounts 

consistent with the 2012 Final Rule 

would be difficult or impracticable 

given the myriad institutions to which 

such remittance transfers may be sent 

and the myriad fee schedules that may 

apply across these institutions. 

Even under the Bureau’s proposal to 

provide additional flexibility for 

remittance transfer providers in 

estimating certain recipient institution 


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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30673 

fees for transfers to accounts, the 

comment letters and the Bureau’s 

outreach suggest that the burden of 

obtaining and maintaining applicable 

fee information sufficient to provide the 

permitted estimates in all cases would 

still be substantial. The Bureau is 

concerned that even if it adopted the 

December Proposal, the requirements to 

disclose recipient institution fees might 

cause a number of providers to raise 

their prices, significantly reduce their 

offerings, or exit the market due to the 

requirements related to the disclosure of 

recipient institution fees. If any price 

increase were similar to the size of a 

recipient institution fee, that alone 

might offset the benefit of improved 

information about the size of such fees. 

Furthermore, as the Bureau stated in the 

December Proposal, the Bureau believes 

that the loss of market participants 

would be detrimental to senders by 

decreasing market competition and the 

convenient availability of remittance 

transfer services. 

Moreover, the Bureau is concerned 

that the estimate methodologies 

proposed in the December Proposal 

would have produced disclosures that 

varied so widely that their use to 

senders in calibrating transfer amounts 

and comparison shopping would have 

been limited. In many cases, the 

December Proposal would have required 

the remittance transfer provider to overestimate recipient institution fees, by 

disclosing the highest possible fee that 

could be imposed on the remittance 

transfer with respect to any unknown 

variable. To the extent providers used 

differing methodologies upon which to 

base their estimates, the disclosed fees 

could vary significantly across 

institutions, making it difficult for 

senders to decide how much money to 

transmit. 

In addition, because these fees would 

be separately disclosed and included 

within the total to recipient on the 

disclosure forms, differences in amounts 

disclosed among remittance transfer 

providers could lead senders to 

mistakenly focus on discrepancies 

within these fees when comparison 

shopping, even though the actual fee 

would likely be the same regardless of 

the provider so long as the sender 

transmitted the same amount to the 

same designated recipient at the same 

institution using the same transfer 

method. While the Bureau believes that 

it is important to encourage estimates 

and increasingly reliable methodologies 

over time, the Bureau has concluded 

that given current limitations it is 

appropriate to require use of a more 

generic disclaimer to alert senders 

where recipient institution fees may 

apply and to change the model forms in 

a way that will reduce the risk of 

consumer confusion in attempting to 

make comparisons where estimates are 

provided. By providing the disclaimer, 

senders themselves can investigate such 

fees. In addition, as discussed in the 

section-by-section analysis of 

§ 1005.31(b)(1)(viii), providers may be 

incentivized to seek such information to 

better compete with providers providing 

more detailed price information. The 

Bureau believes this amendment to the 

disclosure requirements will best 

preserve senders’ access to competitive 

remittance transfer markets, while 

facilitating continued informationgathering about such fees both by 

senders and providers. 

Alternatively, the Bureau considered 

further delaying implementation of the 

section 1073 protections, to allow 

remittance transfer providers to 

continue to seek more reliable fee 

information in order to reduce 

implementation burdens and make feerelated disclosures more accurate and 

thus more useful for senders. However, 

the Bureau believes that it is critical to 

provide senders timely access to the 

important new consumer protection 

benefits of the 2012 Final Rule 

including rights to cancellation and 

error resolution. 

Accordingly, the Bureau has tailored 

its amendments to § 1005.31(b)(1)(vi), 

and as discussed below, 

§ 1005.31(b)(1)(vii), to focus on the 

third-party fees that the Bureau believes 

are most difficult for remittance transfer 

providers to disclose. Based on the 

Bureau’s outreach, it appears that 

providers sending transfers through 

open network systems have had 

considerably more success in obtaining 

information needed to estimate or 

disclose accurately fees imposed by 

intermediary institutions, as compared 

to recipient institutions that maintain 

ongoing customer relationships with 

individual designated recipients. Some 

providers (or business partners) have 

changed or contemplated changing the 

methods they use to send transfers 

between bank accounts, in order to 

avoid the imposition of any 

intermediary fees. In addition, some 

providers have worked with 

correspondents to understand such 

intermediary fees. Thus, the Bureau is 

not eliminating the requirement to 

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

intermediary bank fees or to include 

such amount in the calculation of the 

amount required to be disclosed under 

§ 1005.31(b)(1)(vii). 

Similarly, although the Bureau is 

making an adjustment for recipient 

institution fees that it believes industry 

cannot reasonably disclose, it is not 

adjusting the required disclosures for 

transfers that a recipient picks up at a 

paying agent. As noted above, the 

additional guidance included in the 

December Proposal targeted situations 

in which providers did not have specific 

knowledge regarding variables that 

affect the amount imposed by the 

recipient’s institution for receiving a 

transfer in an account. By contrast, 

where the designated recipient’s 

institution is an agent of the remittance 

transfer provider, the Bureau believes 

the provider should have access to or be 

able to contract concerning the 

disclosure of any fees imposed by such 

institution. Consequently, the Bureau is 

maintaining the provider’s obligation 

under the 2012 Final Rule to disclose a 

designated recipient institution’s fees 

where such recipient institution is 

acting as an agent of the provider in the 

remittance transfer. Through a 

provider’s contractual arrangements 

with its agents, the Bureau believes that 

such information should be readily 

available to or obtainable by a provider 

or that the provider can control such 

fees, based on the terms of the contract 

between the provider and such agent. 

For similar reasons, the Bureau is 

maintaining the requirement to disclose 

fees assessed for remittance transfers to 

credit cards, prepaid cards, or virtual 

accounts held by an Internet-based or 

mobile phone company that is not a 

bank, credit union, or equivalent 

institution. See comment 30(h)–3. In the 

December Proposal, the Bureau did not 

specifically propose to allow estimation 

of these amounts. Although a few 

comment letters suggested that the 

proposed estimates exception should be 

expanded to cover more than depository 

institution accounts, such as general 

purpose reloadable (or prepaid) cards, 

mobile phones, or mobile or electronic 

wallets, no commenters suggested that 

obtaining this information would be as 

burdensome as the disclosure of 

depository institution fees. Indeed, 

upon further outreach, industry 

participants largely confirmed that 

currently the majority of such 

transactions currently take place within 

a single network whereby such fees are 

a matter of contract. The Bureau 

believes that the systems for offering 

such transfers are still nascent and that 

currently most of these transfers are 

provided through systems in which 

remittance transfer providers have 

contractual arrangements with the 

recipient institutions, or the providers 

and the recipient institutions operate 

within one single network. The Bureau 

further believes that these arrangements 


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30674 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

6The modern open network banking system 

evolved slowly over the seventeenth and eighteenth 

centuries and did not become electronic and 

automated until the 1970s. The earliest banks did 

not transfer money between themselves. Over time, 

however, smaller or more remote banks began to 

rely on larger mutual or central banks that they all 

trusted to facilitate transfers of funds although the 

remote banks had no relationship with one another. 

Into the mid-Twentieth Century, this system 

became computerized and banks could 

electronically message one another. See Ben 

Norman, et al., The History of Interbank Settlement 

Arrangements: Exploring Central Banks’ Role in the 

Payment System (June 2011), available at: http:// 

papers.ssrn.com/sol3/ 

papers.cfm?abstract_id=1863929. 

will likely permit providers to exercise 

some control over, or learn about, fees 

charged by recipient institutions. As 

these systems grow, the Bureau expects 

that providers, and any associated 

networks, can design systems so that 

any associated fees with respect to such 

transfers are transparent to providers 

and senders alike. 

The Bureau does not believe that the 

same sort of evolution can happen as 

quickly or easily in existing open 

network systems, and in particular for 

the interbank wire transfer system. 

These systems use communication and 

settlement protocols that have been 

developed over decades (or longer) and 

assume that participating institutions 

will exercise little control over each 

other.6 Furthermore, these systems 

depend on the participation of many 

foreign entities that have no duty or 

incentive to comply with subpart B of 

Regulation E. Consequently, for 

purposes of determining the fees 

imposed on the remittance transfer by 

the designated recipient’s institution for 

receiving a remittance transfer into an 

account under § 1005.30(h)(2), the 

Bureau includes transfers into an asset 

account, regardless of whether or not it 

is a consumer asset account, established 

for any purpose and held by a bank, 

savings association, credit union, or 

equivalent institution. See comment 

30(h)–3. The Bureau believes that these 

institutions are likely subject to legacy 

systems that cannot easily be modified 

to capture fee information. 

In light of these conclusions, to 

effectuate the purposes of the EFTA, the 

Bureau is exercising its authority under 

EFTA sections 904(a) and (c) to 

maintain in § 1005.31(b)(1)(vi) the 

remittance transfer provider’s obligation 

to disclose covered third-party fees and 

that such fees be included in the 

amount disclosed pursuant to 

§ 1005.31(b)(1)(vi), discussed further 

below. The Bureau believes that 

providing a total to recipient that 

reflects the impact of such fees, and 

separately disclosing these fees, will 

provide senders with a greater 

transparency regarding the cost of a 

remittance transfer. 

Insofar as the Bureau is eliminating 

the required disclosure of non-covered 

third-party fees, the Bureau is also not 

adopting the suggestion of several 

industry and consumer group 

commenters that to facilitate 

compliance, the Bureau help develop 

and maintain a database of recipient 

institution fees that could be accessed 

by remittance transfer providers. The 

Bureau continues to believe that 

because providers are engaged in the 

business of sending remittance transfers 

and likely will develop relationships 

with recipient institutions over time, 

providers are in a better position than 

the Bureau is to determine applicable 

fee information. The Bureau will 

continue to monitor implementation of 

this rule and market developments, 

including whether better information 

about recipient institution fees becomes 

more readily available over time. The 

Bureau will also engage in stakeholder 

dialogue about methods to encourage 

improvements in communications 

methodologies and data gathering so as 

to promote the provision of increasingly 

accurate estimates and disclosures of 

actual fees over time. 

Disclosure of Foreign Taxes 

Commenters’ arguments regarding the 

disclosure of foreign taxes have largely 

paralleled their arguments regarding the 

disclosure of recipient institution fees. 

Notably, since the Board’s proposal, 

industry has argued that the 

requirement to disclose foreign taxes is 

unduly burdensome given the number 

of jurisdictions that may impose taxes 

and the challenges of determining 

whether or how various tax exceptions 

or exclusions may apply. Although the 

Bureau recognized the challenges for 

remittance transfer providers in 

disclosing foreign taxes, the Bureau also 

believed that this disclosure would 

provide senders with greater 

transparency regarding the cost of a 

remittance transfer, which the Bureau 

believed was consistent with the 

purposes of the EFTA. Consequently, 

§ 1005.31(b)(1)(vi) of the 2012 Final 

Rule generally would have required that 

providers disclose foreign taxes and take 

such taxes into account when 

calculating the disclosure of the amount 

to be received under § 1005.31(b)(1)(vii). 

This disclosure of taxes would have 

included foreign taxes imposed by a 

country’s central government, as well as 

taxes imposed by regional, provincial, 

state, or other local governments. 

After the Bureau published the 2012 

Final Rule, industry continued to 

express concern about the ability of 

remittance transfer providers to disclose 

these foreign taxes in two respects. First, 

industry argued that it is significantly 

more burdensome to research and 

disclose subnational taxes than to 

research and disclose only foreign taxes 

imposed by a country’s central 

government, with little commensurate 

benefit to consumers. Second, industry 

suggested that the existing guidance on 

the disclosure of foreign taxes is 

insufficient where variables that 

influence the applicability of foreign 

taxes are not easily knowable by the 

sender or the provider. 

In light of these comments, in its 

December Proposal, the Bureau 

proposed two revisions to the 2012 

Final Rule regarding foreign tax 

disclosures. First, the proposal would 

have revised § 1005.31(b)(1)(vi) to state 

that only foreign taxes imposed by a 

country’s central government on the 

remittance transfer need to be disclosed. 

Proposed comment 31(b)(1)(vi)–3 would 

have further clarified that regional, 

provincial, state, or other local foreign 

taxes do not need to be disclosed, 

although the remittance transfer 

provider could choose to disclose them. 

In the event that the subnational taxes 

were not disclosed, the proposal would 

have required that a provider state that 

a disclosure is ‘‘Estimated.’’ Consistent 

with this amendment, regional, 

provincial, state, or other local foreign 

taxes would not have needed to be taken 

into account when calculating the 

disclosure of the amount to be received 

under § 1005.31(b)(1)(vii). 

Second, the December Proposal also 

would have provided additional 

flexibility regarding the determination 

of foreign taxes imposed by a country’s 

central government. Under 

§ 1005.31(b)(1)(vi), if a remittance 

transfer provider did not have specific 

knowledge regarding variables that 

affect the amount of these taxes imposed 

by a person other than the provider, the 

provider could disclose the highest 

possible tax that could be imposed on 

the remittance transfer with respect to 

any unknown variable. Where a 

provider relied on this estimation 

method, the proposal would have 

required that a provider state that 

related disclosures are ‘‘Estimated.’’ 

The Bureau sought comment on both 

aspects of these proposed changes, 

including whether the proposed 

revisions would facilitate compliance 

and how the revisions would impact 

senders. Similar to comments about the 

proposed revisions to the disclosure of 

recipient institution fees, the Bureau 

received numerous comments from 

industry and consumer groups on its 

proposed elimination of the subnational 


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tax disclosure and also its proposed 

methods for the estimation of taxes 

imposed by a foreign country’s central 

government. 

With respect to the proposed change 

related to the elimination of the 

requirement to disclose subnational 

taxes and to include such taxes in the 

calculation of the amount to be 

received, there was uniform support 

from industry commenters. Nearly all 

industry commenters expressed concern 

that it was infeasible to attempt to 

research all potential jurisdictions that 

might impose a subnational tax. Further, 

industry commenters noted that there 

would be an ongoing and potentially 

significant cost required to maintain 

information related to all subnational 

tax laws throughout the world given the 

number of potential jurisdictions that 

could impose a tax. Additionally, in 

terms of the feasibility of the disclosure 

of subnational taxes, one money 

transmitter also stated that it would be 

difficult for it to disclose subnational 

taxes given that its customers were not 

required, when sending a transfer, to 

specify a sub-region within a country 

where the transfer would be picked up. 

Another money transmitter also stated 

that, in its experience, it believed that 

subnational taxes were rare. Although 

this commenter did not cite any 

examples of tax practice in specific 

jurisdictions, this commenter argued 

that many localities wanted to 

encourage the inflow of transfers, and 

therefore, would be unlikely to impose 

subnational taxes. This commenter and 

others stated that the cost to determine, 

in every case, whether subnational taxes 

applied, a cost that might be passed on 

to all senders, would outweigh the 

benefits given that it appeared that such 

taxes rarely applied in practice. 

In contrast to the uniform support by 

industry commenters for the elimination 

of the requirement to disclose 

subnational taxes, consumer group 

commenters were divided regarding 

their views about the proposed 

elimination of the requirement to 

disclose subnational taxes. Some 

consumer group commenters opposed 

the proposed change and stated that full 

disclosure of the exact amount of 

foreign taxes was critical in order for 

senders to be aware of exactly how 

much money would be received. They 

stated that elimination of the 

requirement to disclose subnational 

taxes would harm senders because they 

would not know with certainty how 

much money would ultimately be 

received. Other consumer group 

commenters, however, stated that the 

burden of researching and disclosing 

subnational taxes outweighed the 

relative benefit to senders. These 

consumer group commenters noted that 

some remittance transfer providers 

could withdraw from the market or 

increase prices if required to research 

and disclose subnational taxes. 

With respect to the Bureau’s proposal 

to allow remittance transfer providers 

increased flexibility to estimate the 

taxes imposed by a country’s central 

government, many industry commenters 

expressed concern that the December 

Proposal did not sufficiently ease the 

burden of researching foreign taxes. 

These industry commenters raised 

several concerns with respect to the 

proposed estimated disclosure of taxes 

imposed by a foreign country’s central 

government. Some industry participants 

commented that they did not have the 

capability to research the relevant tax 

laws in the first place because they did 

not have foreign contacts, or, 

alternatively, that they did not have the 

resources to expend to determine the 

applicable foreign tax laws. Thus, they 

asserted that an ability to estimate 

would not facilitate compliance since 

such estimation would require an 

underlying knowledge of the foreign tax 

laws. 

Industry commenters, particularly 

smaller banks and credit unions, also 

noted that remittance transfer providers 

were reluctant to rely on information 

from third-party service providers (such 

as larger correspondent institutions) 

because they would have no means to 

verify the accuracy of the information 

provided by the third-parties. Further, 

even where the tax information was 

accurate, some industry commenters 

stated that there could be a high cost 

associated with relying on a third-party 

provider to obtain that foreign tax 

information. Similar to industry 

comments about the disclosure of 

subnational taxes, commenters stated 

that these costs not only included the 

upfront costs of acquiring the tax 

information but also ongoing costs 

required to maintain and update tax 

information. For example, commenters 

expressed concern that, even if a 

provider (or a third-party selling the tax 

information) determined that a 

particular country did not tax 

remittance transfers, the provider would 

need to continue to monitor that 

country’s tax law to know whether any 

new tax laws were enacted in the future. 

Industry commenters (as well as some 

consumer group commenters) stated 

that some of the burden resulting from 

the disclosure of foreign taxes imposed 

by a country’s central government could 

be solved if the Bureau itself developed 

a tax database that was made available 

to remittance transfer providers. 

Industry commenters noted that a 

Bureau-provided database would 

eliminate the cost and potential 

inaccuracy that could result from each 

provider’s individual attempts to 

determine the applicable foreign taxes. 

Along similar lines, the Bureau 

learned through outreach that at least 

one trade association is developing a 

database containing information about 

foreign taxes imposed on remittance 

transfers by a country’s central 

government. The trade association 

informed the Bureau that, by working 

with a third-party, it thought it could 

eventually determine the relevant tax 

laws for most countries. The trade 

association, however, stated that there 

were several challenges associated with 

determining and disclosing the 

applicable tax under the proposed 

estimation method. According to the 

trade association and other commenters, 

one concern was that many foreign taxes 

have exceptions and exclusions that are 

not imposed uniformly on all transfers. 

The trade association noted that, even if 

a database listed applicable tax laws, it 

might be difficult for remittance transfer 

providers, particularly smaller 

providers, to apply these exceptions and 

incorporate the exceptions into 

computer programs or onto forms to 

arrive at an accurate tax disclosure. 

Some industry commenters also noted 

that, if a provider did not apply an 

exception, that provider might appear to 

be imposing a higher tax than another 

provider that applied the exception, 

even if the tax is the same. Thus, these 

commenters stated that a sender might 

misidentify the cheapest provider. 

Relatedly, several other industry 

commenters expressed concern that a 

tax law might be misinterpreted or 

misunderstood by the remittance 

transfer provider because of the 

challenges of interpreting foreign laws. 

As a result, several industry 

commenters and a trade association 

stated that the Bureau should provide a 

safe harbor for providers that use some 

reasonable processes to acquire the tax 

information. Other commenters stated 

that they would favor a safe harbor 

whereby, if the provider relied on some 

reasonable source of information in 

obtaining tax information, that provider 

would not be liable if the disclosed tax 

was incorrect. 

Industry commenters also echoed 

similar comments to those made with 

respect to the December Proposal’s 

provisions regarding the recipient 

institution fee disclosures, stating that 

the estimated tax disclosure would be of 

limited benefit to senders because they 

believed that in many instances the 

same tax likely would apply to all 


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30676 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

7The Bureau recognizes that this uniformity may 

not always be the case. For example, a tax could 

be imposed differently based on whether the tax 

law treated transfers sent through a closed or open 

network differently. But, for most transfers, the 

Bureau believes that a tax law would apply in the 

same manner where a transfer was of the same 

amount to the same destination in a country. 

transfers to a particular country. As a 

result, a disclosure of the foreign tax 

would not improve a sender’s ability to 

comparison shop among remittance 

transfer providers. In addition, other 

commenters noted that because the 

Bureau’s proposed estimation method 

required a disclosure of the highest 

possible foreign tax that could be 

imposed with respect to any unknown 

variable, a sender might transfer more 

money than was required to compensate 

for the high estimated tax that the 

sender believed would be deducted. The 

commenters noted, for example, that if 

a sender was transferring funds to a 

foreign merchant, the higher disclosed 

tax could harm the sender who 

inadvertently provided more money 

than was necessary to pay for a good or 

service. 

In contrast to industry commenters 

and as with respect to the Bureau’s 

proposal to eliminate the requirement to 

disclose subnational taxes, consumer 

groups were divided with respect to 

their comments about the proposed 

change to allow estimation to be used in 

the determination of the foreign country 

tax disclosure. Some consumer groups 

stated that the estimation of foreign 

taxes would harm senders because they 

would not know exactly how much 

money would be received. In contrast, 

other consumer groups supported the 

Bureau’s proposed estimation method 

for those taxes imposed by a country’s 

central government. These consumer 

groups stated that the Bureau’s 

proposed estimation method would 

facilitate compliance, and thereby 

encourage providers to stay in the 

market or prevent providers from 

increasing prices. 

Similar to its reasoning with respect 

to the elimination of the requirement to 

disclose certain recipient institution 

fees, as a result of comments received, 

additional outreach, and the Bureau’s 

independent monitoring of efforts to 

implement the 2012 Final Rule, the 

Bureau believes it is necessary and 

proper both to further the purposes of 

the EFTA and to facilitate compliance to 

exercise its exception authority under 

EFTA section 904(c) to eliminate the 

requirement that remittance transfer 

providers include taxes collected by a 

person other than the provider— 

including both subnational taxes and 

taxes imposed by a foreign country’s 

central government, in the calculation of 

the amount to be disclosed under 

§ 1005.31(b)(1)(vii). Consistent with this 

revision, the Bureau is also eliminating 

the requirement to disclose taxes 

imposed by a person other than the 

remittance transfer provider under 

§ 1005.31(b)(1)(vi) since such taxes are 

no longer necessary to clarify the 

calculation of the amount to be received 

under § 1005.31(b)(1)(vii). Under the 

2013 Final Rule, a provider continues to 

be required to disclose any taxes 

collected by the provider, as described 

under § 1005.31(b)(ii), but providers are 

no longer required to disclose taxes 

collected by other persons. 

As stated in the February Final Rule, 

the Bureau believes that disclosures 

regarding the taxes collected by a person 

other than the remittance transfer 

provider can benefit senders by making 

them aware of the impact of these taxes 

on the total amount transferred, 

deciding how much money to transfer, 

facilitating comparison shopping, and 

aiding in error resolution. Yet, while 

this foreign tax information is important 

for consumers, the Bureau is concerned 

that requiring disclosure of taxes 

collected by a person other than the 

provider could at this time produce 

increased costs for all transactions or 

result in a significant contraction in 

access to remittance transfers, 

particularly for less popular corridors. 

Similar to its decision about eliminating 

the requirement to disclose certain 

recipient institution fees, the Bureau 

believes that both of these results would 

substantially harm consumers and 

undermine the broader purposes of the 

statutory scheme. Accordingly, the 

Bureau has concluded that in the 

current environment, this amendment to 

the tax disclosure requirements will best 

preserve access to competitive prices for 

remittance transfers for a wide range of 

countries. 

As with fees, one key factor in the 

Bureau’s decision was a concern that 

the required tax disclosure might limit 

the availability of remittance services to 

certain countries or result in an 

increased cost for many transfers. With 

respect to cost increases, under the 2012 

Final Rule and the December Proposal, 

most remittance transfer providers 

would have needed to conduct research 

to determine (or purchase information 

regarding) the relevant foreign tax laws, 

potentially for many countries. These 

providers would also need to expend 

resources to update this information on 

a regular basis. Although one industry 

association has been undertaken to 

develop a database of applicable central 

government taxes, that association 

acknowledged several challenges both 

in developing the database and with 

how individual providers would make 

use of the data contained in it. For 

example, validation and continuous 

updating of the information collected 

remains a substantial concern. As 

described above, the Bureau is 

concerned that many providers would 

pass the costs associated with these 

efforts on to senders in the form of 

increased prices that would affect 

remittance transfers across the board, 

even to countries in which no such 

taxes are actually imposed. The Bureau 

also remains concerned that the cost of 

maintaining the required tax 

information could cause providers to 

exit the market, or limit their offerings— 

even if the requirement was limited to 

taxes imposed by a foreign country’s 

central government. Some providers, for 

example, might curtail their services 

and limit transfers only to the highest 

traffic corridors in order to minimize 

their necessary foreign tax law research. 

Because some providers might restrict 

their services to certain corridors with 

less volume, a sender might have 

limited ability to send transfers to those 

regions. 

As a result, while the Bureau 

generally believes that senders can 

benefit from transparency regarding the 

foreign tax disclosure, in the present 

market, the cost of obtaining the 

necessary tax information may exceed 

the benefit of this information to many 

senders. As with recipient institution 

fees, the Bureau also recognizes that in 

many instances the benefit of the 

disclosure may be minimized because 

the actual foreign tax imposed is likely 

to be uniform across all remittance 

transfers to a particular person in a 

particular country (and, therefore, the 

same tax would apply).7

In addition, as with the estimation of 

recipient institution fees, the disclosure 

of the highest tax estimates based on 

any unknown variable, as required in 

the December Proposal, could result in 

consumer confusion where providers 

disclosed different tax estimates. Even if 

third-party providers developed 

common databases of information, there 

is still a risk of inconsistent disclosures 

depending on providers’ knowledge of 

potentially relevant variables, practices, 

and interpretations of foreign tax law. 

The Bureau believes that using the 

general disclaimer and moving any 

voluntarily provided estimates or actual 

numbers lower on the form will help to 

reduce the risk that senders mistakenly 

choose providers based on 

discrepancies in tax estimates. Further, 

rather than adopting a systematic rule 

that tends to overestimate tax rates, the 

Bureau believes that senders may prefer 


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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30677 

to apply different approaches to 

different types of transfers, for instance 

by being more conservative about the 

risk of overfunding a transfer to a 

business as compared to a family 

member. 

The Bureau also does not believe that 

it is appropriate or feasible to create a 

safe harbor for remittance transfer 

providers that rely on a third-party 

database or some other third-party 

source for tax information. At this time, 

the Bureau is not aware of any data 

source whose accuracy it can guarantee, 

absent extensive monitoring. The 

Bureau is not currently positioned to 

evaluate the accuracy of each database 

that might be created nor can it 

determine whether providers are 

reasonably researching, interpreting, or 

applying the applicable foreign tax laws. 

Similarly, the Bureau does not believe 

that currently it is positioned to create 

a database itself. In addition, even if a 

database existed, as noted above, it 

would still be necessary to determine 

how the particular tax laws and 

exceptions or exclusions applied, and 

the Bureau believes that providers are 

better positioned to learn over time how 

foreign tax laws apply to individual 

transfers. 

Overall, given the current burden of 

researching the foreign taxes and the 

potential risks of sender confusion, 

increased cost, and reduced transfer 

services, the Bureau believes that the 

best result at this time is to eliminate 

the obligation to disclose taxes collected 

by parties other than the remittance 

transfer provider and to eliminate the 

requirement to include this amount in 

the calculation of the amount to be 

received by the designated recipient. 

The Bureau, however, notes that its 

decision is based on the current 

feasibility and cost associated with 

determining or estimating such taxes 

imposed on a remittance transfer, as 

well as the potential impact on market 

structure and pricing practices. The 

Bureau intends to monitor whether the 

development and availability of 

information regarding taxes collected on 

a remittance transfer by a person other 

than the provider becomes more feasible 

in the future. The Bureau will also 

engage in stakeholder dialogue about 

methods to encourage improvements in 

communications methodologies and 

data gathering so as to promote the 

provision of increasingly accurate 

estimates and disclosures of foreign 

taxes over time. 

Conforming Changes to 

§ 1005.31(b)(1)(vi) 

In light of the changes the Bureau is 

making with respect to the disclosure of 

non-covered third-party fees and foreign 

taxes, § 1005.31(b)(1)(vi) in the 2013 

Final Rule requires only the disclosure 

of covered third-party fees. The 2013 

Final Rule also makes conforming edits 

to comment 31(b)(1)(vi)–1 to reflect that 

the disclosure of covered third-party 

fees must be made in the currency in 

which the funds will be received by the 

designated recipient. While the revised 

§ 1005.31(b)(1)(vi) provides that only 

covered third-party fees be disclosed 

under this subsection, as discussed 

below, under § 1005.31(b)(1)(viii) a 

remittance transfer provider would 

remain free to disclose separately any 

non-covered third-party fees or taxes 

collected by a person other than the 

provider of which it is aware, to the 

extent consistent with the parameters of 

that section. 

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

Section 1005.31(b)(1)(vi) of the 2012 

Final Rule implements EFTA section 

919(a)(2)(A)(i) by requiring that a 

remittance transfer provider disclose to 

the sender the amount that will be 

received by the designated recipient, in 

the currency in which the funds will be 

received. As adopted by the 2012 Final 

Rule, this disclosure must reflect all 

charges that would affect the amount to 

be received including any recipient 

institution fees and taxes imposed by a 

person other than the provider. As 

stated above, the Bureau is exercising its 

exception authority under EFTA section 

904(c) to revise § 1005.31(b)(1)(vii) to 

eliminate the requirement to include 

non-covered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the provider in the 

calculation of the amount received, 

consistent with the narrowed scope of 

§ 1005.31(b)(1)(vi). Section 

1005.31(b)(1)(vii) of the 2013 Final Rule 

thus provides that the disclosed amount 

must be disclosed in the currency in 

which the funds will be received, using 

the term ‘‘Total to Recipient’’ or a 

substantially similar term except that 

this amount shall not include any noncovered third party fee or tax collected 

by a person other than the provider, 

whether such fee or tax is disclosed 

pursuant to § 1005.31(b)(1)(viii). 

While § 1005.31(b)(1)(viii) gives the 

provider the option to disclose noncovered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the provider, as 

discussed below, a provider cannot, in 

any circumstance, include these 

amounts in the amount disclosed under 

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

that eliminating the requirement to 

include non-covered third-party fees 

and taxes collected on the remittance 

transfer by a person other than the 

provider in the calculation of the 

disclosed amount to be received by the 

designated recipient is necessary and 

proper to facilitate compliance and 

further the purposes of the EFTA 

because the Bureau is concerned that 

requiring disclosure of such amounts 

within the amount disclosed under 

§ 1005.31(b)(1)(vii) might hamper 

senders’ ability to make informed 

comparisons across similar providers. 

The 2013 Final Rule also makes 

conforming edits to comment 

31(b)(1)(vii) to clarify that the amount 

disclosed pursuant to 

§ 1005.31(b)(1)(vii) must reflect the 

exchange rate, all fees imposed and all 

taxes collected on the remittance 

transfer by the provider, as well as any 

covered third-party fees as provided by 

§ 1005.31(b)(1)(vi). The Bureau 

recognizes that in some cases the 

amount disclosed pursuant to 

§ 1005.31(b)(1)(vii) will not reflect the 

amount that the designated recipient 

will ultimately receive due to additional 

non-covered third-party fees and taxes 

collected on the remittance transfer by 

a person other than the provider. 

31(b)(1)(viii) Statements That NonCovered Third-Party Fees or Taxes 

Collected on the Remittance Transfer by 

a Person Other Than the Provider May 

Apply 

In the December Proposal, the Bureau 

solicited comment on methods to 

reduce the burden of required 

disclosures of fees and taxes imposed on 

remittance transfers by persons other 

than the providers and alternative 

disclosures that could be provided. 

Several industry and consumer group 

commenters suggested that in place of 

requiring exact or estimated disclosures 

of recipient institution fees or foreign 

taxes, the Bureau could require a 

statement within the disclosure forms 

alerting senders that the total amount 

received may be reduced by recipient 

institution fees or foreign taxes. These 

commenters contended that such a 

disclosure would ensure that senders 

are aware of the potential for further 

reductions in the disclosed amount 

received, due to fees or taxes that are 

not disclosed, and would encourage 

senders and recipients to investigate the 

fees associated with a transfer to the 

recipient’s financial institution, as 

compared to those associated with other 

mechanisms for sending a remittance 

transfer. 

