```

[Federal Register Volume 79, Number 181 (Thursday, September 18, 2014)]
[Rules and Regulations]
[Pages 55970-55995]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-20681]

[[Page 55970]]

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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

[Docket No. CFPB-2014-0008]
RIN 3170-AA45

Electronic Fund Transfers (Regulation E)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretation.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
amending subpart B of Regulation E, which implements the Electronic 
Fund Transfer Act, and the official interpretation to the regulation 
(Remittance Rule). This final rule extends a temporary provision that 
permits insured institutions to estimate certain pricing disclosures 
pursuant to section 1073 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act. Absent further action by the Bureau, that 
exception would have expired on July 21, 2015. Based on a determination 
that the termination of the exception would negatively affect the 
ability of insured institutions to send remittance transfers, the 
Bureau is extending the temporary exception by five years from July 21, 
2015, to July 21, 2020. The Bureau is also making several 
clarifications and technical corrections to the regulation and 
commentary.

DATES: This rule is effective on November 17, 2014.

FOR FURTHER INFORMATION CONTACT: Jane G. Raso and Shiri Wolf, Counsels; 
Eric Goldberg, Senior Counsel, Office of Regulations, at (202) 435-7700 
or CFPBRemittanceRule@consumerfinance.gov. Please also visit 
the following Web site for additional information about the Remittance 
Rule: http://www.consumerfinance.gov/remittances-transfer-rule-amendment-to-regulation-e/.

SUPPLEMENTARY INFORMATION:

I. Summary of the Final Rule

    This final rule amends regulations that implement provisions of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act) that establish a new system of federal protections for remittance 
transfers sent by consumers in the United States to individuals and 
businesses in foreign countries.\1\ The amendments in this final rule 
extend by five years an exception in the rule that allows remittance 
transfer providers flexibility in meeting disclosure requirements that 
the Bureau believes would otherwise cause some remittance transfer 
providers to stop sending certain transfers, as well as making 
clarifications and technical corrections on various issues. The Bureau 
proposed these amendments in April 2014 (the April Proposal or the 
Proposal).
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    \1\ Public Law 111-203 was signed into law on July 21, 2010. 
Between February 2012 and August 2013, the Bureau issued several 
final rules concerning remittance transfers pursuant to the Dodd-
Frank Act (collectively, the 2013 Final Rule or the Remittance 
Rule). The Remittance Rule took effect on October 28, 2013.
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A. Temporary Exception for Estimated Disclosures

    The Dodd-Frank Act provisions adopted by Congress as section 
919(a)(4) of the Electronic Fund Transfer Act (EFTA) generally requires 
that consumers be provided with exact pricing disclosures before paying 
for a remittance transfer. However, Congress created a temporary 
provision that allowed insured institutions for several years to 
provide estimated disclosures where exact information could not be 
determined for reasons beyond their control. The provision was 
apparently designed to provide a transition period to allow credit 
unions, banks, and thrifts to develop better communication mechanisms 
with foreign financial institutions that may help execute wire 
transfers and certain other types of remittance transfers.
    The statute provides that the exception shall expire five years 
after the enactment of the Dodd-Frank Act, or July 21, 2015, but 
permits the Bureau, if it determines that expiration of the temporary 
exception would negatively affect the ability of insured institutions 
to send remittances to locations in foreign countries, to extend the 
temporary exception for up to ten years after enactment of the Dodd-
Frank Act (i.e., to July 21, 2020). EFTA section 919(a)(4)(B). Having 
made that determination after a period of public comment, the Bureau is 
now extending the Regulation E estimation provision that implements 
this statutory provision, Sec.  1005.32(a) in the Remittance Rule, to 
July 21, 2020.

B. Additional Clarifications

    The Bureau is also adopting several clarifications and technical 
corrections to the Remittance Rule. First, the Bureau is clarifying 
that U.S. military installations abroad are considered to be located in 
a State for purposes of the Remittance Rule. Second, the Bureau is 
clarifying that whether a remittance transfer from an account is for 
personal, family, or household purposes (and thus, whether the transfer 
could be a remittance transfer) may be determined by ascertaining the 
primary purpose of the account. Third, the Bureau is clarifying that 
faxes are considered writings for purposes of satisfying certain 
provisions of the Remittance Rule that require remittance transfer 
providers to provide disclosures in writing, and that, in certain 
circumstances, a provider may provide oral disclosures after receiving 
a remittance inquiry from a consumer in writing. Fourth, the final rule 
permits providers to include the Bureau's new remittance-specific 
consumer Web pages as the Bureau Web site that providers must disclose 
on remittance transfer receipts. Finally, the Bureau is clarifying two 
of the rule's error resolution provisions: What constitutes an 
``error'' caused by delays related to fraud and related screenings, and 
the remedies for certain errors, including the clarification of a 
comment in the official interpretation to the rule.

II. Background

A. Types of Remittance Transfers

    As the Bureau discussed in more detail when it first published the 
Remittance Rule in February 2012, consumers can choose among several 
methods of transferring money to foreign countries (February 2012 Final 
Rule). 77 FR 6194 (Feb. 7, 2012). These methods generally involve 
either closed network or open network systems, although hybrids between 
open and closed networks also exist. Consistent with EFTA section 919, 
the Remittance Rule applies to remittance transfers sent through any 
electronic mechanism, including closed network and open network 
systems, or some hybrid of the two. As detailed below, in practice, the 
situations in which the temporary exception applies frequently involve 
remittance transfers sent through open networks.
Closed Networks and Money Transmitters
    In a closed network, a remittance transfer provider uses either its 
own operations or a network of agents or other partners to collect 
funds from senders in the United States and disburse those funds to 
designated recipients abroad. Through the provider's contractual 
arrangements with those agents or other partners, the provider 
typically can exercise some control over the remittance transfer from 
end to end, including the ability to set, limit, and/or learn of fees, 
exchange rates, and other terms of service.

[[Page 55971]]

Accordingly, the Bureau expects that a provider that is sending 
remittance transfers using some version of a closed network is likely 
able to leverage its control and knowledge of the transfer terms in 
order to be able to disclose the exact exchange rates and third-party 
fees that apply to remittance transfers.
    Non-depository institutions, known generally as money transmitters, 
are the type of remittance transfer providers that most frequently use 
closed networks to send remittance transfers. Remittance transfers sent 
through money transmitters can be funded by the sender and received 
abroad using a variety of payments devices. However, the Bureau 
believes that most remittance transfers sent by money transmitters are 
currently sent and received abroad in cash, rather than as, for 
example, debits from and/or direct deposits to accounts held by 
depository institutions or credit unions.
Open Networks and Wire Transfers
    As the data discussed below indicates, the most common form of open 
network remittance transfer is a wire transfer, an electronically 
transmitted order that directs a receiving institution to deposit funds 
into an identified beneficiary's account. Indeed, virtually all bank 
respondents to the March 2014 Federal Financial Institutions 
Examination Council (FFIEC) Consolidated Reports of Condition and 
Income (FFIEC Call Report) \2\ who reported that they were remittance 
transfer providers said they provided wire transfer services to 
consumers.\3\ Unlike closed network transactions, which generally can 
only be sent to entities that have signed on to work with the specific 
provider in question, wire transfers can reach most banks (or other 
similar institutions) worldwide through national payment systems that 
are connected through correspondent and other intermediary bank 
relationships. Also unlike closed networks, open networks are typically 
used to send funds from and to accounts at depository institutions, 
credit unions, or similar financial institutions. The Bureau believes 
that the great majority of open network transfers are provided by 
insured institutions (including credit unions) and that, in turn, open 
network transfers are the most common type of remittance transfer 
provided by insured institutions and broker-dealers. However, some 
money transmitters also use open networks to send some or all of their 
remittance transfers.
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    \2\ The remittance transfer data collected for the period 
beginning on January 1, 2014 and ending on March 31, 2014, is the 
first quarter in which data related to remittance transfers was 
collected as part of the FFIEC Call Report; the specific questions 
and responses are discussed below. The data for this one quarter is 
the only FFIEC Call Report data available to the Bureau for review 
and analysis. The Bureau has some concerns about some of the 
responses and has noted those concerns where relevant in this 
Federal Register notice. The Bureau expects to continue to monitor 
responses to future FFIEC Call Reports to questions related to 
remittance transfers in the FFIEC Call Report.
    \3\ The Bureau's analysis determined 691 depository institutions 
identified themselves as remittance transfer providers, and 680 of 
the said 691 institutions reported that they provide wire transfer 
services during the first quarter of 2014. See generally FFIEC Call 
Report data in response to the March 2014 Call Report, available at 
https://cdr.ffiec.gov/public/.
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    In an open network, the remittance transfer provider with which the 
consumer interfaces (i.e., the originating institution), typically does 
not have control over, or a relationship with, all of the participants 
in transmitting the remittance transfer. The originating institution 
may communicate indirectly with the designated recipient's institution 
by sending funds and payment instructions to a correspondent 
institution, which will then transmit the instructions and funds to the 
designated recipient's institution directly, such as in the form of a 
book transfer, or indirectly through other intermediary institutions (a 
serial payment). Alternatively, under certain circumstances, the 
originating institution may send payment instructions directly to the 
designated recipient's institution, but it will nevertheless rely on a 
network of intermediary bank relationships to send funds for settlement 
(a cover payment). In some cases, depending on how the transfer is 
sent, any one of the intermediary institutions through which the 
remittance transfer passes may deduct a fee from the principal amount 
(sometimes referred to as a lifting fee). Likewise, if the originating 
institution does not conduct any necessary currency exchange, any 
institution through which the funds pass potentially could perform the 
currency exchange before the designated recipient's institution 
deposits the funds into the designated recipient's account.
    Institutions involved in open network transfers may learn about 
each other's practices regarding fees or other matters through 
contractual or other relationships, through experience in sending such 
transfers over time, through reference materials, through information 
provided by consumers, or through surveying other institutions. 
However, at least until the implementation of the Remittance Rule, 
intermediary and designated recipient institutions did not, as a matter 
of uniform practice, communicate with originating institutions 
regarding the fees and exchange rates that institutions might apply to 
transfers. Further, the communication systems used to send these 
transfers typically do not facilitate two-way, real-time transmission 
of information about the exchange rate and fees associated with the 
transfers sent through an open network. See generally 78 FR 30662, 
30663 (May 22, 2013).
International ACH
    In recent years, some depository institutions and credit unions 
have begun to send remittance transfers through the automated clearing 
house (ACH) system, although use of ACH for consumer transfers is 
limited. In the FFIEC Call Report for the quarter ending March 31, 
2014, only 78 of the 691 depository institutions that reported being 
remittance transfer providers also reported that they provide 
international ACH services for consumers. When the Bureau first issued 
the Remittance Rule in February 2012, the Bureau explained that it 
considered international ACH transfers to be open network transactions. 
Like wire transfers, international ACH transfers can involve payment 
systems in which a large number of institutions may participate, such 
that the originating institution and the designated recipient's 
institution may have no direct relationship. The Bureau acknowledged, 
however, that international ACH transfers also share some 
characteristics of closed network transfers. The agreements among 
gateway ACH operators in the United States and foreign entities 
involved may be used to control the amount and type of fees that are 
charged and/or exchange rates that are applied to a remittance 
transfer. To maintain consistency with the Bureau's prior rulemakings, 
international ACH transfers are discussed herein as open network 
transactions.
Available Remittance Transfer Market Share Data
    Based on available information and as discussed in greater detail 
below, the Bureau believes that closed network transactions facilitated 
by money transmitters make up the great majority of the remittance 
transfers sent. Relatedly, the Bureau believes that money transmitters 
collectively send far more remittance transfers each year than 
depository institutions and credit unions. In January 2014, in 
connection with a ``larger participant'' rulemaking (discussed in 
greater detail below), the Bureau estimated that money transmitters 
annually send about 150 million international money transfers, most of 
which the Bureau believes would likely qualify as remittance

[[Page 55972]]

transfers pursuant to Sec.  1005.30(e) and, thus, be covered by the 
Remittance Rule. See 79 FR 5302, 5306. (Jan. 31, 2014). By comparison, 
information reported by credit unions to the National Credit Union 
Administration (NCUA) through the NCUA Call Report and Credit Union 
Profile forms (NCUA Call Report) suggests that credit unions may have 
collectively sent less than one percent of this total in 2013 (i.e. 
less than 1 million remittance transfers collectively). Data from the 
FFIEC Call Report confirm that depository institutions send many more 
remittance transfers than credit unions, but still far fewer than money 
transmitters. Specifically, the data show that banks that are 
considered remittance transfer providers pursuant to Sec.  1005.30(f) 
collectively sent about 2.2 million remittance transfers from October 
28 through December 31, 2013.\4\ Annualizing this figure (without any 
seasonal adjustments to account for the fact that this data cover the 
Christmas-New Year holiday season, which the Bureau understands to be 
traditionally a time of increased transfer volume), the Bureau 
estimates that depository institutions collectively sent at most 13.2 
million international transfers in 2013. This figure is less than 10 
percent of the estimated 150 million remittance transfers sent by money 
transmitters. Although the Bureau believes that money transmitters are 
responsible for sending the great majority of the remittance transfers, 
it believes that the typical size of transfers sent by depository 
institutions and credit unions is larger than the typical size of 
transfers sent by a money transmitter.\5\ A transfer sent by a 
depository institution or credit union may be in the thousands of 
dollars, while the Bureau estimates that the typical size of remittance 
transfers sent by money transmitters is in the hundreds of dollars.\6\
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    \4\ Although the FFIEC Call Report covered the period from 
January 1 through March 31, 2014, this question, concerning the 
volume of transfers sent, asked about the period October 28 through 
December 31, 2013. (The remittance rule went into effect on October 
28, 2013.)