Although the Bureau is eliminating 

the requirement to calculate and 

disclose non-covered third-party fees 

and taxes collected on a remittance 

transfer by a person other than the 


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30678 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

remittance transfer provider, the Bureau 

strongly believes that it is nonetheless 

important to inform senders when fees 

and taxes that are not disclosed may 

apply to the remittance transfer. 

Accordingly, to further the purposes of 

the EFTA, the Bureau believes that it is 

necessary and proper to exercise its 

authority under EFTA sections 904(a) 

and (c) to add § 1005.31(b)(1)(viii), 

which requires that a provider include, 

as applicable, a statement indicating 

that non-covered third-party fees or 

taxes collected on the remittance 

transfer by a person other than the 

provider may apply to the remittance 

transfer and result in the designated 

recipient receiving less than the amount 

disclosed pursuant to 

§ 1005.31(b)(1)(vii). Moreover, under 

this paragraph, a provider may, but is 

not required to, disclose any applicable 

non-covered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider using 

the language set for in Model Forms A– 

30(b)–(d) of Appendix A to this part or 

substantially similar language. Any such 

figures must be disclosed in the 

currency in which the funds will be 

received, using the language set forth in 

Model Forms A–30(b) through (d) of 

Appendix A to this part, as appropriate, 

or substantially similar language. The 

exchange rate used to calculate any 

disclosed non-covered third-party fees 

or taxes collected on the remittance 

transfer by a person other than the 

provider is the exchange rate used 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. Although 

new § 1005.31(b)(1)(viii) makes the 

disclosure of the amount of non-covered 

third-party fees and taxes collected on a 

remittance transfer by a person other 

than the provider optional, the Bureau 

believes that providers may be 

motivated to collect and disclose such 

information voluntarily, in the interest 

of providing high levels of customer 

service to senders and to better compete 

for remittance business against other 

providers. 

New comment 31(b)(1)(viii)–1 

clarifies that if non-covered third-party 

fees or taxes collected on the remittance 

transfer by a person other than the 

remittance transfer provider apply to a 

particular remittance transfer, or if a 

provider does not know if such fees or 

taxes may apply to a particular 

remittance transfer, § 1005.31(b)(1)(viii) 

requires the provider to include the 

disclaimer with respect to such fees and 

taxes. Comment 31(b)(1)(viii)–1 

additionally clarifies that required 

disclosures under § 1005.31(b)(1)(viii) 

may only be provided to the extent 

applicable. For example, if the 

designated recipient’s institution is an 

agent of the provider and thus, noncovered third-party fees cannot apply to 

the transfer, the provider must disclose 

all fees imposed on the remittance 

transfer and may not provide the 

disclaimer regarding non-covered thirdparty fees. In this scenario, the 

commentary clarifies, the provider may 

only provide the disclaimer regarding 

taxes collected on the remittance 

transfer by a person other than the 

provider, as applicable. 

New comment 31(b)(1)(viii)–2 

explains that § 1005.31(b)(1)(viii) 

permits a provider to disclose the 

amount of any non-covered third-party 

fees or taxes collected on the remittance 

transfer by a person other than the 

provider. For example, when a 

remittance transfer provider knows that 

the designated recipient’s institution 

imposes a fee or that a foreign tax will 

apply, the provider may choose to 

disclose the relevant fee or tax as part 

of the information disclosed pursuant to 

§ 1005.31(b)(1)(viii). The comment also 

notes that § 1005.32(b)(3) permits the 

provider to disclose estimated amounts 

of such taxes and fees, provided any 

estimates are based on reasonable 

source of information. See comment 

32(b)(3)–1. It further provides that 

where the provider chooses, at its 

option, to disclose the amounts of the 

relevant recipient institution fee or tax 

as part of the information disclosed 

pursuant to § 1005.31(b)(1)(viii), the 

provider must not include that fee or tax 

in the amounts disclosed pursuant to 

§ 1005.31(b)(1)(vi) or (b)(1)(vii). 

31(b)(2) Receipt 

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

Receipt 

Section 1005.31(b)(2)(i) in the 2012 

Final Rule provides that the same 

disclosures included in the pre-payment 

disclosure must be disclosed on the 

receipt. As discussed above, the Bureau 

is adding a new requirement that prepayment disclosures include 

disclaimers when non-covered thirdparty fees or taxes collected on a 

remittance transfer by a person other 

than the provider may apply. In 

addition, as stated above, to facilitate 

compliance and further the purposes of 

the EFTA, the Bureau believes it is 

necessary and proper to exercise its 

exception authority under EFTA section 

904(c) to revise § 1005.31(b)(1)(vii) to 

eliminate the requirement to include 

non-covered third-party fees and taxes 

collected on the remittance transfer by 

a person other than the remittance 

transfer provider in the calculation of 

the amount received, disclosed on the 

receipt provided to the sender under 

§ 1005.31(b)(2)(i), consistent with the 

narrowed scope of § 1005.31(b)(1)(vi). 

As discussed above, to further the 

purposes of the EFTA, the Bureau also 

believes that it is necessary and proper 

to exercise its authority under EFTA 

sections 904(a) and (c) to require 

providers to include disclaimers stating, 

as applicable, that non-covered thirdparty fees or taxes collected by a person 

other than the provider may apply to the 

remittance transfer and result in the 

designated recipient receiving less than 

the amount disclosed pursuant to 

§ 1005.31(b)(1)(vii). Accordingly, the 

Bureau is amending the cross-reference 

in § 1005.31(b)(2)(i) to require that such 

disclaimers be provided on the receipt. 

These changes would also be reflected 

on a combined disclosure. See 

§ 1005.31(b)(3). 

31(c) Specific Format Requirements 

31(c)(1) Grouping 

EFTA section 919(a)(3)(A) states that 

disclosures provided pursuant to EFTA 

section 919 must be clear and 

conspicuous. The 2012 Final Rule 

incorporates this requirement and sets 

forth grouping, proximity, prominence, 

size, and segregation requirements to 

ensure that it is satisfied. In particular, 

§ 1005.31(c)(1) requires that information 

about the transfer amount, fees and 

taxes imposed by a person other than 

the provider, and amount received by 

the designated recipient be grouped 

together. The purpose of this grouping 

requirement is 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, will be 

reduced by fees imposed or taxes 

collected on the remittance transfer by 

a person other than the remittance 

transfer provider. As previously 

discussed, under the 2013 Final Rule 

the disclosure of non-covered thirdparty fees and taxes collected on the 

remittance transfer by a person other 

than the provider is no longer required 

under § 1005.31(b)(1)(vi), or included in 

the calculation of the amount required 

to be disclosed under 

§ 1005.31(b)(1)(vii), but instead is 

subject to new § 1005.31(b)(1)(viii). 

Consequently, the 2013 Final Rule 

amends § 1005.31(c)(1) to group the new 

§ 1005.31(b)(1)(viii) disclosure 

requirement with the information 

required by §§ 1005.31(b)(1)(v), (vi), and 

(vii). The Bureau believes that this 

grouping will ensure that the sender 


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will understand that the total amount 

received by the designated recipient 

will be affected by these additional fees 

and taxes as applicable. In addition, the 

Bureau clarifies that although 

disclosures provided via mobile 

application or text message to the extent 

permitted by § 1005.31(a)(5) generally 

need not comply with the grouping 

requirements, information required or 

permitted by § 1005.31(b)(1)(viii) must 

be grouped with § 1005.31(b)(1)(vii). 

The Bureau believes that it is important 

that the new disclaimers—which advise 

of potential additional fees and taxes— 

be grouped with the disclosure of the 

amount to be received by the designated 

recipient in order to maximize the 

likelihood that senders will see the 

disclaimers and read them in 

conjunction with the disclosures under 

§ 1005.31(b)(1)(vii). Insofar as the 

Bureau is requiring that information 

required or permitted by 

§ 1005.31(b)(1)(viii) be grouped with 

§ 1005.31(b)(1)(vii) for disclosures 

provided via mobile application or text 

message, the Bureau is adding guidance 

in comment 31(c)(1)–1 to explain that to 

comply with the requirement a provider 

could send multiple text messages 

sequentially to provide the full 

disclosure. 

31(c)(2) Proximity 

To effectuate EFTA section 

919(a)(3)(A), § 1005.31(c)(2) of the 2012 

Final Rule also requires that certain 

disclosures be placed in close proximity 

to each other. The purpose of this 

proximity requirement is to prevent 

such disclosures from being overlooked 

by a sender. As previously discussed, 

under the 2013 Final Rule the 

disclosure of non-covered third-party 

fees and taxes collected by a person 

other than the provider is no longer 

required under § 1005.31(b)(1)(vi); 

instead, remittance transfer providers 

are subject to the new disclosure 

provision of § 1005.31(b)(1)(viii). 

Consequently, the 2013 Final Rule 

amends § 1005.31(c) to require that the 

new § 1005.31(b)(1)(viii) disclaimers be 

in close proximity with the disclosure 

required by § 1005.31(b)(1)(vii) (the 

amount received by the designated 

recipient). Section 1005.31(c)(2) further 

notes that disclosures provided via 

mobile application or text message, to 

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

generally need not comply with the 

proximity requirements of § 1005.31(c), 

except that information required or 

permitted by § 1005.31(b)(1)(viii) must 

follow the information required by 

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

that it is important that the new 

disclaimers—which advise of potential 

additional fees and taxes—be grouped 

in close proximity to the disclosure of 

the amount to be received by the 

designated recipient. Insofar as the total 

amount to be received may not include 

certain items the disclosure of which is 

no longer required, the disclaimers 

should be placed in close proximity to, 

or in the case of disclosures provided 

via mobile application or text message 

follow, the disclosure required by 

§ 1005.31(b)(1)(vii) in order to maximize 

the likelihood that senders will see the 

disclaimers and read them in 

conjunction with the amount disclosed 

pursuant to § 1005.31(b)(1)(vii). 

31(c)(3) Prominence 

Section 1005.31(c)(3) sets forth the 

requirements regarding the prominence 

and size of the disclosures required 

under subpart B of Regulation E. In light 

of the new disclaimer required by 

§ 1005.31(b)(1)(viii), as well as the 

optional disclosures under that 

paragraph, the Bureau is making 

conforming edits to § 1005.31(c)(3) to 

note that the disclosures required or 

permitted by § 1005.31(b) when 

provided in writing or electronically 

must be provided on the front of the 

page on which the disclosure is printed, 

in a minimum eight-point font, except 

for disclosures provided via mobile 

application or text message, and must be 

in equal prominence to each other. 

Comment 31(c)(4)–2 Segregation 

Section 1005.31(c)(4) provides 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. Comment 31(c)(4)–2 in the 

2012 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. In light of new 

§ 1005.31(b)(1)(viii) permitting certain 

optional disclosures, the Bureau is 

amending this list to clarify that the 

optional disclosure of non-covered 

third-party fees and taxes collected by a 

person other than the provider is 

directly related information. 

31(f) Accurate When Payment Is Made 

Section 1005.31(f) of the 2012 Final 

Rule states that 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. In 

light of the new disclaimer required by 

§ 1005.31(b)(1)(viii), as well as the 

optional disclosures under that 

paragraph, the Bureau is making 

conforming edits to § 1005.31(f) and 

comment 31(f)–1 to note that the 

disclosures required by § 1005.31(b) or 

permitted by § 1005.31(b)(1)(viii) must 

be accurate when a sender makes 

payment for the remittance transfer, 

except to the extent estimates are 

permitted by § 1005.32. Comment 31(f)– 

1 further notes that while a remittance 

transfer provider is not required to 

guarantee the terms of the remittance 

transfer in the disclosures required or 

permitted by § 1005.31(b) for any 

specific period of time, if any of the 

disclosures required or permitted 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. 

The Bureau believes that extending 

the accuracy requirement to the optional 

disclosures regarding non-covered third 

party fees and taxes collected by 

persons other than the remittance 

transfer provider is necessary in order to 

communicate accurately to the sender 

how confident the remittance transfer 

provider is concerning the information 

provided. As discussed above, the 

Bureau believes that such information 

can be useful to senders under certain 

circumstances and hopes to encourage 

use of increasingly reliable information 

over time. Although the vast majority of 

remittance transfer providers may 

choose to disclose any numbers 

provided as estimates due to the various 

uncertainties with regard to foreign 

taxes and fees discussed above, the 

Bureau believes it is important to 

preserve remittance transfer providers’ 

ability to compete based on disclosure 

of actual figures. 

31(g) Foreign Language Disclosures 

31(g)(1) General 

Section 1005.31(g) of the 2012 Final 

Rule explains that disclosures required 


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by the rule must be provided in English 

and, in certain circumstances, in other 

languages as well. Similar to the 

changes discussed above regarding 

§ 1005.31(a)(1) concerning clear and 

conspicuous disclosures, the Bureau is 

making conforming edits to 

§ 1005.31(g)(1) to reflect the addition of 

the optional disclosures elsewhere in 

the 2013 Final Rule. While the 

disclosures are optional (see 

§§ 1005.31(b)(1)(viii) and 1005.33(h)(3)), 

the Bureau believes it is important that 

they conform to the 2013 foreign 

language disclosure requirements. Thus, 

the Bureau is amending § 1005.31(g)(1) 

to state that except as provided in 

§ 1005.31(g)(2), disclosures required by 

this subpart or permitted by 

§ 1005.31(b)(1)(viii) or § 1005.33(h)(3) 

must be made in English and, if 

applicable in accordance with 

§ 1005.31(g)(1)(i) and (ii). 

Section 1005.32 Estimates 

Consistent with EFTA section 919, the 

2012 Final Rule generally requires that 

disclosures provided to senders state the 

actual exchange rate, fees, and taxes that 

will apply to a remittance transfer and 

the actual amount that will be received 

by the designated recipient of a 

remittance transfer. Section 1005.32, as 

adopted in the 2012 Final Rule, 

includes only three specific exceptions 

to this requirement. First, consistent 

with EFTA section 919(a)(4), 

§ 1005.32(a) of the 2012 Final Rule 

provides a temporary exception for 

certain transfers by insured institutions. 

Second, consistent with EFTA section 

919(c), § 1005.32(b)(1) provides a 

permanent exception for transfers to 

certain countries. Third, the 2012 Final 

Rule also includes an exception under 

§ 1005.32(b)(2) for transfers scheduled 

five or more business days before the 

date of the transfer. Thus, a remittance 

transfer provider is permitted to 

estimate exchange rates, fees, and taxes 

that are required by § 1005.31 to be 

disclosed to the extent permitted in 

§ 1005.32(a) and (b). The December 

Proposal would have created additional 

exceptions to permit estimation with 

respect to certain recipient institution 

fees under proposed § 1005.32(b)(4) and 

national foreign taxes under proposed 

§ 1005.32(b)(3). The proposed related 

commentary would have described the 

particular methods that could be used to 

estimate under these two methods. As 

discussed above, under § 1005.31(d), in 

both cases, the provider would have 

been required to disclose that the 

amount was estimated pursuant to 

§ 1005.31(b)(1)(vi) and (vii). 

Given that the 2013 Final Rule does 

not require the disclosure of noncovered third-party fees or taxes 

collected by a person other than the 

remittance transfer provider (see 

§ 1005.31(b)(1)(vi)), the two proposed 

estimation methods are now 

unnecessary. As a result, the proposed 

changes to the 2012 Final Rule under 

§ 1005.32(b)(3) and (4) are not being 

adopted nor is the Bureau adopting the 

related proposed changes to the 

commentary. See proposed comments 

32(b)(3) and (4). 

Instead, as described below, the 

Bureau is adopting a new 

§ 1005.32(b)(3) to describe possible 

reasonable estimation methods that can 

be used where a remittance transfer 

provider elects to disclose non-covered 

third-party fees or taxes collected by a 

person other than the provider. 

32(b)(3) Estimates for Non-Covered 

Third-Party Fees and Taxes Collected by 

a Person Other Than the Provider 

As described above, the Bureau is 

eliminating the requirement to disclose 

certain recipient institution fees and 

taxes collected on the remittance 

transfer by a person other than the 

provider and to include such amounts 

in the amount received, required to be 

disclosed under § 1005.31(b)(1)(vii) and 

(b)(2)(i). Nevertheless, the Bureau 

believes that where the remittance 

transfer provider knows or can 

reasonably estimate any applicable noncovered third-party fee or tax collected 

on the remittance transfer by a person 

other than the provider and elects to 

disclose one or both of such amounts, 

senders are likely to benefit from more 

accurate and informative disclosures. 

Consequently, § 1005.31(b)(1)(viii) 

permits a provider to disclose any 

applicable non-covered third-party fees 

or taxes collected on the remittance 

transfer by a person other than the 

provider applicable to a remittance 

transfer in conjunction with the 

required disclaimers. 

In order to encourage the optional 

disclosure of such information, 

§ 1005.32(b)(3) of the 2013 Final Rule 

permits remittance transfer providers 

latitude to estimate any applicable noncovered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider. Such 

estimates may be based on reasonable 

sources of information. The Bureau 

acknowledges that permitting providers 

to estimate such amounts may result in 

providers providing disclosures that 

may not reflect the actual charge by 

individual recipient institutions or the 

taxes levied upon such transfers. 

Nonetheless, the Bureau believes that 

permitting a reasonable approximation 

of the amount of non-covered thirdparty fees and taxes collected on the 

remittance transfer by persons other 

than the remittance transfer provider 

that could be assessed based on 

reasonable sources would provide 

senders valuable information about the 

amount to be received while also 

allowing the provider sufficient 

flexibility to disclose such information. 

New comment 32(b)(3)–1 further 

notes that reasonable sources of 

information may include, for example: 

Information obtained from recent 

transfers to the same institution or the 

same country or region; fee schedules 

from the recipient institution; fee 

schedules from the recipient 

institution’s competitors; surveys of 

recipient institution fees in the same 

country or region as the recipient 

institution; information provided or 

surveys of recipient institutions’ 

regulators or taxing authorities; 

commercially or publicly available 

databases, services or sources; and 

information or resources developed by 

international nongovernmental 

organizations or intergovernmental 

organizations. The 2013 Final Rule also 

includes new model forms that provides 

examples of how such information may 

be integrated within the disclaimers of 

§ 1005.31(b)(1)(viii). See Model Forms 

30(b)–(d). 

Additional Conforming Edits to 

§ 1005.32 

In addition, because of the changes 

made to the disclosure requirements 

under § 1005.31(b)(1)(vi), 

§ 1005.32(b)(2)(ii) and (c)(3)(i) have been 

amended to conform with the 

requirements of § 1005.31(b)(1)(vi), as 

amended, which requires that a party 

disclose only covered third-party fees. 

Conforming changes have also been 

made to comments 32(a)(1)–1, (a)(1)– 

2.ii, 32(a)(1)–3.ii, and 32(b)(2)–1 so that 

these comments and related headings, 

as finalized, use the term ‘‘covered 

third-party fees’’ rather than ‘‘other 

fees.’’ 

In § 1005.32(c)(3)(ii), however, the 

Bureau notes that it has retained a 

reference to fees imposed by both the 

intermediary and the final recipient’s 

institution. Although fees imposed by 

the recipient institution are generally 

non-covered third-party fees, under 

§ 1005.30(h), certain recipient 

institution fees may qualify as covered 

third-party fees if they are imposed by 

an agent of the provider. See comment 

30(h)–2.ii. 

In addition to the conforming changes 

related to the disclosure of covered 

third-party fees pursuant to 

§ 1005.31(b)(1)(vi), references to taxes 

collected on the remittance transfer by 


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a person other than the provider in 

§ 1005.32(b)(2)(ii) and (c)(4) of the 2012 

Final Rule have been deleted and 

§ 1005.32(c)(5) has been renumbered as 

§ 1005.32(c)(4). Several comments 

clarifying how to estimate these taxes 

have also been deleted, including 

comments 32(a)(1)–2.iii, 32(a)(1)–3.iii 

and 32(c)(4)–1. 

Section 1005.33 Procedures for 

Resolving Errors 

EFTA section 919(d) provides that 

remittance transfer providers shall 

investigate and resolve errors where a 

sender provides a notice of an error 

within 180 days of the promised date of 

delivery of a remittance transfer. The 

statute generally does not define what 

types of transfers and inquiries 

constitute errors, but rather gives the 

Bureau broad authority to set standards 

for remittance transfer providers with 

respect to error resolution relating to 

remittance transfers. The 2012 Final 

Rule implements such error resolution 

standards in § 1005.33. 

Under § 1005.33, as adopted in the 

2012 Final Rule, an error occurs in 

various situations including when the 

remittance transfer is not made available 

to a designated recipient by the date of 

availability stated in the disclosure 

provided by § 1005.31(b)(2) or (3) for the 

remittance transfer. Such an error may 

result from a sender’s provision of an 

incorrect account or routing number to 

a remittance transfer provider. Industry 

expressed concern after the February 

Final Rule was published about the 

remedies available when a sender 

provides an incorrect account number to 

the provider. Providers have stated that 

in some cases, as a result of such errors, 

remittance transfers may be deposited 

into the wrong account and, despite 

reasonable efforts by the provider, 

cannot be recovered. Under 

§ 1005.33(c)(2)(ii) of the 2012 Final 

Rule, a provider is obligated to resend 

to the designated recipient or refund to 

the sender the total amount of the 

remittance transfer regardless of 

whether it can recover the funds. 

Industry has noted that this problem is 

of particular concern with respect to 

transfers of large sums, particularly for 

smaller institutions that might have 

more difficulty bearing the loss of the 

entire transfer amount. In addition, 

providers have expressed concern that 

the remedy provisions of the 2012 Final 

Rule create a potential for fraud, despite 

an exception that excludes transfers 

with fraudulent intent from the 

definition of error. See 

§ 1005.33(a)(1)(iv)(C). 

In response to these concerns, in the 

December Proposal the Bureau proposed 

a new exception to the definition of 

error in § 1005.33. The exception set 

forth in proposed § 1005.33(a)(1)(iv)(D) 

would have excluded from the 

definition of error under 

§ 1005.33(a)(1)(iv) the sender having 

given the remittance transfer provider 

an incorrect account number, provided 

the provider met certain specified 

conditions. The Bureau also proposed 

several other changes to the error 

resolution procedures in § 1005.33 to 

address questions of how remittance 

transfer providers should provide 

remedies to senders for errors that 

occurred because the sender provided 

incorrect or insufficient information. 

Based on comments received, the 

Bureau is adopting the proposed 

exception and is further revising these 

procedures as detailed below. The 

Bureau is also adopting conforming 

changes to the error resolution 

procedures to reflect revisions to the 

disclosure requirements concerning 

non-covered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the provider as well 

as making several technical, nonsubstantive changes. 

33(a) Definition of Error 

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

Covered 

Section 1005.33(a)(1) lists the types of 

remittance transfers or inquiries that 

constitute ‘‘errors’’ under the 2012 Final 

Rule. The types of errors relevant to this 

final rule are discussed below. 

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

by the Designated Recipient 

Section 1005.33(a)(1)(iii), as adopted 

in the 2012 Final Rule, defines as an 

error 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. The commentary to 

§ 1005.33(a)(1)(iii) explains that this 

category includes situations in which 

the designated recipient may receive an 

incorrect amount of currency. See 

comment 33(a)–2. Insofar as the Bureau 

is amending § 1005.31(b)(1)(vii) to 

exclude from the disclosed total to be 

received by the designated recipient 

non-covered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the provider, the 

Bureau has adjusted the definition of 

error under § 1005.33(a)(1)(iii) to reflect 

that change. Thus, as adopted in the 

2013 Final Rule, § 1005.33(a)(1)(iii) 

states that an error includes the failure 

to make available to a designated 

recipient the amount of currency 

disclosed pursuant to 

§ 1005.31(b)(1)(vii) and stated in the 

disclosure provided to the sender under 

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

transfer. Relatedly, the Bureau is adding 

a new exception, in 

§ 1005.33(a)(1)(iii)(C), which states that 

no error under § 1005.33(a)(1)(iii) occurs 

if the difference results from the 

application of non-covered third-party 

fees or taxes collected on the remittance 

transfer by a person other than the 

provider and the provider provided the 

disclosure required by 

§ 1005.31(b)(1)(viii). The Bureau is also 

making conforming edits to 

§ 1005.33(a)(1)(iii)(A) and (B) to allow 

for the addition of § 1005.33(a)(1)(iii)(C). 

The Bureau is also making 

conforming edits to the related 

commentary. In the 2013 Final Rule, the 

examples in comment 33(a)–3.ii are 

revised to reflect the changes discussed 

above regarding the disclosure of noncovered third-party fees and taxes 

collected on a remittance transfer by a 

person other than the provider. 

Comment 33(a)–3.ii, as revised, 

discusses as an example a situation in 

which 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 the additional foreign taxes 

that will be collected in Colombia on 

the transfer but includes the disclaimer 

required by § 1005.31(b)(1)(viii). The 

comment explains that because the 

designated recipient will receive less 

than the amount of currency disclosed 

on the receipt due solely to the 

additional foreign taxes that the 

provider was not required to disclose, 

no error has occurred. Comment 33(a)– 

3.iii, as revised, addresses a situation 

where 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 in this example will receive 

less than the amount of currency 

disclosed in the receipt due to the 

additional covered third-party fees, an 

error under § 1005.33(a)(1)(iii) has 

occurred. 

The Bureau is also adding new 

comment 33(a)–3.vi, which provides an 

example of a situation where a sender 

requests that his bank send US$120 to 

a designated recipient’s account at an 

institution in a foreign country. The 

foreign institution is not an agent of the 

provider. Only US$100 is deposited into 

the designated recipient’s account 

because the recipient institution 

imposed a US$20 incoming wire fee and 

deducted the fee from the amount 

deposited into the designated recipient’s 


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account. Because this fee is a noncovered third-party fee that the 

remittance transfer provider is not 

required to disclose under 

§ 1005.31(b)(1)(vi), no error has 

occurred if the provider provided the 

disclosure required by 

§ 1005.31(b)(1)(viii). 

Separately, in the December Proposal, 

the Bureau proposed to make technical 

corrections to comment 33(a)–4, which, 

as published in the Federal Register as 

part of the February Final Rule had 

improperly cited to 

§ 1005.33(a)(1)(iv)(B) rather than to 

§ 1005.33(a)(1)(iii)(B) and thus 

improperly described the relevant 

exception. The Bureau received no 

comments on this proposed correction, 

and it is adopted as proposed with a 

change to reflect the revisions discussed 

above to § 1005.31(b)(1)(vii). 

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

Available by Date of Availability 

33(a)(1)(iv)(D) 

Section 1005.33(a)(1)(iv) of the 2012 

Final Rule defines as an error a 

remittance transfer provider’s failure to 

make funds available to the designated 

recipient by the date of availability 

stated on the receipt or combined 

disclosure, subject to three listed 

exceptions, including an exception for 

remittance transfers made with 

fraudulent intent by the sender or a 

person working in concert with the 

sender. See § 1005.33(a)(1)(iv)(C). 

Comment 33(a)–5 to the 2012 Final Rule 

elaborates on the definition of the term 

‘‘error’’ under § 1005.33(a)(1)(iv) and 

explains that such errors under subpart 

B of Regulation E include, among other 

things, the late delivery of funds, the 

total non-delivery of a remittance 

transfer, and the delivery of funds to the 

wrong account. See comments 33(a)–5.1 

and .ii. The commentary further notes 

that if only a portion of the funds are 

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. 

As explained under comment 33(c)–2 

in the 2012 Final Rule, an error under 

§ 1005.33(a)(1)(iv) would include 

situations where a remittance transfer 

provider failed to make funds in 

connection with a remittance transfer 

available to a designated recipient by 

the disclosed date of availability 

because the sender provided an 

incorrect account number to the 

remittance transfer provider. After 

issuance of the 2012 Final Rule, the 

Bureau received comments from 

industry that providers often have no 

means to verify designated recipients’ 

account numbers for remittance 

transfers into foreign bank accounts. As 

a result, providers could have to bear 

the potentially significant costs of their 

customers’ mistakes in cases in which 

funds were deposited in the wrong 

account and could not be recovered as 

a result of the sender’s provision of an 

incorrect account number. 

In the December Proposal, the Bureau 

proposed to revise the definition of error 

in § 1005.33(a)(1)(iv) by adding a fourth, 

conditional exception. Proposed 

§ 1005.33(a)(1)(iv)(D) would have 

excluded from the definition of error a 

failure to make funds available to the 

designated recipient by the disclosed 

date of availability, where such failure 

resulted from the sender having given 

the remittance transfer provider an 

incorrect account number, provided that 

the provider met the conditions set forth 

in proposed § 1005.33(h). These 

proposed conditions, would have 

required providers to notify senders of 

the risk that their funds could be lost, 

to investigate reported errors, and to 

attempt to recover the missing funds. In 

addition, the exception would have 

been limited to situations in which the 

funds were actually deposited into the 

wrong account. Where these conditions 

were met, the proposed exception 

would not have required providers to 

bear the cost of refunding or resending 

transfers. 

The Bureau sought comment on the 

proposed exception generally and 

whether it should be limited to mistakes 

regarding account numbers or expanded 

to include other incorrect information 

provided by senders in connection with 

remittance transfers, such as routing 

numbers. Each of these is discussed 

below. 

Exception for Senders’ Mistakes 

Regarding Account Numbers 

Industry commenters uniformly 

supported the addition of the proposed 

exception to the definition of error 

where the error was caused by the 

sender’s provision of an incorrect 

account number. They put forth a 

number of reasons why they favored the 

proposed change. In many respects, 

these comments expanded upon those 

received prior to the December 

Proposal. 

Industry commenters reiterated earlier 

concerns about the large potential 

exposure given their general inability of 

remittance transfer providers to validate 

the accuracy of a designated recipient’s 

account number provided in connection 

with a wire transfers and similar types 

of open network transfers sent to 

accounts at banks and other institutions 

abroad. These commenters argued that 

providers sending these transfers over 

open networks generally have limited 

ability to cross-check account numbers 

with the names of accountholders prior 

to sending transfers because they often 

have no direct relationships with 

recipient institutions and thus no means 

of accessing those institutions’ account 

information. Commenters further stated 

that as a result, the only way for a 

provider to validate such numbers may 

be to contact the recipient institution 

manually, which may be timeconsuming and difficult due to language 

and time zone issues. Such validation 

would necessitate manual handling of 

remittance transfers and limit the ability 

of providers to use automated systems, 

which are less costly than manual 

handling of each transfer. Commenters 

stated their concern that manual 

validation could substantially increase 

costs to senders and delay the 

processing of remittance transfers. 

Relatedly, several commenters claimed 

that it was infeasible to expect providers 

to develop account number verification 

systems, automated or otherwise, before 

the effective date of the 2012 Final Rule 

(which was scheduled to take effect on 

February 7, 2013) due to the number of 

institutions worldwide that would need 

to adjust their systems used for 

transmitting wires. 

Industry commenters also reiterated 

concerns expressed prior to the issuance 

of the December Proposal regarding the 

potential for fraud if a sender’s 

provision of an incorrect account 

number is considered an error under 

§ 1005.33(a)(1)(iv). As discussed in the 

December Proposal, commenters had 

stated that the 2012 Final Rule could 

enable fraudulent activity to flourish 

because, if unscrupulous senders 

provided incorrect account numbers 

and funds were sent to a coconspirator, 

remittance transfer providers might 

have to send transfer amounts again to 

another coconspirator without first 

recovering them. Commenters argued 

that the fraud exception in the 2012 

Final Rule—§ 1005.33(a)(1)(iv)(C)—is 

insufficient because for providers to use 

the exception would be difficult in most 

circumstances. Many industry 

commenters stated that providers in the 

United States typically have a limited 

ability to gather evidence of fraud from 

a recipient institution abroad or to 

mandate cooperation from foreign 

institutions with whom they have no 

direct relationship. Industry 

commenters also noted that even if a 

provider suspected fraud, the lack of 

evidence would cause providers to 

hesitate to accuse one of its own 

customers of fraud. Industry 


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8Section 1005.11 of subpart A of Regulation E 

contains error resolution provisions for electronic 

fund transfers. Section 1005.11(a)(ii) states that a 

potential error under the rule is an ‘‘incorrect 

electronic fund transfer to or from the consumer’s 

account.’’ 

commenters also stated that the 2012 

Final Rule departed from current 

industry practice by requiring that 

remittance transfer providers resend or 

refund a remittance transfer even when 

a sender’s mistake results in misdelivery of funds that cannot be 

recovered. 

Many industry commenters expressed 

concern that in light of the significant 

exposure under the 2012 Final Rule’s 

sender error provisions, if the Bureau 

did not revise the error resolution 

procedures as it proposed to do in the 

December Proposal, many remittance 

transfer providers would curtail their 

remittance transfer offerings such as by 

limiting the amount permitted per 

transfer, limiting transfers to certain 

trusted customers, or by exiting the 

remittance transfer business altogether. 

Industry commenters also argued that 

the Bureau should not have adopted the 

approach taken in the 2012 Final Rule 

to sender error because it was not 

mandated by statute. One of these 

commenters opined that because the 

Dodd-Frank Act was not specific with 

respect to who must bear the cost of a 

mis-directed remittance transfer, the 

Bureau’s legal authority to require 

remittance transfer providers to bear the 

cost of mistakes made by senders was 

questionable. 

In contrast to comments from 

industry, consumer group commenters 

were divided on whether the Bureau 

should adopt the proposed exception for 

certain sender errors. Two consumer 

groups supported the proposed change 

because, they contended, the proposed 

rule achieved the appropriate allocation 

of risk between senders and remittance 

transfer providers and incentivized 

providers to minimize the occurrence of 

errors. These commenters also stated 

that it would be difficult for providers, 

particularly small providers, to retrieve 

funds sent to the wrong account. They 

further asserted that it would be 

difficult for providers, and particularly 

credit unions, to accuse their customers 

or members of fraud in order to avail 

themselves of the fraud exception in 

§ 1005.33(a)(1)(iv)(C). As a result, these 

consumer group commenters argued 

that absent the proposed revision, many 

providers might choose to exit the 

remittance transfer business altogether, 

resulting in a loss of access to senders. 

Other consumer groups opposed the 

proposed changes and urged the Bureau 

not to amend the 2012 Final Rule with 

respect to sender mistakes regarding 

account numbers that result in the loss 

of the transfer amount. First, some of 

these groups argued that the Bureau 

would be undermining the intent of 

Congress, which, they argued, was to 

motivate industry to change existing 

practices to develop more secure means 

of sending remittance transfers. By 

adopting the proposed exception, these 

commenters argued, the Bureau would 

eliminate any incentive for remittance 

transfer providers to develop enhanced 

security procedures. Relatedly, some 

consumer groups also argued that the 

existing definition of error in subpart A 

of Regulation E, specifically 

§ 1005.11(a)(ii), already addresses the 

situation in which a consumer provides 

an incorrect recipient account number 

by creating an error for ‘‘incorrect’’ 

electronic fund transfers.8 These 

commenters noted that insofar as 

§ 1005.11(a)(ii) is phrased in general 

terms and refers to an ‘‘incorrect 

electronic fund transfer’’ by its plain 

language it does not exclude incorrect 

information provided by a consumer (or 

any other party). Insofar as 

§ 1005.11(a)(ii) has long applied to a 

portion of remittance transfers, the 

commenters contended that had 

Congress intended to deny the 

protections of this provision to 

consumers, it would have done so more 

explicitly. 

Finally, some consumer group 

commenters suggested that the Bureau 

should not adopt the proposed 

exception to the definition of error, even 

if the 2012 Final Rule would result in 

some remittance transfer providers 

exiting the market because they are 

unable to implement adequate 

verification procedures today. 

Alternatively, these commenters 

suggested that, in order to reduce the 

risk of market exit, that the Bureau 

could adopt the proposed revisions, but 

limit the proposed exception to the 

definition of error to transfers over a 

certain dollar amount so that senders of 

smaller transfers would still benefit 

from the error provisions in the 2012 

Final Rule. 

Upon consideration of these 

comments and further consideration 

and to facilitate compliance, the Bureau 

is finalizing § 1005.33(a)(1)(iv)(D) with 

several changes from the proposed 

provision, which are discussed below. 

As in the December Proposal, the 

exception as finalized will only apply if 

a remittance transfer provider can meet 

certain conditions including warnings 

to senders and use of reasonable 

validation methods where available. 

These conditions are set forth in 

§ 1005.33(h) and also are discussed in 

detail below. Where the exception 

applies, providers will not be required 

to bear the cost of refunding or 

resending transfers if funds ultimately 

cannot be recovered. 

As it noted in the December Proposal, 

the Bureau believes that this exception 

appropriately allocates risk based on 

remittance transfer providers’ existing 

methods for sending transfers, which 

often do not allow for or facilitate 

verification of designated recipients’ 

account numbers. The Bureau continues 

to believe it is important for industry to 

develop improved security procedures 

and expects to engage in a dialogue with 

industry about how to encourage the 

growth of improved controls and 

communication mechanisms. But the 

Bureau understands that industry is 

unlikely to be reasonably able to 

implement such changes in the near 

future. Subpart B of Regulation E does 

not regulate most recipient institutions, 

and the Bureau has concluded that 

individual providers, and particularly 

those sending transfers through open 

networks have limited ability to 

influence the practices of financial 

institutions worldwide in the short 

term. 

Absent such changes, the Bureau is 

concerned that remittance transfer 

providers will exit the market or reduce 

remittance offerings rather than risk 

having to bear the cost of the entire 

transfer amount where funds are 

deposited into the wrong account due to 

the sender’s provision of an incorrect 

account number. The Bureau believes 

such an interim disruption would not be 

in consumers’ best interests, and thus 

has finalized the proposed exception as 

discussed below. The Bureau, however, 

will continue to evaluate the 

development of procedures as it 

monitors providers’ implementation of 

and compliance with the 2013 Final 

Rule. 

The Bureau disagrees with those 

consumer group commenters that the 

2012 Final Rule should be allowed to 

take effect absent the proposed 

exception for sender account number 

mistakes, and that the Bureau should 

instead monitor whether the concerns 

summarized in the December 

Proposal—such as increased fraud and 

remittance transfer providers exiting the 

market—actually materialize. As stated 

above and in the December Proposal, 

the Bureau is concerned that absent the 

proposed change, some providers would 

severely curtail their offerings or 

withdraw from the remittance transfer 

business altogether, and such a market 

change could have a negative impact on 

senders. The Bureau also does not 

believe, as commenters suggested, that it 


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9For example, in order to route a wire transfer to 

a foreign bank, a bank in the United States may 

require that the sender provide the name of the 

designated recipient and the recipient’s institution 

as well as the BIC for the recipient’s institution, and 

the recipient’s account number. 

is appropriate to limit the scope of the 

exception to larger value transfers, 

because doing so could potentially 

encourage providers to limit senders’ 

access to smaller value transfers. In 

addition, the Bureau does not believe it 

appropriate to engage in line drawing or 

to provide differential protections in 

this circumstance. Furthermore, the 

Bureau disagrees that the proposed 

exception would harm senders in that 

the exception in many ways maintains 

the status quo insofar as the Bureau 

believes that, today, senders typically 

bear the loss when their mistake leads 

to a mis-deposit. Nor does the Bureau 

believe that the problem of senders 

losing the transfer amount is 

particularly widespread today; insofar 

as the status quo is maintained, the 

Bureau does not expect this to change. 

The Bureau’s outreach confirmed that in 

most cases where there is a problem in 

the transmission of a remittance 

transfer, the provider is able to retrieve 

the funds or have them routed properly. 

With regard to commenters’ 

arguments about the Bureau’s statutory 

authority, the Bureau disagrees both 

with industry participant and consumer 

group arguments that the EFTA or 

section 1073 of the Dodd-Frank Act 

specifies which party must bear the cost 

of a sender’s mistake with respect to 

remittance transfer. Rather, EFTA 

section 919 gives the Bureau broad 

discretion to set standards for 

remittance transfer providers with 

respect to error resolution, including to 

define errors, and does not mandate a 

specific result with regard to which 

party should bear the risk of loss under 

any particular circumstances. Nor does 

the Bureau believe that the definition of 

error in subpart A of Regulation E, 

which does not apply to all remittance 

transfers, precludes the Bureau from 

adopting more specifically tailored error 

resolutions, and corresponding 

definitions, applicable to all remittance 

transfers under subpart B of Regulation 

E. See also § 1005.33(f). Accordingly, 

the Bureau has adopted the proposed 

exception for sender account number 

mistakes subject to specific conditions 

discussed below. 

The Scope of the Sender Error 

Exception 

As noted above the Bureau also 

sought comment on the scope of the 

proposed exception to the definition of 

error under § 1005.33(a)(1)(iv) and 

whether it should apply to incorrect 

information provided by senders in 

addition to designated recipients’ 

account numbers and, in particular, 

whether the proposed exception should 

apply in cases in which senders make 

mistakes regarding routing numbers or 

similar institution identifiers in 

addition to mistakes regarding account 

numbers. 

In response, many industry 

commenters suggested that the proposed 

exception be expanded to refer to sender 

mistakes regarding any information 

provided by a sender in connection with 

a remittance transfer rather than just 

mistaken account numbers, as proposed. 

Other commenters listed specific types 

of incorrect information that should be 

addressed by the exception to 

§ 1005.33(a)(1)(iv), such as: Routing 

numbers, Business Identifier Codes 

(BICs), Society for Worldwide Interbank 

Financial Telecommunication codes 

(SWIFT codes), International Bank 

Account Numbers (IBANs), local bank 

codes, prepaid, debit or credit card 

account numbers, recipient institutions’ 

names, designated recipients’ names, 

escrow account numbers, currencies in 

which transfers will be received, 

incomplete wire instructions, and 

recipients’ email addresses, phone 

numbers, and addresses. Commenters 

offered different reasons as to why the 

proposed exception should be expanded 

to include sender mistakes regarding 

each suggested type of information. In 

addition to considering these comments, 

the Bureau conducted additional 

outreach to understand the nature of 

errors related to the suggested types of 

information and why remittance transfer 

providers thought they should be 

included in any exception to an error 

under § 1005.33(a)(1)(iv) in the 2012 

Final Rule. 

Many of the industry commenters that 

urged that the proposed exception 

should be extended to all mistakes made 

by senders argued, as noted above, that 

there is no statutory basis to make 

remittance transfer providers bear the 

cost of all senders’ mistakes. Relatedly, 

one commenter argued that no other 

consumer finance statute protects 

consumers from their own errors and 

that there is a distinction between 

allocating risk to a provider for mistakes 

by third parties, or where fault cannot 

be determined, and requiring providers 

to bear the cost of senders’ mistakes. 

As for the specific types of 

information provided by senders, nearly 

all industry commenters and some 

consumer group commenters favored 

expanding the proposed exception to 

apply to sender mistakes regarding 

routing numbers and other recipient 

institution identifiers. Commenters 

explained that for many remittance 

transfers into accounts, remittance 

transfer providers request, in addition to 

the number of the designated recipient’s 

account, an alphanumeric identifier of 

the recipient institution, similar to the 

routing numbers used to identify 

depository institutions in the United 

States.9 Providers, and any other 

intermediaries involved in the transfer, 

then use this identifier to determine the 

institution to which the transfer should 

be sent. Commenters further explained 

that, in many cases, a sender’s mistake 

regarding the identifier of a bank could 

pose a similar problem for a provider as 

an incorrect account number. The 

commenters stated that, like account 

numbers, many providers lack the 

ability to verify the accuracy of 

alphanumerical identifiers related to 

recipient institutions that are provided 

by senders. If a recipient institution 

identifier is incorrect and the provider 

does not match it with an institution 

name, funds could conceivably be misdeposited if the institution represented 

by the incorrect routing number has an 

account matching the number provided 

by the sender. 

In addition to sender mistakes 

regarding account numbers and 

recipient institution identifiers, several 

commenters asked that the Bureau 

exclude from the definition of error 

under § 1005.33(a)(1)(iv) senders’ 

mistakes regarding correspondent 

routing instructions (i.e., if the sender 

suggests that the remittance transfer 

provider send the transfer through a 

particular correspondent that is unable 

to complete the transfer). Several 

commenters stated that generally this 

sort of mistake generally would lead to 

a delay of a transfer and not its misdeposit into the wrong account. 

Finally, several industry commenters 

argued that the proposed exception 

should be expanded to apply to senders’ 

mistakes regarding designated 

recipients’ names and information that 

the designated recipient themselves 

might need to apply the proceeds of 

remittance transfers after receipt. For 

example, a trade association commenter 

asked that the Bureau expand the 

proposed exception to include sender 

mistakes about additional information a 

designated recipient needs to process a 

transfer it receives. The commenter 

stated that if, for example, the 

designated recipient is an insurer, it 

might need the designated recipient’s 

policy number to process the funds 

received. Similarly, one commenter 

stated that if a designated recipient is a 

property lessor, the lessor might need an 

identifying apartment number in order 


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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30685 

to process a transfer that is a rent 

payment. 

After careful consideration of the 

comments received and upon further 

consideration, the Bureau is expanding 

the exception to the definition of error 

in § 1005.33(a)(1)(iv)(D) to include 

situations where a sender has provided 

an incorrect recipient institution 

identifier in addition to situations 

where a sender provides an incorrect 

account number, as long as the error 

results in a mis-deposit of the funds and 

that the remittance transfer provider 

meets the conditions set forth in 

§ 1005.33(h). As discussed below, the 

2013 Final Rule includes as one such 

condition, that the provider use 

reasonably available means to verify the 

recipient institution identifier provided 

by the sender. See § 1005.33(h)(2). 

Based on its monitoring of the 

remittance market, review of comment 

letters, and other outreach, the Bureau 

believes that situations in which an 

incorrect recipient institution identifier 

could result in a transfer being 

deposited into the wrong account are 

exceedingly rare but not unheard of. 

More typically, the Bureau understands, 

a mistaken identifier will result in a 

transfer that is returned to the 

remittance transfer provider because 

either the identifier does not match any 

institution or the account number does 

not match an account at the institution 

to which the transfer is mistakenly 

directed. Nevertheless, the Bureau is 

expanding the exception in the 2013 

Final Rule beyond what was proposed 

because, upon further consideration, it 

believes that it is appropriate to treat 

mistakes in recipient institution 

identifiers similarly to mistakes in 

account numbers. The two types of 

identifiers are similar in purpose and, in 

some cases, are combined into one. In 

addition, these identifiers may not be 

easily verifiable by providers sending 

remittance transfers over an open 

network and are used in straightthrough, automated processing of 

transfers. Additionally, although less 

likely than as with respect to account 

numbers, under the 2012 Final Rule an 

unscrupulous sender could potentially 

provide an incorrect routing number to 

perpetrate a fraud with a coconspirator 

abroad. 

Contrary to requests by commenters 

that the Bureau extend the proposed 

exception for sender mistakes regarding 

account numbers to mistakes regarding 

all types of information, the Bureau is 

limiting the exception in 

§ 1005.33(a)(1)(iv)(D) to sender mistakes 

regarding account numbers and 

recipient institution identifiers because 

it does not believe it is appropriate to 

extend the exception to all mistakes a 

sender might make in connection with 

a remittance transfer for several reasons. 

While the chance of mis-deposit is 

limited for all sender mistakes, the 

Bureau believes there is a greater risk for 

mistakes regarding account numbers 

and recipient institution identifiers. 

However, for most other types of sender 

mistakes identified by commenters, 

such as mistakes regarding the 

recipient’s address or wire instructions, 

the Bureau does not believe that the 

incorrect information would usually 

result in a mis-deposit of a remittance 

transfer. Instead, the Bureau believes 

that these mistakes will at most result in 

a delay of delivery or in non-delivery of 

the remittance transfer. In situations 

where the recipient institution identifies 

a customer with the same name as the 

designated recipient but is unable to 

match that customer’s name to the 

provided account number, the Bureau 

believes that the recipient institution 

will generally be unable to apply the 

funds and that the transfer will be 

returned or otherwise delayed but that 

the funds will not be mis-deposited. 

The Bureau does not believe that it is 

warranted to extend the exception to 

those sender mistakes that are likely to 

result only in either a delay or a return 

of the transfer to the remittance transfer 

provider, and not the loss of funds, 

because the cost to the provider of delay 

or non-delivery differs markedly from 

the cost of lost transfers. Under the 2012 

Final Rule, when a transfer is delayed 

or returned to the provider, the provider 

must refund its fee to the sender. See 

§ 1005.33(c)(2)(ii). Additionally, when 

the transfer is returned to the provider, 

the sender can request that the transfer 

be resent at no charge (although thirdparty fees may be imposed on the 

resend) or have the transfer amount 

refunded. See § 1005.33(c)(2)(ii). The 

cost to the provider in these 

circumstances differs markedly from the 

cost to the provider under the 2012 

Final Rule for a transfer that is misdeposited into the wrong account and 

cannot be retrieved. When a mis-deposit 

occurs, absent an exception, the 

provider may have to resend or refund 

the entire transfer amount if the transfer 

could not be retrieved from the wrong 

account rather than merely refund its 

fee or send a transfer at no cost. See 

§ 1005.33(c)(2)(ii) and comment 33(c)–2 

in the 2012 Final Rule. Thus, for misdeposited transfers, the fact that the 

provider is potentially at risk of having 

to absorb a loss of principal is far higher 

than for other types of errors and thus 

is far more likely to lead to a significant 

curtailment of services. Furthermore, 

the Bureau believes that, in many 

respects, the remedy under the 2012 

Final Rule for non-delivery is similar to 

many providers’ existing practices in 

that they now resend funds at no charge 

with the corrected information. 

Therefore, to maintain as an error 

sender mistakes that merely result in 

delay or non-delivery of the remittance 

transfer as part of this final rule would 

not require a significant adjustment for 

those providers. Finally, the 2012 Final 

Rule already allows providers a 

mechanism to manage uncertainty 

regarding the date of delivery of funds. 

See § 1005.31(b)(2)(ii) and comment 

32(b)(2)–1 (interpreting 

§ 1005.31(b)(2)(ii) to allow a provider to 

disclose the ‘‘latest date on which funds 

will be available’’). 

Several industry commenters 

suggested that the Bureau should make 

senders, rather than providers, bear the 

costs of their own mistakes because no 

other consumer protection regimes 

makes the regulated entities bear the 

costs of consumers’ mistakes. The 

Bureau does not think it is necessary or 

appropriate that the remittances rules’ 

remedy provisions match perfectly 

those in other consumer protection 

regimes, given the unique statutory 

structure and nature of the transactions 

at issue. The Bureau is maintaining the 

2012 Final Rule’s error provisions 

regarding sender mistakes other than 

those covered by the exception in 

§ 1005.33(a)(1)(iv)(D), because it 

believes providers are generally in the 

best position to institute systems to 

limit their occurrence and to work with 

other industry participants to resolve 

particular mistakes in transmissions. 

With respect to those mistakes that 

are likely to result only in a delay or 

non-delivery of a remittance transfer 

(e.g., mistakes other than those 

regarding account number or the 

recipient institution identifier), the 

Bureau believes that retaining the 

current rule, which does not include an 

exception for such mistakes, strikes the 

appropriate balance been protecting 

senders and encouraging providers to 

limit the incidence of such errors 

without exposing providers to the risk 

of loss of the transfer amount. With 

respect to those sender mistakes that 

make it impossible for the recipient (as 

opposed to the recipient institution) to 

know how to use the funds received 

(e.g., an apartment number to apply a 

rent payment), the Bureau does not 

believe that such mistakes would give 

rise to an error under § 1005.33(a)(1)(iv). 

This is true because the 2013 Final Rule 

only does not define as an error the 

inability of the designated recipient to 


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timely apply the funds for a particular 

purpose once a transfer is received. 

The Bureau also does not believe that 

a sender’s provision of an incorrect 

name would result in an error under the 

2013 Final Rule, and thus a sender’s 

provision of an incorrect name need not 

be included in the exception from the 

term error under § 1005.33(a)(1)(iv)(D). 

As defined under § 1005.30(c), a 

designated recipient is ‘‘any person 

specified by the sender as the 

authorized recipient of a remittance 

transfer to be received at a foreign 

country.’’ As noted above, comment 

30(c)–1 in the 2012 Final Rule stated 

that a designated recipient can be either 

a natural person or an organization, 

such as a corporation. The Bureau is 

further clarifying this comment in the 

2013 Final Rule to explain that the 

designated recipient is identified by the 

name of the person provided by the 

sender to the remittance transfer 

provider and disclosed by the provider 

to the sender pursuant to 

§ 1005.31(b)(1)(iii). See comment 30(c)– 

1. Thus, assume for example that a 

sender tells a remittance transfer 

provider to send a transfer to ‘‘Jane Doe’’ 

at a foreign bank, the provider discloses 

‘‘Jane Doe’’ pursuant to 

§ 1005.31(b)(2)(iii), and the transfer is 

timely deposited by that bank into Jane 

Doe’s account. If the sender later asserts 

that an error occurred because the 

sender in fact intended the transfer to be 

sent to ‘‘John Doe’’ but had not 

communicated that to the provider, no 

error has occurred under the final rule 

because ‘‘Jane Doe’’ was the name of the 

designated recipient stated on the 

receipt provided to the sender. 

In some cases, however, a sender’s 

name can result in an error. If, for 

example, the recipient institution could 

not deliver the remittance transfer 

described above because no one named 

‘‘Jane Doe’’ had an account at the 

recipient institution, or more than one 

person named ‘‘Jane Doe’’ had an 

account at that institution such that the 

funds could not be applied, the transfer 

would be delayed or rejected resulting 

in an error because the sender provided 

incorrect or insufficient information. 

Insofar as this would not lead to the 

deposit of the transfer in the wrong 

account, the Bureau is not inclined to 

include these mistakes in the exception. 

Commenters also urged the Bureau to 

include in the exception to 

§ 1005.33(a)(1)(iv) to mistakes regarding 

mobile phone numbers, email 

addresses, and debit, credit and prepaid 

card numbers, arguing that these 

additional categories of identifiers 

warrant the same treatment as those 

covered by proposed 

§ 1005.33(a)(1)(iv)(D). Commenters 

supporting expansion of the exception 

to include these identifiers generally put 

forth the same reasons as those 

discussed above regarding account 

numbers and recipient institution 

identifiers. These commenters generally 

did not address the practical differences 

between transfers sent between bank 

accounts and those sent to other types 

of accounts. 

The Bureau does not think it 

appropriate to extend the exception to 

§ 1005.33(a)(1)(iv)(D) to these sorts of 

identifiers for several reasons. First, 

§ 1005.31(b)(2)(iii) requires that a 

remittance transfer provider disclose the 

name of the designated recipient to the 

sender and comment 30(c)–1 now 

clarifies that the designated recipient is 

identified by the name of the person 

stated on the disclosure provided 

pursuant to § 1005.31(b)(1)(iii) 

regardless of what other identifying 

information that the sender may also 

have provided to the provider. Insofar as 

a provider must disclose the name of the 

designated recipient on the receipt 

provided to the sender, the provider is 

not permitted to process a remittance 

transfer under the 2013 Final Rule by 

only disclosing a non-name identifier, 

such as a card number, email address, 

or mobile number. To the extent 

providers currently send transfers 

without disclosing a name to the sender, 

they will not be able to continue doing 

so once the 2013 Final Rule takes effect. 

Second, the Bureau believes that in 

the current market, only a small number 

of providers send remittance transfers to 

designated recipients who are identified 

by mobile phone numbers, email 

addresses, and debit, credit and prepaid 

card numbers. These providers are often 

conducting transfers between two of 

their own customers through a closed 

network, and thus are in position to 

verify designated recipients’ identities. 

In other words, for transfers conducted 

through these closed-networks, both the 

sender and recipient will have agreed to 

sign on to the provider’s network in 

order to send or receive funds. The 

Bureau understands that, today, a 

number of the providers using these 

identifiers may not verify that the 

identifier matches the name of the 

designated recipient in every instance. 

However, the Bureau believes that 

unlike providers using account numbers 

to identify designated recipients in 

transfers through the open network 

system, these providers have a 

reasonable ability to implement security 

measures in order to limit the 

possibility that senders make mistakes 

regarding designated recipients’ mobile 

phone numbers, email addresses, and 

debit, credit and prepaid card numbers. 

These measures might include 

confirmation codes, test transactions, or 

other methods to prevent transfers from 

being sent to the wrong person. 

Third, the Bureau believes that the 

systems are still limited and nascent for 

transfers in which the mobile phone 

numbers, email addresses, and debit, 

credit and prepaid card numbers are 

used to identify designated recipients 

and the transfer is not sent entirely over 

the remittance transfer provider’s own 

network. As these systems grow, the 

Bureau expects that providers can 

proactively design systems in such a 

way as to allow for the development of 

better verification protocols. If, in the 

future, providers intend to develop new 

systems to allow transfers using only 

names and mobile phone numbers to 

identify designated recipients, for 

example, the Bureau believes that such 

systems should be designed to verify 

that the provided names and numbers 

match before recipients can receive 

transfers. The Bureau does not believe 

that such methods can be implemented 

for most transfers sent to bank accounts. 

As described above, such transfers are 

generally sent as wire transfers, through 

an open network system. 

As noted, the Bureau has limited the 

exception in § 1005.33(a)(1)(iv)(D) to 

account numbers and recipient 

institution identifiers in order to 

encourage the growth of improved 

controls and communication 

mechanisms that may generally limit 

the possibility of other errors in the 

transmission of remittance transfers. 

Furthermore, the Bureau intends to 

monitor closely industry’s ability to 

verify account numbers and recipient 

institution identifiers and will consider 

modifying this exception if it thinks 

such verification methods become 

reasonably available and are able to 

prevent most errors from occurring. 

Comment 33(a)–7 

In the December Proposal, the Bureau 

proposed comment 33(a)–7 to explain 

further when the proposed exception in 

§ 1005.33(a)(1)(iv)(D) would apply. The 

Bureau received no comments on this 

proposed comment and it is adopted 

with minor clarifying changes in light of 

the conditions in § 1005.33(h) in the 

2013 Final Rule, which are discussed 

further below. Comment 33(a)–7 in the 

2013 Final Rule now states that the 

exception in § 1005.33(a)(1)(iv)(D) 

applies where a sender gives the 

remittance transfer provider an incorrect 

account number or recipient institution 

identifier and all five conditions in 

§ 1005.33(h) are satisfied. The exception 

does not apply, however, where the 


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failure to make funds available is the 

result of a mistake by a provider or a 

third party or due to incorrect or 

insufficient information provided by the 

sender other than an incorrect account 

number or recipient institution 

identifier, such as an incorrect name of 

the recipient institution. 

Comments 33(a)–8 and 33(a)–9 

To clarify what the Bureau means by 

account number and recipient 

institution identifier, the Bureau is also 

adopting new comment 33(a)–8. 

Comment 33(a)–8 states that, for 

purposes of the exception in 

§ 1005.33(a)(1)(iv)(D), the terms account 

number and recipient institution 

identifier refer to alphanumerical 

account or institution identifiers other 

than names or addresses, such as 

account numbers, routing numbers, 

Canadian transit numbers, ISO 9362 or 

13616 codes (including International 

Bank Account Numbers (IBANs) and 

Business Identifier Codes (BICs)) and 

other similar account or institution 

identifiers. In addition, for purposes of 

this exception, the term designated 

recipient’s account refers only to an 

account held in the recipient’s name at 

a bank, credit union, or equivalent 

institution that maintains savings or 

checking accounts or accounts used for 

the purchase or sale of securities. An 

account for purposes of this definition 

is not limited to accounts held by 

consumers. For the reasons discussed 

above, the comment states that the term 

does not, however, refer to a credit card, 

prepaid card, or a virtual account held 

by an Internet-based or mobile phone 

company that is not a bank, credit 

union, or equivalent institution. 

The Bureau proposed to renumber 

comment 33(a)–7 in the 2012 Final Rule 

as comment 33)(a)–8. Due to the 

addition of both comments 33(a)–7 and 

–8 in the 2013 Final Rule, this comment 

will be renumbered as comment 33(a)– 

9 but is otherwise unchanged from the 

2012 Final Rule. 

33(a)(2) Types of Inquiries and 

Transfers Not Covered 

Section 1005.33(a)(2) and the 

accompanying commentary address 

circumstances that do not constitute 

errors under the 2012 Final Rule. 

Section 1005.33(a)(2)(iv) provides that 

an error does not include a change in 

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. Comment 33(a)–8 of the 

2012 Final Rule provides two 

illustrative examples. 

The December Proposal would have 

made revisions to § 1005.33(a)(2)(iv) in 

accordance with the proposed revisions 

to §§ 1005.31(b)(1)(vi) and (vii) and the 

accompanying commentary to make 

clear that an error does not include a 

change in the amount of currency 

received by the designated recipient 

from the amount disclosed because the 

remittance transfer provider did not 

disclose foreign taxes other than those 

imposed by a central government. This 

proposed change would have been 

consistent with the proposed 

elimination of the requirement to 

disclose subnational taxes pursuant to 

proposed § 1005.31(b)(1)(vi). Insofar as 

the Bureau is not adopting this part of 

the proposal these proposed changes to 

§ 1005.33(a)(1)(iii) are not being adopted 

in the 2013 Final Rule. 

The Bureau also proposed revisions to 

renumber and revise comment 33(a)–8 

in the 2012 Final Rule in light of the 

revisions proposed to § 1005.31(b)(1)(vi) 

and (vii) to explain that a remittance 

transfer provider need not disclose 

regional, provincial, state or other local 

foreign taxes. Proposed comment 33(a)– 

9 would have revised the comment to 

explain that a provider need not 

disclose regional, provincial, state or 

other local foreign taxes. The proposed 

revisions also would have made clear 

that where, under the proposal, a 

provider was permitted to rely on a 

sender’s representations, no error would 

have occurred. As proposed, comment 

33(a)–9 would additionally have 

explained that any discrepancy between 

the amount disclosed and the actual 

amount received resulting from the 

provider’s reliance upon the proposed 

provision that would not have required 

the disclosure of subnational taxes 

would not constitute an error under 

§ 1005.33(a)(2)(iv). Insofar as the Bureau 

is not adopting the proposed changes 

regarding subnational taxes, the 

proposed revisions to the comment are 

no longer relevant and are not being 

adopted. The Bureau is, however, 

removing language from comment 

33(a)–8 that referred to a provider’s 

reliance on the sender’s representations 

regarding variables that affect the 

amount of taxes imposed by a person 

other than the provider because such 

taxes are no longer required to be 

disclosed. The comment is finalized as 

comment 33(a)–10. In the 2013 Final 

Rule comment 33(a)–10 states that 

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 and 31(b)(1)(vi)–1. 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). 

33(c) Time Limits and Extent of 

Investigation 

33(c)(2) Remedies 

Section 1005.33(c)(2) of the 2012 

Final Rule implements EFTA section 

919(d)(1)(B) and establishes procedures 

and remedies for correcting an error 

under the rule. In particular, where 

there has been an error under 

§ 1005.33(a)(1)(iv) for failure to make 

funds available to a designated recipient 

by the disclosed date of availability, 

§ 1005.33(c)(2)(ii) of the 2012 Final Rule 

permits a sender to choose either to: (1) 

Obtain a refund of the amount tendered 

in connection with the remittance that 

was not properly transmitted, or an 

amount appropriate to resolve the error; 

or (2) have the remittance transfer 

provider resend to the designated 

recipient the amount appropriate to 

resolve the error, at no additional cost 

to the sender or designated recipient. 

See § 1005.33(c)(2)(ii)(A). However, if 

the error resulted from the sender 

having provided incorrect or 

insufficient information, 

§ 1005.33(c)(2)(ii)(A)(2) permits thirdparty fees to be imposed for resending 

the remittance transfer with the 

corrected information although the 

provider may not charge its own fee 

again. In addition, comment 33(c)–2 

explains that § 1005.33(c)(2) requires a 

remittance transfer provider to resend a 

transfer at the exchange rate it is using 

on the date of resend if funds were not 

already exchanged in the first 

unsuccessful remittance transfer 

attempt. Comment 33(c)–2 in the 2012 

Final Rule also explains that the 

provider was required to disclose this 

new exchange rate to senders in 

accordance with § 1005.31. 