    \5\ Pursuant to the Remittance Rule, transfers of $15 or less 
are not considered remittance transfers under the rule. Accordingly, 
although the FFIEC Call Report notes a very low median transaction 
amount for remittance transfers (approximately $9), the Bureau 
believes that the typical size of the transfers sent by depository 
institutions and credit unions is a larger number.
    \6\ The Bureau lacks data on remittance transfers sent by 
broker-dealers.
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B. Section 1073 of the Dodd-Frank Act

    Section 1073 of the Dodd-Frank Act amended EFTA by establishing a 
new 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 created a new EFTA section 919. It generally 
requires: (i) The disclosure of the actual exchange rate and remitted 
amount to be received prior to and at the time of payment by the 
consumer; (ii) cancelation and refund rights; (iii) the investigation 
and remedy of errors by providers; and (iv) liability standards for 
providers for the acts of their agents. 15 U.S.C. 1693o-1.
    EFTA section 919 provides two exceptions to the requirement that 
providers disclose actual amounts.\7\ The first, the temporary 
exception, is an accommodation for insured depository institutions and 
credit unions, in apparent recognition of the fact that these 
institutions might need additional time to develop the necessary 
systems or protocols to disclose the exchange rates and/or covered 
third-party fees that could be imposed on a remittance transfer. The 
temporary exception permits an insured institution that is sending a 
remittance transfer from the sender's account to provide reasonably 
accurate estimates of the amount of currency to be received where that 
institution is ``unable to know [the amount], for reasons beyond its 
control'' at the time that the sender requests a transfer through an 
account held with the institution. EFTA section 919(a)(4)(A). The 
temporary exception sunsets five years from the date of enactment of 
the Dodd-Frank Act (i.e., July 21, 2015), but EFTA section 919, as 
added by section 1073 of the Dodd-Frank Act, permits the Bureau to 
extend that date up to five more years (i.e., July 21, 2020), if the 
Bureau determines that the termination of the temporary exception on 
July 21, 2015, would negatively affect the ability of insured 
depository institutions and insured credit unions to send remittance 
transfers. EFTA section 919(a)(4)(B).
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    \7\ The Bureau created two additional permanent exceptions by 
regulation in Sec.  1005.32(b)(2) and (b)(3). They are discussed 
below.
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    The second statutory exception in EFTA section 919 is permanent. 
The exception provides that if the Bureau determines that a recipient 
country does not legally allow, or that the method by which the 
transactions are made in the recipient country does not allow, a 
remittance transfer provider to know the amount of currency that will 
be received by the designated recipient, the Bureau may prescribe rules 
addressing the issue. EFTA section 919(c).

C. Remittance Rulemakings Under the Dodd-Frank Act

    The Bureau initially issued regulations to implement section 1073 
of the Dodd-Frank Act in February 2012, which was followed by two 
significant rounds of amendments and some additional minor 
clarifications and technical corrections. The consolidated Remittance 
Rule took effect on October 28, 2013.
The 2012 Final Rules
    The Board of Governors of the Federal Reserve System (the Board) 
first proposed in May 2011 to amend Regulation E to implement the 
remittance transfer provisions in section 1073 of the Dodd-Frank Act. 
76 FR 29902 (May 23, 2011). On February 7, 2012, the Bureau finalized 
the Board's proposal, as authority to implement the new Dodd-Frank Act 
provisions amending EFTA had 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 EFTA).
    The Remittance Rule includes provisions that generally require a 
remittance transfer provider to provide to a sender a written pre-
payment disclosure containing detailed information about the transfer 
requested by the sender. The information includes, among other things, 
the exchange rate, certain fees and taxes, and the amount to be 
received by the designated recipient. In addition to the pre-payment 
disclosure, 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 pre-payment disclosure, as well as 
additional information, such as the date of availability of the funds, 
the designated recipient's name and, if provided, contact information, 
and information regarding the sender's error resolution and 
cancellation rights. In some cases, a provider may provide the required 
disclosures orally or via text message. Section 1005.31(a)(3)-(5). As 
is noted below, the Bureau subsequently modified provisions regarding 
the disclosure of foreign taxes and certain recipient institution fees 
in May 2013.
    The Remittance Rule generally requires that the required 
disclosures state the actual exchange rate, if any, that will apply to 
a remittance transfer, and the actual amount that will be received by 
the designated recipient of the transfer, unless an exception applies. 
Section 1005.32(a) implements the temporary exception. Section Sec.  
1005.32(b)(1) implements the

[[Page 55973]]

permanent statutory exception. As implemented by the Bureau, this 
permanent exception permits a remittance transfer provider to rely on a 
list of countries published by the Bureau to determine whether 
estimates may be provided.\8\ The Remittance 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.
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    \8\ See 78 FR 66251 (Nov. 5, 2013). The list, which is also 
maintained on the Bureau's Web site, contains countries whose laws 
the Bureau believes prevent remittance transfer providers from 
determining, at the time the required disclosures must be provided, 
the exact exchange rate for a transfer involving a currency 
exchange. However, if the provider has information that a country's 
laws or the method by which transactions are conducted in that 
country permit a determination of the exact disclosure amount, the 
provider may not rely on the Bureau's list. When the Bureau first 
issued the list of such countries on September 26, 2012, the Bureau 
stated that the list is subject to change, and invited the public to 
suggest additional countries to add to the list. The Bureau 
continues to accept suggestions on potential changes to this list 
and analyzes those suggestions as they are received.
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    The Bureau amended the Remittance Rule on August 20, 2012.\9\ These 
amendments include a safe harbor defining which persons are not 
remittance transfer providers for purposes of the Remittance Rule, 
because they do not provide remittance transfers in the normal course 
of their business. The amendments also include provisions that apply to 
remittance transfers that are scheduled significantly in advance of the 
date of transfer, including a provision that allows a provider to 
estimate certain disclosure information for such transfers. See Sec.  
1005.32(b)(2).
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    \9\ On July 10, 2012, the Bureau published a technical 
correction to the Remittance Rule. See 77 FR 40459 (Jul. 10, 2012).
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The 2013 Final Rule
    Following the initial publication of the Remittance Rule in 
February 2012, the Bureau engaged in dialogue with both industry and 
consumer groups regarding implementation efforts and compliance 
concerns. As an outgrowth of those conversations, the Bureau proposed 
amendments to specific aspects of the Remittance Rule in a notice of 
proposed rulemaking published on December 31, 2012, in order to avoid 
potentially significant disruptions to the provision of remittance 
transfers. See 77 FR 77188 (Dec. 31, 2012). The Bureau then decided to 
delay temporarily the Remittance Rule's original effective date of 
February 7, 2013, in order to complete this additional rulemaking. See 
78 FR 6025 (Jan. 29, 2013).
    The Bureau finalized these proposed amendments in May 2013. 78 FR 
30662 (May 23, 2013). In these amendments, the Bureau modified the 
Remittance Rule to make optional the requirement to disclose taxes 
collected on the remittance transfer by a person other than the 
remittance transfer provider and in certain circumstances, the 
requirement to disclose fees imposed by a designated recipient's 
institution (defined as non-covered third-party fees). In place of 
these two disclosure requirements, the Remittance Rule now requires 
providers, where applicable, to add disclaimers to the disclosures they 
must provide to sender. The disclaimers must inform senders that due to 
non-covered third-party fees and taxes collected on the transfer by a 
person other than the remittance transfer provider, the designated 
recipient may receive less than the amount listed on the disclosures as 
the total amount of funds that will be received by him or her. The May 
2013 amendments also created an additional permanent exception that 
allows providers to estimate, if they choose to, non-covered third-
party fees and taxes collected on the remittance transfer by a person 
other than the provider. See Sec.  1005.32(b)(3). Finally, the Bureau 
revised 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.\10\ The Remittance Rule 
then became effective on October 28, 2013.
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    \10\ In August 2013, the Bureau adopted a clarification and a 
technical correction to the Remittance Rule. 78 FR 49365 (Aug. 14, 
2013).
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Notice of Proposed Rulemaking Regarding Larger Participants
    Section 1024 of the Dodd-Frank Act establishes that the Bureau may 
supervise certain nonbank covered persons that are ``larger 
participants'' in consumer financial markets, as defined by rule. 12 
U.S.C. 5514(a)(1)(B). Pursuant to this authority, the Bureau published 
a proposal on January 31, 2014, to identify a nonbank market for 
international money transfers and define ``larger participants'' of 
this market that would be subject to the Bureau's supervisory program. 
79 FR 5302 (Jan. 31, 2014). Specifically, the proposal would extend 
Bureau supervisory authority to any nonbank international money 
transfer provider that has at least one million aggregate annual 
international money transfers to determine compliance with, among other 
things, the Remittance Rule. The comment period on this proposal ended 
on April 1, 2014, and the Bureau is in the process of preparing to 
issue a final rule.\11\
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    \11\ The comments submitted regarding this proposed rule are 
available at https://federalregister.gov/a/2014-01606.
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D. Implementation Initiatives for the Remittance Rule and Related 
Activities

    The Bureau has been actively engaged in an initiative to support 
implementation of the Remittance Rule. For example, the Bureau has 
established a Web page that contains links to various industry and 
consumer resources.\12\ These resources include a small entity 
compliance guide that provides a plain-language summary of the 
Remittance Rule and highlights issues that businesses, in particular 
small businesses, may want to consider when implementing the Remittance 
Rule. In conjunction with the release of this final rule, the Bureau is 
revising the compliance guide to update its text to reflect the changes 
to the Remittance Rule adopted herein and improve the guide's clarity. 
A video overview of the Remittance Rule and its requirements, model 
forms, and other resources are also available.
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    \12\ Available at http://www.consumerfinance.gov/remittances-transfer-rule-amendment-to-regulation-e/.
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    Consumer resources the Bureau has created include answers to 
frequently asked questions regarding international money transfers, and 
materials that consumer groups and other stakeholders can use to 
educate consumers about the new rights provided to them by the 
Remittance Rule.\13\ Some of these resources are available in languages 
other than English. The Bureau has also conducted media interviews in 
English and Spanish and participated in other public engagements to 
publicize the new consumer rights available under the Remittance Rule. 
The Bureau continues to provide ongoing guidance support to assist 
industry and others with interpreting the Remittance Rule, and has sent 
staff to speak at conferences and in other for a, both to provide 
additional guidance on the Remittance Rule, and learn from providers 
and others about efforts to comply with the Rule.
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    \13\ Available at http://www.consumerfinance.gov/blog/category/remittances/.
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III. Summary of the Rulemaking Process

A. Fact Gathering Concerning the Temporary Exception

    As noted, EFTA section 919(a)(4)(B) permits the Bureau to issue a 
rule to

[[Page 55974]]

extend the temporary exception if it determines that the termination of 
the exception on July 21, 2015, would negatively affect the ability of 
insured institutions to send remittance transfers. In February 2012, 
the Bureau noted that some industry commenters urged the Bureau at that 
time to make the temporary exception permanent, or in the alternative, 
extend the exception to July 21, 2020. The Bureau declined to extend 
the exception in February 2012. It believed then that it would have 
been premature to make a determination on the extension of the 
temporary exception three years in advance of the July 2015 sunset 
date, prior to the rule's release, and before the market has had a 
chance to respond to the regulatory requirements. See 77 FR 6194, 6202, 
and 6243 (Feb. 7, 2012).
    Since the Bureau first issued the Remittance Rule, the Bureau has 
supplemented its understanding of the remittance transfer market 
through information received in the course of subsequent rulemakings, 
additional research and monitoring of the market, and initiatives 
related to the implementation of the Remittance Rule. The additional 
research and monitoring have included in-depth conversations with 
several remittance transfer providers about how they have implemented 
the requirements of the Remittance Rule, participation in industry 
conferences and related meetings, as well as similar monitoring 
efforts. In addition, Bureau staff conducted interviews with 
approximately 35 industry stakeholders and consumer groups after the 
Remittance Rule took effect in connection with this rulemaking.\14\ 
Through these interviews, the Bureau gathered information regarding 
providers' reliance on the temporary exception for certain remittance 
transfers, and whether viable alternatives currently exist for those 
transfers. The Bureau conducted the interviews in order to build on the 
Bureau's existing knowledge and assist it in making a determination as 
to whether expiration of the temporary exception on July 21, 2015, 
would negatively affect the ability of insured institutions to send 
remittance transfers.\15\
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    \14\ The Office of Management and Budget (OMB) control number 
for this information collection is 3170-0032.
    \15\ See Consumer Financial Protection Bureau Request for 
Approval under the Generic Clearance: Compliance Costs and Other 
Effects of Regulation, available at http://www.reginfo.gov/public/
do/PRAViewIC?refnbr=201205-3170-003&icID=209232.
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    The industry stakeholders that the Bureau contacted included both 
remittance transfer providers and service providers. The Bureau 
contacted community banks, regional banks, credit unions, nonbank 
service providers, and very large banks that send remittance transfers 
on behalf of their retail customers and on behalf of other providers. 
The Bureau also contacted remittance transfer providers that are 
broker-dealers. The Bureau believes that broker-dealers may send 
transfers via open networks, similar to those used by many insured 
institutions.\16\ The Bureau also contacted nonbank money transmitters 
that use open networks to send some of their transfers. Although the 
temporary exception only applies to insured institutions, the Bureau 
believed that interviewing certain nonbank money transmitters that send 
open network transfers without being able to rely on the temporary 
exception would help the Bureau better understand what methods exist 
for providing exact disclosures for open network transfers. The service 
providers that the Bureau contacted included correspondent banks and 
corporate credit unions, bankers' banks, and foreign banks that offer 
correspondent banking services to U.S.-based remittance transfer 
providers, or act as intermediaries in the payment clearing and 
settlement chain. Insofar as the conversations were voluntary, the 
Bureau did not ultimately speak with every institution it contacted.