The December Proposal would have 

allowed for additional flexibility in 

providing the required disclosures when 

funds are resent following errors that 

occurred because the sender provided 

incorrect or insufficient information. 

The December Proposal was intended to 

address concerns expressed by industry 

participants that the approach taken in 


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the 2012 Final Rule created certain 

operational tensions between the timing 

and accuracy provisions in § 1005.31(e) 

and (f), as referenced in comments 

33(c)–2, 33(c)–3, and 33(c)–4, which 

together did not allow a remittance 

transfer provider to resend a transfer in 

some circumstances without contacting 

the sender because the sender either 

previously requested that the transfer be 

resent or the provider is employing its 

default remedy, which is to resend the 

transfer. 

To reduce this tension, the December 

Proposal would have created a new 

§ 1005.33(c)(3), revised comment 33(c)– 

2 and added a new comment 33(c)–11. 

Proposed § 1005.33(c)(3) would have 

provided new remedy procedures for 

errors that occurred pursuant to 

§ 1005.33(a)(1)(iv) where a sender 

provides incorrect or insufficient 

information. These proposed procedures 

would have allowed remittance transfer 

providers to provide oral, streamlined 

disclosures. The proposed commentary 

would have made clear that providers 

need not treat resends of remittance 

transfers as entirely new remittance 

transfers. Under proposed 

§ 1005.33(c)(3)(i), a provider would have 

been able to set a future date of transfer 

and to disclose an estimated exchange 

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

provider did not make direct contact 

with the sender. If a provider had 

disclosed an estimated exchange rate 

under proposed § 1005.33(c)(3)(i), the 

rule would have required the sender to 

disclose the cancellation period 

pursuant to § 1005.36(c), as well as the 

date the provider will complete the 

resend, using the term ‘‘Transfer Date’’ 

or a substantially similar term. A sender 

would have been allowed to cancel the 

resend up to three business days before 

the date of transfer. In the alternative, 

proposed § 1005.33(c)(3)(ii) would have 

required a provider that made direct 

contact with the sender to disclose and 

apply the exchange rate used for 

remittance transfers on the date of 

resend, rather than providing an 

estimate. 

Under § 1005.33(c)(2)(ii)(A)(2) of the 

2012 Final Rule, a remittance transfer 

provider could impose third-party fees, 

but not include taxes, for resending the 

remittance transfer when an error 

occurred because the sender provided 

incorrect or insufficient information. 

Separately, the 2012 Final Rule did not 

state expressly whether a provider 

should be permitted to deduct thirdparty fees imposed or taxes collected on 

a remittance transfer when a transfer is 

returned from an institution abroad, 

following a failed delivery, to the 

provider before being resent or 

refunded. In the December Proposal, the 

Bureau also sought comment on 

whether the provider should be 

permitted to impose taxes incurred 

when resending funds or, more 

generally, whether other remedies were 

appropriate with respect to fees and 

taxes. 

With respect to the appropriate 

remedy for errors that occurred because 

a sender provided incorrect or 

insufficient information, industry 

commenters generally stated that they 

appreciated the Bureau’s attempt to 

revise the resend procedures in the 2012 

Final Rule. However, those who 

commented on this issue stated that the 

Bureau’s proposed approach was too 

complicated because proposed 

§ 1005.33(c)(3) required disclosures 

with distinct content, timing and 

accuracy requirements that did not 

necessarily apply to other disclosures 

required by the 2012 Final Rule, 

particularly if the provider was not 

otherwise providing the disclosures 

unique to transfer scheduled before the 

date of transfer. See § 1005.36(a). As a 

result, these commenters contended that 

the new requirements would necessitate 

the development of additional 

disclosures, systems changes, and 

additional employee training. 

Commenters asserted that proposed 

§ 1005.33(c)(3) would be difficult, 

costly, and time-consuming to 

implement and that they had concerns 

about the compliance costs and 

operation challenges posed by this part 

of the December Proposal. Instead, 

several industry trade association 

commenters suggested an alternative 

approach, under which a remittance 

transfer provider would provide notice 

that the sender provided incorrect or 

insufficient information in connection 

with a remittance transfer, that funds 

had been credited (at the current 

exchange rate) to the sender’s account, 

and that the sender should notify the 

provider if the sender wished to initiate 

a new remittance transfer. Commenters 

argued that this approach would 

simplify the remedy in situations where 

an error occurs due a sender’s mistake. 

Commenters further suggested that 

the Bureau should not allow a sender to 

designate a resend remedy prior to the 

remittance transfer provider’s 

investigation of the error, permitted 

under § 1005.33(c)(2) as explained by 

comment 33(c)–2. Instead, regardless of 

the sender’s prior remedy election, the 

commenters advocated requiring the 

sender to elect affirmatively to resend 

funds after the provider completed its 

investigation and the sender received 

notice of that investigation and the 

related refund. 

As for the amount appropriate to 

refund or resend, industry commenters 

generally urged the Bureau to revise the 

2012 Final Rule so that remittance 

transfer providers are permitted to 

deduct from the amount refunded or 

resent the fees imposed or taxes 

collected on the first unsuccessful 

transfer by a party other than the 

provider both when the transfer was 

initially sent and when it was returned 

to the provider. These commenters 

contended that it was unfair that 

providers would also have to refund to 

senders any amounts actually deducted 

from the transfer amount when a misdelivered transfer is returned to the 

provider (i.e., lifting fees and taxes 

deducted from the transfer amount in 

the process of returning the funds to the 

provider in the United States after the 

failed delivery of the initial transaction). 

Based on comments received and 

upon further consideration, the Bureau 

adopts new § 1005.33(c)(2)(iii), which 

states that in the case of an error under 

§ 1005.33(a)(1)(iv) that occurred because 

the sender provided incorrect or 

insufficient information in connection 

with the remittance transfer, the 

remittance transfer provider shall 

refund to the sender the amount of 

funds provided by the sender in 

connection with the remittance transfer 

that was not properly transmitted, or the 

amount appropriate to resolve the error, 

within three business days of providing 

the report required by § 1005.33(c)(1) or 

(d)(1) except that the provider may agree 

to the sender’s request, upon receiving 

the results of the error investigation, 

that the funds be applied towards a new 

remittance transfer, rather than be 

refunded, if the provider has not yet 

processed a refund. The provider may 

deduct from the amount refunded or 

applied towards a new transfer any fees 

actually imposed on or, to the extent not 

prohibited by law, taxes actually 

collected on the remittance transfer as 

part of the first unsuccessful remittance 

transfer attempt. 

The Bureau is adopting this approach 

because it has concluded that for the 

small number of transactions to which 

these provisions would likely apply, the 

Bureau’s proposed alternative to the 

2012 Final Rule’s approach could be 

complicated for remittance transfer 

providers to implement. The Bureau is 

adopting the revised provision in 

§ 1005.33(c)(2)(iii) rather than in 

§ 1005.33(c)(3), as originally proposed, 

because the Bureau believes it more 

appropriate to put all remedies for 

errors arising under § 1005.33(a)(1)(iv) 

under subsection § 1005.33(c)(2). 

Accordingly, the Bureau is revising 

§§ 1005.33(c)(2) and (c)(2)(ii) to make 


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clear that these provisions only apply 

when an error did not occur because the 

sender provided incorrect or insufficient 

information. Similarly, the Bureau is 

also revising §§ 1005.33(c)(2)(A)(2) and 

(c)(2)(B) to remove references to 

situations in which an error occurred 

because the sender provided incorrect 

or insufficient information. The 

provision that was § 1005.33(c)(2)(iii) in 

the 2012 Final Rule is finalized as 

§ 1005.33(c)(2)(iv) with no substantive 

changes. 

Specifically, the Bureau is adopting 

this new approach because of the 

challenges associated with both 

resending a transfer at a new exchange 

rate and timely disclosing such rate to 

the sender. The Bureau is convinced by 

commenters’ assertions that the 

Bureau’s attempts to make disclosures 

more streamlined and reduce the 

number of paper disclosures provided 

could potentially increase the cost of 

compliance for remittance transfer 

providers, by necessitating changes in 

disclosures and procedures. 

Furthermore, the Bureau believes that 

the new § 1005.33(c)(2)(iii) will preserve 

the 2012 Final Rule’s protections for 

senders in event of a resend that follows 

an error that occurred due to a sender’s 

mistake. 

Although commenters suggested that 

an alternative where funds could be 

credited instantly to a sender’s account, 

not all remittance transfers are made 

from an account. In some cases, a sender 

may not receive notice immediately or 

the sender would have to wait to resend 

funds until receiving the refund check. 

See comment 33(c)–6. As adopted, 

under § 1005.33(c)(2)(iii) in the 2013 

Final Rule, in situations where a sender 

wants to resend the transfer, the sender 

would have to make a request to the 

remittance transfer provider after receipt 

of the error investigation report and the 

provider would treat the remittance 

transfer as a new remittance transfer 

request subject to the same disclosures 

and other procedures as any other new 

transfer requested. The transaction 

would be subject to applicable fees and 

taxes and processed at the exchange rate 

in effect at the time the sender 

authorizes the new transfer. 

Additionally, the Bureau agrees with 

commenters that it is not appropriate, in 

situations where funds are returned 

because of a sender’s mistake, for the 

remittance transfer provider to have to 

bear the cost of fees imposed by third 

parties and taxes that have been 

collected in connection with the 

unsuccessful remittance transfer and, if 

applicable, when the undelivered funds 

are returned to the provider. 

Finally, although the Bureau had also 

sought comment on the exchange rate 

that should apply when transfers are 

resent following an error that occurred 

because the sender provided incorrect 

or insufficient information, that issue is 

largely moot insofar as the 2013 Final 

Rule requires these transactions to be 

treated as new remittance transfers. As 

explained by comment 33(c)–2 in the 

2012 Final Rule, if a remittance transfer 

was to be resent because an error 

occurred following a sender’s mistake, 

the original exchange rate applied to the 

resend of the transfer. Thus, the 

recipient would have received the same 

amount and type of currency that the 

sender had provided to fund the 

transfer. Industry commenters generally 

had argued that a sender should not 

benefit from an exchange rate that has 

changed in the sender’s favor due to an 

error that occurred because of the 

sender’s mistake and thus the same 

exchange rate that applied to the 

original transfer should apply to the 

resent transfer. Insofar as the Bureau is 

revising the remedy in the 2013 Final 

Rule for errors that occurred because of 

a sender’s mistake, if a sender chooses 

to resend a remittance transfer under the 

revised rule and the remittance transfer 

provider agrees, the remittance transfer 

will be treated as a new remittance 

transfer, and thus the exchange rate 

used for transfers on the date of resend 

will necessarily apply to it. Insofar as 

providers are concerned with the 

exchange rate used when funds are 

refunded to the sender in the original 

currency, the Bureau believes it 

appropriate to maintain the originally 

disclosed exchange rate insofar as the 

refund should put the parties in the 

same position they were in prior to the 

transfer, less the taxes and fees that the 

provider may deduct. 

Revisions to the Official Interpretations 

of § 1005.33(c)(2) 

As noted above, in the December 

Proposal, the Bureau proposed to 

modify comment 33(c)–2 to eliminate a 

phrase stating that requests to resend 

(following an error that occurred 

because the sender provided incorrect 

or insufficient information) are 

considered requests for remittance 

transfers. Relatedly, proposed comment 

33(c)–11 would have clarified how to 

provide the disclosures required by 

proposed § 1005.33(c)(3). Insofar as 

resends, as they existed in the 2012 

Final Rule, will no longer be permitted 

as remedies for errors pursuant to 

§ 1005.33(a)(1)(iv) where a sender 

provided incorrect or insufficient 

information, the Bureau is not adopting 

these proposed revisions to comment 

33(c)–2. The December Proposal also 

would have revised comment 33(c)–2 to 

correspond with the proposed exception 

in § 1005.33(a)(1)(iv)(D) by removing the 

comment’s reference to senders’ 

mistakes about an account number and 

to make clear that no error would have 

occurred in this situation if the 

remittance transfer provider satisfied 

the requirements of proposed 

§ 1005.33(h). The Bureau received no 

comments regarding the specific 

amendments to proposed § 1005.33(c)(2) 

and comment 33(c)–2, with respect to 

the proposed adjustments necessary to 

correspondent to the proposed 

exception in § 1005.33(a)(1)(iv)(D). 

Consequently, those portions of 

proposed comment 33(c)–2 are adopted 

as proposed with some alterations to 

improve clarity. 

Comment 33(c)–2, as finalized in the 

2013 Final Rule, now states that the 

remedy in § 1005.33(c)(2)(iii) applies 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’s 

address or by providing insufficient 

information such that the entity 

distributing the funds cannot identify 

the correct designated recipient. A 

sender is not considered to have 

provided incorrect or insufficient 

information for purposes of 

§ 1005.33(c)(2)(iii) if the provider 

discloses the incorrect location where 

the transfer may be picked up, gives the 

wrong confirmation number/code for 

the transfer, or otherwise 

miscommunicates information 

necessary for the designated recipient to 

pick-up the transfer. The remedies in 

§ 1005.33(c)(2)(iii) do not apply if the 

sender provided an incorrect account 

number or recipient institution 

identifier and the provider has met the 

requirements of § 1005.33(h) because 

under § 1005.33(a)(1)(iv)(D) no error 

would have occurred. See 

§ 1005.33(a)(1)(iv)(D) and comment 

33(a)–7. 

The Bureau is also adopting a new 

comment 33(c)–11, which reflects the 

new refund procedure, and which 

replaces language regarding resends 

from comment 33(c)–2. As revised in 

the 2013 Final Rule, comment 33(c)–11 

states that § 1005.33(c)(2)(iii) generally 

requires a remittance transfer provider 

to refund the transfer amount to the 

sender even if the sender’s previously 

designated remedy was a resend or if 

the provider’s default remedy in other 


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circumstances is a resend. However, if 

before the refund is processed, the 

sender receives notice pursuant to 

§ 1005.33(c)(1) or (d)(1) that an error 

occurred because the sender provided 

incorrect or insufficient information and 

then requests that the provider send the 

remittance transfer again, and the 

provider agrees to that request, 

§ 1005.33(c)(2)(iii) requires that the 

request be treated as a new remittance 

transfer and the provider must provide 

new disclosures in accordance with 

§ 1005.31 and all other applicable 

provisions of subpart B. However, 

§ 1005.33(c)(2)(iii) does not obligate the 

provider to agree to a sender’s request 

to send a new remittance transfer. 

Section 1005.33(c)(2)(iii), as adopted 

in the 2013 Final Rule, applies in 

situations where an error occurs because 

the sender provided incorrect or 

insufficient information, and overrides 

provisions that generally permit both a 

sender’s prior selection of a resend 

remedy, see comment 33(c)–3, and a 

remittance transfer provider’s 

designation of a default remedy, see 

comment 33(c)–4, where that default is 

to resend a transfer. Accordingly, the 

Bureau is revising comments 33(c)–3 

and –4. 

As to comment 33(c)–3 in the 2012 

Final Rule, which explains how a 

sender designates a preferred remedy 

insofar as the revisions to 

§ 1005.33(c)(2) will no longer allow a 

sender to designate a remedy (or will 

nullify a designation of a resend remedy 

prior to the conclusion of an 

investigation) when an error occurs 

because the sender provided incorrect 

or insufficient information, the portion 

of the comment discussing advance 

designation of a remedy is revised in the 

2013 Final Rule. Comment 33(c)–3 now 

states, like the 2012 Final Rule, that the 

provider may also request that the 

sender indicate the preferred remedy at 

the time the sender provides notice of 

the error. However, as finalized, the 

comment states that if the provider does 

so, it should indicate that if the sender 

chooses a resend at that time, the 

remedy may be unavailable if the error 

occurred because the sender provided 

incorrect or insufficient information. 

This will prevent senders from being 

confused as to why they did not receive 

their requested remedy. However, if the 

sender does not indicate the desired 

remedy at the time of providing notice 

of error, the provider must notify the 

sender of any available remedies in the 

report provided under § 1005.33(c)(1) or 

(d)(1) if the provider determines an error 

occurred. 

Similarly, the Bureau is revising 

comment 33(c)–4 to explain that a 

remittance transfer provider’s default 

remedy is overridden by the 

requirements of § 1005.33(c)(2)(iii), 

which sets forth a specific remedy that 

applies when an error occurs because a 

sender provides incorrect or insufficient 

information. The Bureau is also making 

conforming changes to comment 33(c)– 

5 to reflect the renumbering in 

§ 1005.33(c)(2). 

Finally, in light of the changes 

described above to § 1005.33(c)(2)(ii), 

the Bureau is adopting new comment 

33(c)–12, which provides guidance on 

how a remittance transfer provider 

should determine the amount to refund 

to the sender, or to apply to a new 

transfer, pursuant to § 1005.33(c)(2)(iii). 

Comment 33(c)–12 explains that 

although § 1005.33(c)(2)(iii) permits the 

provider to deduct from the amount 

refunded, or applied towards a new 

transfer, any fees or taxes actually 

deducted from the transfer amount by a 

person other than the provider as part 

of the first unsuccessful remittance 

transfer attempt or that were deducted 

in the course of returning the transfer 

amount to the provider following a 

failed delivery. However, a provider 

may not deduct those fees and taxes that 

will ultimately be refunded to the 

provider. When the provider deducts 

fees or taxes from the amount refunded 

pursuant to § 1005.33(c)(2)(iii), the 

provider must inform the sender of the 

deduction as part of the notice required 

by either § 1005.33(c)(1) or (d)(1) and 

the reason for the deduction. Comment 

33(c)–12 also contains several 

illustrative examples. 

33(h) Incorrect Account Number 

Provided by the Sender 

Proposed § 1005.33(h) contained 

several conditions that a remittance 

transfer provider would have been 

required to satisfy in order to benefit 

from the proposed exception in 

§ 1005.33(a)(1)(iv)(D). Specifically, 

proposed § 1005.33(h)(1) through (4) 

would have provided four conditions, 

including: That the provider be able to 

demonstrate that the sender did in fact 

provide an incorrect account number, 

that the provider gave the sender notice 

that if the sender provided an incorrect 

account number that the transfer could 

be lost, that the incorrect account 

number resulted a deposit of the transfer 

into the wrong account, and that the 

provider used reasonable efforts to 

attempt to retrieve the mis-deposited 

funds. 

In response to proposed § 1005.33(h), 

many industry commenters sought more 

specificity in the conditions, especially 

with respect to the form of notice 

required to inform senders that the 

transfer amount could be lost, what 

would satisfy as a reasonable effort to 

retrieve lost funds, and the timeframe in 

which such efforts would be deemed 

prompt. Other industry participants, 

however, supported the generality in the 

proposed conditions because the 

commenters believed that the 

conditions provided flexibility and 

accommodated existing practice. In 

addition, some industry commenters 

expressed concern with the proposed 

condition that funds actually be misdeposited into the wrong account for the 

proposed exception to apply. These 

commenters argued that often it is 

difficult for remittance transfer 

providers to know whether funds have 

in fact been mis-deposited. The Bureau 

has considered these comments and is 

finalizing the rule with five conditions 

in § 1005.33(h)(1) through (5), each of 

which is discussed below. 

Generally speaking, the Bureau 

believes that the conditions set forth in 

§ 1005.33(h) are consistent with 

industry best practices today and will 

provide further incentive to continue 

improving safeguards against misdeposit over time. Where a remittance 

transfer is deposited into the wrong 

account today, the Bureau believes that 

many, if not most, providers already 

attempt to recover the principal amount 

of the transfer. However, because 

providers have reported that they often 

do not have direct relationships with 

receiving institutions, and that in some 

instances those institutions may be 

unresponsive to requests for assistance, 

providers may face difficulties in 

recovering funds from the wrong 

account. The Bureau believes that, in 

many instances, to reverse these 

transactions requires the accountholder 

to authorize a debit from the account 

and, thus, the lack of this authority may 

prohibit a recipient institution from 

debiting the account in the amount of 

the incorrect deposit absent an 

authorization. Relatedly, a provider in 

the United States may be able to do little 

to assist the foreign institution in its 

attempt to persuade its accountholder to 

provide debit authorization due to the 

lack of privity between the provider and 

the recipient institution or the 

accountholder. 

Thus, the 2013 Final Rule strikes an 

appropriate balance by limiting the 

exception in § 1005.33(a)(1)(iv)(D) to 

circumstances of actual mis-deposits 

and by requiring reasonable verification 

methods, without holding remittance 

transfer providers responsible for 

circumstances beyond their control. 


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10See http://www.swift.com/products_services/ 

bic_and_iban_format_registration_bic_details. 

33(h)(1) 

Proposed § 1005.33(h)(1) would have 

required that a remittance transfer 

provider be able to demonstrate that the 

sender provided an incorrect account 

number in connection with the 

remittance transfer. The Bureau 

explained that it did not believe that 

this proposed condition represented a 

substantial change from the 2012 Final 

Rule, which incentivized providers to 

document whether the sender had 

provided inaccurate information in 

order to invoke the right to charge 

certain related fees in connection with 

a resent transaction. See 

§ 1005.33(c)(2)(ii)(A)(2) in the 2012 

Final Rule. The Bureau received no 

comments specific to this proposed 

condition. Accordingly, proposed 

§ 1005.33(h)(1) is adopted substantially 

as proposed, except that it is expanded 

to apply both to account numbers and 

recipient institution identifiers, as 

discussed above. The comment is also 

revised to make clear that the provider 

must be able to demonstrate that the 

sender provided the incorrect account 

number or recipient institution 

identifier, language that was in 

proposed § 1005.33(h). 

33(h)(2) 

In the December Proposal, the Bureau 

noted that typically remittance transfer 

providers have no means to verify 

whether a sender provided account 

number for the designated recipient is 

accurate. Thus, the Bureau did not 

propose, as a condition of the proposed 

exception in § 1005.33(a)(1)(iv)(D), that 

providers verify account numbers before 

sending a remittance transfer to an 

account. However, and as noted above, 

the Bureau is expanding the exception 

to § 1005.33(a)(1)(iv) to include senders’ 

mistakes regarding recipient institution 

identifiers, as well as mistakes regarding 

account numbers. 

In response to the Bureau’s request for 

comment on sender mistakes generally, 

some industry commenters 

acknowledged that, in some instances, 

institution identifier information 

provided by senders may be at least 

partially verifiable. Foremost among 

these are BICs (sometimes referred to as 

SWIFT codes) and other recipient 

institution identifiers. Commenters 

noted, however, that verification is 

neither ubiquitous nor perfect. Several 

consumer group commenters argued, on 

the other hand, that the Bureau should 

not expand the exception to mistakes 

regarding recipient institution 

identifiers because remittance transfer 

providers should be able to verify such 

identifiers. 

As a result of the Bureau’s inclusion 

of recipient institution identifiers in the 

exception to the definition of error 

under § 1005.33(a)(1)(iv)(D), the Bureau 

is adopting new § 1005.33(h)(2), which 

provides that for any instance in which 

the sender provided the incorrect 

recipient institution identifier, prior to 

or when sending the transfer, the 

provider used reasonably available 

means to verify that the recipient 

institution identifier provided by the 

sender corresponded to the recipient 

institution name provided by the 

sender. 

As adopted, § 1005.33(h)(2) will 

permit remittance transfer providers to 

rely on the exception in 

§ 1005.33(a)(1)(iv)(D) only in situations 

where no reasonable verification is 

possible or where reasonably available 

means were applied but were unable to 

prevent a mis-deposit that occurred 

because the sender provided an 

incorrect recipient institution identifier. 

The exception does not apply to account 

number mistakes insofar as the Bureau 

continues to believe that no reasonable 

means to verify that an account number 

matches the name of the designated 

recipient disclosed to the sender exists 

today for most transfers. The Bureau 

will continue to monitor whether 

expansion of the condition is 

appropriate. Furthermore, 

§ 1005.33(h)(2) requires that the 

verification occur prior to or when the 

provider is sending the transfer because 

if the verification occurs later it may be 

too late to prevent a mis-deposit. 

The Bureau is adopting new comment 

33(h)–1, which explains that the 

exception in § 1005.33(a)(1)(iv)(D) 

applies only when a sender provides an 

incorrect recipient institution identifier, 

§ 1005.33(h)(2) limits the exception in 

§ 1005.33(a)(1)(iv)(D) to situations 

where the provider used reasonably 

available means to verify that the 

recipient institution identifier provided 

by the sender did correspond to the 

recipient institution name provided by 

the sender. Reasonably available means 

may include accessing a directory of 

Business Identifier Codes and verifying 

that the code provided by the sender 

matches the provided institution name, 

and, if possible, the specific branch or 

location provided by the sender. 

Comment 33(h)–1 explains that 

providers may also rely on other 

commercially available databases or 

directories to check other recipient 

institution identifiers. If reasonable 

verification means fail to identify that 

the recipient institution identifier is 

incorrect, the exception in 

§ 1005.33(a)(1)(iv)(D) will apply, 

assuming that the provider can satisfy 

the other conditions in § 1005.33(h). 

Similarly, if no reasonably available 

means exist to verify the accuracy of the 

recipient institution identifier, 

§ 1005.33(h)(2) would be satisfied and 

thus the exception in 

§ 1005.33(a)(1)(iv)(D) also will apply, 

again assuming the provider can satisfy 

the other conditions in § 1005.33(h). 

However, where a provider does not 

employ reasonably available means to 

verify a recipient institution identifier, 

§ 1005.33(h)(2) is not satisfied and the 

exception in § 1005.33(a)(1)(iv)(D) will 

not apply. 

The Bureau is adopting this provision 

because upon further consideration, it 

concludes that if remittance transfer 

providers want to avail themselves of 

the exception to § 1005.33(a)(1)(iv) for 

mistakes regarding recipient institution 

identifiers, they must take reasonable 

steps to limit the occurrence of these 

mistakes. The Bureau believes that, in 

many instances providers can and 

currently do verify the accuracy of some 

identifiers, and that in many other 

instances verification is not feasible. For 

example, many providers require, and 

senders provide, BICs to identify 

recipient institutions. Providers, or their 

third-party partners, typically have 

access to a directory in which they can 

match the BIC with the institution name 

(and possibly location), and the Bureau 

believes many providers (or their 

business partners) perform such 

verifications today. The Bureau also 

recognizes, however, that some 

providers may not conduct such 

verification. In other instances, precise 

verification that the sender has 

identified the proper institution may be 

challenging, particularly if a recipient 

institution has no BIC code or other type 

of identifier for which there is an 

internationally accessible directory, or if 

a sender has not given all the 

information about the recipient 

institution that may be reflected in a 

numerical identifier, such as the branch 

location.10 The Bureau believes the 

requirement appropriately requires 

verification where such mechanisms are 

reasonable available. 

Finally, the Bureau notes that it 

intends to monitor the availability of 

other means to verify account numbers 

and recipient institution identifiers and 

it may propose to revise 

§ 1005.33(a)(1)(iv)(D) and (h)(2) and the 

related commentary if such means 

become reasonably available. 


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30692 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

11Section 1005.31(a)(2) generally requires 

disclosures required by subpart B of Regulation E 

to be in writing. The provision makes exceptions for 

pre-payment disclosures, which may be provided 

electronically. 

33(h)(3) 

Proposed § 1005.33(h)(2) would have 

required a remittance transfer provider 

to demonstrate that the sender had 

notice that, if the sender provided an 

incorrect account number, the sender 

could lose the transfer amount. 

Although the Bureau did not propose a 

specific form of notice under proposed 

§ 1005.33(h)(2), it requested comment 

on whether the Bureau should specify 

the form of the notice and when and 

how such notice should be delivered. 

Industry commenters were largely 

divided on whether the Bureau should 

provide specific form and content 

instructions for the required notice. 

However, no commenter objected to the 

basic requirement of notice, and several 

commenters affirmatively agreed that 

notice would be beneficial. Those 

commenters who preferred that the 

Bureau specify a specific form for the 

required notice, including several 

smaller depository institutions, argued 

that model language provided by the 

Bureau would ease their compliance 

burden, particularly if there were a safe 

harbor for its use. Those commenters 

who preferred the flexibility of the 

proposed notice provisions argued that 

remittance transfer providers may 

already provide this sort of notice in a 

number of different forms. To require, or 

encourage through a safe harbor, 

specific model language or a form, these 

commenters contended, would cause 

remittance transfer providers to incur 

additional compliance costs as they 

would be required to alter existing 

forms and practices to match whatever 

the Bureau has established. In addition, 

these commenters argued, providers 

would need additional time to comply 

with this final rule if they were required 

to use specific language to provide the 

proposed notice. 

Several consumer group commenters 

argued that the proposed notice should 

be provided in a clear and conspicuous 

manner and in the same language that 

the rest of the transfer is conducted. 

These commenters urged the Bureau to 

adopt a notice that comports with the 

clarity and language requirements of 

similar disclosures in other consumer 

statutes. 

The Bureau adopts proposed 

§ 1005.33(h)(2) with three changes as 

§ 1005.33(h)(3). New § 1005.33(h)(3) 

provides as a condition of 

§ 1005.33(a)(1)(iv)(D) exception, a 

requirement that the remittance transfer 

provider provided notice to the sender 

before the sender made payment for the 

remittance transfer that, in the event the 

sender provided an incorrect account 

number or recipient institution 

identifier, the sender could lose the 

transfer amount. The provision also 

provides that for purposes of providing 

the § 1005.33(h)(3) notice, 

§ 1005.31(a)(2) applies to this notice 

unless the notice is given at the same 

time as other disclosures required by 

subpart B for which information is 

permitted to be disclosed orally or via 

mobile application or text message, in 

which case this disclosure may be given 

in the same medium as the other 

disclosures 

This provision reflects three changes 

from the December Proposal: (1) 

Mention of recipient institution 

identifiers in light of the expanded 

scope of § 1005.33(a)(1)(iv)(D); (2) 

clarification that the notice must be 

provided before the sender authorizes 

the remittance transfer; (3) clarification 

that this notice may be given orally if 

provided along with a prepayment 

disclosure provided orally in 

accordance with § 1005.31(a)(2).11 The 

Bureau believes that the requirement 

that the notice be provided before 

authorization of the transfer is generally 

in accordance with how most providers 

currently provide notice today and thus 

should not be a significant change from 

existing practice. The 2013 Final Rule 

does not specify the form of such notice 

but the Bureau intends to monitor how 

providers implement this condition to 

determine whether additional 

specificity is appropriate. 

The Bureau notes that, pursuant to the 

revisions to § 1005.31(a)(1) discussed 

above, the notice provided pursuant to 

§ 1005.33(h)(3), like all disclosures 

required by subpart B of Regulation E, 

in § 1005.33(h)(3) must be clear and 

conspicuous. See also comment 

33(a)(1)–1. In addition, insofar as the 

Bureau has also amended the foreign 

language requirements of § 1005.31(g) to 

apply to all disclosures permitted by the 

2013 Final Rule, the notice permitted by 

§ 1005.33(h)(3) must be disclosed in 

accordance with the foreign language 

disclosure requirements of 

§ 1005.33(g)(1). 

As explained in the December 

Proposal, the Bureau’s goal is to ensure 

that senders are informed of the risks of 

a mistake. Given that many remittance 

transfer providers are already providing 

notices of this risk through various 

means, the Bureau wants to ensure that 

the practice is adopted across the 

remainder of the industry while 

minimizing the need to change existing 

notices if they were already sufficient 

for the purposes of proposed 

§ 1005.33(h)(2). While the Bureau 

understands that providing model 

language might make compliance easier 

for some providers, the Bureau believes 

that there are sufficient models available 

in providers’ existing materials that it is 

inappropriate to delay adoption of this 

condition while the Bureau designs and 

tests appropriate model language. 

33(h)(4) 

Proposed 33(h)(3) would have stated 

that for a remittance transfer provider to 

avail itself of the exception in proposed 

§ 1005.33(a)(1)(iv)(D), the provider 

would be required to demonstrate that 

the incorrect account number resulted 

in the deposit of the remittance transfer 

into a customer’s account that is not the 

designated recipient’s. 

The Bureau received a number of 

comments from industry commenters 

and some consumer group commenters 

encouraging the Bureau to eliminate this 

proposed condition. These commenters 

stated that even if funds are not 

deposited into another customer’s 

account, other forms of improper 

routing due to erroneous information 

provided by a sender could cause 

transferred funds to be lost or, at the 

very least, delayed beyond the original 

date of availability. Other consumer 

group commenters disagreed, however, 

asserting that, in their opinion, 

remittance transfer providers typically 

can retrieve funds that have been 

misrouted unless the funds are 

deposited into the wrong customer’s 

account. These consumer group 

commenters opined that so long as the 

funds remain in an institution’s control, 

there is generally no concern that those 

funds will disappear. 

The Bureau is adopting proposed 

§ 1005.33(h)(3) substantially as 

proposed as § 1005.33(h)(4). The Bureau 

believes, as stated in the December 

Proposal, that when a remittance 

transfer is sent with the wrong account 

number for the designated recipient, a 

remittance transfer provider will be far 

more likely to recover the funds in 

situations where the funds are either 

rejected by another institution or 

otherwise reversed before they are 

deposited into the wrong account. To 

the extent that commenters’ concerns 

related to the delay of funds rather than 

their disappearance, as noted above, the 

Bureau declines to expand the 

exception in § 1005.33(a)(1)(iv)(D) to 

cover delayed transfers rather than 

actual mis-deposited transfers. 

33(h)(5) 

Proposed 33(h)(4) would have 

required a remittance transfer provider 


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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30693 

to promptly use reasonable efforts to 

recover the amount that was to be 

received by the designated recipient. 

Proposed comment 33(h)–1 would have 

clarified how a provider might use 

reasonable efforts to recover funds. The 

Bureau received several comments on 

the proposed provision and associated 

commentary. 

Several industry commenters and 

consumer groups agreed with this 

proposed condition. These commenters 

approved of its flexibility and one 

industry commenter noted that it was in 

accordance with its preexisting practice, 

which is to exercise best efforts to 

recover missing funds. Two other 

commenters—a trade association and 

credit union—asked that the Bureau 

provide more explanation regarding the 

timeframe to meet the promptness 

requirement and the number of attempts 

to recover the funds required. These 

commenters were concerned that the 

lack of clarity would invite litigation as 

to whether a particular remittance 

transfer provider’s efforts were in fact 

reasonable and prompt. 

Finally, one commenter asked that the 

Bureau clarify that a recipient 

institution, even if also the remittance 

transfer provider, not be required to 

debit an account that has a zero balance. 

In other words, this commenter sought 

clarity on whether it would be required 

to advance funds on behalf of a 

customer if that customer has 

withdrawn the transfer amount from the 

customer’s account. The Bureau does 

not believe clarification on this point is 

necessary, insofar as nothing in the 2013 

Final Rule states that a provider is 

required to advance funds that the 

recipient institution cannot retrieve 

from a customer if the exception in 

§ 1005.33(a)(1)(iv)(D) applies. Rather, 

the 2013 Final Rule has the opposite 

intent—the exception is intended to 

apply when funds cannot be retrieved. 

Accordingly, the Bureau is finalizing 

proposed § 1005.33(h)(4) substantially 

as proposed as § 1005.33(h)(5). The 

Bureau continues to believe—as it 

explained in the December Proposal— 

that it is not appropriate to mandate 

specific methods that a remittance 

transfer provider must use to attempt to 

recover funds. The Bureau believes the 

circumstances around individual 

transfers can vary greatly and that what 

may be reasonable in one circumstance 

may be unreasonable in another. 

In addition, the Bureau is adopting 

proposed comment 33(h)–1 

substantially as proposed as comment 

33(h)–2 with minor revisions to improve 

clarity and to replace one of the 

proposed examples. The Bureau is also 

incorporating proposed comment 33(h)– 

1.iii to comment 33(h)–1, which now 

states that § 1005.33(h)(5) requires a 

remittance transfer provider to use 

reasonable efforts to recover the amount 

that was to be received by the 

designated recipient. Whether a 

provider has used reasonable efforts 

does not depend on whether the 

provider is ultimately successful in 

recovering the amount that was to be 

received by the designated recipient. 

Under § 1005.33(h)(5), if the remittance 

transfer provider is requested to provide 

documentation or other supporting 

information in order for the pertinent 

institution or authority to obtain the 

proper authorization for the return of 

the incorrectly credited amount, 

reasonable efforts to recover the amount 

include timely providing any such 

documentation to the extent that it is 

available and permissible under law. 

The two examples in proposed 

comments 33(h)–1.i and .ii are finalized 

as proposed as comments 33(h)–2.i. and 

.ii. 

Proposed comment 33(h)–2 would 

have explained that the proposed 

condition requires a remittance transfer 

provider to act promptly in using 

reasonable efforts to recover the amount 

that was to be received by the 

designated recipient. The Bureau 

received comments from industry that it 

should clarify when exactly reasonable 

efforts are considered to be prompt and 

also that it should create a safe harbor 

time period in which efforts would be 

deemed prompt. The Bureau continues 

to believe that whether a particular 

provider’s efforts are prompt depends 

on the facts and circumstances, for 

instance when the fact of an error is first 

identified. In general, the Bureau 

believes a provider acts promptly where 

it acts before the date that the funds are 

expected to be made available to the 

recipient, but a provider may not have 

notice that there is a problem with the 

transfer that early. Accordingly, the 

Bureau has adopted proposed comment 

33(h)–2 as comment 33(h)–3 and is 

expanding its discussion. The comment 

adopts the proposed language 

explaining that § 1005.33(h)(5) requires 

that a remittance transfer provider act 

promptly in using reasonable efforts to 

recover the amount that was to be 

received by the designated recipient and 

that whether a provider acts promptly to 

use reasonable efforts depends on the 

facts and circumstances. The comment 

also provides an example stating that 

where a sender informs the provider 

that he or she had provided a mistaken 

account number before the date of 

availability disclosed pursuant to 

§ 1005.31(b)(2)(ii), the provider has 

acted promptly if it attempts to contact 

the institution that received the 

incorrect remittance transfer before the 

disclosed date of availability. 

Section 1005.36 Transfers Scheduled 

Before the Date of Transfer 

Under § 1005.36 of the 2012 Final 

Rule, the Bureau established disclosure 

requirements specifically applicable to 

remittance transfers scheduled before 

the date of transfer. Section 1005.36(a) 

and (b) address specific requirements 

for the timing and accuracy of 

disclosures for these 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. As described 

above, there is no longer a requirement 

to disclose taxes collected by a person 

other than the provider. See 

§ 1005.31(b)(1)(vi). As a result, comment 

36(a)(2)–1, which relates to disclosures 

required for preauthorized transfers, has 

been amended to refer solely to the 

required disclosure of taxes collected by 

the provider and not those collected by 

a third party. 

Appendix A—Model Disclosure Clauses 

and Forms 

In Appendix A of the 2012 Final Rule, 

the Bureau provides twelve model forms 

that a remittance transfer provider may 

use in connection with remittance 

transfers. The 2012 Final Rule also 

provides instructions related to the use 

of these model forms. In particular, 

Instruction 4 to Appendix A provides 

general instructions for how providers 

may use the model forms, including 

instructions as to formatting and 

necessary disclosures. Instruction 4 also 

describes what portions of the 

disclosures are optional, and states that 

the Bureau will not review or approve 

providers’ disclosure forms. 

In light of the changes to the 2012 

Final Rule’s disclosure requirements 

discussed above, the 2013 Final Rule 

amends the model forms, as well as the 

related instructions in Appendix A, and 

includes several additional model forms 

reflecting the new requirements. First, 

the Bureau is removing from all of the 

model forms references to ‘‘Other 

Taxes’’ because the Bureau has 

eliminated this disclosure requirement. 

See § 1005.31(b)(1)(vi). Second, 

although there is no longer a 

requirement to disclose recipient 

institution fees in certain circumstances, 

there remains a requirement that 

remittance transfer providers disclose 

covered third-party fees under 


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30694 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

12 In the interest of clarity on the model forms, 

non-covered third-party fees are referred to as ‘‘fees 

charged by a recipient’s bank.’’ However, to the 

extent that the term ‘‘bank’’ is imprecise, a provider 

may use an alternate term to describe the recipient 

institution. 

13Also in the interest of clarity, these taxes are 

described as ‘‘foreign taxes,’’ although it is possible 

that the taxes collected by a person other than the 

provider could include taxes imposed by a U.S. 

state or the Federal government where such taxes 

are not collected by the provider. 

§ 1005.31(b)(1)(vi). As a result, the line 

on the model forms that relates to the 

disclosure of the amount of ‘‘Other 

Fees’’ has been retained and will now 

reflect only covered third-party fees 

imposed upon the remittance transfer. 

Third, insofar as § 1005.31(b)(1)(viii) 

requires a remittance transfer provider 

to include disclaimers on the required 

disclosures where non-covered thirdparty fees or taxes collected on the 

remittance transfer by a person other 

than the provider may apply, the model 

forms have been amended to include 

versions of these disclaimers. These 

disclaimers are required unless a 

provider knows that neither noncovered third-party fees nor taxes 

collected on the remittance transfer by 

a person other than the provider apply. 

See § 1005.31(b)(1)(viii) and comment 

31(b)(1)(viii)–1. Thus, where a 

disclaimer is necessary, there are now 

three potential disclaimer statements 

that could be used depending on the 

nature of the transaction: (1) A 

disclaimer that states that the recipient 

may receive less due to fees charged by 

the recipient’s bank; 12 (2) A disclaimer 

that states that the recipient may receive 

less due to foreign taxes; 13 or (3) A 

disclaimer that states that the recipient 

may receive less due to fees charged by 

the recipient’s bank and foreign taxes. 

In addition to the requirement to 

include these disclaimers, a remittance 

transfer provider may also elect to 

disclose the actual or estimated amounts 

of non-covered third-party fees and 

taxes collected by a person other than 

the provider. See §§ 1005.31(b)(1)(viii) 

and 1005.32(b)(3). Model forms A–30(a) 

through (d) include samples of how a 

provider may include versions of these 

required disclaimers, as well as the 

optional disclosures regarding the actual 

or estimated amount of such fees and 

taxes. 

Specifically, Model Form A–30(a) 

provides sample disclaimer language 

that ‘‘a recipient may receive less due to 

fees charged by the recipient’s bank and 

foreign taxes.’’ Model Forms A–30(b) 

through (d) include examples of how a 

remittance transfer provider could 

include the optional estimates of noncovered third-party fees and taxes 

collected on the remittance transfer by 

a person other than the provider. 

Specifically, Model Form A–30(b) 

includes a sample disclaimer that shows 

a parenthetical containing an estimate of 

the applicable non-covered third-party 

fees that may apply to the sample 

transfer, while Model Form A–30(c) 

includes a sample disclaimer that shows 

a parenthetical with an estimate for the 

taxes collected on the remittance 

transfer by a person other than the 

provider that may apply. Model Form 

A–30(d) includes an example for how a 

provider could provide an estimate for 

both non-covered third-party fees and 

taxes collected on the remittance 

transfer by a person other than the 

provider. Finally, although not included 

in a model form, if a provider knows 

that fees or taxes will be deducted, the 

disclaimer could indicate that the 

recipient ‘‘will receive less,’’ rather than 

‘‘may receive less,’’ due to nondisclosed fees and taxes. A provider also 

may elect to include the precise 

amounts for fees and/or taxes. 

Instruction 4 also has been amended 

to indicate that the disclosure of the 

actual or estimated amounts for noncovered third-party fees and taxes 

collected by a person other than the 

provider is optional as provided in 

§ 1005.31(b)(1)(viii) in the 2013 Final 

Rule. Instruction 4 also now includes 

language that a remittance transfer 

provider cannot include disclaimers 

that cannot apply to the particular 

transfer. For example, if the provider 

knows that the only fees that can apply 

to the transfer are covered third-party 

fees, a provider should not include a fee 

disclaimer. See § 1005.31(b)(1)(viii) and 

comment 31(b)(1)(viii)–1. 

Finally, because additional model 

forms have been added, the Appendix 

and Instructions are revised to indicate 

that there are now 15 model forms. 

Effective Date 

This final rule is effective on October 

28, 2013. As discussed below, the 

Bureau believes that this effective date 

will, on balance, facilitate the 

implementation of both the remaining 

requirements of the 2012 Final Rule and 

the new requirements of the 2013 Final 

Rule. 

In the December Proposal, the Bureau 

proposed to temporarily delay the 

effective date of the 2012 Final Rule 

from February 7, 2013, until 90 days 

after the publication of the 2013 Final 

Rule in the Federal Register. The 

Bureau stated then that it believed that 

this modest delay would balance the 

need for consumers to receive the 

protections afforded by the rule as 

quickly as possible with industry’s need 

to make adjustments to comply with the 

provisions of the rule. As part of the 

December Proposal, the Bureau sought 

comment on this proposed 90-day 

extension period. On January 29, 2013, 

in the Temporary Delay Rule, the 

Bureau temporarily delayed the 

February 7, 2013 effective date pending 

completion of this rulemaking. 

All commenters—including consumer 

group commenters—generally agreed 

that the Bureau should extend the 

effective date of the 2013 Final Rule 

until at least 90 days after it is 

published in the Federal Register. 

Although no commenters suggested an 

implementation period of fewer than 90 

days following publication of the 2013 

Final Rule, one consumer group 

commenter noted that while it did not 

object to a 90 day-extension, it saw no 

need for any implementation period 

longer than 90 days after the finalization 

of this rule. Additionally, one industry 

trade association suggested a 90-day 

implementation period could be 

workable depending on the scope of the 

final rule. Most industry commenters, 

however, urged the Bureau to extend the 

effective date beyond 90 days. In doing 

so, industry commenters suggested a 

range of periods—with many industry 

commenters suggesting periods of 

between 180 and 365 days following the 

publication of the 2013 Final Rule. One 

industry trade association provided an 

example of an implementation timeline 

suggesting that a large correspondent 

would need at least 121 days from when 

the final rule is released in order to 

integrate a compliance solution within 

its client banks’ systems. Industry 

commenters in general contended that 

remittance transfer providers, their 

vendors, and other business partners all 

would need additional time to adjust 

their computer systems and compliance 

procedures, renegotiate contracts, and 

train staff. 

Separately, commenters representing 

smaller insured institutions in 

particular requested a longer 

implementation period, stating that 

many of these remittance transfer 

providers depend on larger third-parties 

to aid their compliance. These 

commenters uniformly stated that 

smaller providers might face particular 

challenges with implementing necessary 

changes over a short time period 

because smaller providers will only be 

able to integrate compliance solutions 

after the third parties have incorporated 

necessary updates and conduct testing, 

and include the changes in their 

scheduled releases. Relatedly, a number 

of these commenters referenced the 

Bureau’s recent rulemakings pursuant to 


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14See Escrow Requirements under the Truth in 

Lending Act (Regulation Z), 78 FR 4725 (Jan. 22, 

2013); Ability to Repay and Qualified Mortgage 

Standards Under the Truth in Lending Act 

(Regulation Z), 78 FR 6407 (Jan. 30, 2013; High-Cost 

Mortgage and Homeownership Counseling 

Amendments to the Truth in Lending Act 

(Regulation Z) and Homeownership Counseling 

Amendments to the Real Estate Settlement 

Procedures Act (Regulation X), 78 FR 6855 (Jan. 31, 

2013); Real Estate Settlement Procedures Act 

(Regulation X) and Truth in Lending Act 

(Regulation Z) Mortgage Servicing Final Rules, 78 

FR 10695 (Feb. 14, 2013); Disclosure and Delivery 

Requirements for Copies of Appraisals and Other 

Written Valuations Under the Equal Credit 

Opportunity Act (Regulation B), 78 FR 7215 (Jan. 

31, 2013); Appraisals for Higher-Priced Mortgage 

Loans, 78 FR 10367 (Feb. 13, 2013); Loan Originator 

Compensation Requirements under the Truth in 

Lending Act (Regulation Z), 78 FR 11279 (Feb. 15, 

2013). 

15Section 1022(b)(2)(A) of the Dodd-Frank Act 

calls for the Bureau to consider the potential 

benefits and costs of a regulation to consumers and 

covered persons, including the potential reduction 

of access by consumers to consumer financial 

products or services; the impact on depository 

institutions and credit unions with $10 billion or 

less in total assets as described in section 1026 of 

the Dodd-Frank Act; and the impact on consumers 

in rural areas. 

16The Bureau also solicited feedback from other 

agencies with supervisory and enforcement 

authority regarding the 2013 Final Rule. 

17Benefits and costs incurred by remittance 

transfer providers may, in practice, be shared 

among providers’ business partners, such as agents, 

correspondent banks, or foreign exchange 

providers. To the extent that any of these business 

partners are covered persons, the 2013 Final Rule 

could have benefits or costs for these covered 

persons as well. 

title XIV of the Dodd-Frank Act 14 and 

indicated that implementing all of the 

requirements of those rules and the 

requirements of this final rule at the 

same time will create a significant 

cumulative burden. These industry 

commenters also expressed concern 

over both the breadth and complexity of 

new rules expected from the Bureau. 

The industry commenters’ concerns 

regarding the implementation period, 

particularly those relating to necessary 

system changes, were largely focused 

around three expected results of the 

2012 Final Rule, as it would have been 

modified by the December Proposal: (1) 

The need to build and maintain a 

database of applicable taxes imposed by 

foreign countries’ central governments; 

(2) the need to obtain fee schedules or 

other information regarding applicable 

recipient institution fees in order to 

compute estimates of the applicable 

fees; and (3) the need to adjust systems 

and processes to accommodate the 

provisions discussing resends to correct 

errors that occurred because the sender 

provided incorrect or insufficient 

information. Furthermore, some 

industry commenters suggested that the 

appropriate effective date would depend 

on the scope of the final rule. Noting the 

difficulty of collecting certain 

information concerning recipient 

institution fees and foreign taxes, as 

indicated above, one industry trade 

association commenter indicated that if 

the Bureau eliminated the requirement 

to disclose recipient institution fees and 

foreign taxes and simplified the 

procedure for resends, then this 

commenter thought that a 90-day 

implementation period could be 

workable. 

The Bureau is adopting an effective 

date of October 28, 2013. In light of the 

way the Bureau has streamlined the 

requirements of the 2012 Final Rule, the 

Bureau believes that an effective date of 

October 28, 2013 (or approximately 180 

days after the release of the 2013 Final 

Rule) will allow sufficient time for 

providers, both large and small, to 

implement any necessary changes to 

their systems in order to comply with 

the 2013 Final Rule. The Bureau is 

adopting a date certain in order to 

eliminate the risks of delay and provide 

greater assurances to both consumers 

and industry as to when to expect the 

valuable protections of the new rule. 

The Bureau also believes that this 

implementation period allows sufficient 

time because the Bureau is not adopting 

the aspects of the December Proposal 

that commenters identified as requiring 

the most time to implement. 

The primary additional substantive 

requirements in the 2013 Final Rule are 

the requirement that remittance transfer 

providers include disclaimers regarding 

non-covered third-party fees and taxes 

collected by a person other than the 

provider and adopt additional 

verification measures and provide 

notice to senders of the potential loss of 

funds to take advantage of the Bureau’s 

expansion of the exception to the 

definition of the term error under 

§ 1005.33(a)(1)(iv)(D). The Bureau 

believes that any programmatic changes 

required by these provisions should not 

take most providers a particularly long 

period of time to implement. To the 

extent providers need to change the 

terms of their consumer contracts or 

other communications to provide 

senders the notice contemplated by 

§ 1005.33(h)(3), the Bureau expects the 

required time to produce this notice will 

be modest, particularly because the 

2013 Final Rule does not mandate any 

particular notice form, or format apart 

from requiring that such notice be clear 

and conspicuous and meet certain 

foreign language requirements. 

Although translating such notice may 

require testing and certain systems 

changes, and the Bureau expects that 

many providers will integrate any such 

notice into existing communications or 

the required prepayment disclosures. 

Moreover, based on its outreach and 

monitoring of the market, the Bureau 

believes that responsible providers and 

correspondents are already using 

reasonable methods of verification to 

reduce the risk of errors. Nonetheless, 

recognizing that the 2013 Final Rule 

will likely require changes to 

informational technology and 

operational procedures and that small 

providers may benefit from additional 

time in order to test compliance 

solutions for their customers, the 

Bureau believes a modest increase in the 

implementation period from what was 

proposed may limit potential 

disruptions in the remittance transfer 

market. 

For these reasons, the Bureau is 

expanding the implementation period 

for this final rule beyond what was 

proposed by making it effective October 

28, 2013. 

VI. Dodd-Frank Act Section 1022(b)(2) 

Section 1022(b)(2) Analysis 

A. Overview 

In developing the 2013 Final Rule, the 

Bureau has considered potential 

benefits, costs, and impacts 15 and has 

consulted or offered to consult with the 

prudential regulators and the Federal 

Trade Commission, including regarding 

the consistency of the 2013 Final Rule 

with prudential, market, or systemic 

objectives administered by such 

agencies.16

The analysis below considers the 

benefits, costs, and impacts of the key 

provisions of the 2013 Final Rule 

against the baseline provided by the 

2012 Final Rule. Those provisions 

regard: The disclosure of non-covered 

third-party fees and taxes collected by a 

person other than the remittance 

transfer provider, error resolution 

requirements with respect to situations 

in which senders provide incorrect or 

insufficient information regarding 

remittance transfers (including account 

numbers and recipient institution 

identifiers), and the effective date. With 

respect to these provisions, the analysis 

considers the benefits and costs to 

senders (consumers) and remittance 

transfer providers (covered persons).17

The Bureau has discretion in future 

rulemakings to choose the most 

appropriate baseline for that particular 

rulemaking. 

The Bureau notes at the outset that 

quantification of the potential benefits, 

costs, and impacts of the 2013 Final 

Rule is not possible due to the lack of 

available data. As discussed in the 

February Final Rule, there is a limited 


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amount of data about remittance 

transfers and remittance transfer 

providers that are publicly available and 

representative of the full market. 

Similarly, there are limited data on 

consumer behavior, which would be 

essential for quantifying the benefits or 

costs to consumers. Furthermore, as the 

Bureau has delayed the effective date of 

the 2012 Final Rule, providers are still 

in the process of implementing its 

requirements. Therefore, this analysis 

generally provides a qualitative 

discussion of the benefits, costs, and 

impacts of the 2013 Final Rule. As 

discussed in more detail below, the 

Bureau expects that the 2013 Final Rule 

will generally benefit providers by 

facilitating compliance, while 

maintaining many of the 2012 Final 

Rule’s valuable new consumer 

protections and ensuring that these 

protections can effectively be delivered 

to consumers. 

B. Potential Benefits and Costs to 

Consumers and Covered Persons 

1. Non-Covered Third-Party Fees and 

Taxes Collected by a Person Other Than 

the Provider 

a. Benefits and Costs to Covered Persons 

Compared to the 2012 Final Rule, the 

2013 Final Rule benefits remittance 

transfer providers by eliminating some 

of the information that they were 

previously required to disclose, which 

will likely reduce the cost of providing 

required disclosures for most providers. 

The changes regarding fee and tax 

disclosures might additionally benefit 

providers by facilitating their continued 

participation in the market. Industry 

commenters suggested that due in part 

to the 2012 Final Rule’s third-party fee 

and foreign tax disclosure requirements, 

some providers might eliminate or 

reduce their remittance transfer 

offerings, such as by not sending 

transfers to markets where tax or fee 

information is particularly difficult to 

obtain in light of the lack of ongoing 

reliable and complete information 

sources. By reducing the amount of 

information needed to provide 

disclosures, the Bureau expects that the 

2013 Final Rule will encourage more 

providers to retain their current services 

(and thus any associated profit, revenue, 

and customers). 

The 2013 Final Rule requires 

remittance transfer providers to add an 

additional disclaimer to disclosure 

forms in instances where non-covered 

third-party fees imposed and taxes 

collected by a person other than the 

provider may apply. The Bureau 

believes that the cost of adding these 

disclaimers will be small, particularly 

compared to the costs of complying 

with the disclosure requirements of the 

2012 Final Rule. Affected providers will 

also have to reprogram systems to 

conform to the new requirements for 

calculating ‘‘Other Fees’’ (pursuant to 

§ 1005.31(b)(1)(vi)) and the amount to be 

disclosed pursuant to 

§ 1005.31(b)(1)(vii)). All providers will 

have to remove references to ‘‘Other 

Taxes’’ from their forms, and make any 

necessary system changes, insofar as the 

Bureau has eliminated this disclosure. 

The modification to existing forms and 

systems changes may be minimal for 

many providers whose processes allow 

for them to adjust forms and systems 

more easily, and the Bureau expects that 

some providers may not have finished 

any systems modifications necessary to 

comply with the 2012 Final Rule, and 

thus may be able to incorporate any 

changes into previously planned work. 

Furthermore, to the extent any provider 

elects to provide optional disclosures of 

non-covered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider, 

providers may bear some costs in 

determining these amounts and 

programming disclosures to allow for 

the dynamic disclosure of this 

information. 

The Bureau expects that the 

provisions regarding fee and tax 

disclosures will have the largest impact 

on depository institutions, credit 

unions, and broker-dealers that are 

remittance transfer providers. These 

types of providers tend to send most or 

all of their remittances transfers to 

foreign accounts, for which non-covered 

third-party fees could be charged. 

Furthermore, due to the mechanisms 

these providers use to send money, they 

generally have the ability to send 

transfers to virtually any destination 

country (for which tax research might be 

required) and thus many different 

recipient institutions. By contrast, 

money transmitters that are providers 

are more likely to send remittance 

transfers to be received by agents, for 

which non-covered third-party fees will 

not be relevant. Furthermore, with some 

exceptions, most money transmitters, 

and particularly small ones, generally 

send transfers to a limited number of 

countries and institutions; 

consequently, the benefits, in terms of 

avoided costs, of eliminating the 

requirement that taxes be disclosed may 

not be as large for these money 

transmitters as for other remittance 

transfer providers. 

b. Benefits and Costs to Consumers 

The changes regarding the disclosure 

of non-covered third-party fees and 

taxes collected on the remittance 

transfer by a person other than the 

provider may allow senders to avoid 

increased costs to the extent that 

remittance transfer providers pass along 

any cost savings from the new 

requirements in the form of lower 

prices. Also, if the 2013 Final Rule 

facilitates providers’ continued 

participation in the market, it will 

prevent senders from having their 

access to remittance transfers limited, 

by giving them a wider set of options for 

sending transfers. 

The Bureau believes that a minority of 

transfers will be affected by the 

refinements in the 2013 Final Rule 

concerning non-covered third-party fees 

insofar as a minority of remittance 

transfers are deposited into accounts. 

The Bureau is retaining the requirement 

to disclose covered third-party fees and, 

therefore, senders will retain the 

benefits derived from the disclosure of 

such fees. Specifically, the Bureau 

believes that the majority of remittance 

transfers are received in cash; therefore, 

the senders of those transfers will 

generally receive complete information 

about the fees applicable to the transfer. 

The Bureau, however, believes that 

most, if not all, transfers will be affected 

by the refinements concerning taxes 

collected on a remittance transfer by a 

person other than the provider, as 

providers may not be able to verify 

whether taxes may apply to particular 

transactions. It is important to note that 

the Bureau expects that fee and tax 

disclosures that would have been 

required by the 2012 Final Rule but that 

will not be required by the 2013 Final 

Rule will generally not vary across 

providers sending money to the same 

recipient account using the same 

mechanism. 

The 2013 Final Rule may impose 

costs on senders that want a guarantee 

that the designated recipient receives a 

particular amount, to the extent that it 

makes disclosures for a particular 

transfer less accurate because 

disclosures will now contain 

disclaimers in lieu of actual figures 

regarding non-covered third-party fees, 

for transfer that could involve such fees, 

and taxes collected on the remittance 

transfer by a person other than the 

provider. 

In addition, without the tax and fee 

disclosures, senders may have a more 

difficult time ensuring that an exact 

amount of money reaches a designated 

recipient and thus also may have 

difficulty determining if an error 

occurred because the designated 

recipient did not receive the amount 

disclosed. However, this difficulty 

should be mitigated when a sender 


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18Prior to the February Final Rule, the Credit 

Union National Association reported a rate of less 

than 1% for international wire ‘‘exceptions.’’ In 

more recent outreach, other industry participants 

suggested that investigation or exception rates for 

international wire transfers tend to be between 1 

percent and 3 percent of all wire transfers. 

repeatedly transfers funds to the same 

recipient via the same method, as the 

recipient can inform the sender about 

taxes and fees that routinely apply to 

the transfer. 

Eliminating the requirement that noncovered third-party fees be disclosed 

also may have varied effects on the 

ability of senders to comparison shop. 

As to those senders who are only 

shopping between providers that can 

send remittance transfers to a particular 

account via the same method, the 2013 

Final Rule should not significantly 

reduce the ability of senders to compare 

costs across remittance transfer 

providers that can send remittances to 

this account. In fact, to the extent that 

providers are not providing differing 

estimates of the same recipient 

institution fees, consumers may benefit 

because comparisons will be easier. 

However, senders may have a more 

difficult time comparing costs across 

providers sending funds via different 

mechanisms. For example, if a sender is 

agnostic as to whether the designated 

recipient should receive the transfer in 

cash verses the transfer being deposited 

in the designated recipient’s account, to 

the extent non-covered third-party fees 

are not disclosed, the sender may not 

appreciate the full costs of the latter 

option for sending the remittance 

transfer, or understand which method of 

transfer is likely to be most cost 

effective. For the transfer to an account, 

the pre-payment disclosure may not 

contain a disclosure of non-covered 

third-party fees, while the disclosure for 

the transfer to be received in cash must 

disclose all fees. Therefore, whether a 

sender’s ability to comparison shop has 

been impaired by the changes in the 

2013 Final Rule may depend on the type 

of comparison undertaken by the 

sender. 

Nevertheless, as important as this 

information is for senders, requiring 

disclosure of non-covered third-party 

fees and taxes collected on the 

remittance transfer by a person other 

than the provider would likely require 

a substantial delay in implementation of 

all of the 2012 Final Rule or would 

produce a significant contraction in 

senders’ access to remittance transfer 

services, particularly in smaller 

corridors. The Bureau believes that both 

of these results would impose 

significant costs on consumers and 

undermine the broader purposes of the 

statutory scheme. 

2. Incorrect or Insufficient Information 

a. Benefits and Costs to Covered Persons 

The 2013 Final Rule includes two sets 

of changes related to errors caused by 

the sender’s provision of incorrect or 

insufficient information in connection 

with a remittance transfer. First, the 

2013 Final Rule creates a new exception 

to the definition of error for situations 

in which a sender provides an incorrect 

account number or recipient institution 

identifier, and the remittance transfer 

provider meets certain conditions. 

Second, the 2013 Final Rule also adjusts 

the remedy in certain situations, other 

than those covered by this new 

exception, in which an error occurred 

because the sender provided incorrect 

or insufficient information. 

The exception to the definition of 

error benefits remittance transfer 

providers in instances in which senders’ 

mistakes regarding account numbers or 

recipient institution identifiers, which 

would have resulted in errors under the 

2012 Final Rule, will not constitute 

errors under the 2013 Final Rule, 

provided that providers satisfies the 

conditions enumerated in § 1005.33(h). 

There are several cumulative benefits of 

these changes to providers. First, to the 

extent that the new exception applies, 

providers will no longer bear the costs 

of funds that they cannot recover. The 

magnitude of the benefit will depend on 

the frequency of senders’ mistakes 

regarding account numbers or recipient 

institution identifiers that result in 

funds being deposited in the wrong 

account with the provider unable to 

recover funds, and the sizes of those lost 

transfers.18 The magnitude will also 

depend on the extent to which 

providers maintain procedures 

necessary to satisfy the conditions 

enumerated in § 1005.33(h). 

Second, remittance transfer providers 

may derive additional benefit if the 

2013 Final Rule reduces the potential 

for fraudulent account number mistakes 

made by unscrupulous senders, which 

providers have cited as a risk under the 

2012 Final Rule. By eliminating the 

requirement, in some circumstances, 

that the provider resend or refund the 

transfer amount, the 2013 Final Rule 

reduces the direct costs of fraud and the 

indirect costs of fraud prevention and 

facilitates providers’ continued 

participation in the remittance transfer 

market, without (or with fewer) new 

limitations on service. Industry 

commenters indicated that, at least in 

part, due to the risk of such fraud under 

the 2012 Final Rule, providers might 

exit the market or limit the size or type 

of transfers sent. The cumulative 

magnitude of these benefits will depend 

on the magnitude of the actual and 

perceived risk of account number- or 

recipient institution identifier-related 

fraud under the 2012 Final Rule. 