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    \16\ Staff of the Securities and Exchange Commission (SEC) wrote 
a no-action letter on December 14, 2012, that concludes it will not 
recommend enforcement actions to the SEC under Regulation E if a 
broker-dealer provides disclosures as though the broker-dealer were 
an insured institution for purposes of the temporary exception. The 
letter is available at http://www.sec.gov/divisions/marketreg/mr-noaction/2012/financial-information-forum-121412-rege.pdf.
---------------------------------------------------------------------------

    As noted above, the Bureau has also reviewed NCUA Call Report.\17\ 
The data provided information on the number and types of remittances 
sent by credit unions, the methods by which credit unions send 
remittance transfers, and the payment systems credit unions utilize to 
send remittance transfers. Additionally, as discussed above, the Bureau 
has reviewed FFIEC Call Report data about remittance transfer 
practices. On the forms due in April 2014 regarding the reporting 
period from January 1 through March 31, 2014, depository institutions 
were required to provide select information, including, as relevant 
here, information on the types of remittance transfers provided and, 
for institutions that provide more than 100 transfers per year, the 
number and dollar value of remittance transfers sent by the reporting 
institutions in their capacity as remittance transfer providers. The 
report also included information on the frequency with which a 
reporting institution uses the temporary exception in its role as a 
remittance transfer provider.\18\
---------------------------------------------------------------------------

    \17\ See generally http://www.ncua.gov/dataapps/qcallrptdata/Pages/default.aspx.
    \18\ See 79 FR 2509 (Jan. 14, 2014); FDIC Financial Institution 
Letter FIL 4-2014.
---------------------------------------------------------------------------

    The Bureau notes that the data from the NCUA and FFIEC Call Reports 
do not cover every practice, or every type of remittance transfer 
providers and service providers that the Bureau has researched and 
interviewed through its market monitoring efforts. However, as noted in 
the April Proposal, the FFIEC and NCUA Call Reports have the potential 
to provide valuable quantitative data to complement the more in-depth 
qualitative information that the Bureau has been able to gather through 
interviews and other sources because the scope of the data covers every 
depository institution and credit union reporting to the NCUA and 
FFIEC, respectively. At this point, the value of the data collected in 
the first quarter FFIEC Call Report is limited in part because there 
has only been one reporting cycle. The Bureau will continue to monitor 
the data, with a focus on trends over time. The Bureau also expects to 
continue to assess the data as depository institutions become more 
familiar with these new reporting requirements. Finally, to the extent 
that responses to the FFIEC Call Report can provide an accurate measure 
of the extent of the utilization of the temporary exception by insured 
institutions, this measure is not the only, nor necessarily the primary 
factor that the Bureau has considered in determining whether to extend 
the temporary exception under EFTA section 919(a)(4)(B).
    The Bureau also notes that in connection with the April Proposal, 
it consulted with consumer groups to attempt to identify the effects, 
if any, that estimating covered third-party fees and exchange rates may 
have on consumers, as well as the potential effect on consumers of the 
expiration of the temporary exception, and, in the alternative, its 
extension to July 21, 2020.

B. Summary of the April Proposal

    As noted above, in April 2014, the Bureau proposed amendments to 
various provisions of the Remittance Rule to extend a temporary 
provision that permits insured institutions to estimate certain third-
party fees and exchange rates, and to clarify or revise

[[Page 55975]]

several regulatory provisions and official interpretations previously 
adopted by the Bureau.
    The primary focus of the April Proposal was the temporary 
exception. The Bureau proposed to extend the Regulation E estimation 
provision in Sec.  1005.32(a). That provision allows remittance 
transfer providers to estimate certain third-party fees and exchange 
rates associated with a remittance transfer, if certain conditions are 
met. Specifically, a remittance transfer provider may rely on the 
temporary exception if (1) the provider is an insured depository 
institution or credit union; (2) the remittance transfer is sent from 
the sender's account with the provider; and (3) the provider cannot 
determine the exact amounts for reasons outside of its control. Based 
on its outreach and internal research and analysis, the Bureau 
preliminarily determined that the termination of the temporary 
exception would negatively affect the ability of insured institutions 
to send remittance transfers. Thus, the Bureau proposed to amend Sec.  
1005.32(a)(2) by extending the temporary exception by five years from 
July 21, 2015, to July 21, 2020.

C. Additional Clarifications

    The Bureau also proposed several clarificatory amendments and 
technical corrections to the Remittance Rule. First, the Bureau sought 
comment on whether (and if so, how) it should clarify treatment of U.S. 
military installations located in foreign countries for purposes of the 
Remittance Rule. The Bureau explained in the April Proposal that it 
believes there is a potential for confusion in the treatment of these 
transfers, because the Remittance Rule does not expressly address their 
status. Second, the Bureau proposed to clarify that whether a transfer 
from an account is for personal, family, or household purposes (and 
thus, whether the transfer is a remittance transfer) can be determined 
by ascertaining the purpose for which the account was created. Third, 
the Bureau proposed to clarify that faxes are considered writings for 
purposes of certain disclosure provisions of the Remittance Rule, and 
that, in certain circumstances, a remittance transfer provider may 
provide oral disclosures, after receiving a remittance inquiry from a 
consumer in writing. Finally, the Bureau proposed to clarify two of the 
rule's error resolution provisions. More specifically, the Bureau 
proposed to clarify what constitutes an ``error'' caused by delays 
related to fraud and related screening, and the remedies for certain 
errors.

D. Comments Received

    The Bureau received more than 30 comments on the April Proposal. 
The majority of comments were submitted by industry commenters, 
including depository institutions of various sizes, money transmitters, 
and industry trade associations. In addition, the Bureau received 
comment letters from two consumer groups.
    Industry commenters overwhelmingly supported the April Proposal, 
and agreed with the Bureau's preliminary determination that the 
expiration of the temporary exception would have a negative impact on 
the ability of insured institutions to send remittance transfers. In 
support of the April Proposal, several institutions and industry trade 
associations explained how and why they used the temporary exception. 
Industry commenters further asserted that the temporary exception is 
critical and that they would not have the ability to disclose exact 
amounts for all remittance transfers by July 2015. Other commenters 
expressed concern that the expiration of the temporary exception could 
cause many community banks to either exit the remittance transfer 
market, or significantly cut back the scope of their services.
    The two consumer group commenters both opposed this part of the 
April Proposal. One consumer group commenter asserted that the Bureau 
should limit the extension of the temporary exception to situations 
where it was necessary, as defined by the Bureau, or for shorter period 
of time, rather than the full five years permitted by the Dodd-Frank 
Act. The other consumer group commenter asserted that if the Bureau 
were to extend the temporary exception, then it should require insured 
institutions that rely on the exception to disclose to customers that 
money transmitters (i.e., remittance transfer providers that are not 
insured institutions and, thus, are not permitted by the Remittance 
Rule to rely on the temporary exception) would provide consumers with 
exact disclosures.
    With respect to the Bureau's request for comment and data regarding 
the treatment of transfers to and from U.S. military installations 
located in foreign countries, the Bureau received several comments, but 
only limited data. Industry commenters generally urged the Bureau to 
determine that military installations located in foreign countries be 
treated as being located in a State, so that, for example, transfers 
from a State to a U.S. military installation located in a foreign 
country would not be covered by the Remittance Rule. These commenters 
asserted that transfers to or from a U.S. military installation were no 
different than domestic transfers that are already exempt from the 
Remittance Rule. One consumer group, however, urged that the Bureau 
take the opposite approach, and treat a U.S. military installation 
located in a foreign country as being located in the foreign country. 
This consumer group asserted that transfers received on a military 
installation in a foreign country should not be treated differently 
from transfers received outside the installation in the foreign 
country.
    As for the Bureau's other proposed amendments, commenters generally 
supported the proposed changes, although some noted particular 
objections. Specifically, with respect to the proposed clarification 
concerning the treatment of faxes as writings, one commenter, a 
consumer group, opposed the change, arguing that faxes should only be 
allowed to comply with the Remittance Rule's disclosure requirements 
where the sender has consented to receive the disclosure by fax by 
providing E-Sign consent. Commenters also supported the Bureau's 
proposal that would permit alternatives to disclosing the URL for the 
Bureau's Web site on required receipts, as well as the Bureau's 
proposal that would permit remittance transfer providers to respond to 
written requests for a remittance transfer with oral disclosures, when 
providing written disclosures would be impractical. Commenters 
similarly supported the proposal to permit providers to look to the 
type of account from which the transfer is being sent to determine if 
the transfer is a remittance transfer (although, as discussed in 
greater detail below, one large money transmitter opposed the proposal, 
to the extent the proposal would have been a mandatory change).
    The Bureau also received several comments regarding the proposed 
changes to the Remittance Rule's error resolution and remedy 
provisions. These comments were mixed. Regarding the proposed change 
clarifying the circumstances under which provider delay due to certain 
fraud screening would not be considered an error under the Rule, 
several commenters contended that the Bureau's proposed approach was 
too narrow, and that it would exclude several categories of screening-
related delays that should be included in the Remittance Rule's 
exception. Other industry commenters disagreed; they supported the 
proposed change, and noted that it would cover the majority, if not 
all, of the delays financial institutions experience related to fraud 
screening. One consumer group

[[Page 55976]]

commenter also supported these proposed changes. With respect to the 
proposed clarifications to the remedies for certain errors, some 
industry commenters supported, or did not oppose, the proposed 
clarifications, although several argued that providers should not have 
to refund their fees, in cases where the designated recipient did not 
receive the remittance transfer by the date of availability disclosed 
by the provider, because the sender had provided incorrect or 
insufficient information. Finally, several commenters urged the Bureau 
to adjust other parts of the Remittance Rule that were beyond the scope 
of the April Proposal.
    In addition to the comments received on the April Proposal, Bureau 
staff conducted outreach with various parties about the issues raised 
by the Proposal or raised in comments. Records of these outreach 
conversations are reflected in ex parte submissions included in the 
rulemaking record (accessible by searching by the docket number 
associated with this final rule at www.regulations.gov).

IV. Legal Authority

    Section 1073 of the Dodd-Frank Act created a new section 919 of 
EFTA and requires remittance transfer providers to provide disclosures 
to senders of remittance transfers, pursuant to rules prescribed by the 
Bureau. As discussed above, the Dodd-Frank Act established a temporary 
exception in amending EFTA, which provides that subject to rules 
prescribed by the Bureau, insured depository institutions and insured 
credit unions may provide estimates of the amount to be received where 
the remittance transfer provider is ``unable to know [the amount], for 
reasons beyond its control'' at the time that the sender requests a 
transfer to be conducted through an account held with the provider. 
EFTA section 919(a)(4)(A). The Dodd-Frank Act further establishes that 
the exception shall terminate five years from the date of enactment of 
the Dodd-Frank Act (i.e., July 21, 2015), unless the Bureau determines 
that the termination of the exception would negatively affect the 
ability of depository institutions and credit unions to send remittance 
transfers. In which case, the Bureau may extend the application of the 
exception to not longer than ten years after the enactment of the Dodd-
Frank Act (i.e., July 21, 2020). EFTA section 919(a)(4)(B).
    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. Finally, EFTA 
section 919(f) requires the Bureau to establish standards of liability 
for remittance transfer providers, including those providers that act 
through agents. Except as described below, the final rule is adopted 
under the authority provided to the Bureau in EFTA section 919, and as 
more specifically described in this Supplementary Information.

V. Section-by-Section Analysis

Section 1005.30 Remittance Transfer Definitions

1005.30(c) Designated Recipient & 1005.30(g) Sender
Application of the Remittance Rule to U.S. Military Installations 
Abroad
    As noted in the April Proposal, the Remittance Rule applies when a 
sender located in a ``State'' sends funds to a designated recipient at 
a location in a ``foreign country.'' See Sec.  1005.30(c) and (g). 
Further, the Rule specifies that in the context of transfers to or from 
an account, the Rule's application depends on the location of the 
account rather than the account owner's physical location at the time 
of transfer. See comments 30(c)-2.ii and 30(g). The Rule does not, 
however, specifically address the status of a transfer that is sent to 
or from a U.S. military installation located in a foreign country, nor 
does the definition of ``State'' in subpart A of Regulation E (Sec.  
1005.2(l)) directly address the definition's application to a U.S. 
military installation.
    In the April Proposal, the Bureau recognized that the Remittance 
Rule's application to transfers sent to and from U.S. military 
installations located abroad could, in some cases, lead to confusion. 
Specifically, the Bureau had received inquiries about whether U.S. 
military installations located abroad should be treated as located in a 
State or in a foreign country. The Bureau noted that application of the 
Remittance Rule might also differ depending on whether the transfer was 
sent to or from a depository institution account or would be picked up 
by the recipient at a location on the military installation. For 
example, there could be confusion as to whether the Remittance Rule 
applies when a consumer in the United States sends a cash transfer to 
be picked up by a recipient at a financial institution (not into the 
recipient's account) on a U.S. military base in a foreign country. 
Depending on whether the financial institution is deemed to be at a 
location in a ``foreign country'' or a ``State,'' the Remittance Rule 
may or may not apply. There might also be confusion about whether a 
cash transfer from a consumer on a foreign military installation to a 
recipient in the surrounding country would be subject to the rule, 
again depending on whether the foreign military installation is deemed 
to be in a ``State.''