The new exception to the definition of 

error does not impose any new 

requirements on remittance transfer 

providers and therefore will not directly 

impose costs on providers. But, to 

ensure that they can satisfy the 

conditions enumerated in § 1005.33(h) 

and thus trigger the new exception, 

providers may choose to bear some 

costs. For instance, providers may 

change their customer contracts or other 

communications to provide to senders 

the notice contemplated by 

§ 1005.33(h)(3). However, the Bureau 

expects that the cost of doing so will be 

modest, particularly because the 2013 

Final Rule does not mandate any 

particular notice wording, form, or 

format (apart from being clear and 

conspicuous and meeting certain foreign 

language requirements), and the Bureau 

expects that many providers already 

have included any such notice in their 

existing communications or the required 

prepayment disclosures. While the 

notice required by § 1005.33(h)(3) must 

generally be in writing, the Bureau 

believes that providers typically provide 

this notice in writing today. Relatedly, 

providers may change their existing 

procedures to implement the 

verification procedures contemplated by 

§ 1005.33(h)(2). Again, however, insofar 

as most providers are already 

implementing verification methods like 

those contemplated by the 2013 Final 

Rule, most providers will bear minimal 

cost in complying with this 

requirement. 

The Bureau expects that remittance 

transfer providers will generally not 

experience any other costs if they 

choose to satisfy the remainder of the 

conditions in § 1005.33(h), because their 

existing practices generally will already 

satisfy those conditions. In particular, 

based on outreach, the Bureau believes 

that keeping records or other documents 

that can satisfy the conditions described 

in § 1005.33(h) will generally match 

providers’ usual and customary 

practices to serve their customers, to 

manage their risk, and to satisfy the 

requirements under the 2012 Final Rule 

to retain records of the findings of 

investigations of alleged errors. See 

§ 1005.33(g)(2). 

The extent to which remittance 

transfer providers will choose to bear 

any costs related to § 1005.33(h) and the 

magnitude of such costs will depend on 

providers’ existing business practices, 

their expectations about the frequency 


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and size of transfers that are deposited 

into the wrong accounts and not 

recovered because of account number or 

recipient institution identifier mistakes 

by senders, their expectations about the 

risk of fraud, as well as the extent to 

which providers have already begun 

adapting their practices to the 2012 

Final Rule. The Bureau expects that 

providers will only develop their 

practices to comply with § 1005.33(h) if 

doing so will benefit the providers by 

reducing the costs of losses due to 

account number and recipient 

institution identifier mistakes by 

senders or fraud by more than the costs 

of implementing these practices. The 

Bureau believes that this could be the 

case for most providers that make 

transfers to accounts covered by the 

exception, particularly because the 

practices described in § 1005.33(h) 

closely match existing practice, and for 

those providers for whom it does not 

match existing practice, the practices 

that providers would have otherwise 

developed to comply with the 2012 

Final Rule. 

The changes regarding remedies for 

certain errors that occurred because the 

sender provided incorrect or insufficient 

information (other than those errors 

covered by the exception in 

§ 1005.33(a)(1)(iv)(D)) will also benefit 

remittance transfer providers. In 

instances in which they are applicable, 

as discussed above, the changes will 

allow a provider to refund the transfer 

amount to the sender without having to 

meet the timing and other requirements 

of the 2012 Final Rule. In addition, 

insofar as the 2013 Final Rule permits 

providers, for errors that occurred 

because the sender provided incorrect 

or insufficient information, to deduct 

from the amount refunded any fees or 

taxes actually deducted from the 

transfer amount as part of the first 

unsuccessful transfer attempt, providers 

will no longer have to bear the cost of 

these fees and taxes, which previously 

providers could not pass on to senders. 

The changes regarding these remedies 

could impose a cost on remittance 

transfer providers to revise their 

procedures. Providers may need to 

arrange to send refunds when 

previously they were going to resend 

funds. Providers may also have to bear 

costs from the need to adjust their 

default remedies, procedures for 

requesting senders’ preferred remedies, 

and error resolution reports, but the 

Bureau believes these costs should be 

minimal. 

b. Benefits and Costs to Consumers 

The new exception to the definition of 

error will allow senders to avoid 

increased prices, compared to the 2012 

Final Rule, to the extent that remittance 

transfer providers pass along any cost 

savings in the form of lower prices. The 

new exception will also allow senders 

to avoid disruptions in available 

remittance transfer services, to the 

extent it would enable more providers 

to stay in the market or preserve the 

breadth of their current offerings, thus 

preserving competition. 

Under certain conditions, a sender 

who provides an incorrect account or 

recipient institution identifier resulting 

in funds being delivered to the wrong 

account will bear the costs of those misdeposited funds. However, as discussed 

above, the Bureau expects that the 

incidence of such losses will be rare; 

furthermore, the risk of incurring such 

costs may be mitigated, because senders 

will have stronger incentives to ensure 

the accuracy of account number and 

recipient institution identifier 

information to the extent possible. In 

addition, with respect to recipient 

institution identifiers, the exception is 

limited to situations in which the 

provider could not reasonably be 

expected to verify that the recipient 

institution identifier matches the 

institution’s name or location or in 

which the verification does not prevent 

an error from occurring. 

The Bureau expects that the changes 

regarding remedies for errors that occur 

because a sender provided incorrect or 

insufficient information will have very 

small impacts on senders. As described 

above, the Bureau expects that the 

circumstances in which the changes 

apply will arise infrequently. However, 

the changes impose a modest cost on 

senders for two reasons. First, for those 

senders that want to resend funds, they 

will be unable ask the provider to do so 

until the provider’s investigation is 

complete (and the provider is not 

obligated to resend the funds at all). 

Second, insofar as the 2013 Final Rule 

permits providers to deduct from the 

amount refunded any fees or taxes 

actually deducted from the transfer 

amount by a person other than the 

provider as part of the first unsuccessful 

remittance transfer, this provision will 

impose a cost for senders in that they 

will now have to bear the cost of these 

fees and taxes that were to be absorbed 

by the provider under the 2012 Final 

Rule. 

3. Effective Date 

The extension of the 2012 Final Rule’s 

effective date generally benefits 

remittance transfer providers by 

delaying the start of any ongoing 

compliance costs. The additional time 

may also enable providers (and their 

vendors) to build solutions that cost less 

than those that might otherwise have 

been possible. Senders also benefit to 

the extent that the changes eliminate 

any disruptions in the provision of 

remittance transfer services. But the 

delay also imposes costs on senders by 

delaying the time when they will 

receive the benefits of the 2012 Final 

Rule. 

C. Access to Consumer Financial 

Products and Services 

As discussed above, the Bureau 

expects that the 2013 Final Rule will not 

decrease consumers’ (senders’) access to 

consumer financial products and 

services relative to the 2012 Final Rule 

and may significantly preserve access by 

refining certain provisions of the rule 

that were likely to drive some 

remittance transfer providers to suspend 

or curtain their remittance services. By 

avoiding some of the costs that 

providers might otherwise have had to 

bear in order to provide disclosures and 

resolve errors under the 2012 Final 

Rule, the 2013 Final Rule may lead 

providers to reduce their prices and may 

reduce the likelihood that providers will 

exit the remittance market, compared to 

what might have occurred under the 

2012 Final Rule. By facilitating 

providers’ participation in the market, 

the 2013 Final Rule may give senders a 

wider set of options for sending 

transfers, as well as preserve 

competition within this market. 

D. Impact on Depository Institutions 

and Credit Unions With $10 Billion or 

Less in Total Assets 

Given the lack of data on the 

characteristics of remittance transfers, 

the ability of the Bureau to distinguish 

the impact of the 2013 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 is quite limited. 

Overall, the impact of the 2013 Final 

Rule on depository institutions and 

credit unions will depend on a number 

of factors, including whether they are 

remittance transfer providers, the 

importance of remittance transfers for 

the institutions, how many institutions 

or countries they send to, the cost of 

complying with the 2012 Final Rule, 

and the progress made toward 

compliance with the 2012 Final Rule. 

However, information that the Bureau 

obtained prior to finalizing the August 

Final Rule suggests that among 

depository institutions and credit 

unions that provide any remittance 

transfers, an institution’s asset size and 


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19For purposes of assessing the impacts of the 

2013 Final Rule on small entities, ‘‘small entities’’ 

is defined in the RFA to include small businesses, 

small not-for-profit organizations, and small 

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

business’’ is determined by application of Small 

Business Administration regulations and reference 

to the North American Industry Classification 

System (‘‘NAICS’’) classifications and size 

standards. 5 U.S.C. 601(3). A ‘‘small organization’’ 

is any ‘‘not-for-profit enterprise which is 

independently owned and operated and is not 

dominant in its field.’’ 5 U.S.C. 601(4). A ‘‘small 

governmental jurisdiction’’ is the government of a 

city, county, town, township, village, school 

district, or special district with a population of less 

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

20The definition of ‘‘remittance transfer 

provider’’ includes a safe harbor that means that if 

a person provided 100 or fewer remittance transfers 

in the previous calendar year and provides 100 or 

fewer such transfers in the current calendar year, 

it is deemed not to be providing remittance 

transfers for a consumer in the normal course of its 

business, and is thus not a remittance transfer 

provider. See § 1005.30(f)(2). 

21Small Bus. Admin., Table of Small Business 

Size Standards Matched to North American 

Industry Classification System Codes, http:// 

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

Size_Standards_Table.pdf. Effective October 1, 

2012. 

22Many state-licensed money transmitters act 

through agents. However, the 2012 Final Rule 

applies to remittance transfer providers and 

explains, in official commentary, that a person is 

not deemed to be acting as a provider when it 

performs activities as an agent on behalf of a 

provider. Comment 30(f)–1. Furthermore, for the 

purpose of this analysis, the Bureau assumes that 

providers, and not their agents, will assume any 

costs associated with implementing the 

modifications. 

the number of remittance transfers sent 

by the institution are positively, though 

imperfectly, related. There are several 

inferences that can be drawn from this 

relationship. First, the Bureau expects 

that among depository institutions and 

credit unions with $10 billion or less in 

total assets that provide any remittance 

transfers, compared to larger such 

institutions, a greater share qualify for 

the safe harbor related to the definition 

of ‘‘remittance transfer provider’’ and 

therefore are entirely unaffected by the 

2013 Final Rule because they are not 

subject to the requirements of the 2012 

Final Rule. See § 1005.30(f)(2). Second, 

the Bureau believes that depository 

institutions and credit unions with $10 

billion or less in total assets that are 

covered by the 2012 Final Rule will 

experience, on a per-institution basis, 

less of the variable benefits and costs 

described above because they generally 

perform fewer remittance transfers than 

larger institutions. However, to the 

extent that the 2013 Final Rule will 

reduce any fixed costs of compliance, 

such as the costs of gathering 

information on taxes and fees if these 

institutions were to attempt to do that 

themselves, these institutions may 

experience more of the benefits 

described above, on a per-transfer basis 

because that is likely how they pay the 

third party for the compliance services. 

Additionally, the Bureau believes that 

the magnitude of the 2013 Final Rule’s 

impact on smaller depository 

institutions and credit unions will be 

affected by these institutions’ likely 

tendency to rely on correspondents or 

other service providers to obtain 

recipient institution fee and foreign tax 

information, as well as provide standard 

disclosure forms. In some cases, this 

reliance will mitigate the impact on 

these providers of 2013 Final Rule’s 

provisions regarding such information 

because those third parties will likely 

spread the cost of any required work (or 

cost savings) across its customer 

institutions. 

E. Impact of the 2013 Final Rule on 

Consumers in Rural Areas 

Senders in rural areas may experience 

different impacts from the 2013 Final 

Rule than other senders. The Bureau 

does not have data with which to 

analyze these impacts in detail. 

However, to the extent that the 2013 

Final Rule leads to more remittance 

transfer providers to continue to provide 

remittance transfers, the 2013 Final Rule 

may disproportionately benefit senders 

living in rural areas. Senders in rural 

areas may have fewer options for 

sending remittance transfers, and 

therefore may benefit more than other 

senders from changes that keep more 

providers in the market. 

VII. Regulatory Flexibility Act 

A. Overview 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to conduct 

an initial regulatory flexibility analysis 

(IRFA) and a final regulatory flexibility 

analysis (FRFA) of any rule subject to 

notice-and-comment rulemaking 

requirements, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. The Bureau 

also is subject to certain additional 

procedures under the RFA involving the 

convening of a panel to consult with 

small business representatives prior to 

proposing a rule for which an IRFA is 

required. 5 U.S.C. 609. 

The Bureau is certifying the 2013 

Final Rule. Therefore, a FRFA is not 

required for this rule because it will not 

have a significant economic impact on 

a substantial number of small entities. 

B. Affected Small Entities 

The analysis below evaluates the 

potential economic impact of the 2013 

Final Rule on small entities as defined 

by the RFA.19 The 2013 Final Rule 

applies to entities that satisfy the 

definition of ‘‘remittance transfer 

provider’’: 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. See 

§ 1005.30(f).20 Potentially affected small 

entities include insured depository 

institutions and credit unions that have 

$175 million or less in assets and that 

provide remittance transfers in the 

normal course of their business, as well 

as non-depository institutions that have 

average annual receipts that do not 

exceed $7 million and that provide 

remittance transfers in the normal 

course of their business.21 These 

affected small non-depository entities 

may include state-licensed money 

transmitters, broker-dealers, and other 

money transmission companies.22

This analysis examines the benefits, 

costs, and impacts of the key provisions 

of the 2013 Final Rule relative to the 

baseline provided by the 2012 Final 

Rule. The Bureau has discretion in 

future rulemakings to choose the most 

appropriate baseline for that particular 

rulemaking. 

C. Non-Covered Third-Party Fees and 

Taxes Collected on the Remittance 

Transfer by a Person Other Than the 

Provider 

The 2013 Final Rule eliminates the 

requirement that remittance transfer 

providers disclose non-covered thirdparty fees imposed and taxes collected 

on the remittance transfer by a person 

other than the provider. Under the 2013 

Final Rule, providers are required to 

provide disclaimers, where applicable, 

noting that additional fees and taxes 

may apply and reduce the amount 

disclosed pursuant to 

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

that the cost of adding these disclaimers 

will be small. Affected providers will 

also have to reprogram systems to 

conform to the new requirements for 

calculating ‘‘Other Fees’’ (pursuant to 

§ 1005.31(b)(1)(vi)) and the amount to be 

disclosed (pursuant to 

§ 1005.31(b)(1)(vii)). All providers will 

have to remove references to ‘‘Other 

Taxes’’ from their forms, and make any 

necessary systems changes, insofar as 

the Bureau has eliminated this 

disclosure. The modifications to 

existing forms and systems changes may 

be minimal for many providers whose 

processes allow for them to adjust forms 

and systems more easily, and the 

Bureau expects that some providers may 

not have finished any systems 

modifications necessary to comply with 

the 2012 Final Rule, and thus may be 


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30700 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

able to incorporate any changes into 

previously planned work. Furthermore, 

to the extent any provider elects to 

provide optional disclosures of noncovered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider, 

providers may bear some costs in 

determining these amounts and 

programming disclosures to allow for 

the dynamic disclosure of this 

information. Also, the Bureau expects 

that many small depository institutions 

and credit unions are relying on 

correspondent institutions or other 

service providers to provide standard 

disclosure forms; as a result, related 

costs will often be spread across 

multiple institutions. 

The 2013 Final Rule’s elimination of 

the requirement to disclose non-covered 

third-party fees and taxes collected on 

the remittance transfer by a person other 

than the provider may provide 

meaningful benefits to remittance 

transfer providers. The benefits include 

a reduced cost to prepare required 

disclosures. Furthermore, industry has 

suggested that due in part to the 2012 

Final Rule’s third party fee and foreign 

tax disclosure requirements, some 

providers might have eliminated or 

reduced their remittance transfer 

offerings, such as by not sending to 

countries where tax or fee information 

is particularly difficult to obtain, due to 

the lack of ongoing reliable and 

complete information sources. By 

reducing the amount of information 

needed to provide disclosures, the 2013 

Final Rule will encourage more 

providers (including small entities) to 

retain their current services (and thus 

any associated profit, revenue, and 

customers). 

The Bureau expects that, amongst 

small entities, the revised provisions 

regarding recipient institution fees will 

have the largest effect on remittance 

transfer providers that are depository 

institutions, credit unions, and brokerdealers that are remittance transfer 

providers. These types of providers tend 

to send most or all of their remittances 

transfers to foreign accounts, for which 

recipient institution fees may be 

charged. Furthermore, due to the 

mechanisms these providers use to send 

money, they generally have the ability 

to send transfers to virtually any 

destination country for which tax 

research might be required. By contrast, 

money transmitters that are providers 

are more likely to send remittance 

transfers to be received by agents, for 

which non-covered third-party fees will 

not be relevant. Furthermore, with some 

exception, most money transmitters, 

and particularly small ones, generally 

send transfers to a limited number of 

countries and institutions, so the 

benefits, in avoided costs, of eliminating 

the requirement that taxes be disclosed 

may not be as large for money 

transmitters as for other providers. 

D. Incorrect or Insufficient Information 

The 2013 Final Rule includes two sets 

of changes related to errors caused by 

the sender’s provision of incorrect or 

insufficient information. First, the 2013 

Final Rule creates a new exception to 

the definition of the error for situations 

in which a sender provides an incorrect 

account number or recipient institution 

identifier, and the remittance transfer 

provider meets certain conditions. 

Second, the 2013 Final Rule also adjusts 

the remedy in certain situations in 

which an error occurred because the 

sender provided incorrect or insufficient 

information (other than those covered 

by the new exception). 

The Bureau expects that a number of 

small remittance transfer providers will 

be unaffected by the changes regarding 

the definition of error as they only apply 

to remittance transfers that are received 

in accounts. Though some money 

transmitters send money to be deposited 

into bank accounts, the Bureau’s 

outreach suggests that, unlike most 

small depository institutions, credit 

unions, and broker-dealers, many small 

money transmitters only send money to 

be received in cash, and some of those 

that do send money to be deposited into 

accounts may be doing so through agent 

relationships. 

With regard to small remittance 

transfer providers that do send money to 

accounts at recipient institutions that 

are not agents, the new exception to the 

definition of error does not impose any 

mandatory costs. Under the 2013 Final 

Rule, certain account number and 

recipient institution identifier mistakes 

will no longer generate ‘‘errors’’ if the 

provider satisfied certain conditions 

enumerated in § 1005.33(h). Instead of 

satisfying these conditions, providers 

can continue under the 2012 Final 

Rule’s definition of error. 

If remittance transfer providers 

choose to satisfy the conditions 

enumerated in § 1005.33(h), they may 

incur some costs for implementing 

certain verification procedures pursuant 

to § 1005.33(h)(2) and changing the 

terms of their consumer contracts or 

other communications to provide 

senders the notice contemplated by 

§ 1005.33(h)(3). However, the Bureau 

expects that the cost of providing this 

notice will be modest, particularly 

because the 2013 Final Rule does not 

mandate any particular notice, form, or 

format (apart from requiring that the 

notice be clear and conspicuous and 

meeting certain foreign language 

requirements), and the Bureau expects 

that many providers already have 

included any such notice into existing 

communications or the required 

prepayment disclosures. While the 

notice required by § 1005.33(h)(3) must 

generally be in writing, the Bureau also 

believes that providers already provide 

this notice in writing. 

The Bureau believes that satisfying 

the remainder of the conditions in 

§ 1005.33(h) will not impose new costs 

on remittance transfer providers because 

their existing practices generally will 

already satisfy those conditions. In 

particular, based on outreach, the 

Bureau believes that that keeping 

records or other documents that can 

satisfy the conditions described in 

§ 1005.33(h) will generally match 

providers’ usual and customary 

practices to serve their customers, to 

manage their risk, and to satisfy the 

requirements under the 2012 Final Rule 

to retain records of the findings of 

investigations of alleged errors. See 

§ 1005.33(g)(2). 

In any case, the Bureau expects that 

remittance transfer providers will only 

develop their practices to comply with 

§ 1005.33(h), and thus take advantage of 

the new exception to the definition of 

error, if doing so will reduce the costs 

of losses due to account number and 

recipient institution identifier mistakes 

by senders or fraud by more than the 

costs of implementing these practices. 

The Bureau believes that for most 

providers, including small ones, the 

changes to the definition of error likely 

will provide greater benefits than 

implementation costs. If the new 

exception applies, providers will no 

longer bear the cost of funds that they 

could not recover if they are able to 

satisfy the conditions of § 1005.33(h). 

Providers will further benefit if the 2013 

Final Rule reduces the potential for 

fraudulent account number and 

recipient institution identifier mistakes 

made by unscrupulous senders, which 

providers have cited as a risk under the 

2012 Final Rule. By reducing the 

remedies available in such cases, the 

2013 Final Rule will reduce the direct 

costs of fraud and the indirect costs of 

fraud prevention and facilitate 

providers’ continued participation in 

the remittance transfer market, without 

(or with fewer) new limitations on 

service. Industry commenters indicated 

that, at least in part, due to the risk of 

such fraud under the 2012 Final Rule, 

providers might exit the market or limit 

the size or type of transfers sent. 

The change regarding remedies for 

certain errors that occurred because the 


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23The Bureau expects that remittance transfer 

providers will generally experience low error rates. 

Prior to the February Final Rule, the Credit Union 

National Association reported a rate of less than 1% 

for international wire ‘‘exceptions.’’ In more recent 

outreach, other industry participants suggested that 

investigation or exception rates for international 

wire transfers tend to be between 1 percent and 3 

percent of all wire transfers. 

24The decrease in respondents relative to the 

PRA analysis for the August Final Rule reflects a 

change in the number of insured depository 

institutions and credit unions supervised by the 

Bureau, a focus on the Bureau’s estimate of the 

number of insured depository institutions and 

credit unions that will qualify as remittance transfer 

providers, and a revision by the Bureau of the 

estimated number of state-licensed money 

transmitters that offer remittance services. The 

revised estimate of the number of state-licensed 

money transmitters that offer remittance services is 

based on subsequent analysis of publicly available 

state registration lists and other information about 

the business practices of licensed entities. The 

decrease in burden relative to what was previously 

reported for the 2012 Final Rule from this revision 

is not included in the change in burden reported 

here. However, the revised entity counts are used 

for calculating other changes in burden that will 

arise from the 2013 Final Rule. The total estimated 

number of respondents also includes an estimated 

162 broker-dealers that may be remittance transfer 

providers. 

sender provided incorrect or insufficient 

information will also benefit small 

remittance transfer providers, though 

the Bureau expects that the benefits 

would be small because the 

circumstances covered by the change 

will arise very infrequently.23 In 

instances in which they are applicable, 

the changes will require a provider to 

refund the transfer amount unless the 

sender requested a resend after being 

informed of the results of the error 

investigation and the provider agreed to 

such a resend. Any request to resend the 

funds will be treated as a new 

remittance transfer. Similarly, the 

changes will benefit providers insofar as 

they may deduct from the amount 

refunded, or applied towards a new 

transfer, any fees or taxes actually 

deducted from the transfer amount by a 

person other than the provider and thus 

they will no longer have to bear the cost 

of these fees and taxes, which 

previously providers could not pass on 

to senders. The changes regarding 

certain instances in which remittance 

transfer providers resend transactions to 

correct errors could impose a cost on 

providers to revise their procedures. 

Providers may also have to bear costs 

from the need to adjust their default 

remedies, procedures for requesting 

senders’ preferred remedies, and error 

resolution reports, but the Bureau 

believes these costs will be modest. 

E. Effective Date 

The 2013 Final Rule will not take 

effect until October 28, 2013. This 

change will generally benefit small 

remittance transfer providers, by 

delaying the start of any ongoing 

compliance costs. The additional time 

might also enable providers (and their 

vendors) to build solutions that cost less 

than those that might otherwise have 

been possible. 

F. Cost of Credit for Small Entities 

The 2013 Final Rule does not apply 

to credit transactions or to commercial 

remittances. Therefore, the Bureau does 

not expect this rule to increase the cost 

of credit for small businesses. With a 

few exceptions, the 2013 Final Rule 

generally does not change or lowers the 

cost of compliance for depositories and 

credit unions, many of which offer 

small business credit. Any effect of the 

2013 Final Rule on small business 

credit, however, would be highly 

attenuated. The 2013 Final Rule also 

generally does not change or lowers the 

cost of compliance for money 

transmitters. Money transmitters 

typically do not extend credit to any 

entity, including small businesses. 

G. Certification 

Accordingly, the undersigned hereby 

certifies that this rule will not have a 

significant economic impact on a 

substantial number of small entities. 

VIII. Paperwork Reduction Act 

Pursuant to the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.) 

(PRA) requires that the Bureau may not 

conduct or sponsor and, 

notwithstanding any other provision of 

law, a respondent is not required to 

respond to an information collection 

unless the collection displays a valid 

OMB control number. Regulation E, 12 

CFR part 1005, contains collections of 

information that have previously 

approved by OMB. The Bureau’s OMB 

control number for Regulation E is 

3170–0014. Certain provisions of the 

2013 Final Rule contain revisions to the 

information collection requirements as 

currently approved under OMB No. 

3170–0014. The revised information 

collection requirements as contained in 

the 2013 Final Rule and identified as 

such have been submitted to OMB for 

review under section 3507(d) of the PRA 

and are not effective until OMB 

approval is obtained. The unapproved 

revised information collection 

requirements are contained in 

§§ 1005.31(b)(1)(viii), 1005.33(h), and 

1005.33(g) of this final rule. 

Documentation prepared in support of 

this submission to OMB is available at 

www.reginfo.gov. This documentation 

contains among other things a 

description of likely respondents to 

these information collection 

requirements and detailed burden 

analysis. The Bureau will publish a 

separate notice in the Federal Register 

announcing OMB’s action on this 

submission. 

A. Overview 

The title of these information 

collections is Electronic Fund Transfer 

Act (Regulation E) 12 CFR part 1005. 

The frequency of collection is on 

occasion. As described below, the 2013 

Final Rule amends portions of the 

collections of information currently in 

Regulation E. Some portions of these 

information collections are required to 

provide benefits for consumers and are 

mandatory. However, some portions are 

voluntary because certain information 

collections under the 2013 Final Rule 

would simply give remittance transfer 

providers optional methods of 

compliance. Because the Bureau does 

not collect any information under the 

2013 Final Rule, no issue of 

confidentiality arises. The likely 

respondents are providers, including 

small businesses. Respondents are 

required to retain records for 24 months, 

but this regulation does not specify the 

types of records that must be 

maintained. See §§ 1005.13(c) and 

1005.33(g)(2). 

Under the 2013 Final Rule, the 

Bureau generally accounts for the 

paperwork burden associated with 

Regulation E for the following 

respondents pursuant to its 

administrative enforcement authority: 

Insured depository institutions and 

insured credit unions with more than 

$10 billion in total assets, and their 

depository institution and credit union 

affiliates (together, ‘‘the Bureau 

depository respondents’’), and certain 

non-depository remittance transfer 

providers, such as certain state-licensed 

money transmitters and broker-dealers 

(‘‘the Bureau non-depository 

respondents’’). 

Using the Bureau’s burden estimation 

methodology, the Bureau estimates that 

the total one-time burden for the 

estimated 5,915 respondents potentially 

affected by the 2013 Final Rule would 

be approximately 385,000 hours.24 The 

Bureau estimates that the ongoing 

burden to comply with Regulation E 

would be reduced by approximately 

276,000 hours per year by the 2013 

Final Rule. The aggregate estimates of 

total burdens presented in this analysis 

are based on estimated costs that are 

averages across respondents. The 

Bureau expects that the amount of time 

required to implement the changes for a 

given remittance transfer provider may 


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25The Bureau’s estimate of non-depository 

respondents is based on an estimate of the number 

of state-licensed money transmitters that are 

remittance transfer providers. Furthermore, the 

Bureau notes that while its analysis in the February 

Final Rule attributed burden to the agents of statelicensed money transmitters, in this case, the 

Bureau expects that the changes in burden 

discussed in this PRA analysis will generally be 

borne only by money transmitters themselves, not 

their agents. In particular, the Bureau believes that 

money transmitters will generally gather and 

prepare recipient institution fee and foreign tax 

information centrally, rather than requiring their 

agents to do so. Similarly, the Bureau expects that 

money transmitters will generally investigate and 

respond to errors centrally, rather than asking their 

agents to take responsibility for such functions. 

Comment 30(f)–1 states 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. 

26 In the December Proposal, the Bureau proposed 

that providers be permitted to use simplified 

disclosures that would have contained one 

additional piece of information that was not 

otherwise required on existing disclosures. Insofar 

as the Bureau is not finalizing this part of the 

December Proposal, the burden allotted to this 

disclosure is not included in this analysis. 

vary based on the size, complexity, and 

practices of the respondent. 

For the 153 Bureau depository 

respondents, the Bureau estimates for 

the purpose of this PRA analysis that 

the 2013 Final Rule will increase onetime burden by approximately 9,900 

hours and reduce ongoing burden by 

approximately 7,300 hours per year. For 

the estimated 300 Bureau nondepository respondents, the Bureau 

estimates that the 2013 Final Rule will 

increase one-time burden by 

approximately 20,000 hours and reduce 

ongoing burden by 6,300 hours per 

year.25 The Bureau and the Federal 

Trade Commission (FTC) generally both 

have enforcement authority over nondepository institutions under Regulation 

E, including state-licensed money 

transmitters. The Bureau has allocated 

to itself half of its estimated burden to 

Bureau non-depository respondents, (or 

approximately 10,000 hours in one-time 

burden and a reduction in ongoing 

burden of 3,150 hours) which is based 

on an estimate of the number of statelicensed money transmitters that are 

remittance transfer providers. The FTC 

is responsible for estimating and 

reporting to OMB its total paperwork 

burden for the institutions for which it 

has administrative enforcement 

authority. It may, but is not required to, 

use the Bureau’s burden estimation 

methodology. 

B. Analysis of Potential Burden 

1. Recipient Institution Fees and 

Foreign Taxes 

As described in parts V and VI above, 

in lieu of disclosing certain recipient 

institution fees and foreign taxes, 

remittance transfer providers will be 

required to bear some cost of modifying 

their systems to include the disclaimer 

required by § 1005.31(b)(1)(viii). 

Effected providers will also have to 

reprogram systems to conform to the 

new requirements for calculating ‘‘Other 

Fees’’ (pursuant to § 1005.31(b)(1)(vi)) 

and the amount to be disclosed 

(pursuant to § 1005.31(b)(1)(vii)). In 

addition, certain providers may choose 

to program their systems to include the 

option to disclose non-covered thirdparty fees and taxes collected by a 

person other than the provider pursuant 

to § 1005.31(b)(1)(viii). All providers 

will have to remove references to ‘‘Other 

Taxes’’ from their forms. The Bureau 

also expects that many depository 

institutions and credit unions are 

relying on correspondent institutions or 

other service providers to provide 

recipient institution fee and foreign tax 

information, as well as standard 

disclosure forms; as a result, any 

development cost associated with the 

2013 Final Rule will be spread across 

multiple institutions. 

Furthermore, the Bureau expects that 

some remittance transfer providers may 

not have finished any systems 

modifications necessary to comply with 

the 2012 Final Rule, and thus may be 

able to incorporate any changes into 

previously accounted-for work. In the 

interest of providing a conservative 

estimate, however, the Bureau assumes 

that all providers will need to modify 

their systems to calculate disclosures 

and to add the new disclaimers. The 

Bureau estimates that making revisions 

to systems to adjust to the new 

disclosure requirements will take, on 

average, 40 hours per provider. Because 

the forms to be modified are existing 

forms, the Bureau estimates that adding 

the disclaimer will require eight hours 

per form per provider. 

On the other hand, the 2013 Final 

Rule will eliminate remittance transfer 

providers’ ongoing cost of obtaining and 

updating information on foreign taxes 

and, for some providers, eliminate the 

ongoing cost of obtaining and updating 

information on recipient institution 

fees. By eliminating these ongoing costs, 

the Bureau estimates that insured 

depository institutions and credit 

unions will save, on average, 48 hours 

per year and non-depository institutions 

will save, on average, 21 hours per year. 