    The Bureau noted in the April Proposal, however, that the 
application of the Remittance Rule could be different for transfers 
from accounts of persons located on U.S. military installations abroad. 
When a transfer is made from such an account, whether the sender is 
located in a State is determined by the location of the sender's 
account rather than the physical location of the sender at the time of 
the transaction. Similarly, whether or not the Remittance Rule applies 
to transfers from the United States to accounts of different persons 
stationed at U.S. military installations abroad could differ, depending 
on the locations of those recipients' accounts. Thus, there may also be 
confusion as to whether the Remittance Rule applies when a transfer is 
sent from an account in the United States to an account located at a 
U.S. military installation abroad, to the extent such accounts exist.
    In light of the complexity of these issues, the Bureau sought 
comment on whether it would be advisable to provide further clarity on 
this point and also sought data regarding these issues. The Bureau 
acknowledged in the April Proposal that it did not then have sufficient 
information or data to make a determination regarding whether the 
Remittance Rule should (or should not) treat foreign military 
installations as ``States'' for purposes of the Remittance Rule, both 
in the context of transfers received in cash and in the context of 
transfers sent to or from an account that is located on a military 
installation. Accordingly, the Bureau sought data on the relative 
number of transfers sent to and from individuals and/or accounts 
located on U.S. military installations in foreign countries. In 
addition, the Bureau sought comment on the appropriateness of extending 
any clarification regarding U.S. military installations to other U.S. 
government installations abroad, such as U.S. diplomatic missions.
    The Bureau received several comments on this issue. While a small 
number of commenters reported on the number of transfers they send to 
overseas military installations, commenters did not provide data on the 
relative number of transfers sent to and from such installations. The 
vast majority of commenters, however, recommended that the Bureau treat 
U.S.

[[Page 55977]]

military installations abroad as located ``on U.S. soil,'' and 
therefore exempt transfers sent to such installations from the 
Remittance Rule. Commenters favoring this approach provided various 
rationales. Several commenters, including a large bank, a community 
bank, and a State trade association, recommended exempting remittance 
transfers to U.S. military installations abroad from the Rule. They 
stated that such transfers present lower risks to consumers than 
remittance transfers sent from the United States to other foreign 
locations, because transfers involving U.S. military installations are 
generally sent to and from U.S. financial institutions, in U.S. 
dollars, using U.S. payment systems (thus subject to the rules of those 
systems). They further argued that such transfers do not involve 
fluctuating exchange rates, and will likely be subject to U.S. consumer 
protection laws (insofar as the recipient institution is a U.S. 
financial institution).
    Other commenters, including community banks, large banks, credit 
unions, and trade associations, noted that other statutory and 
regulatory regimes currently treat U.S. military installations located 
abroad as located in the United States. For example, a large bank noted 
that deposits in foreign branches of U.S. financial institutions that 
are located on a U.S. military installation and governed by Department 
of Defense regulations are insured by the Federal Deposit Insurance 
Corporation, while deposits in foreign branches that are not located on 
such installations are not. A national trade association and a federal 
credit union similarly noted that the U.S. Postal Service treats mail 
sent from the United States to U.S. military installations overseas as 
domestic mail. Several other commenters, including a number of credit 
unions, urged the Bureau to exempt transfers to U.S. military 
installations abroad because, they claimed, many remittance transfer 
providers were already treating such installations as located on ``U.S. 
soil.''
    A few commenters did not support treating U.S. military 
installations as ``States'' for purposes of the Remittance Rule. One 
consumer group argued that the Bureau should treat military 
installations abroad as located in a foreign country because 
individuals who send remittance transfers to family members stationed 
abroad should receive the protections of the Remittance Rule. Other 
commenters, including a group of national trade associations, noted 
that any solution that applied exclusively to military installations 
would pose logistical challenges, because it may be difficult to 
determine whether a recipient or a recipient's account is located on a 
military installation. These commenters were either silent about how 
the Bureau should resolve the issue of money transfers to U.S. military 
installations or advocated that the Bureau maintain the status quo.
    Based on its review of the comments received and its own analysis 
of this issue, the Bureau is persuaded, for the reasons discussed 
below, that transfers to individuals and accounts located on U.S. 
military installations located abroad, as well as transfers from 
individuals and their accounts located on U.S. military installations 
abroad to designated recipients in the United States, should be 
excluded from the Remittance Rule's application. Accordingly, the 
Bureau is finalizing revisions to the commentary to the definitions of 
``designated recipient'' (Sec.  1005.30(c)) and ``sender'' (Sec.  
1005.30(g)). These revisions clarify that, for purposes of determining 
whether a transfer qualifies as a ``remittance transfer'' under the 
Rule, persons or accounts that are located on a U.S. military 
installation abroad are considered to be located in a State. Pursuant 
to these revisions, revised comment 30(c)-2.i explains that funds that 
will be received at a location on a U.S. military installation that is 
physically located abroad are received in a State, and revised comment 
30(c)-2.ii explains that, for transfers that are sent to a recipient's 
account, an account that is located on a U.S. military installation 
abroad is considered to be located in a State. As revised, comment 
30(g)-1 now explains that senders or senders' accounts that are located 
on U.S. military installations that are physically located abroad are 
located in a State for purposes of subpart B.
    The Bureau believes this approach provides clarity without 
undermining the important consumer protections provided by the 
Remittance Rule. The Bureau agrees with the majority of commenters that 
transfers from the United States to a U.S. military installation 
located abroad share many of the characteristics of domestic transfers, 
and as such harbor less risk for consumers than a typical remittance 
transfer. In sum, while the Bureau agrees that servicemembers and their 
families deserve to receive the same consumer protections that are 
available to all other consumers, the Bureau agrees with those 
commenters who asserted that the consumer protection concerns 
associated with transfers sent to locations in a foreign country 
generally do not apply to transfers sent to U.S. military installations 
abroad. Meanwhile, the Bureau notes that transfers from locations on 
U.S. military installations abroad to recipients in foreign countries 
may, in many circumstances, qualify as remittance transfers. Unlike the 
quasi-domestic nature of transfers to the U.S. military installations 
abroad, transfers from those installations to foreign countries are 
typically sent without the protection of laws and rules in place for 
domestic transfers and are more likely to be involve a foreign currency 
exchange. The Bureau will continue to monitor, through its complaint 
intake processes and other channels, whether particular concerns arise 
with respect to transfers involving U.S. military installations abroad.
    The Bureau declines to adopt the bright-line test proposed by one 
money transmitter commenter that would have allowed remittance transfer 
providers to determine an account's location by looking at whether the 
account was held with a United States or a foreign financial 
institution. The Bureau believes that such a rule would be over-broad 
in that it would exclude transfers that are sent to accounts located in 
foreign branches of U.S. financial institutions, of which the Bureau 
believes there are many. Such transfers, with the limited exception of 
transfers to foreign branches located on U.S. military installations 
abroad, as discussed above, currently qualify as remittance transfers 
under the Rule, and the Bureau did not intend to change this result 
when it proposed to clarify the treatment of U.S. military 
installations.
    The Bureau acknowledges that, as noted by a few commenters, there 
may be some scenarios in which it is impossible for the remittance 
transfer provider to know that the transfer will be sent to a location 
or account located on a U.S. military installation. The Bureau notes, 
however, that such scenarios already exist regardless of whether the 
transfer involves a U.S. military installation located abroad; indeed, 
the Bureau has previously addressed these scenarios in existing comment 
30(c)-2.iii, which explains that, where a sender does not specify 
information about a designated recipient's account, a provider may make 
the determination of whether funds will received in a foreign country 
based on ``other information.'' Thus, those providers who currently 
make a determination about the location of a recipient or a recipient's 
account by, for example, looking at the routing number and address of 
the branch of the financial institution receiving the transfer, can 
continue to do so; the

[[Page 55978]]

revised commentary merely provides that where they have specific 
information that the account is located on a U.S. military 
installation, they can treat the account as located in a State, 
notwithstanding any information to the contrary derived from the 
account's routing number.
    Finally, the Bureau is not finalizing a provision that would 
address the application of the Remittance Rule to other U.S. government 
installations abroad. The Bureau did not receive any comments 
indicating that there is actual or potential confusion with respect to 
the Remittance Rule's application to non-military U.S. installations 
located in foreign countries.
Non-Consumer Accounts
    Section 1005.30(g) provides that a ``sender'' under subpart B of 
Regulation E means a consumer in a State who primarily for personal, 
family, or household purposes requests a remittance transfer provider 
to send a remittance transfer to a designated recipient. Together with 
the definition of ``remittance transfer'' in Sec.  1005.30(e), this 
means that for the Remittance Rule to apply to an electronic transfer 
of funds, the transfer must have been requested by a consumer primarily 
for personal, family, or household purposes.
    In response to certain questions about how to determine whether the 
Remittance Rule applies to transfers sent from an account that is not 
an account for the purposes of Regulation E, such as a business 
account, the Bureau proposed to add comment 30(g)-2 to explain that a 
consumer is a ``sender'' only if the consumer requests a transfer 
primarily for personal, family, or household purposes. The proposed 
comment would have also explained that for transfers from an account, 
the primary purpose for which the account was established determines 
whether a transfer from that account is requested for personal, family, 
or household purposes. Accordingly, under the proposed clarification, a 
transfer is not requested primarily for personal, family, or household 
purposes if it is sent from an account that was not established 
primarily for personal, family, or household purposes, such as an 
account that was established as a business or commercial account or an 
account held by a business entity such as a corporation, not-for-profit 
corporation, professional corporation, limited liability company, 
partnership, or sole proprietorship, and a person requesting a transfer 
from such an account therefore is not a sender under Sec.  1005.30(g). 
Having reviewed the comments received and for the reasons set forth 
below, the Bureau is adopting comment 30(g)-2 with the modifications 
explained below.
    One of the two consumer group commenters supported this aspect of 
the April Proposal. Industry commenters generally supported clarifying 
that the Remittance Rule does not apply to transfers sent from business 
accounts. Several trade association commenters also supported the 
change but noted that some financial institutions may re-code accounts 
that were initially set up as consumer accounts as business accounts, 
based on the way an accountholder uses the account. The trade 
association commenters asserted that the Bureau should clarify that 
financial institutions could rely on the way the account is identified 
in their records at the time the transfer is requested to determine 
whether the transfer is made for personal, family, or household 
purposes. One large money transmitter commenter expressed concern about 
proposed comment 30(g)-2, because it interpreted the proposed comment 
to mean that a remittance transfer provider must apply the Remittance 
Rule to any transfer from a consumer account, even if the customer 
indicates that the transfer is for a business purpose. The commenter 
asserted that this interpretation would result in compliance burden for 
some money transmitters. It explained that it offers customers the 
ability to send transfers from accounts, but because it does not hold 
the accounts, it does not know whether those accounts are consumer or 
non-consumer accounts. Therefore, it relies on the purpose of a 
transfer, as indicated by its customer, to determine if the transfer is 
a remittance transfer for purposes of the Rule. A large bank commenter 
requested that the Bureau adopt additional commentary to clarify that 
the Remittance Rule does not apply to transfers from accounts held by a 
financial institution under a bona fide trust agreement because those 
accounts do not meet the definition of ``account'' under the general 
provisions of Regulation E.
    The Bureau has considered the comments and, for reasons discussed 
in more detail below, is adopting as proposed the aspect of proposed 
comment 30(g)-2 that would have explained the definition of a 
``sender.'' The Bureau is also adding new comment 30(g)-3, in which it 
is adopting the aspect of proposed comment 30(g)-2 that would have 
explained that a transfer sent from a non-consumer account is not 
requested primarily for personal, family, or household purposes, and 
therefore a consumer requesting a transfer from such an account is not 
a sender under Sec.  1005.30(g).
    Additionally, the Bureau is explaining in comment 30(g)-3 that a 
transfer from an account held by a financial institution under a bona 
fide trust agreement is also not requested for personal, family, or 
household purposes, and therefore a consumer requesting a transfer from 
such an account is not a sender under Sec.  1005.30(g). Section 
1005.2(b)(3) provides that the term ``account'' in Regulation E does 
not include an account held by a financial institution under a bona 
fide trust agreement. The Bureau believes that adding this 
clarification to comment 30(g)-3 is consistent with the Bureau's intent 
to clarify that insofar as a transfer is sent from an account, the 
Remittance Rule only applies to transfers from accounts that fall 
within the definition of ``account'' under the general provisions of 
Regulation E.
    The Bureau is not adopting the aspect of the proposed comment 
30(g)-2 that would have explained that the primary purpose for which 
the account was established determines whether a transfer from that 
account is for personal, family, or household purposes. Upon further 
consideration, the Bureau believes that this aspect of the proposed 
comment could have been interpreted to mean that a provider would have 
to apply the Remittance Rule to all transfers from a consumer account, 
even in situations in which the sender indicates that the primary 
purpose of the transfer is a non-consumer purpose. Although the Bureau 
continues to believes that a provider should be able to rely on the 
primary purpose for which the account was established to determine 
whether a transfer from that account is for personal, family, or 
household purposes, the Bureau believes that applying the Rule to all 
transfers from a consumer account, even in situations in which the 
sender indicates that the primary purpose of the transfer is a non-
consumer purpose, would be in tension with the definition of a 
``sender.'' The Bureau is also concerned that such a bright-line test 
could cause compliance burden, as suggested above by a large money 
transmitter, if required in all cases. The Bureau further believes that 
it is appropriate to draw a clear line with respect to the 
applicability of the Remittance Rule to transfers sent from accounts 
that were not established primarily for personal, family, or household 
purposes for providers who have access to that information.