The Bureau cannot estimate the number 

of providers that will choose to provide 

optional disclosures of foreign taxes and 

non-covered third-party fees. The 

Bureau believes even for such providers 

there will be significant time savings as 

providers may choose to focus on 

heavily trafficked corridors where 

information may be more easily 

obtainable. 

2. Incorrect or Insufficient Information 

As described in parts V and VI above, 

the Bureau expects that remittance 

transfer providers that send money to 

accounts, in order to benefit from the 

changes to the definition of the term 

error, may choose to provide senders 

with notice that if they provide 

incorrect account numbers, they could 

lose the transfer amount, and providers 

may also choose to maintain sufficient 

records to satisfy, wherever possible, the 

conditions enumerated in § 1005.33(h) 

(though no such recordkeeping is 

required). These enumerated conditions 

include: Being able to demonstrate facts 

regarding senders’ responsibility for any 

account number or recipient institution 

identifier mistake; verification of 

recipient institution identifiers; the 

above-referenced notice; the results of 

an incorrect account number or 

recipient institution identifier; and the 

provider’s effort to recover funds. In 

addition, § 1005.33(h) may encourage 

providers to implement security 

procedures for verifying account and 

recipient institution identifiers that they 

did not previously utilize. 

Because this will likely involve 

modifications to existing 

communications, the Bureau estimates 

that providing senders with the notice 

described above will require a one-time 

burden of eight hours per remittance 

transfer provider and will not generate 

any ongoing burden. With regard to 

satisfying compliance with the 

conditions enumerated in § 1005.33(h), 

the Bureau believes that any related 

record retention will be a usual and 

customary practice by providers under 

the 2012 Final Rule, and that therefore 

there will be no additional burden 

associated with these aspects of the 

2013 Final Rule. Many commenters 

indicated that their existing disclosures 

to consumers already contain a notice of 

the sort contemplated by this provision. 

Under the 2013 Final Rule, to correct 

an error caused by incorrect or 

insufficient information provided by a 

sender, a remittance transfer provider 

must refund a transfer amount to the 

sender, unless the sender specifically 

requests that the provider resend the 

funds as a new remittance transfer and 

the provider agrees to do so. When a 

sender and provider agree to send a new 

transfer, the procedures for sending that 

new transfer should not result in any 

increased burden.26

The Bureau also estimates that to 

reflect the changes regarding certain 

errors, remittance transfer providers will 


TKELLEY on DSK3SPTVN1PROD with RULES2
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30703 

spend, on average, one hour, to update 

written policies and procedures 

designed to ensure compliance with 

respect to the error resolution 

requirements applicable to providers, 

pursuant to § 1005.33(g). 

The Bureau expects that the revised 

remedy for certain errors will also 

reduce remittance transfer providers’ 

ongoing burden, by eliminating the need 

to provide both a pre-payment 

disclosure and a receipt under covered 

circumstances. However, because the 

Bureau expects that the covered 

circumstances will arise very 

infrequently, the Bureau expects that 

this burden reduction would be 

minimal. 

In summary, the 2013 Final Rule will 

result in an increase in one-time burden 

for CFPB respondents of approximately 

20,000 hours and a decrease in ongoing 

burden for CFPB respondents of 10,000 

hours per year. The current total annual 

burden for OMB No. 3170–0014 is 

4,005,122 hours. As a result of the 2013 

Final Rule, the new burden for OMB No. 

3170–0014 will be 4,014,323 hours. 

List of Subjects in 12 CFR Part 1005 

Banking, Banks, Consumer protection, 

Credit unions, Electronic fund transfers, 

National banks, Remittance transfers, 

Reporting and recordkeeping 

requirements, Savings associations. 

Authority and Issuance 

For the reasons stated in the 

preamble, the Bureau further amends 12 

CFR part 1005, as amended February 7, 

2012 (77 FR 6194) and August 20, 2012 

(77 FR 50244) and delayed January 29, 

2013 (78 FR 6025), as set forth below: 

PART 1005—ELECTRONIC FUND 

TRANSFERS (REGULATION E) 

■ 1. The authority citation for part 1005 

continues to read as follows: 

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

1693b. 

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

5601. 

Subpart B—Requirements for 

Remittance Transfers 

■ 2. Section 1005.30 is amended by 

revising the introductory text and 

adding paragraph (h) to read as follows: 

§ 1005.30 Remittance transfer definitions. 

Except as otherwise provided, for 

purposes of this subpart, the following 

definitions apply: 

* * * * * 

(h) Third-party fees. (1) ‘‘Covered 

third-party fees.’’ The term ‘‘covered 

third-party fees’’ means any fees 

imposed on the remittance transfer by a 

person other than the remittance 

transfer provider except for fees 

described in paragraph (h)(2) of this 

section. 

(2) ‘‘Non-covered third-party fees.’’ 

The term ‘‘non-covered third-party fees’’ 

means any fees imposed by the 

designated recipient’s institution for 

receiving a remittance transfer into an 

account except if the institution acts as 

an agent of the remittance transfer 

provider. 

■ 3. Section 1005.31 is amended by 

revising paragraphs (a)(1), (b)(1)(ii), 

(b)(1)(v), (b)(1)(vi), (b)(1)(vii), (b)(2)(i), 

(c)(1), (c)(2), (c)(3), (f), and (g)(1), and 

adding paragraph (b)(1)(viii) to read as 

follows: 

§ 1005.31 Disclosures. 

(a) General form of disclosures—(1) 

Clear and conspicuous. Disclosures 

required by this subpart or permitted by 

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

§ 1005.33(h)(3) must be clear and 

conspicuous. Disclosures required by 

this subpart or permitted by paragraph 

(b)(1)(viii) of this section or 

§ 1005.33(h)(3) may contain commonly 

accepted or readily understandable 

abbreviations or symbols. 

* * * * * 

(b) * * * 

(1) * * * 

(ii) Any fees imposed and any taxes 

collected 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; 

* * * * * 

(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 covered 

third-party fees 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 covered third-party fees, in 

the currency in which the funds will be 

received by the designated recipient, 

using the term ‘‘Other Fees,’’ or a 

substantially similar term. The exchange 

rate used to calculate any covered thirdparty fees 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; 

(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 except that this amount shall not 

include non-covered third party fees or 

taxes collected on the remittance 

transfer by a person other than the 

provider regardless of whether such fees 

or taxes are disclosed pursuant to 

paragraph (b)(1)(viii) of this section. 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. 

(viii) A statement indicating that noncovered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider may 

apply to the remittance transfer and 

result in the designated recipient 

receiving less than the amount disclosed 

pursuant to paragraph (b)(1)(vii) of this 

section. A provider may only include 

this statement to the extent that such 

fees or taxes do or may apply to the 

transfer, using the language set forth in 

Model Forms A–30(a) through (c) of 

Appendix A to this part, as appropriate, 

or substantially similar language. In this 

statement, a provider also may, but is 

not required, to disclose any applicable 

non-covered third-party fees or taxes 

collected by a person other than the 

provider. Any such figure must be 

disclosed in the currency in which the 

funds will be received, using the 

language set forth in Model Forms A– 

30(b) through (d) of Appendix A to this 

part, as appropriate, or substantially 

similar language. The exchange rate 

used to calculate any disclosed noncovered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider 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) * * * 

(i) The disclosures described in 

paragraphs (b)(1)(i) through (viii) of this 

section; 

* * * * * 

(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), (vii), and (viii) 

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, generally need not 

comply with the grouping requirements 


TKELLEY on DSK3SPTVN1PROD with RULES2
30704 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

of this paragraph, however information 

required or permitted by paragraph 

(b)(1)(viii) of this section must be 

grouped with information required by 

paragraph (b)(1)(vii) of this section. 

(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. The information required or 

permitted by paragraph (b)(1)(viii) must 

be in close proximity to the information 

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

section. Disclosures provided via mobile 

application or text message, to the 

extent permitted by paragraph (a)(5) of 

this section, generally need not comply 

with the proximity requirements of this 

paragraph, however information 

required or permitted by paragraph 

(b)(1)(viii) of this section must follow 

the information required by paragraph 

(b)(1)(vii) of this section. 

(3) Prominence and size. Written 

disclosures required by this subpart or 

permitted by paragraph (b)(1)(viii) of 

this section must be provided on the 

front of the page on which the 

disclosure is printed. Disclosures 

required by this subpart or permitted by 

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

permitted by paragraph (b)(1)(viii) of 

this section that are provided in writing 

or electronically must be in equal 

prominence to each other. 

* * * * * 

(f) Accurate when payment is made. 

Except as provided in § 1005.36(b), 

disclosures required by this section or 

permitted by paragraph (b)(1)(viii) of 

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 or 

permitted by paragraph (b)(1)(viii) of 

this section or § 1005.33(h)(3) must be 

made in English and, if applicable, 

either in: 

* * * * * 

■ 4. Section 1005.32 is amended by 

revising paragraphs (b)(2)(ii) and (c)(3), 

adding paragraph (b)(3), revising 

paragraph (c)(4) and removing 

paragraph (c)(5) to read as follows: 

§ 1005.32 Estimates. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) Covered third-party fees described 

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

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

only if the exchange rate is also 

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

this section and the estimated exchange 

rate affects the amount of such fees. 

* * * * * 

(3) Permanent exception for optional 

disclosure of non-covered third-party 

fees and taxes collected by a person 

other than the provider. For disclosures 

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

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

be provided for applicable non-covered 

third-party fees and taxes collected on 

the remittance transfer by a person other 

than the provider, which are permitted 

to be disclosed under 

§ 1005.31(b)(1)(viii), provided such 

estimates are based on reasonable 

sources of information. 

(c) * * * 

(3) Covered third-party fees. (i) 

Imposed as percentage of amount 

transferred. In disclosing covered thirdparty fees, as described under 

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

of the amount transferred to the 

designated recipient, an estimated 

exchange rate 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 the intermediary or 

final institution. In disclosing covered 

third-party fees pursuant to 

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

based on one of the following: 

* * * * * 

(4) 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 (3) of this section, as applicable. 

■ 5. Section 1005.33 is amended by 

revising paragraphs (a)(1)(iii), 

(a)(1)(iv)(B), (c)(2) introductory text, 

(c)(2)(ii) introductory text, 

(c)(2)(ii)(A)(2) and (c)(2)(ii)(B), 

redesignating paragraph (c)(2)(iii) as 

paragraph (c)(2)(iv), and adding 

paragraphs (a)(1)(iv)(D), (c)(2)(iii) and 

(h) to read as follows: 

§ 1005.33 Procedures for resolving errors. 

(a) * * * 

(1) * * * 

(iii) The failure to make available to 

a designated recipient the amount of 

currency disclosed pursuant to 

§ 1005.31(b)(1)(vii) and 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(a), (b)(1) or 

(b)(2) 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; or 

(C) The difference results from the 

application of non-covered third-party 

fees or taxes collected on the remittance 

transfer by a person other than the 

provider and the provider provided the 

disclosure required by 

§ 1005.31(b)(1)(viii). 

(iv) * * * 

(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; 

* * * * * 

(D) The sender having provided the 

remittance transfer provider an incorrect 

account number or recipient institution 

identifier for the designated recipient’s 

account or institution, provided that the 

remittance transfer provider meets the 

conditions set forth in paragraph (h) of 

this section; 

* * * * * 

(c) * * * 

(2) Remedies. Except as provided in 

paragraph (c)(2)(iii) of this section, 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: 

* * * * * 

(ii) Except as provided in paragraph 

(c)(2)(iii) of this section, in the case of 

an error under paragraph (a)(1)(iv) of 

this section 

(A) * * * 

(2) Making available to the designated 

recipient the amount appropriate to 

resolve the error. Such amount must be 


TKELLEY on DSK3SPTVN1PROD with RULES2
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30705 

made available to the designated 

recipient without additional cost to the 

sender or to the designated recipient; 

and 

(B) Refunding to the sender any fees 

imposed and, to the extent not 

prohibited by law, taxes collected on the 

remittance transfer; 

(iii) In the case of an error under 

paragraph (a)(1)(iv) of this section that 

occurred because the sender provided 

incorrect or insufficient information in 

connection with the remittance transfer, 

the remittance transfer provider shall 

refund to the sender the amount of 

funds provided by the sender in 

connection with the remittance transfer 

that was not properly transmitted, or the 

amount appropriate to resolve the error, 

within three business days of providing 

the report required by paragraph (c)(1) 

or (d)(1) of this section except that the 

provider may agree to the sender’s 

request, upon receiving the results of 

the error investigation, that the funds be 

applied towards a new remittance 

transfer, rather than be refunded, if the 

provider has not yet processed a refund. 

The provider may deduct from the 

amount refunded or applied towards a 

new transfer any fees actually imposed 

on or, to the extent not prohibited by 

law, taxes actually collected on the 

remittance transfer as part of the first 

unsuccessful remittance transfer 

attempt. 

* * * * * 

(h) Incorrect account number or 

recipient institution identifier provided 

by the sender. The exception in 

paragraph (a)(1)(iv)(D) of this section 

applies if: 

(1) The remittance transfer provider 

can demonstrate that the sender 

provided an incorrect account number 

or recipient institution identifier to the 

provider in connection with the 

remittance transfer; 

(2) For any instance in which the 

sender provided the incorrect recipient 

institution identifier, prior to or when 

sending the transfer, the provider used 

reasonably available means to verify 

that the recipient institution identifier 

provided by the sender corresponded to 

the recipient institution name provided 

by the sender; 

(3) The provider provided notice to 

the sender before the sender made 

payment for the remittance transfer that, 

in the event the sender provided an 

incorrect account number or recipient 

institution identifier, the sender could 

lose the transfer amount. For purposes 

of providing this disclosure, 

§ 1005.31(a)(2) applies to this notice 

unless the notice is given at the same 

time as other disclosures required by 

this subpart for which information is 

permitted to be disclosed orally or via 

mobile application or text message, in 

which case this disclosure may be given 

in the same medium as those other 

disclosures; 

(4) The incorrect account number or 

recipient institution identifier resulted 

in the deposit of the remittance transfer 

into a customer’s account that is not the 

designated recipient’s account; and 

(5) The provider promptly used 

reasonable efforts to recover the amount 

that was to be received by the 

designated recipient. 

■ 6. Appendix A to part 1005 is 

amended as follows: 

■ a. Title A–30 is removed and reserved 

and new titles A–30(a) through A–30(d) 

are added. 

■ b. New Model Forms A–30(a), A– 

30(b), A–30(c), A–30(d) are added, and 

Model Forms A–31 through A–41 are 

revised. 

The additions and revisions read as 

follows: 

Appendix A to Part 1005—Model 

Disclosures and Forms 

* * * * * 

A–30(a)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency including a 

disclaimer where non-covered third-party 

fees and foreign taxes may apply 

(§ 1005.31(b)(1)) 

A–30(b) —Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency including a 

disclaimer with estimate for non-covered 

third-party fees (§ 1005.31(b)(1) and 

§ 1005.32(b)(3)) 

A–30(c)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency including a 

disclaimer with estimate for foreign taxes 

(§ 1005.31(b)(1) and § 1005.32(b)(3)) 

A–30(d)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency, including 

a disclaimer with estimates for noncovered third-party fees and foreign taxes 

(§ 1005.31(b)(1) and § 1005.32(b)(3)) 

* * * * * 

A–30(a)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency 

(§ 1005.31(b)(1)) 

A–30(b)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency 

(§ 1005.31(b)(1)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.242</GPH> ER22MY13.243</GPH>
30706 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

A–30(c)—Model Form for Pre-Payment 

Disclosures for Remittance Transfers 

Exchanged into Local Currency 

(§ 1005.31(b)(1)) 

A–30(d)—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)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.244</GPH> ER22MY13.245</GPH> ER22MY13.246</GPH> ER22MY13.247</GPH>
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30707 

A–33—Model Form for Pre-Payment 

Disclosures for Dollar-to-Dollar Remittance 

Transfers (§ 1005.31(b)(1)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.248</GPH> ER22MY13.249</GPH>

E'or questions or complaints about ABC 

Company, contabt: 

State Regulatory Agency 

600-111-2222 

www.stateregulatoryagency.gov 

Consumer Financial Protection Bureau 

855-411-2372 

B55-729~2372 iTTY/TDD) 

www.consumerfinance.gov 

Today'a Date: 

Transfer Arttount: 

Tr,'.msfer Fees: 

Transfer Taxes: 

Total: 

Transfer Arnount: 

Other Fees: 

ABC Company 

1000 XYZ Avenue 

Any town, Anystate 12345 

March 3, 2014 

NOTA RECEIPT 

Total to Recipient: 

$100.00 

+$7.00 

+$3.00 

$110.00 

$100.00 

"-$4.00 

$96.00 

Recipient may receive leas due to fees charged by the recipient's 

bank and foreign taxes. 
30708 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

A–34—Model Form for Receipts for Dollarto-Dollar Remittance Transfers 

(§ 1005.31(b)(2)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.250</GPH>

ABC Coapany 

100.0 XYZ Avenue 

Any town. Anysta:te 12.1115 

Today's:Oa~e: :Maroh .3,. 2014 

SENDER: 

pat JOnes 

100 AhywhereStreet. 

Anytown, ll.nywhere54321 

301-555-1212 

Confirmation Code: 

bate. Available: 

T:r:t·ansfer AIttOunt: 

Transfer Fees.: 

Transfer Taxes~ 

Total: 

Transfer Aniount.: 

Ot.her Fees: 

Total. to Recipient: 

RECEIPT 

REOIPIENT: 

carlos Gomez 

i06 Cal1~XXX 

Mexico City 

Mexico 

PICK,..tlPI.ocATION: 

:ABC Company 

65 Avenida YYY 

Mexico City 

Mexico 

MlC 123 DEli' 45.6 

Mar.ch 4,1014 

$10,1.00 

+$7:.00 

+$3~00 

$110 .• 00 

$100.00 

-$4.0.0 

$96.00 

Redipientmay receive. less dueta :f.ee$cha~ged hy therecipientl $.bank arid 

foreign taxes:. 

YOU have a right to dispute errors in your transaction. If you think there 

an erro.r, contact .us within 180' days at eOO-123"4567 orwww.a:bccompany .•. com. 

You can. also contaot us for a writte:nexplanat.ionof your. rights. 

You can cancel fora: full refund. wi thin.10 minutes of. payment, unless the 

funds have been picked up or depOSited. 

E'or questions orco~laintsabou.tAB.C Company, contact.: 

state Regulatdry Agency 

80.0-111-2222 

www.s.tatereg1.l1atoryagE;!ncY.gov 

Consumer E'inan.cialPrdtection Bureau 

$55-411-2372 

855;";729-2372 ("I:TY!TDD) 

www .~cort$Ume:rd·lnance ... gov 
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30709 

A–35—Model Form for Combined 

Disclosures for Dollar-to-Dollar Remittance 

Transfers (§ 1005.31(b)(3)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.251</GPH>

Today's Date! 

SENDER: 

Pat Jones 

100 Anywhere Street 

Anytown, Anywhere 54.321 3.01~555-1212 

Cdnfitlllati.on CQae! 

Date Availab;te! 

Transfer Amount: 

Trans,fer Fee.s: 

Trarisfer Taxes! 

Total.: 

Tran~fer.Atn:pu:Qt: 

Other Fees: 

Total to RecipieIlt: 

ABC Campany 

1000 XYZAvenue 

AnytQwn, Anystate 12345 

RECIPIENT: 

Carlos Gomez 

106 Calle xxx 

Mexico tity 

Mexico 

pICK-UP LOCATION: 

ABC Company 

65 Avenida YYY 

Mexico City 

Mexic.Q 

ABC 1230:E:F 456 

'Marcl:l4,2014 

$100.00 

+$7 •. 00 

+$3 •. 00 

$110.0'0 

$100.QO 

-$4 .. 00 

$9fLOQ 

Recipient may I:~ceive less due to fees .charged by tMrecipieht's bank and 

foreigntaxE!s. 

You. ha\iE! iii tight to dispute errors in your transaction. If you thitikthere is 

an error, contact us within. 1.80 days at 800-123-4567 or www.abccolllPany.com. 

Yo~ .¢an also t;:ontact. ug. ,tor Ciw:r::itten ex.planation of your tights. 

You can cancelfo:ra fun refu.nd within 30 minutes o.f paymerit.,unless the 

funds have been piCked up or deposi tech 

State RequlatoryAgency 

8.(lO--1l1-2222 

www.stateregulatoryaqency.qov 

C.ohSUllle;r: Financial ProteetiOn BuZ;:ea\l 

855-411-2372 

855-729.-2372 (TTY/TOO) 

wWw.cb:nsurnerfinance.g()v 
30710 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

A–36—Model Form for Error Resolution and 

Cancellation Disclosures (Long) 

(§ 1005.31(b)(4)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.252</GPH>

·WhattodQ if yon think there has been an error or problem: 

IfYQn think. then: has been attettQrorprQolem withyoUf renrlttance transfer: 

• Callusat[insett telephonehU1I1ber][; 01'] 

-write uS at [insertaddress]U or] 

• [E-mail us at [in~electronictpai1.addressn. 

Y9u must contact us within 180 days of the date we promised to youtbatfunds would be made 

available to the recipient. When you dOl please tell us: 

(1) Y our:name and address. [ottelephonenumbet]; 

(2) The etror otprobiemwith the ttansfer,. and why you believe it ismetrororproblem; 

(3) The name oftlteperson receiVing thefund~and.ifyoukttow.it, hiS other telephone 

numberOi'acidtess; [and] 

(4) The doUarantcmnt oftbetransfer; [and 

(S)Theconfirmationcod,e O1'.number ptthe tran$8ctio.n~l 

Wewilldetenriil1e whetheranerrotoccurred withit190 days after you contact us and we will 

colte:ctanyetrorptol1:lptly. We will tell you the results within three busmessdays after comple~ ourmvestigation. Ifwe decide that there was no error, we w1I1sendyou aWrltten 

explanation; "You may ask f01'copies ofauy documents we usedinourm:vestigation~ 

What to do iryou wanhocancelaremittance transfer: 

Vou.bave the right tocancel.a, remittance transfer and, obtain are~d orall funds paid to us~ 

mcludiliganyfees.In order to cancel, youmtistcorilactus atthe. [phone numheror e-mail 

address] above Withi:n.30 minutes of payment fotthe transfer. 

When you con1act)lS, you must provide us withittformationtohelpusid.entify.the~sf(tt YOll 

wish to cancel, inclu4ing.theamount andlocationwhere the funds werescnt; .WewiU~&utd 

your money within. three business days of your request tocancelatra11sfer as long as the tUtids 

have nota1readYbeen plckedup or deposited into a reCipient's. account. 
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30711 

A–37—Model Form for Error Resolution and 

Cancellation Disclosures (Short) 

(§ 1005.31(b)(2)(iv) and (b)(2)(vi)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.253</GPH>

You.have a tight·todisputeerrors in your transaction .. If youth ink th~isanerror,.·contactus. 

within 1St) days at [inserttelephonenumberlor[insert website]. You~ana1so contact us fora 

written explanation ofyourrl.ghts. 

¥oucan cancelfo! afull.refimdwithin 30 minutes ofpaymen~.unlessthe funds have been 

pickedupot deposited. 

FOtqllesfions orcom.plmnts.about [ihSert fia1neoftemitfance transfer provtder] , co:ri.tact: 
30712 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

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)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.254</GPH> ER22MY13.255</GPH> ER22MY13.256</GPH>

lPOOX~Z Avenue 

Anytowtt, Attysta'j;e12345 

Fecha: 3 !;iE! .liiarzo !;ie 2014 

Canj;i~d de. En~~~! 

Carqospor .Envio: 

11n)?uestos de EnVio: 

Totalf 

C'atttidad de. EnviOi 

otros carqOSporEl'iv1o: 

$ilOtI.OO 

+$'7.btl 

+$3.0/l 

1,.227 •. 0<l MXN 

-30.00 MXN 

1,197.00. MXN: 

:Ell behefieiaifo podrflfreeibir menos dinero debido !l las coruslona:s 

CQbradas pOrel banCQdEoi 

benelficiario ·e itnpuest:o~eXtranjeros. 

uc: COIIIpaftJ' 

1000 XYZ Avenue 

Anytowft, Anyatate 12S45 

hcb: 

lIIa~f 

1i'&1; iTOMS 

100 Anywher:e st~e1; 

Anytown, . AnyW!len 54331 

222-555-1212 

DlS'1!memuo: 

CiRlo. Gomez 

123 c.l1a m 

Cludadde M8xioo. n.!'. 

Me:dco 

PUR'lO DE PAGOI 

ABC .Co!Ipany 

65 Avenid& :rft 

Ciudacide M8xioo, n.!'. 

Mhico 

4 de .. rio de 2014 

Cantidad de hvlo: 

eu-goa per Bnv10: 

I!pU!31;oadelDVlo: 

'l'ot.l~ 

$1100.00 

+$1.00 

+§3.00 

$110.0!! 

Tasa de cambia: US$1.00 - 12.21 MXB 

cant~dad de Envlo: 

OUOII Cargos por Bmff.oJ 

Totalal Destinatario: 

1,221.00.IIXII 

-30.00 HXN 

1, lin. 00 .IIXII 

III bene1'lce:l.u:l.o podrittne:Lb1r menos d1nel:04ebl4o a lall COIIl1l11one .. oobll:'adu pell:el <banco dal 

lIeDet'lciU'ioe ~at:oll ext:l:'anjeoll. 

v.ted ti_ .1 dewdl.o .da d1l!CI,l,tir 

arJ:o:r:ea en au t:r:ana.OCI:l.on. 8:1. 01:'" 

que hq 1m er!:Or, contiotenoll dentro 

de 180 dia. 1,1 800-123~45'7 0 

www.lIbCcC!!!!pl!.ny.QQIIl. ramtiUn puada 

cOntactunoeparlt obtaner 1;IBit 

expl1oac161l e.llorita de 3UII deregho",. 

Puede ClmClt.lar e1 envio 'll recibir 1m 

reembollotota1dentro de 30 m1nut08 

de baI:>u: naliza40 .1 pago. a tiO 181: 

que loa fondo. hayan 8.140 tEloo/l'1Cloa 0 

depelllttadQa. 

para pJ;eguntas (;I pre$entar \1l).a queja 

sobrEI ~C CompallY, .oontaotea t 

State Re9iJ,latoryAg'ency 

800";11.1-2222 

www.stata:reqy.1atoli:yaQeney.g'Qv 

Consumer Financial~rotection Bureau 

855-411-2372 

e5S-729'-2372 (T'rU'rDD1 

www.¢onsumerfinance.QQv 
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30713 

A–40—Model Form for Combined 

Disclosures for Remittance Transfers 

Exchanged into Local Currency—Spanish 

(§ 1005.31(b)(3)) 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.257</GPH>

ABC Company 

lOOO XYZ Averiue 

Anytown. Anyst",te, 12345 

3 ¢e marzo de 2014 

REHlnam:: 

Pat JO!les 

10,0 Anywhere street 

Any town, Anywhere, 5'4321 

2~2-555-1212 

DESTINATARIQ: 

cal:lQs Gome:l: 

12.3 calle xXx C~u¢a.d¢eMexiCo, D.F. 

Mexico 

PUNTO DE PAGO: 

A:SCCoiDpany 

65 Aveni<1&YY:Y 

¢iuda¢ de Mexico, D.F., 

Mexico 

C6di'10 de ConfirtilaCi6n: 1IllC 123 DEF 456 

:E:echa Disponible, 4 de marzo de 2014 

cantidadde,Eihvio: 

Carqospor EllVio: 

lmeuestos de Enlr.io,: 

$100.00 

+$1.,00 

+$3.00 

$110.00 

TipO de Csrnbio: U$$1.,OO - .12.27, MXN 

Cantidad de Envio! 

Otros Cargos por Envio: 

Total al ~stinatario: 

1,227.00 MXN 

'-3,O.OU MXN 

1, 197. .00 MXN 

El beneficiario podria raclbir manos dinEirodebi¢o' a las comisiQnas 

cQbradas por al bancodal 

beneficiariQ e impuestos axtranjeros. 

Usted tiene el derecho de dis~t!r 

errores IOn au transaccion. 8i oree que hay un error, contil.ctenoa dentro 

de 180 diU a1 aUO-123-4567 0 

........ .occompanJ', com~ Tsrnbien puede 

contactarnos para ootener una exPlicacion escr!ta d2 sus'derechos; 

puede c:anc:elar e1 enlrio ':l reoibir un 

ree!llbOlso total dentro de 30 niintitos 

de haller rElalizadQ Ell pa.qQ, a no ser que lOS fondQs hayan aido recoqidOa 6 

depQaitados, 

Para pl::egUnta~ 0 preselltar ~a CFleja 

sobre ABC Company ,.contacte a: 

State RegUlatGry Agency 

800-111-2222 

WWW'.stateregulatoryaqency.qov 

Cons.umer Financial Protection Bureau B55~4:l.1.-23'72 

855-129-23'12 (TTY/TOI» 

www.conl!nllnerfinance.qov 
30714 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

A–41—Model Form for Error Resolution and 

Cancellation Disclosures (Long)—Spanish 

(§ 1005.31(b)(4)) 

* * * * * 

■ 7. In Supplement I to Part 1005— 

Official Interpretations: 

■ A. Under Section 1005.30: 

■ i. Under comment 30(c), paragraph 1 

is revised. 

■ ii. Comment 30(h) is added. 

■ B. Under Section 1005.31: 

■ i. Under comment 31(b), paragraphs 1 

and 2 are revised. 

■ ii. Under comment 31(b)(1), 

paragraphs 1, 2, and 3 are revised. 

■ iii. The heading of comment 

31(b)(1)(vi) is revised. 

■ iv. Under newly designated comment 

31(b)(1)(vi), paragraph 1 is revised and 

paragraph 2 is removed. 

■ v. Under comment 31(b)(1)(vii), 

paragraph 1 is revised. 

■ vi. Comment 31(b)(1)(viii) is added. 

■ vii. Under comment 31(c)(1), 

paragraph 1 is revised. 


TKELLEY on DSK3SPTVN1PROD with RULES2ER22MY13.258</GPH>

Lo que usted debe ha:cersi creegue hay un error 0 problema: 

Sfcreequehayunerror 0 problema eon suenvIo de dinero: 

.Llamenos a [msette: nitnJ.ero de telefooo][; 0] 

• Eseribanosa [msertedirOOCibn][;~J 

• [Envienos ran;correo electr6nico a [inserteclirecci6ndecotreoele¢tr6nicQ)]. 

Debeconfactamos dentro de 180 ~apa:rtir de lafechaenque sc leprometi6queJosfondos 

estarlan dispo:nibles al destinatario.Cuandti· se colll.1.llliqueconnosofros, por favo:rprovea 1a 

siguiente informaci6n: 

(1) SUllombtey d1reccian [Oil.umerode:telefono]~ 

(2) EI error 0 problema con S11 envio de dinero,y porquecreeque hay un error 0 problell1a~ 

(3) Elno1nbre del <lestlnatarlo, y.silosabe, sunUnieto.de tel6fon.oo direcci6n~ [y] 

(4) :sImontodelenY{o end61ates; [y 

(5) EI comgodeootUirmaci6n 0 elnumetodeJa.1tat1sa.cci6n.] 

Nosotros determinaremos si ocurrio un error deniro de 90 diafidespues de que usted noscontacte 

y 16corregiremosmpidamente. Le diremos tosresultados dentro<de ttesdias hibiles despu6s de. 

temrlnarn:uestra mvestiga.ci6n.Si decidirttos ctueno hubo un ertor~ Jeenviaremosa usted una 

explicaci6n escrita. Usted puedepedir :copias de los documentosqueusamos en nuestta 

investiga:ci6n. 

Loque usteddebehacer siguierecan~lal' un enviodedinero: 

tieneel dereehode tancelar Utl envio de.dinero y obtenef unreemD61so de t6dOel dine:ro, 

incluyendotmifas 0 gastoscquetlsted nospag6. Para cancelat debe eontactarnos al.[nu.mero.de 

telefottoodirecci6ttde correo electrOnico] que Se encuentra arriba dentro de 30 minutosdehaber 

realizado elpagopa,ra elenvio de dinero. 