[[Page 55979]]

    Accordingly, as adopted, comment 30(g)-2 explains that a consumer 
is a ``sender'' only where he or she requests a transfer primarily for 
personal, family, or household purposes and that a consumer who 
requests a transfer primarily for other purposes, such as business or 
commercial purposes, is not a sender under Sec.  1005.30(g). It further 
explains that if a consumer requests a transfer from an account that 
was established primarily for personal, family, or household purposes, 
then a remittance transfer provider may generally deem that the 
transfer is requested primarily for personal, family, or household 
purposes and the consumer is therefore a ``sender'' under Sec.  
1005.30(g). However, if the consumer indicates that he or she is 
requesting the transfer primarily for other purposes, such as business 
or commercial purposes, then the provider may deem the consumer not to 
be a sender under Sec.  1005.30(g), even if the consumer is requesting 
the transfer from an account that is used primarily for personal, 
family, or household purposes.
    Comment 30(g)-3 explains that a provider may deem that a transfer 
that is requested to be sent from an account that was not established 
primarily for personal, family, or household purposes, such as an 
account that was established as a business or commercial account or an 
account held by a business entity such as a corporation, not-for-profit 
corporation, professional corporation, limited liability company, 
partnership, or sole proprietorship, as not being requested primarily 
for personal, family, or household purposes. A consumer requesting a 
transfer be sent from such an account therefore is not a sender under 
Sec.  1005.30(g). The comment also explains that a transfer that is 
sent from an account held by a financial institution under a bona fide 
trust agreement pursuant to Sec.  1005.2(b)(3) is not requested 
primarily for personal, family, or household purposes, and a consumer 
requesting a transfer from such an account therefore is not a sender 
under Sec.  1005.30(g).
    Lastly, as discussed above, several trade association commenters 
suggested that the Bureau adopt guidance that would permit a financial 
institution to rely on the way an account is identified in its records 
at the time the transfer is requested (rather than when the account was 
established) to determine whether the transfer is made primarily for 
personal, family, or household purposes. The Bureau is not adopting 
this recommendation. The Bureau proposed comment 30(g)-2 to provide 
additional clarification that transfers from accounts that do not meet 
the definition of ``account'' under the general provisions of 
Regulation E are not subject to the Remittance Rule. Pursuant to Sec.  
1005.2(b)(1), an account at a financial institution is an ``account'' 
for purposes of Regulation E if it was ``established primarily for 
personal, family, or household purposes.'' (Emphasis added.) In other 
words, the primary purpose for which an account was established 
determines whether the account is an ``account'' for purposes of 
Regulation E. Accordingly, the Bureau believes that adopting this 
suggestion would be inconsistent with Sec.  1005.2(b)(1), which is a 
long-standing part of Regulation E. Insofar as commenters did not 
suggest why accounts should be treated differently for purposes of 
subpart B of Regulation E, the Bureau is not adopting this suggestion.

Section 1005.31 Disclosures

31(a) General Form of Disclosures
31(a)(2) Written and Electronic Disclosures
    EFTA, as implemented by the Remittance Rule, generally requires 
remittance transfer providers to provide disclosures required by 
subpart B of Regulation E to the sender in writing. Sec.  
1005.31(a)(2). But neither the statute nor the Remittance Rule 
specifies what qualifies as a writing (except to state that written 
disclosures may be provided on any size of paper, as long as the 
disclosures are clear and conspicuous, see comment 31(a)(2)-2). The 
Bureau proposed comment 31(a)(2)-5, which would have explained that 
disclosures provided pursuant to Sec.  1005.31 or Sec.  1005.36 by 
facsimile transmission (i.e., fax) are written disclosures for purposes 
of providing disclosures in writing pursuant to subpart B of Regulation 
E, and are not subject to the requirements for electronic disclosures 
set forth in Sec.  1005.31(a)(2). Pursuant to Sec.  1005.31(a)(2) and 
comment 31(a)(2)-1, a provider may provide the pre-payment disclosure 
to a sender in electronic form, without regard to the applicable 
requirements of the E-Sign Act, only if a sender electronically 
requests the provider to send the remittance transfer. However, with 
respect to other disclosures required by subpart B of Regulation E, the 
provider would have to comply with the consumer consent and other 
applicable provisions of the E-Sign Act. Proposed comment 31(a)(2)-5 
would have reflected similar guidance with respect to disclosures made 
by fax. For the reasons set forth below, comment 31(a)(2)-5 is adopted 
as proposed.
    Industry commenters overwhelmingly supported this aspect of the 
April Proposal. Several commenters asserted that the Bureau should 
expand the interpretation of ``written disclosures'' to include any 
electronic disclosure if the provider has met its obligations to comply 
with the E-Sign Act. Consumer group commenters had mixed reactions: one 
consumer group commenter supported the proposal, but the other asserted 
that faxes should be subject to the requirements for electronic 
disclosures set forth in Sec.  1005.31(a)(2) because they are 
considered electronic records under the Uniform Electronic Transaction 
Act of 1999.\19\ The Bureau has considered the comments and believes it 
is appropriate to use the Bureau's interpretive authority under EFTA to 
treat disclosures provided pursuant to Sec.  1005.31 or Sec.  1005.36 
by fax as ``written disclosures'' for purposes of the Remittance Rule.
---------------------------------------------------------------------------

    \19\ Uniform Electronic Transactions Act of 1999 section 2, 
comment 6 (2000), available at http://www.uniformlaws.org/shared/
docs/electronic%20transactions/uetafinal99.pdf.
---------------------------------------------------------------------------

    As the Bureau explained in the April Proposal, it considers 
disclosures made by fax to be a ``writing'' under the Remittance Rule 
because such disclosures are generally received on paper in a form the 
sender can retain. Additionally, the Bureau does not believe that 
treating faxes as writings will have any significant negative impact on 
the benefits consumers derive from the Remittance Rule, both because 
many consumers have long communicated with remittance transfer 
providers via fax and those consumers accept faxes as a legitimate and 
efficient method of communication. The Bureau observes that the 
consumer group that opposed interpreting disclosures provided via fax 
as written disclosures did not contend that such an interpretation 
would have a significant negative impact on the benefits consumers 
derive from the Remittance Rule. Thus, the Bureau believes it 
appropriate to interpret faxes as ``a writing'' for purposes of 
providing disclosures pursuant to Sec.  1005.31 and Sec.  1005.36. The 
Bureau, however, does not believe that it is necessary to clarify that 
any electronic disclosure constitutes a ``writing'' if the provider 
complies with the E-Sign Act. As discussed above, the Remittance Rule 
permits a provider to provide electronic disclosures instead of written 
disclosures, when such electronic disclosures are provided pursuant to

[[Page 55980]]

Sec.  1005.31(a)(2) as clarified by comment 31(a)(2)-1.
31(a)(3) Disclosures for Oral Telephone Transactions
    Section 1005.31(e)(1) states that a remittance transfer provider 
must provide the pre-payment disclosure when the sender requests the 
remittance transfer, but prior to payment for the transfer. Section 
1005.31(a)(3) permits providers to make these pre-payment disclosures 
orally if the ``transaction is conducted orally and entirely by 
telephone'' and if certain other language and disclosure requirements 
are met. The Bureau recognized in the April Proposal that a provider 
may be uncertain as to how to comply with the timing requirements set 
forth in Sec.  1005.31(e)(1) where a sender is neither physically 
present nor in ``real time'' communication with a provider's staff. To 
provide further clarification, the Bureau proposed to revise comment 
31(a)(3)-2 to set forth that a remittance transfer provider may treat a 
written or electronic communication as an inquiry when it believes that 
treating the communication as a request would be impractical. In such 
circumstances, as long as the provider otherwise conducted the 
transaction orally and entirely by telephone, the provider could 
provide disclosures orally as permitted by Sec.  1005.31(a)(3). The 
Bureau also proposed two conforming edits to comments 31(a)(3)-1 and 
31(e)-1 to accommodate this change: the proposed revision to 31(a)(3)-1 
would have distinguished the scenario proposed in revised 31(a)(3)-2 
from a situation in which a sender requests a remittance transfer in 
person; the revision to 31(e)-1 would have clarified that a sender has 
not requested a remittance transfer for purposes of triggering the 
timing requirements set forth in Sec.  1005.31(e)(1) where the provider 
treats the request as an inquiry.
    All commenters who commented on this part of the Proposal generally 
supported the Bureau's proposed revisions, with the majority of 
commenters expressing support without reservation. Some commenters 
provided additional, specific feedback. For example, one consumer group 
stated that it supported the proposed revision only if the consumer who 
made the initial request in writing received a disclosure that his 
request was being treated as an inquiry. A number of trade associations 
sought additional illustrations of when it would be ``impractical'' for 
a provider to treat a communication as a request for a transfer. 
Finally, one community bank proposed that the Bureau allow providers to 
provide oral disclosures whenever a sender so requests.
    The Bureau is finalizing the revisions as proposed with one change 
to improve clarity (specifically, removing ``For example''). The Bureau 
declines to adopt the suggestion that providers be allowed to give oral 
disclosures whenever a sender opts for oral disclosures. As stated in 
its February 2012 Federal Register notice, the Bureau believes that 
Congress did not intend to permit remittance transfer providers to 
satisfy the disclosure requirements orally, except in limited 
scenarios, as set forth in the Remittance Rule and in this final rule.
    With respect to the comment that a remittance transfer provider 
should be required to inform the sender that the provider is treating 
the sender's communication as an inquiry, the Bureau does not believe 
this additional, independent disclosure requirement is necessary. By 
definition, the provider provides the pre-payment disclosure before the 
consumer has paid for the remittance transfer; at this point in the 
transaction, there is little risk of consumer harm. Further, the Bureau 
believes the sender is likely to know and understand the status of his 
or her transaction in the course of the sender's subsequent oral 
communication with the provider. Finally, with respect to the request 
for further clarity regarding when it would be impractical for a 
provider to treat a communication as a request, the Bureau believes 
that the proposed comment, which the Bureau is adopting with a non-
substantive change to improve its clarity, provides sufficient guidance 
in the form of a specific example.
31(b) Disclosure Requirements
31(b)(2) Receipt
    Section 1005.31(b)(2)(vi) requires a remittance transfer provider 
to disclose the contact information for the Bureau, including the 
Bureau's Web site URL and its toll-free telephone number. The 
Remittance Rule does not specify which Bureau Web site URL should be 
provided on receipts, but the Model Forms published by the Bureau list 
the Bureau's Internet homepage--www.consumerfinance.gov. See Model 
Forms A-31, A-32, A-34, A-35, A-39, and A-40 of appendix A. In the 
April Proposal, the Bureau explained that it was creating a single page 
that would contain resources relevant to remittance transfers at 
www.consumerfinance.gov/sending-money, as well as a Spanish language 
Web site that would have resources relevant to remittance transfers at 
www.consumerfinance.gov/enviar-dinero.\20\ Accordingly, the Bureau 
proposed to add comment 31(b)(2)-4 to explain that: (1) Providers could 
satisfy the requirement to disclose the Bureau's Web site by disclosing 
the Web address shown on Model Forms A-31, A-32, A-34, A-35, A-39, and 
A-40 of appendix A, (2) alternatively, providers could, but were not 
required to, disclose the Bureau's remittance-specific Web site, 
currently, www.consumerfinance.gov/sending-money, and (3) providers 
making disclosures in a language other than English could, but were not 
required to, disclose a Bureau Web site that would provide information 
for consumers in the relevant language, if such Web site exists.
---------------------------------------------------------------------------

    \20\ At the time of the April Proposal, the additional URLs had 
not ``gone live.'' Since the April Proposal, the Bureau published 
the additional URLs, as well as pages containing the same 
information in Vietnamese, Mandarin, Korean, Tagalog, Russian, 
Arabic, and Haitian Creole. The pages contain information regarding 
consumers' rights under the Remittance Rule, how consumers can use 
the receipts that they receive from providers, and how and when to 
lodge a complaint with the Bureau.
---------------------------------------------------------------------------

    Commenters generally expressed support for the proposed comment. 
Several commenters, however, sought additional confirmation that the 
proposed optional disclosures would remain optional. In addition, a 
consumer group sought confirmation that providers would only be 
permitted to provide a link to the Bureau's non-English Web site where 
the disclosure was provided in that same non-English language.
    As the Bureau stated in both the proposed comment text and the 
discussion of that text in the preamble of the April Proposal, the 
alternative disclosures included in comment 31(b)(2)-4 are optional, 
and do not require remittance transfer providers to change existing 
receipts. Thus, while it urges providers to provide consumers with the 
most relevant, updated information available from the Bureau, the 
Bureau confirms that, at this time, providers can continue to disclose 
the Web site previously listed on all Model Forms. Likewise, the April 
Proposal was clear that providers may only disclose the Bureau's non-
English Web site if they make disclosures in the ``relevant'' language 
used in the non-English Web site. The Bureau will publish a list of any 
URLs it maintains containing specific information about remittances in 
foreign languages on its Web site, currently, http://www.consumerfinance.gov/remittances-transfer-rule-amendment-to-regulation-e/.

[[Page 55981]]

    For the reasons above, the Bureau is adopting proposed new comment 
31(b)(2)-4 substantially as proposed, with minor revisions to include 
references to revised URLs and revised model forms that illustrated the 
alternative disclosures proposed by the comment. Specifically, the URLs 
for the English- and Spanish-language, remittance-specific Web sites 
are consumerfinance.gov/sending-moneyandconsumerfinance.gov/envois, 
respectively. The comment also clarifies that the Bureau will make 
available a list of other foreign-language URLs for Web sites that 
provide specific information about remittance transfers. In addition, 
to accommodate new comment 31(b)(2)-4, the Bureau is renumbering 
current comments 31(b)(2)-4, -5, and -6 as comments 31(b)(2)-5, -6, and 
-7, respectively, without any other changes. Finally, the Bureau is 
revising forms A-31 and A-40 of appendix A to illustrate the optional 
disclosures set forth in new comment 31(b)(2)-4. The other Model Forms 
remain unchanged.