Cu:an.do nos contacte, debe proveetttos mformaci6nquenosayuaam a: identi:li.car.cl enVio de 

dinero que quiere canceIar, incluyendti Ia cantidad del envio Y ellugar adonde fue.enviado. J.,e 

reembolsaremos su dinero denirQde fres.dlashabiles de supeticicm d.ecancelal', a no serque los 

fondos hayansidti recQgidoso depositadosenlacuenta de1destinatario. 
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30715 

■ viii. Under comment 31(c)(4), 

paragraph 2.xi.is added. 

■ ix. Under comment 31(f), paragraph 1 

is revised. 

■ C. Under Section 1005.32 Estimates: 

■ i. Under comment 32(a)(1), paragraphs 

1, 2.ii, and 3.ii. are revised, and 

paragraphs 2.iii and 3.iii are removed. 

■ ii. Under comment 32(b)(2), paragraph 

1 is revised. 

■ iii. Comment 32(b)(3) is added. 

■ iv. The heading of comment 32(c)(3) 

is revised. 

■ v. Comment 32(c)(4) is removed. 

■ D. Under Section 1005.33: 

■ i. Under comment 33(a): 

■ a. Paragraphs 7 and 8 are redesignated 

as paragraphs 9 and 10. 

■ b. Paragraphs 3.ii, 3.iii, 4 and newly 

redesignated paragraph 10 are revised. 

■ c. Paragraphs 3.vi, 7, and 8 are added. 

■ ii. Under comment 33(c), paragraphs 

2, 3, 4 and 5 are revised, and paragraphs 

11 and 12 are added. 

■ iii. Comment 33(h) is added. 

■ E. Under Section 1005.36: 

■ i. Under comment 36(a)(2), paragraph 

1 is revised. 

■ G. Under Subheading Appendix A, 

paragraph 2. and paragraph 4. are 

revised. 

■ The additions and revisions read as 

follows: 

Supplement I to Part 1005—Official 

Interpretations 

* * * * * 

■ Section 1005.30—Remittance Transfer 

Definitions 

* * * * * 

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). The 

designated recipient is identified by the 

name of the person provided by the 

sender to the remittance transfer 

provider and disclosed by the provider 

to the sender pursuant to 

§ 1005.31(b)(1)(iii). 

* * * * * 

30(h) Third-Party Fees 

1. Fees imposed on the remittance 

transfer. Fees imposed on the 

remittance transfer by a person other 

than the remittance transfer provider 

include only those fees that are charged 

to the designated recipient and are 

specifically related to the remittance 

transfer. 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 are not fees 

imposed on the remittance transfer 

because these charges are not 

specifically related to the remittance 

transfer. Account fees are also not 

specifically related to a remittance 

transfer if such fees are merely assessed 

based on general account activity and 

not for receiving transfers. Where an 

incoming remittance transfer results in 

a balance increase that triggers a 

monthly maintenance fee, that fee is not 

specifically related to a 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 fees imposed on the remittance 

transfer. 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 is not a fee 

imposed upon the remittance transfer. 

Fees that specifically relate to a 

remittance transfer may be structured on 

a flat per-transaction basis, or may be 

conditioned on other factors (such as 

account status or the quantity of 

remittance transfers received) in 

addition to the remittance transfer itself. 

For example, where an institution 

charges an incoming transfer fee on 

most customers’ accounts, but not on 

preferred accounts, such a fee is 

nonetheless specifically related to a 

remittance transfer. Similarly, if the 

institution assesses a fee for every 

transfer beyond the fifth received each 

month, such a fee would be specifically 

related to the remittance transfer 

regardless of how many remittance 

transfers preceded it that month. 

2. Covered third-party fees. i. Under 

§ 1005.30(h)(1), a covered third-party fee 

means any fee that is imposed on the 

remittance transfer by a person other 

than the remittance transfer provider 

that is not a non-covered third-party fee. 

ii. Examples of covered third-party 

fees include: 

A. Fees imposed on a remittance 

transfer by intermediary institutions in 

connection with a wire transfer 

(sometimes referred to as ‘‘lifting fees’’). 

B. Fees imposed on a remittance 

transfer by an agent of the provider at 

pick-up for receiving the transfer. 

3. Non-covered third-party fees. 

Under § 1005.30(h)(2), a non-covered 

third-party fee means any fee imposed 

by the designated recipient’s institution 

for receiving a remittance transfer into 

an account except if such institution 

acts as the agent of the remittance 

transfer provider. For example, a fee 

imposed by the designated recipient’s 

institution for receiving an incoming 

transfer into an account is a noncovered third-party fee, provided such 

institution is not acting as the agent of 

the remittance transfer provider. See 

also comment 31(b)(1)(viii)–1. 

Furthermore, designated recipient’s 

account in § 1005.30(h)(2) refers to an 

asset account, regardless of whether it is 

a consumer asset account, established 

for any purpose and held by a bank, 

savings association, credit union, or 

equivalent institution. A designated 

recipient’s account does not, however, 

include a credit card, prepaid card, or 

a virtual account held by an Internetbased or mobile telephone company that 

is not a bank, savings association, credit 

union or equivalent institution. 

* * * * * 

Section 1005.31—Disclosures 

* * * * * 

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, for 

disclosures required by 

§ 1005.31(b)(1)(i) through (vii), 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), the disclosures about 

covered third-party fees generally 

required by § 1005.31(b)(1)(vi), or the 

disclaimers about non-covered thirdparty fees and taxes collected by a 

person other than the provider generally 

required by § 1005.31(b)(1)(viii). 

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 


TKELLEY on DSK3SPTVN1PROD with RULES2
30716 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

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 may describe fees 

imposed by an agent at pick-up as 

‘‘Pick-up Fees’’ in lieu of describing 

them as ‘‘Other Fees.’’ Foreign language 

disclosures required under § 1005.31(g) 

must contain accurate translations of the 

terms, language, and notices required by 

§ 1005.31(b) or permitted by 

§ 1005.31(b)(1)(viii) and § 1005.33(h)(3). 

31(b)(1) Pre-Payment Disclosures 

1. Fees and taxes. i. Taxes collected 

on the remittance transfer by the 

remittance transfer provider include 

taxes collected on the remittance 

transfer by a State or other governmental 

body. A provider need only disclose 

fees imposed or taxes collected on the 

remittance transfer by the provider in 

§ 1005.31(b)(1)(ii), 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 

using the term ‘‘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 imposed and all taxes collected 

on the remittance transfer by the 

provider. For example, a provider must 

disclose any service fee, any fees 

imposed by an agent of the provider at 

the time of the transfer, and any State 

taxes collected on the remittance 

transfer at the time of the transfer. Fees 

imposed on the remittance transfer by 

the provider required to be disclosed 

under § 1005.31(b)(1)(ii) include only 

those fees that are charged to the sender 

and are specifically related to the 

remittance transfer. See also comment 

30(h)–1. In contrast, the fees required to 

be disclosed by § 1005.31(b)(1)(vi) are 

any covered third-party fees as defined 

in § 1005.30(h)(1). 

iii. The term used to describe the fees 

imposed on the remittance transfer by 

the provider in § 1005.31(b)(1)(ii) and 

the term used to describe covered thirdparty fees under § 1005.31(b)(1)(vi) must 

differentiate between such fees. 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. Sections 

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 

covered third-party fees as described 

under § 1005.31(b)(1)(vi) are not 

imposed on the remittance transfer. 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 covered third-party fees in 

§ 1005.31(b)(1)(vi), the amount received 

in § 1005.31(b)(1)(vii), and the optional 

disclosures of non-covered third-party 

fees and other taxes permitted by 

§ 1005.31(b)(1)(viii) 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)(vi) Disclosure of Covered ThirdParty Fees 

1. Fees disclosed in the currency in 

which the funds will be received. 

Section 1005.31(b)(1)(vi) requires the 

disclosure of covered third-party fees in 

the currency in which the funds will be 

received by the designated recipient. A 

covered third-party fee 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 to be disclosed under 

§ 1005.31(b)(1)(vi) in the currency of 

receipt 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 

involved in sending an international 

wire transfer funded in U.S. dollars 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 

covered third-party fee to the sender 

expressed in Euros, calculated using the 

exchange rate disclosed under 

§ 1005.31(b)(1)(iv), prior to any 

rounding of the exchange rate. 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. 

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 the 

exchange rate, all fees imposed and all 

taxes collected on the remittance 

transfer by the remittance transfer 

provider, as well as any covered thirdparty fees required to be disclosed by 

§ 1005.31(b)(1)(vi). The disclosed 


TKELLEY on DSK3SPTVN1PROD with RULES2
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30717 

amount received must be reduced by the 

amount of any fee or tax—except for a 

non-covered third-party fee or tax 

collected on the remittance transfer by 

a person other than the provider—that 

is imposed on the remittance transfer 

that affects the amount received even if 

that amount is imposed or itemized 

separately from the transaction amount. 

31(b)(1)(viii) Statement When 

Additional Fees and Taxes May Apply 

1. Required disclaimer when noncovered third-party fees and taxes 

collected by a person other than the 

provider may apply. If non-covered 

third-party fees or taxes collected by a 

person other than the provider apply to 

a particular remittance transfer or if a 

provider does not know if such fees or 

taxes may apply to a particular 

remittance transfer, § 1005.31(b)(1)(viii) 

requires the provider to include the 

disclaimer with respect to such fees and 

taxes. Required disclosures under 

§ 1005.31(b)(1)(viii) may only be 

provided to the extent applicable. For 

example, if the designated recipient’s 

institution is an agent of the provider 

and thus, non-covered third-party fees 

cannot apply to the transfer, the 

provider must disclose all fees imposed 

on the remittance transfer and may not 

provide the disclaimer regarding noncovered third-party fees. In this 

scenario, the provider may only provide 

the disclaimer regarding taxes collected 

on the remittance transfer by a person 

other than the provider, as applicable. 

See Model Form A–30(c). 

2. Optional disclosure of non-covered 

third-party fees and taxes collected by a 

person other than the provider. When a 

remittance transfer provider knows the 

non-covered third-party fees or taxes 

collected on the remittance transfer by 

a person other than the provider that 

will apply to a particular transaction, 

§ 1005.31(b)(1)(viii) permits the 

provider to disclose the amount of such 

fees and taxes. Section 1005.32(b)(3)–1 

additionally permits a provider to 

disclose an estimate of such fees and 

taxes, provided any estimates are based 

on reasonable source of information. See 

comment 32(b)(3). For example, a 

provider may know that the designated 

recipient’s institution imposes an 

incoming wire fee for receiving a 

transfer. Alternatively, a provider may 

know that foreign taxes will be collected 

on the remittance transfer by a person 

other than the remittance transfer 

provider. In these examples, the 

provider may choose, at its option, to 

disclose the amounts of the relevant 

recipient institution fee and tax as part 

of the information disclosed pursuant to 

§ 1005.31(b)(1)(viii). The provider must 

not include that fee or tax in the amount 

disclosed pursuant to § 1005.31(b)(1)(vi) 

or (b)(1)(vii). Fees and taxes disclosed 

under § 1005.31(b)(1)(viii) must be 

disclosed in the currency in which the 

funds will be received. See comment 

31(b)(1)(vi)–1. Estimates of any noncovered third-party fees and any taxes 

collected on the remittance transfer by 

a person other than the provider must 

be disclosed in accordance with 

§ 1005.32(b)(3). 

* * * * * 

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(a)–(d) 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. A 

provider could also send multiple text 

messages sequentially to provide the 

full disclosure. 

31(c)(4) Segregation 

* * * * * 

2. Directly related. * * * 

* * * * * 

xi. Disclosure of any non-covered 

third-party fees and any taxes collected 

by a person other than the provider 

pursuant to § 1005.31(b)(1)(viii). 

* * * * * 

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) or permitted by 

§ 1005.31(b)(1)(viii) 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 or 

permitted by § 1005.31(b) for any 

specific period of time. However, if any 

of the disclosures required by 

§ 1005.31(b) or permitted by 

§ 1005.31(b)(1)(viii) are not accurate 

when a sender makes payment for the 

remittance transfer, a provider must give 

new disclosures before accepting 

payment. 

* * * * * 

Section 1005.32—Estimates 

* * * * * 

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 

covered third-party fee required to be 

disclosed under § 1005.31(b)(1)(vi). For 

example, if an insured institution has a 

correspondent relationship with an 

intermediary financial institution in 

another country and that intermediary 

institution sets the exchange rate or 

imposes a fee for remittance transfers 

sent from the insured institution to the 

intermediary 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. * * * 

ii. Covered third-party fees. An 

insured institution cannot determine the 

exact covered third-party fees to 

disclose under § 1005.31(b)(1)(vi) if an 

intermediary institution with which the 

insured institution does not have a 

correspondent relationship, imposes a 

transfer or conversion fee. 

3. * * * 

ii. Covered third-party fees. An 

insured institution can determine the 

exact covered third-party fees required 

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

if it has agreed upon the specific fees 

with an intermediary correspondent 

institution, and this correspondent 

institution is the only institution in the 

transmittal route to the designated 

recipient’s institution. 

* * * * * 

32(b) Permanent Exceptions 

* * * * * 

32(b)(2) Permanent Exceptions for 

Transfers Scheduled Before the Date of 

Transfer 

1. Fixed amount of foreign currency. 

The following is an example of when 

and how a remittance transfer provider 

may disclose estimates for remittance 

transfers scheduled five or more 

business days before the date of transfer 

where the provider agrees to the 

sender’s request to fix the amount to be 

transferred in a currency in which the 


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30718 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

transfer will be received and not the 

currency in which it was funded. If on 

February 1, a sender schedules a 1000 

Euro wire transfer to be sent from the 

sender’s bank account denominated in 

U.S. dollars to a designated recipient on 

February 15, § 1005.32(b)(2) allows the 

provider to estimate the amount that 

will be transferred to the designated 

recipient (i.e., the amount described in 

§ 1005.31(b)(1)(i)), any fees imposed or 

taxes collected on the remittance 

transfer by the provider (if based on the 

amount transferred) (i.e., the amount 

described in § 1005.31(b)(1)(ii)), and the 

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

amount described in 

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

also estimate any covered third-party 

fees if the exchange rate is also 

estimated and the estimated exchange 

rate affects the amount of fees (as 

allowed by § 1005.32(b)(2)(ii)). 

32(b)(3) Permanent Exception for 

Optional Disclosure of Non-Covered 

Third-Party Fees and Taxes Collected 

on the Remittance Transfer by a Person 

Other Than the Provider 

1. Reasonable sources of information. 

Pursuant to § 1005.32(b)(3) a remittance 

transfer provider may estimate 

applicable non-covered third-party fees 

and taxes collected on the remittance 

transfer by a person other than the 

provider using reasonable sources of 

information. Reasonable sources of 

information may include, for example: 

information obtained from recent 

transfers to the same institution or the 

same country or region; fee schedules 

from the recipient institution; fee 

schedules from the recipient 

institution’s competitors; surveys of 

recipient institution fees in the same 

country or region as the recipient 

institution; information provided or 

surveys of recipient institutions’ 

regulators or taxing authorities; 

commercially or publicly available 

databases, services or sources; and 

information or resources developed by 

international nongovernmental 

organizations or intergovernmental 

organizations. 

* * * * * 

32(c)(3) Covered Third-Party Fees 

* * * * * 

Section 1005.33—Procedures for 

Resolving Errors 

33(a) Definition of Error 

* * * * * 

3. * * * 

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 the 

additional foreign taxes that will be 

collected in Colombia on the transfer 

but does include the statement required 

by § 1005.31(b)(1)(viii). If the designated 

recipient will receive less than the 

amount of currency disclosed on the 

receipt due solely to the additional 

foreign taxes that the provider was not 

required to disclose, no 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 in the 

receipt due to the additional covered 

third-party fees, an error has occurred. 

* * * * * 

vi. A sender requests that his bank 

send US$120 to a designated recipient’s 

account at an institution in a foreign 

country. The foreign institution is not 

an agent of the provider. Only US$100 

is deposited into the designated 

recipient’s account because the 

recipient institution imposed a US$20 

incoming wire fee and deducted the fee 

from the amount transferred. Because 

this fee is a non-covered third-party fee 

that the provider is not required to 

disclose under § 1005.31(b)(1)(vi), no 

error has occurred if the provider 

provided the disclosure required by 

§ 1005.31(b)(1)(viii). 

4. Incorrect amount of currency 

received—extraordinary circumstances. 

Under § 1005.33(a)(1)(iii)(B), a 

remittance transfer provider’s failure to 

make available to a designated recipient 

the amount of currency disclosed 

pursuant to § 1005.31(b)(1)(vii) and 

stated in the disclosure provided 

pursuant to § 1005.31(b)(2) or (3) for the 

remittance transfer 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)(iii)(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). 

* * * * * 

7. Sender account number or recipient 

institution identifier error. The 

exception in § 1005.33(a)(1)(iv)(D) 

applies where a sender gives the 

remittance transfer provider an incorrect 

account number or recipient institution 

identifier and all five conditions in 

§ 1005.33(h) are satisfied. The exception 

does not apply, however, where the 

failure to make funds available is the 

result of a mistake by a provider or a 

third party or due to incorrect or 

insufficient information provided by the 

sender other than an incorrect account 

number or recipient institution 

identifier, such as an incorrect name of 

the recipient institution. 

8. Account number or recipient 

institution identifier. For purposes of 

the exception in § 1005.33(a)(1)(iv)(D), 

the terms account number and recipient 

institution identifier refer to 

alphanumerical account or institution 

identifiers other than names or 

addresses, such as account numbers, 

routing numbers, Canadian transit 

numbers, International Bank Account 

Numbers (IBANs), Business Identifier 

Codes (BICs)) and other similar account 

or institution identifiers used to route a 

transaction. In addition and for 

purposes of this exception, the term 

designated recipient’s account in 

§ 1005.30(h)(2) refers to an asset 

account, regardless of whether it is a 

consumer asset account, established for 

any purpose and held by a bank, savings 

association, credit union, or equivalent 

institution. A designated recipient’s 

account does not, however, include a 

credit card, prepaid card, or a virtual 

account held by an Internet-based or 

mobile telephone company that is not a 

bank, savings association, credit union 

or equivalent institution. 

* * * * * 

10. 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 and 31(b)(1)(vi)–1. 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 


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Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30719 

the funds and complete the transfer, the 

change in currency does not constitute 

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

* * * * * 

33(c) Time Limits and Extent of 

Investigation 

* * * * * 

2. Incorrect or insufficient information 

provided for transfer. The remedy in 

§ 1005.33(c)(2)(iii) applies 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’s 

address or by providing insufficient 

information such that the entity 

distributing the funds cannot identify 

the correct designated recipient. A 

sender is not considered to have 

provided incorrect or insufficient 

information for purposes of 

§ 1005.33(c)(2)(iii) if the provider 

discloses the incorrect location where 

the transfer may be picked up, gives the 

wrong confirmation number/code for 

the transfer, or otherwise 

miscommunicates information 

necessary for the designated recipient to 

pick-up the transfer. The remedies in 

§ 1005.33(c)(2)(iii) do not apply if the 

sender provided an incorrect account 

number or recipient institution 

identifier and the provider has met the 

requirements of § 1005.33(h) because 

under § 1005.33(a)(1)(iv)(D) no error 

would have occurred. See 

§ 1005.33(a)(1)(iv)(D) and comment 

33(a)–7. 

3. Designation of requested remedy. 

Under § 1005.33(c)(2)(ii), the sender 

may generally choose to obtain a refund 

of funds that were not properly 

transmitted or delivered to the 

designated recipient or, request 

redelivery of the amount appropriate to 

correct the error at no additional cost 

unless the error is determined to have 

occurred because the sender provided 

incorrect or insufficient information. 

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 and the 

error did not occur because the sender 

provided incorrect or insufficient 

information. The provider may also 

request that the sender indicate the 

preferred remedy at the time the sender 

provides notice of the error although if 

provider does so, it should indicate that 

the if the sender chooses a resend at the 

time, the remedy may be unavailable if 

the error occurred because the sender 

provided incorrect or insufficient 

information. 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) or (d)(1) if the provider 

determines an error occurred. 

4. Default remedy. Unless the sender 

provided incorrect or insufficient 

information and § 1005.33(c)(2)(iii) 

applies, the remittance transfer provider 

may set a default remedy that the 

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) or 

(d)(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 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. Form of refund. For a refund 

provided under § 1005.33(c)(2)(i)(A), 

(c)(2)(ii)(A)(1), (c)(2)(ii)(B), or (c)(2)(iii), 

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. 

* * * * * 

11. Procedure for sending a new 

remittance transfer after a sender 

provides incorrect or insufficient 

information. Section 1005.33(c)(2)(iii) 

generally requires a remittance transfer 

provider to refund the transfer amount 

to the sender even if the sender’s 

previously designated remedy was a 

resend or if the provider’s default 

remedy in other circumstances is a 

resend. However, if before the refund is 

processed, the sender receives notice 

pursuant to § 1005.33(c)(1) or (d)(1) that 

an error occurred because the sender 

provided incorrect or insufficient 

information and then requests that the 

provider send the remittance transfer 

again, and the provider agrees to that 

request, § 1005.33(c)(2)(iii) requires that 

the request be treated as a new 

remittance transfer and the provider 

must provide new disclosures in 

accordance with § 1005.31 and all other 

applicable provisions of subpart B. 

However, § 1005.33(c)(2)(iii) does not 

obligate the provider to agree to a 

sender’s request to send a new 

remittance transfer. 

12. Determining amount of refund. 

Section 1005.33(c)(2)(iii) permits the 

provider to deduct from the amount 

refunded, or applied towards a new 

transfer, any fees or taxes actually 

deducted from the transfer amount by a 

person other than the provider as part 

of the first unsuccessful remittance 

transfer attempt or that were deducted 

in the course of returning the transfer 

amount to the provider following a 

failed delivery. However, a provider 

may not deduct those fees and taxes that 

will ultimately be refunded to the 

provider. When the provider deducts 

fees or taxes from the amount refunded 

pursuant to § 1005.33(c)(2)(iii), the 

provider must inform the sender of the 

deduction as part of the notice required 

by either § 1005.33(c)(1) or (d)(1) and 

the reason for the deduction. 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 provider charges a transfer 

fee of US$10 and its correspondent 

imposes a fee of US$15. The sender 

provides incorrect or insufficient 

information that results in non-delivery 

of the remittance transfer as requested. 

Once the provider determines that an 

error occurred because the sender 

provided incorrect or insufficient 

information, the provider must provide 

the report required by § 1005.33(c)(1) or 

(d)(1) and inform the sender, pursuant 

to § 1005.33(c)(1) or (d)(1), that it will 

refund US$85 to the sender within three 

business days unless the sender chooses 

to apply the US$85 towards a new 

remittance transfer. The provider is 

required to refund its own $10 fee but 

not the US$15 fee imposed by the 

correspondent (unless the $15 will be 


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30720 Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 

refunded to the provider by the 

correspondent). 

ii. A sender instructs a remittance 

transfer provider to send US$100 to a 

designated recipient in a foreign 

country, for which the provider charges 

a transfer fee of US$10 (and thus the 

sender pays the provider US$110) 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 an error occurs because the 

sender provides incorrect or insufficient 

information that results in non-delivery 

of the remittance transfer by the date of 

availability stated in the disclosure 

provided to the sender for the 

remittance transfer under 

§ 1005.31(b)(2) or (3), the provider is 

required to refund, or reapply if 

requested and the provider agrees, $105 

unless the intermediary institution 

refunds to the provider the US$5 fee. If 

the sender requests to have the transfer 

amount applied to a new remittance 

transfer pursuant to § 1005.33(c)(2)(iii) 

and provides the corrected or additional 

information, and the remittance transfer 

provider agrees to a resend remedy, the 

remittance transfer provider may charge 

the sender another transfer fee of US$10 

to send the remittance transfer again 

with the corrected or additional 

information necessary to complete the 

transfer. Insofar as the resend is an 

entirely new remittance transfer, the 

provider must provide a prepayment 

disclosure and receipt or combined 

disclosure in accordance with, among 

other provisions, the timing 

requirements of § 1005.31(f) and the 

cancellation provision of § 1005.34(a). 

iii. In connection with a remittance 

transfer, a provider imposes a $15 tax 

that it then remits to a State taxing 

authority. An error occurs because the 

sender provided incorrect or insufficient 

information that resulted in nondelivery of the transfer to the designated 

recipient. The provider may deduct $15 

from the amount it refunds to the sender 

pursuant to § 1005.33(c)(2)(iii) unless 

the relevant tax law will result in the 

$15 tax being refunded to the provider 

by the State taxing authority because the 

transfer was not completed. 

* * * * * 

33(h) Incorrect Account Number 

Supplied 

1. Reasonable methods of verification. 

When a sender provides an incorrect 

recipient institution identifier, 

§ 1005.33(h)(2) limits the exception in 

§ 1005.33(a)(1)(iv)(D) to situations 

where the provider used reasonably 

available means to verify that the 

recipient institution identifier provided 

by the sender did correspond to the 

recipient institution name provided by 

the sender. Reasonably available means 

may include accessing a directory of 

Business Identifier Codes and verifying 

that the code provided by the sender 

matches the provided institution name, 

and, if possible, the specific branch or 

location provided by the sender. 

Providers may also rely on other 

commercially available databases or 

directories to check other recipient 

institution identifiers. If reasonable 

verification means fail to identify that 

the recipient institution identifier is 

incorrect, the exception in 

§ 1005.33(a)(1)(iv)(D) will apply, 

assuming that the provider can satisfy 

the other conditions in § 1005.33(h). 

Similarly, if no reasonably available 

means exist to verify the accuracy of the 

recipient institution identifier, 

§ 1005.33(h)(2) would be satisfied and 

thus the exception in 

§ 1005.33(a)(1)(iv)(D) also will apply, 

again assuming the provider can satisfy 

the other conditions in § 1005.33(h). 

However, where a provider does not 

employ reasonably available means to 

verify a recipient institution identifier, 

§ 1005.33(h)(2) is not satisfied and the 

exception in § 1005.33(a)(1)(iv)(D) will 

not apply. 

2. Reasonable efforts. Section 

1005.33(h)(5) requires a remittance 

transfer provider to use reasonable 

efforts to recover the amount that was to 

be received by the designated recipient. 

Whether a provider has used reasonable 

efforts does not depend on whether the 

provider is ultimately successful in 

recovering the amount that was to be 

received by the designated recipient. 

Under § 1005.33(h)(5), if the remittance 

transfer provider is requested to provide 

documentation or other supporting 

information in order for the pertinent 

institution or authority to obtain the 

proper authorization for the return of 

the incorrectly credited amount, 

reasonable efforts to recover the amount 

include timely providing any such 

documentation to the extent that it is 

available and permissible under law. 

The following are examples of 

reasonable efforts: 

i. The remittance transfer provider 

promptly calls or otherwise contacts the 

institution that received the transfer, 

either directly or indirectly through any 

correspondent(s) or other intermediaries 

or service providers used for the 

particular transfer, to request that the 

amount that was to be received by the 

designated recipient be returned, and if 

required by law or contract, by 

requesting that the recipient institution 

obtain a debit authorization from the 

holder of the incorrectly credited 

account. 

ii. The remittance transfer provider 

promptly uses a messaging service 

through a funds transfer system to 

contact institution that received the 

transfer, either directly or indirectly 

through any correspondent(s) or other 

intermediaries or service providers used 

for the particular transfer, to request that 

the amount that was to be received by 

the designated recipient be returned, in 

accordance with the messaging service’s 

rules and protocol, and if required by 

law or contract, by requesting that the 

recipient institution obtain a debit 

authorization from the holder of the 

incorrectly credited account. 

3. Promptness of Reasonable Efforts. 

Section 1005.33(h)(5) requires that a 

remittance transfer provider act 

promptly in using reasonable efforts to 

recover the amount that was to be 

received by the designated recipient. 

Whether a provider acts promptly to use 

reasonable efforts depends on the facts 

and circumstances. For example, if, 

before the date of availability disclosed 

pursuant to § 1005.31(b)(2)(ii), the 

sender informs the provider that the 

sender provided a mistaken account 

number, the provider will have acted 

promptly if it attempts to contact the 

recipient’s institution before the date of 

availability. 

* * * * * 

Section 1005.36—Transfers Scheduled 

Before the Date of Transfer 

* * * * * 

36(a) Timing 

36(a)(2) Subsequent Preauthorized 

Remittance Transfers 

1. Changes in Disclosures. When a 

sender schedules a series of 

preauthorized remittance transfers, the 

provider is generally not required to 

provide a pre-payment disclosure prior 

to the date of each subsequent transfer. 

However, § 1005.36(a)(1)(i) requires the 

provider to provide a pre-payment 

disclosure and receipt for the first in the 

series of preauthorized remittance 

transfers in accordance with the timing 

requirements set forth in § 1005.31(e). 

While certain information in those 

disclosures is expressly permitted to be 

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

information is not permitted to be 

estimated, or is limited in how it may 

be estimated. When any of the 

information on the most recent receipt 

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

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

disclosures required by 

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

longer accurate with respect to a 


TKELLEY on DSK3SPTVN1PROD with RULES2
Federal Register / Vol. 78, No. 99 / Wednesday, May 22, 2013 / Rules and Regulations 30721 

subsequent preauthorized remittance 

transfer for reasons other than as 

permitted by § 1005.32, the provider 

must provide, within a reasonable time 

prior to the scheduled date of the next 

preauthorized remittance transfer, a 

receipt that complies with 

§ 1005.31(b)(2) and which discloses, 

among the other disclosures required by 

§ 1005.31(b)(2), the changed terms. For 

example, if the provider discloses in the 

pre-payment disclosure for the first in 

the series of preauthorized remittance 

transfers that its fee for each remittance 

transfer is $20 and, after six 

preauthorized remittance transfers, the 

provider increases its fee to $30 (to the 

extent permitted by contract law), the 

provider must provide the sender a 

receipt that complies with 

§§ 1005.31(b)(2) and 1005.36(b)(2) 

within a reasonable time prior to the 

seventh transfer. Barring a further 

change, this receipt will apply to 

transfers after the seventh transfer. Or, 

if, after the sixth transfer, a tax collected 

by the provider increases from 1.5% of 

the amount that will be transferred to 

the designated recipient to 2.0% of the 

amount that will be transferred to the 

designated recipient, the provider must 

provide the sender a receipt that 

complies with §§ 1005.31(b)(2) and 

1005.36(b)(2) within a reasonable time 

prior to the seventh transfer. In contrast, 

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

updated receipt where an exchange rate, 

estimated as permitted by 

§ 1005.32(b)(2), changes. 

* * * * * 

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 

§§ 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, 1005.32 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 15 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–30(a), (b), (c), and (d) 

demonstrate four options regarding 

model language related to the required 

disclaimer, where applicable, of noncovered third-party fees and taxes on 

the remittance transfer collected by a 

person other than the provider under 

§ 1005.31(b)(1)(viii). Model forms 30(b) 

through (d) also include language that 

may be used if a provider elects to 

estimate either these non-covered thirdparty fees or taxes collected by a person 

other than the provider as part of the 

disclaimer. 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, including a confirmation 

code, the sender’s name and contact 

information, and the optional disclosure 

of the estimated amount of these noncovered third-party fees and taxes 

collected by a person other than the 

provider as part of the disclaimer. 

Additional information not required by 

subpart B may be presented on the 

model forms as permitted by 

§ 1005.31(b)(1)(viii) and (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 Statespecific contact information—with 

information applicable to the remittance 

transfer. In addition, if the applicable 

non-covered third-party fees are 

imposed by an institution other than a 

bank, a provider could modify the 

disclaimer accordingly. 

B. Eliminating disclosures that are not 

applicable to the transfer, as described 

under § 1005.31(b). For example, if only 

covered third-party fees are imposed, a 

provider would not use a disclaimer 

related to additional fees that may apply 

because all applicable fees are covered 

and included in the disclosure as 

required under § 1005.31(b)(1)(vi). 

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: April 30, 2013. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–10604 Filed 5–21–13; 8:45 am] 

BILLING CODE 4810–AM–P 


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