Section 1005.32 Estimates

    As discussed above, EFTA section 919(a)(4)(A) establishes a 
temporary exception for insured institutions with respect to the 
statute's general requirement that remittance transfer providers must 
disclose exact amounts to senders. EFTA 919(a)(4)(B) provides that the 
exception shall terminate five years after the enactment of the Dodd-
Frank Act (i.e., July 21, 2015), unless the Bureau issues a rule to 
extend the temporary exception up to five more years (i.e., July 21, 
2020). Specifically, the statute permits the Bureau to extend the 
temporary exception to July 21, 2020, if the Bureau determines that the 
termination of the temporary exception on July 21, 2015, would 
negatively affect the ability of insured institutions to send 
remittance transfers. EFTA section 919(a)(4)(B). The Bureau implemented 
the temporary exception by adopting Sec.  1005.32(a) in the Remittance 
Rule.
    Section 1005.32(a)(1) provides that a remittance transfer provider 
may give estimates for disclosures related to: (1) The exchange rate 
used by the provider; (2) the total amount that will be transferred to 
the designated recipient inclusive of covered third-party fees, if any; 
(3) any covered third-party fees and (4) the amount that will be 
received by the designated recipient (after deducting covered third-
party fees), if the provider meets three conditions. The three 
conditions are: (1) The provider must be an insured institution; (2) 
the provider must not be able to determine the exact amounts for 
reasons beyond its control; and (3) the transfer must be sent from the 
sender's account with the provider. Section 1005.32(a)(2) provides that 
the temporary exception expires on July 21, 2015. Section 1005.32(a)(3) 
provides that insured depository institutions, insured credit unions, 
and uninsured U.S. branches and agencies of foreign depository 
institutions are considered ``insured institutions'' for purposes of 
the temporary exception.\21\
---------------------------------------------------------------------------

    \21\ The Bureau understands that broker-dealers may also rely on 
the temporary exception because a SEC no-action letter concluded 
that the SEC staff would not recommend enforcement action to the SEC 
under Regulation E if a broker-dealer provides disclosures as if the 
broker-dealer were an insured institution for purposes of the 
temporary exception. The letter is available at http://www.sec.gov/divisions/marketreg/mr-noaction/2012/financial-information-forum-121412-rege.pdf.
---------------------------------------------------------------------------

    As discussed above, the Bureau proposed to amend Sec.  
1005.32(a)(2) to extend the expiration date of the temporary exception 
from July 21, 2015, to July 21, 2020, after it had reached a 
preliminary determination that the expiration of the temporary 
exception on July 21, 2015, would negatively impact the ability of 
insured institutions to send remittance transfers. The determination 
was based on the Bureau's own understanding of the remittance transfer 
market, information the Bureau gathered through approximately 35 
interviews with remittance transfer providers, service providers, and 
consumer groups regarding the temporary exception, outreach to industry 
and consumers groups on the Remittance Rule generally, and a review of 
comment letters to prior remittance rulemakings and related materials. 
In the April Proposal, the Bureau sought comments on its preliminary 
determination that the expiration of the temporary exception on July 
21, 2015, would have a negative impact on the ability of insured 
institutions to send remittance transfers. The Bureau also sought 
comments on whether it should extend the exception for a period less 
than the full five years permitted by statute or place other limits on 
the use of the temporary exception.
    The Bureau additionally solicited comments on the current consumer 
impact of the temporary exception, as well as the potential consumer 
impact of either the expiration or the extension of the exception. For 
the reasons stated below, the Bureau has reached a final determination 
that the expiration of the temporary exception on July 21, 2015, would 
negatively affect the ability of insured institutions to send 
remittance transfers, and is therefore adopting the change to Sec.  
1005.32(a)(2) as proposed.
    Industry commenters overwhelmingly supported the proposed extension 
of the temporary exception from July 21, 2015, to July 21, 2020. They 
generally agreed with the Bureau's description of the remittance 
transfer market and preliminary determination that the expiration of 
the temporary exception would have a negative impact on the ability of 
insured institutions to send remittance transfers, emphasizing that the 
expiration of the temporary exception on July 21, 2015, would cause 
some insured institutions to either exit the market or significantly 
reduce the number of destinations to which they send remittances.
    Furthermore, comments from industry commenters were generally 
consistent with the Bureau's understanding of how insured institutions 
are complying with the Remittance Rule's requirements regarding 
disclosures of the applicable exchange rate and covered third party 
fees, including the compliance practices of small institutions. Some 
commenters, ranging from credit unions to a large bank, stated that 
they rely on larger service providers to help disclose covered third-
party fees and exchange rates. Industry commenters also were largely in 
accord with the Bureau's understanding of the drawbacks to wire 
transfer alternatives such as international ACH and closed-network 
remittance transfer products that resemble products offered by money 
transmitters. Several trade association commenters asserted that even 
with the expansion of international ACH products and the development of 
new closed network systems, such expansion will provide a solution only 
for remittance transfers to a limited set of destination countries and 
that providers would have difficulty sending remittance transfers to 
some destinations without reliance on the temporary exception. This is 
consistent with the Bureau's understanding of current market conditions 
based on its interviews with many providers and service providers in 
the course of developing the April Proposal.
    A number of bank and credit union commenters stated that they rely 
on the temporary exception, and trade association commenters stated 
that many of their members rely on the temporary exception for at least 
some portion of the remittance transfers sent by their customers and 
members. Several trade association commenters asserted that the ability 
of insured institutions to rely on the temporary exception is critical 
for certain remittance transfers and emphasized that there are real 
limitations that exist in open network payment systems that

[[Page 55982]]

currently prevent insured institutions from being able to disclose 
actual amounts in all cases. A number of community bank and credit 
union commenters, as well as the trade associations that represent 
them, stated that the expiration of the temporary exception could cause 
many community banks to either exit the remittance transfer market or 
significantly cut back the scope of their services.
    Some industry commenters, including a correspondent bank and 
several trade associations, expressed concern that, even if the Bureau 
extended the temporary exception by five years, insured institutions 
would not be able to develop a comprehensive solution that would allow 
them to disclose exact covered third-party fees and exchange rates for 
every corridor they currently serve by July 2020. Several industry 
commenters also asserted that the Bureau should work with Congress to 
change the temporary exception into a permanent one, and one commenter 
suggested that the Bureau should make the temporary exception permanent 
without waiting for Congress to act.
    As discussed above, the Bureau sought comments on the current 
consumer impact of the temporary exception, as well as the potential 
impact of either the expiration or the extension of the exception. One 
State credit union trade association stated that its member credit 
unions indicated that they have not received any complaints from 
members who received disclosures containing estimated disclosures. A 
number of community bank and credit union commenters, as well as the 
trade associations that represent them, stated that the expiration of 
the temporary exception could cause many community banks to either exit 
the remittance transfer market or significantly cut back the scope of 
their services. They asserted that such a reduction would negatively 
impact consumers, because it would reduce the availability of 
remittance transfer services. They also expressed the concern that such 
a reduction could limit competition and drive up prices.
    The two consumer group commenters opposed this part of the April 
Proposal. One of the consumer group commenters asserted that, rather 
than extend the exception for the maximum of five years permitted by 
the Dodd-Frank Act, the Bureau should limit the extension of the 
temporary exception. Specifically, this commenter suggested that the 
Bureau should: (1) Only extend the temporary exception for up to two 
years and reassess a further extension then; (2) limit the use of the 
exception to remittance transfers for which disclosing exact amounts is 
particularly difficult or impossible; or (3) reissue the proposal for 
additional comment and provide more specific information on the current 
state of compliance. The other consumer group commenter asserted that 
if the Bureau were to extend the temporary exception, then it should 
also require insured institutions that rely on the temporary exception 
to disclose to customers that money transmitters would be able to 
provide consumers with exact disclosures.
    The Bureau has considered the comments and, for the reasons 
discussed below, is finalizing as proposed the extension of the 
temporary exception to July 21, 2020, because the Bureau has made the 
determination that the expiration of the temporary exception would 
negatively affect the ability of insured institutions to send 
remittance transfers. Comments from industry commenters generally 
confirmed the Bureau's original understanding of the remittance 
transfer market and preliminary determination that the expiration of 
the temporary exception would have a negative impact on the ability of 
insured institutions to send remittance transfers.\22\ In particular, 
the Bureau understands that insured institutions typically send 
remittances in the form of wire transfers over open networks. With 
respect to a wire transfer, the insured institution that acts as the 
remittance transfer provider typically does not have control over, or a 
relationship with, all of the participants involved in a remittance 
transfer, to facilitate the provider's ability to control or obtain 
information about the applicable exchange rate and covered third-party 
fees with exactitude. Additionally, the communication systems used to 
send wire transfers typically do not facilitate two-way, real-time 
transmission of such information. While the Bureau understands that 
industry is working to restructure relationships and communication 
systems to provide more precise pricing information, this process is 
not yet complete.
---------------------------------------------------------------------------

    \22\ The Bureau provided a detailed discussion of the reasons 
that lead to it making the preliminary determination that the 
termination of the temporary exception on July 21, 2015, would have 
a negative impact on the ability of insured institutions to send 
remittance transfers. See generally 79 FR 23234 (April 25, 2014).
---------------------------------------------------------------------------

    While some insured institutions provide exact disclosures of the 
exchange rate and covered third-party fees for all of their remittance 
transfers, the Bureau understands that many rely on the temporary 
exception when disclosing the exchange rate and/or covered third-party 
fees for at least some portion of transfers initiated by their own 
consumer customers and as applicable, transfers they send on behalf of 
other providers. The Bureau also understands that many insured 
institutions, in particular small institutions, rely almost entirely on 
larger, intermediary service providers to act as information 
aggregators to provide them with the applicable exchange rate to 
disclose and/or covered third-party fee information.\23\
---------------------------------------------------------------------------

    \23\ In the April Proposal, the Bureau stated that a particular 
institution may use one information aggregator to provide it with 
the covered third-party fee information, and another to provide it 
with the exchange rate information. 79 FR 23245 (Apr. 25, 2014). The 
Bureau also stated that it found that an insured institution that 
uses an information aggregator must generally also use that 
aggregator to help process the remittance transfer. Id.
---------------------------------------------------------------------------

    With respect to the disclosure of the exchange rate, insured 
institutions have reported to the Bureau that they have found that one 
way to provide an exact exchange rate is to convert the funds to the 
applicable foreign currency based on a fixed exchange rate that the 
provider either obtains directly or from an information aggregator. 
However, the Bureau has learned that insured institutions cannot 
provide a fixed exchange rate for a number of currencies and rely on 
the temporary exception (or the Bureau's permanent exception for 
transfers to certain countries, Sec.  1005.32(b)(2)) when disclosing 
the applicable exchange rate in such situations. The Bureau understands 
that these currencies are either (1) so thinly traded that insured 
institutions or their service providers find that purchasing such 
currencies and obtaining a fixed exchange rate for consumer wire 
transfers is impossible, impracticable, or economically undesirable, or 
(2) impracticable to purchase for other reasons (e.g., foreign laws may 
bar the purchase of that currency in the United States). Further, even 
if obtaining and disclosing a fixed exchange rate were possible, the 
Bureau further understands that typically, the volume of remittance 
transfers involving such currencies is often low and providers believe 
that it is impracticable to expend significant resources to provide a 
fixed rate for these low-volume transactions.
    With respect to covered third-party fees, the Bureau understands 
that information aggregators, described above, could directly generate 
the information from foreign banks in their correspondent banking 
networks or with whom they have other contractual relationships. 
Additionally, the Bureau understands that for a number of foreign 
destinations, these entities try to control

[[Page 55983]]

the amount of covered third-party fees, or eliminate such fees 
altogether, by sending remittance transfers through nostro accounts 
they have established with various foreign banks,\24\ using certain 
methods to send wire transfers that put participants processing the 
wire transfer on notice not to deduct a fee from the transfer amount, 
or through a combination of both.
---------------------------------------------------------------------------

    \24\ Nostro accounts are accounts established by U.S. 
institutions with foreign banks, and funds in the accounts are funds 
in the account are typically denominated in the currency of that 
country. See 79 FR at 23245 (Apr. 25, 2014).
---------------------------------------------------------------------------

    The information aggregators have reported to the Bureau that as a 
result of proactively obtaining covered third-party fee information 
from foreign banks and using methods that control or eliminate such 
fees, they and, as applicable, their remittance transfer provider 
clients are typically disclosing exact covered third-party fees where 
they believe they are able to do so, even though they might have 
additional flexibility pursuant to the temporary exception to provide 
estimates instead. But at the same time, information aggregators have 
reported that the methods that allow insured institutions to control or 
eliminate covered third-party fees are not reliable in controlling or 
eliminating such fees for all of the destinations to which they send 
wire transfers. Additionally, with respect to obtaining covered third-
party fees directly from foreign banks, a number of information 
aggregators have indicated that fee information gathered in this manner 
could be incomplete because it is not available for all institutions 
involved in all of the remittance transfers they send. Accordingly, a 
number of insured institutions have to rely on the temporary exception 
when sending at least some of their wire transfers.
    The Bureau also sought information from insured institutions about 
their use of potential alternative methods of sending remittance 
transfers. In particular, the Bureau sought to understand whether 
insured institutions could control or eliminate covered third-party 
fees if they sent remittance transfers using international ACH instead 
of open network wire transfer systems. The Bureau understands that the 
Federal Reserve's international ACH product--FedGlobal ACH--generally 
restricts the deduction of fees from transfer amounts sent through the 
FedGlobal system, but is nonetheless used only for a small portion of 
insured institutions' remittance transfers. The Bureau has found that 
although a number of insured institutions use international ACH for 
commercial international money transfers, many did not see 
international ACH developing into an alternative to wire transfers in 
the near term. A number of insured institutions have reported that 
international ACH reaches far fewer destinations than wire transfers. 
They also expressed concern that developing an international ACH 
service for remittance transfers would involve costs and changes in 
operation systems that outweigh the potential long-term cost savings as 
well as any additional value of facilitating compliance with the 
Remittance Rule.
    The Bureau also sought information from insured institutions about 
developing closed network remittance transfer products that resemble 
products offered by money transmitters that could allow them to control 
or eliminate covered third-party fees. The Bureau also understands that 
a small number of the largest institutions have already developed such 
products. However, most of the insured institutions that the Bureau 
interviewed did not set up closed network alternatives to wire 
transfers and indicated that they did not have plans to develop them. 
As discussed above, several trade association commenters believed that 
the expansion of international ACH products and the development of new 
closed network systems will not provide a comprehensive solution.
    For the above reasons and those stated more fully in the April 
Proposal, the Bureau also believes that it is unlikely that there would 
be near-term solutions that would address the challenges in open-
network payment systems that prevent insured institutions from being 
able to disclose exact amounts for all of the foreign destinations to 
which they send remittance transfers. Accordingly, the Bureau believes 
that it is appropriate to extend the length of the temporary exception 
for the full five years permitted by statute, rather than a shorter 
length of time (or not at all). The Bureau continues to believe that 
insured institutions will not be able to make the significant progress 
necessary for all institutions and corridors to warrant terminating the 
exception before July 2020, and does not believe that reassessing the 
situation after seeking additional public comment now or in two years 
would cause it to reach a different conclusion. At the same time, 
however, the Bureau believes that making the exception permanent in 
this rulemaking would be beyond its scope, which, pursuant to EFTA 
section 919(a)(4)(B), focused (on this issue) on whether the Bureau 
should extend the temporary exception by five additional years. 
Nevertheless, the Bureau will continue to monitor market and 
technological developments in open network payment systems. The Bureau 
expects insured institutions to continue to work towards providing 
actual disclosures for all remittance transfers by July 2020. The 
Bureau also notes that through its supervision of insured institutions 
it will continue to monitor the use of the exception, whether it is 
being abused, and whether and how providers are working towards finding 
a permanent solution for all remittance transfers.
    The Bureau also believes that it is appropriate to extend the 
temporary exception without modifications or additional requirements. 
As noted above, the Bureau continues to believe that insured 
institutions are unable to make the significant progress necessary for 
the Bureau to cause the temporary exception to terminate before July 
2020. Furthermore, the Bureau is not aware of evidence that insured 
institutions are improperly using the temporary exception or that 
consumers are being harmed by its use in particular or, more generally, 
by the receipt of disclosures containing estimates. The Bureau 
understands that although use of the temporary exception varies, the 
exception appears to be used for the minority of eligible transfers 
from insured institutions. The FFIEC Call Report asked banks to 
estimate the number of remittance transfers sent between October 28 and 
December 31, 2013, to which they applied the temporary exception. The 
FFIEC Call Report data suggest that the temporary exception is only 
used in approximately 10 percent of transfers sent by banks that are 
considered remittance transfer providers under the rule. Additionally, 
no data was submitted to the Bureau in response to the request in the 
April Proposal, and the Bureau is aware of no data, that contradicts 
its view that use of the temporary exception is limited to cases where 
providers (and their service providers) deem its use to be necessary.
    Lastly, the Bureau believes that it would be inappropriate to 
require insured institutions that disclose estimates pursuant to the 
temporary exception to inform their customers that money transmitters 
may provide consumers with exact disclosures. The Bureau notes that 
Congress expressly permitted any remittance transfer provider to 
disclose estimates in lieu of exact amounts in certain cases without 
any additional disclosure. See Sec.  1005.32(b)(1) (permanent exception 
for transfers to certain countries) and (b)(2) (advance transfers) 
without any additional disclosure. Insofar as money transmitters rely 
on these exceptions set

[[Page 55984]]

forth in the Remittance rule, it cannot be said that they are 
disclosing exact amounts in those cases.

Section 1005.33 Procedures for Resolving Errors

1005.33(a) Definition of Error
1005.33(a)(1) Types of Transfers or Inquiries Covered
    Section 1005.33(a)(1)(iv)(B) provides that a delay is not an 
``error'' if it is 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. Section 1005.33(a)(1)(iv)(B). In the 
April Proposal, the Bureau explained that it did not intend for this 
provision to apply to delays related to routine fraud screening 
procedures; accordingly, the Bureau proposed to revise Sec.  
1005.33(a)(1)(iv)(B) to apply only to delays related to individualized 
investigation or other special action. To provide additional guidance, 
the Bureau proposed a new comment 33(a)-7, which would have explained 
that a delay is not an error where it is caused by an investigation or 
other special action necessary to address potentially suspicious, 
blocked, or prohibited activity.
    The proposed comment included two examples of the types of delays 
that would not constitute an error under proposed Sec.  
1005.33(a)(1)(iv)(B), namely, a delay that occurs after a screening 
process flags a designated recipient's name as a potentially blocked 
individual, and a delay that occurs because the transfer is flagged as 
being similar to previous fraudulent activity. The proposed comment 
contrasted these two examples with delays caused by ``ordinary fraud or 
other screening procedures, where no potentially fraudulent, 
suspicious, blocked or prohibited activity is identified,'' which would 
not have qualified for the exception.
    The Bureau sought comment on whether the proposed change to the 
regulatory text and related examples and description in the commentary 
accurately reflected industry practice and/or provided sufficient 
guidance on the types of permissible delays. The single consumer group 
that commented on this issue expressed its support for the proposed 
changes. Some industry commenters, including a large bank and a 
community bank, generally expressed support for the Bureau's effort to 
provide further clarity on the types of delays that qualify for the 
error exception, opining that the revisions suggested would cover the 
majority of relevant, screening-related delays.
    The majority of commenters who addressed the issue, however, 
opposed the Bureau's proposed changes, for a variety of different 
reasons. Commenters, including State and national trade associations, 
credit unions, small and large banks, and a bank holding company, 
generally expressed concern that the revised language would discourage 
important fraud, terrorism, and anti-money laundering screenings by 
exposing providers that regularly conduct such screenings to liability 
under Regulation E. Other commenters, including a large money 
transmitter and a number of State credit union trade associations, 
argued that there is a false dichotomy between procedures that are 
``necessary'' or ``special'' and those that are ``ordinary.'' They 
noted that enhanced screening procedures are a standard, routine part 
of most remittance transfer providers' ``ordinary'' business, and that 
whether or not such procedures are ``necessary'' cannot always be 
determined at the outset of an investigation.
    A similar concern was expressed by a large money transmitter 
commenter. Among other concerns, it argued that the two examples 
proposed by the Bureau in proposed comment 33(a)-7 were too narrow, and 
the commenter opposed the use of the term ``individualized'' to 
characterize the types of procedures that would qualify for the 
exception under revised Sec.  1005.33(a)(1)(iv)(B). According to this 
commenter's description of its standard fraud screening procedures, the 
Bureau's choice of examples and terminology did not adequately capture 
screening procedures that apply to certain categories of transfers--
known as ``block screenings''--rather than only to a particular 
transfer. For example, the commenter explained that remittance transfer 
providers sometimes receive real-time information from law enforcement 
that transfers going to a certain geographic area (e.g., a particular 
country or part of a country) could have a high percentage likelihood 
of being related to a criminal operation. When the provider receives 
such information, it may temporarily delay all transfers that fit the 
characteristics identified by law enforcement. According to the 
commenter, under the proposed language, it would be unclear whether 
when such ``block screenings'' resulted in a delay, the commenter could 
would be able to rely on the Sec.  1005.33(a)(1)(iv)(B) exception.
    The Bureau is mindful that commenters are wary of any requirement 
that they view as creating potential liability for what they deem to be 
standard operational procedures. The Bureau believes, however, that the 
commenters have largely based their concerns on an inaccurate and 
overly narrow interpretation of the proposed revisions. The Bureau's 
proposal was related to disclosure; it did not dictate to remittance 
transfer providers the type of screening procedures they could adopt. 
The proposal would simply have required that, where a provider 
ordinarily applies a certain type of procedure in connection with a 
certain type of transfer, the provider account for any additional 
length of time associated with that screening into its disclosure of 
the estimated date of availability. This requirement would have applied 
whether the additional time was 30 minutes or five days--in other 
words, if the provider knew that a procedure would apply to a 
particular remittance transfer and would delay that remittance transfer 
for a period of time (whether it be 30 minutes or five days), the 
provider would have been required to adjust the disclosed date of 
availability accordingly.
    Nonetheless, the Bureau understands that its attempt in proposed 
comment 33(a)-7 to draw a distinction between ``ordinary'' and 
``necessary'' investigations could be construed as not accurately or 
completely capturing the types of procedures that the Bureau believes 
could qualify as an exception under Sec.  1005.33(a)(1)(iv)(B). 
Accordingly, the Bureau is finalizing comment 33(a)-7 with a 
modification to clarify whether the remittance transfer provider could 
have reasonably foreseen the delay at the time the provider provided 
the date of availability disclosure. Specifically, comment 33(a)-7 now 
explains that a delay does not constitute an error, if such delay is 
related to the provider's or any third party's investigation necessary 
to address potentially suspicious, blocked or prohibited activity, and 
the provider did not, and could not have reasonably foreseen the delay 
so as to enable it to timely disclose an accurate date of availability 
when providing the sender with a receipt or combined disclosure. In 
addition, the Bureau is adding two additional examples to comment 
33(a)-7 to illustrate the application of the revised language. The 
first example clarifies that there is no error where a provider delays 
a remittance transfer in order to investigate specific law enforcement 
information indicating that a remittance transfer may match a pattern 
of fraudulent activity if it was not reasonable to disclose that delay

[[Page 55985]]

when the provider disclosed the date of availability. The second 
example states that, if a provider knows in time to make a timely 
disclosure that all remittance transfers to a certain area undergo a 
two-day long screening procedure, the provider must include an 
additional two days in its disclosure of the date of availability.
    The Bureau notes that these examples do not represent the only 
situations that could satisfy this exception. The unique nature of the 
screenings at issue and the variety of business practices and technical 
capabilities among remittance transfer providers do not allow the 
Bureau to address every possible scenario. Furthermore, the Bureau 
emphasizes that nothing in the changes adopted herein should be 
construed as limiting a provider's ability to perform necessary 
screenings. Instead, the Bureau intends the revision to clarify that 
providers cannot avoid liability for an error in situations where they 
could have reasonably foreseen the delay so as to enable them to timely 
disclose an accurate date of availability but failed to disclose that 
date to the sender. Whether a provider could have reasonably foreseen a 
delay in time to make changes to its disclosure depends on the facts 
and circumstances surrounding the transfer. The Bureau believes that 
its approach in the final rule, as opposed to the April Proposal, 
responds to commenters' concerns that the proposed language was perhaps 
too narrow and did not allow for flexibility arising out of the varied 
nature of fraud and other screenings.
    Finally, as proposed, the Bureau is renumbering existing comments 
33(a)-7 through -10 as comments 33(a)-8 through -11, respectively, to 
reflect the insertion of new comment 33(a)-7.
1005.33(c) Time Limits and Extent of Investigation
    Section 1005.33(c)(2) implements EFTA section 919(d)(1)(B) and 
establishes procedures and remedies for correcting an error under the 
Remittance Rule. In particular, where there has been an error under 
Sec.  1005.33(a)(1)(iv) for failure to make funds available to a 
designated recipient by the disclosed date of availability, Sec.  
1005.33(c)(2)(ii) generally permits a sender to choose either: (1) To 
obtain a refund of the amount the sender paid to the remittance 
transfer provider in connection with the remittance transfer that was 
not properly transmitted, or an amount appropriate to resolve the 
error, or (2) to have the provider resend to the designated recipient 
the amount appropriate to resolve the error, at no additional cost to 
the sender or designated recipient. However, if the error resulted from 
the sender providing incorrect or insufficient information, Sec.  
1005.33(c)(2)(iii) requires a provider to refund or, at the consumer's 
request, reapply to a new transfer, the total amount that the sender 
paid to the provider, but it permits the provider to deduct from this 
amount fees actually imposed and, where not otherwise prohibited by 
law, taxes actually collected as part of the first unsuccessful 
remittance transfer attempt. Comment 33(c)-12 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 Sec.  
1005.33(c)(2)(iii). As explained in comment 33(c)-12, Sec.  
1005.33(c)(2)(iii) does not permit a provider to deduct its own fees 
from the amount refunded or applied to a new transfer. The Bureau 
proposed to amend Sec.  1005.33(c)(2)(iii) by incorporating this 
guidance in current comment 33(c)-12 in the text of proposed Sec.  
1005.33(c)(2)(iii).
    Proposed Sec.  1005.33(c)(2)(iii) would have stated that in the 
case of an error under Sec.  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 
provide the remedies required by Sec.  1005.33(c)(2)(ii)(A)(1) and (B) 
within three business days of providing the report required by Sec.  
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. Proposed Sec.  1005.33(c)(2)(iii) also would have 
provided that 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 except that the provider shall not deduct its own fee.
    In connection with the proposed change to Sec.  1005.33(c)(2)(iii), 
the Bureau also proposed to modify comment 33(c)-5 by adding an example 
to further explain how a remittance transfer provider should determine 
the appropriate amount to resolve any error under Sec.  
1005.33(a)(1)(iv). Proposed comment 33(c)-5 would have explained that 
if the designated recipient received the amount that was disclosed 
pursuant to Sec.  1005.31(b)(1)(vii) before the provider must determine 
the appropriate remedy, the amount appropriate to resolve the error 
would be limited to the refund of the appropriate fees and taxes that 
the sender paid, as determined by Sec.  1005.33(c)(2)(ii)(B) or 
(c)(2)(iii) as applicable.
    One consumer group commented on this aspect of the Proposal and 
supported the proposed clarifications. Industry commenters had mixed 
reactions. Several bank commenters and trade associations supported, or 
did not object to, the specific clarifications that the Bureau had 
proposed. However, a number of industry commenters asserted the general 
concern that it was not fair to prohibit remittance transfer providers 
from deducting their own fees from the amount refunded to a sender or 
applied to a new transfer in the case of an error under Sec.  
1005.33(a)(1)(iv), due to the sender providing incorrect or 
insufficient information.
    Current Sec.  1005.33(c)(2)(iii), as clarified by current comment 
33(c)-12, already prohibits remittance transfer providers from 
deducting their own fees in the situation described above. Proposed 
Sec.  1005.33(c)(2)(iii) would have stated more explicitly what is 
already required under current Sec.  1005.33(c)(2)(iii), and, 
relatedly, proposed comment 33(c)-5 would have illustrated the existing 
requirement regarding the appropriate refund amount required to resolve 
an error pursuant to Sec.  1005.33(a)(1)(iv) with an example. Further, 
this refund requirement has been part of the Remittance Rule since it 
was initially adopted in February 2012 and has been was in place since 
the rule took effect in October 2013.\25\ The Bureau did not intend for 
the April Proposal to reopen the issue of what the appropriate remedy 
would be in the case of an error under Sec.  1005.33(a)(1)(iv) that 
occurred because a sender did not provide correct or sufficient 
information in connection with a remittance transfer. The Bureau simply 
intended for the April Proposal clarify Sec.  1005.33(c)(2)(iii) as 
previously adopted. The Bureau considers comments from industry 
commenters regarding whether it is appropriate for them to have to 
deduct their own fees from the amount refunded to a sender or applied 
to a new transfer in the case of an error under Sec.  
1005.33(a)(1)(iv), due to the sender providing incorrect or 
insufficient information in connection with the transfer, to be outside 
the scope of this rulemaking.
---------------------------------------------------------------------------

    \25\ See 77 FR 6257 (Feb. 7, 2012); 78 FR 6025 (Jan. 29, 2013).
---------------------------------------------------------------------------

    Finally, consistent with the Bureau's intent to clarify the 
requirement with respect to the appropriate remedy under

[[Page 55986]]

Sec.  1005.33(c)(2)(iii), the Bureau is adopting a technical correction 
to comment 33(c)-12.i to describe the total amount that a sender has 
paid the provider, the total amount of the refund that such sender will 
receive, and the portion of the total refund that is attributable to 
the provider's refund of its own fee in greater detail. The Bureau 
believes that revised comment 33(c)-12.i provides greater clarity with 
respect to how the total refund amount is calculated but the changes 
adopted do not alter the calculations. The Bureau believes that it is 
appropriate to adopt this technical correction without notice and 
comment because the correction is consistent with the Bureau's intent 
to clarify the requirement with respect to the appropriate remedy under 
Sec.  1005.33(c)(2)(iii).\26\
---------------------------------------------------------------------------

    \26\ One large bank commenter suggested that the Bureau clarify 
current comment 33(c)(12)-i by revising it to add the remittance 
transfer provider's fee to the total refund amount. The Bureau 
believes that the technical correction to comment 33(c)-12.i 
addresses the commenter's concern.
---------------------------------------------------------------------------

    For the above reasons, the Bureau is adopting Sec.  
1005.33(c)(2)(iii) and comment 33(c)-5 as proposed, with the addition 
of the technical correction to comment 33(c)-12.i.

VI. Effective Date

    The Bureau proposed to have all of the changes included in the 
April Proposal take effect thirty days after publication of this final 
rule in the Federal Register. The Bureau had based the proposed 
implementation period on its belief that remittance transfer providers 
would only be required to make minimal changes to their practices to 
align them with the changes included in the Proposal. The Bureau sought 
comment on the proposed effective date, including on whether a later 
effective date would be more appropriate. Several industry commenters, 
including several trade associations representing credit unions and a 
money transmitter, asked the Bureau to adopt a longer implementation 
period, arguing that the changes proposed would require changes to 
compliance, training, and disclosure procedures. The majority of these 
commenters asked for a 90-day implementation period, while the money 
transmitter commenter asked for a 12-month implementation period. The 
Bureau agrees to provide a longer implementation period for this final 
rule in order to allow industry sufficient time to make the changes to 
systems and procedures that providers and their service providers deem 
necessary. Insofar as the clarifications adopted herein are largely 
optional or meant to clarify existing practices or requirements of the 
Remittance Rule, the Bureau does not believe that their implementation 
should result in significant operational changes for providers that 
would require a 12-month implementation period. Accordingly, the final 
rule will take effect 60 days from the date of publication in the 
Federal Register.

VII. Section 1022(b)(2) Analysis

A. Overview

    In developing this final rule, the Bureau has considered potential 
benefits, costs, and impacts \27\ and has consulted or offered to 
consult with the prudential regulators and the Federal Trade 
Commission, including regarding the consistency of this final rule with 
prudential, market, or systemic objectives administered by such 
agencies.\28\
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    \27\ Section 1022(b)(2)(A) of the Dodd-Frank Act directs the 
Bureau, when prescribing a rule under the Federal consumer financial 
laws, 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.
    \28\ The Bureau also solicited feedback from other agencies with 
supervisory and enforcement authority regarding Regulation E and the 
Remittance Rule.
---------------------------------------------------------------------------

    The analysis below considers the benefits, costs, and impacts of 
the key provisions of this final rule against the baseline provided by 
the current Remittance Rule. This final rule makes the following 
changes to the Remittance Rule. First, this final rule extends the 
temporary exception in the Remittance Rule that permits insured 
depository institutions and insured credit unions to estimate the 
exchange rate and covered third-party fees under specified 
circumstances, from July 21, 2015, to July 21, 2020.
    Second, this final rule makes several clarifying amendments and 
technical corrections to the current Remittance Rule concerning: The 
application of the Rule to transfers to and from locations on U.S. 
military installations abroad; the treatment of transfers from consumer 
and non-consumer accounts; the treatment of faxes; the treatment by a 
remittance transfer provider of a communication regarding a potential 
remittance transfer as an inquiry; the Web site addresses to be 
disclosed on consumer receipts; and error resolution provisions related 
to delays and remedies. With respect to these provisions, the analysis 
considers the benefits and costs to senders (consumers) and remittance 
transfer providers (covered persons). The Bureau has discretion in 
future rulemakings to choose the most appropriate baseline for that 
particular rulemaking.
    The Bureau notes at the outset that the analysis below generally 
provides a qualitative discussion of the benefits, costs, and impacts 
of the final rule. The Bureau believes that quantification of the 
potential benefits, costs, and impacts of the provisions is not 
possible. There are limited data on consumer behavior, which would be 
essential for quantifying the benefits or costs to consumers. The 
Bureau also lacks information about the accuracy of estimates for 
exchange rates and covered third-party fees that could help inform the 
Bureau of the potential cost to consumers of extending the temporary 
exception to July 21, 2020, in terms of the benefit foregone of 
receiving actual (as opposed to estimated) information. Further, there 
are still limited data about the remittance transfer market such that 
the Bureau cannot presently quantify the potential benefits, costs, and 
impacts of the provisions on remittance transfer providers. 
Nonetheless, the Bureau has reviewed the available data about the 
remittance transfer market, which now includes responses in the NCUA 
and FFIEC Call Report filings. As noted above, the Bureau believes that 
the additional data have enhanced the Bureau's understanding of the 
remittance transfer offerings of credit unions and depositary 
institutions, including with respect to the number of transfer sent and 
the methods used to send those transfers. As is discussed above, and 
consistent with the Bureau's prior estimates, the data suggest that 
credit unions may have sent less than one percent, and depositary 
institutions less than 10 percent, of the estimated total of 150 
million international remittance transfers sent by money transmitters 
in 2013.

B. Potential Benefits and Costs to Consumers and Covered Persons

1. Extension of the Temporary Exception to July 21, 2020
    This final rule amends the current Remittance Rule by providing 
that remittance transfer providers may estimate exchange rates and 
covered third-party fees until July 21, 2020 (rather than July 21, 
2015, as in the current Remittance Rule), if (1) the provider is an 
insured depository institution or credit union; (2) the remittance 
transfer is sent from the sender's account with the provider; and (3) 
the provider cannot determine the exact amounts for reasons outside of 
its

[[Page 55987]]

control.\29\ The analysis below considers the benefits, costs, and 
impacts of extending the exception against a baseline of allowing the 
exception to expire on July 21, 2015.
---------------------------------------------------------------------------

    \29\ As noted above in the Section-by-Section Analysis, the 
temporary exception does not apply to broker-dealers. However, SEC 
staff issued a no-action letter in December 2012 stating that it 
will not recommend an enforcement action under Regulation E against 
broker-dealers that provide disclosures consistent with the 
requirements of the temporary exception. See http://www.sec.gov/divisions/marketreg/mr-noaction/2012/financial-information-forum-121412-rege.pdf.
---------------------------------------------------------------------------

a. Benefits and Costs to Consumers
    As the Bureau stated in its impact analysis in the April Proposal, 
relative to accurate disclosures, estimated disclosures strike a 
different balance between accuracy and access, potentially offering 
less accuracy but also potentially preserving greater access. 77 FR at 
6274. The Bureau believes that extending the temporary exception may 
benefit those consumers who use insured institutions' remittance 
services because some of those services may otherwise be discontinued 
if the exception were to sunset on July 21, 2015. Specifically, the 
extension may benefit these consumers by preserving their current 
method of sending remittance transfers, particularly if alternatives 
are more expensive or less convenient, to the extent that such 
alternatives exist at all.
    Extending the temporary exception may also provide benefits to 
consumers in the form of avoiding increased prices. This benefit 
depends on the extent to which providing exact information (as opposed 
to estimates) would require insured institutions or their service 
providers to take costly steps to provide that information, and the 
extent to which those institutions would then pass those costs to the 
consumers.
    As stated above, the Bureau understands that disclosures containing 
estimates may be less accurate than those that disclose exact amounts. 
Disclosures that accurately reflect actual covered third-party fees and 
exchange rates may make it easier for a consumer to know whether a 
designated recipient is going to receive an intended sum of money, or 
the amount in U.S. dollars that the consumer must send to deliver a 
specific amount of foreign currency to a designated recipient. 
Extending the temporary exception may impose a cost on consumers in the 
form of these foregone benefits, if the estimated disclosures they 
receive from insured depository institutions and credit unions tend to 
deviate from the actual amount. Accurate disclosures may also make it 
easier for consumers to compare prices across providers. Accordingly, 
the Bureau believes there may be a cost associated with an extension of 
the temporary exception in that consumers may be less likely to engage 
in comparisons, if they believe that they cannot rely on estimated 
disclosures. However, as stated elsewhere in the preamble, the Bureau 
believes that the temporary exception is likely used in a small portion 
of all remittance transfers. To date, the Bureau is not aware of any 
evidence of abuse of the temporary exception; providers appear to use 
it only when necessary. Therefore, the Bureau believes that the overall 
costs to consumers of extending the temporary exception are not 
significant.
b. Benefits and Costs to Covered Persons
    The information the Bureau has gathered with respect to how insured 
depository institutions and credit unions are, or are not, using the 
temporary exception, along with the Bureau's other efforts to 
understand industry's compliance with the requirements of the 
Remittance Rule, have provided the Bureau with a basis to determine 
that if the temporary exception were to sunset on July 21, 2015, its 
expiration would have a negative impact on the ability of insured 
institutions to send remittance transfers. The Bureau expects that 
extending the temporary exception to July 21, 2020, may benefit insured 
institutions that rely on the temporary exception to send remittance 
transfers by mitigating the negative impact of its earlier expiration. 
The Bureau believes that there may not be a cost to insured 
institutions of extending the exemption because it would not require 
them to alter current practices.
    The Bureau understands that many insured institutions have already 
taken significant steps toward disclosing actual exchange rates and 
covered third-party fees when they believe they are able to do so. At 
the same time, the Bureau also understands that some small and some 
large insured institutions rely on the temporary exception for 
remittance transfers from accounts in which they believe covered third-
party fee and/or exchange rate information are not readily available. 
Some of these institutions have indicated to the Bureau that they are 
unlikely to find an alternative to their reliance on the temporary 
exception by July 21, 2015, for at least some portion of the remittance 
transfers for which they currently use the temporary exception.
    For insured institutions, the Bureau believes that a potential 
benefit associated with extending the temporary exception may come from 
preserving the segment of their business for which they rely on the 
temporary exception and for which they are unable to find a practical 
or cost-effective alternative. The Bureau acknowledges that the 
magnitude of this benefit is related to the overall significance of 
that particular segment of business for an insured institution and 
whether that institution uses the exception to estimate the disclosure 
of exchange rates or covered third-party fees (or both). With respect 
to the disclosure of exchange rates, the Bureau acknowledges that the 
magnitude of this benefit may be marginal because the exception's use 
for this purpose is limited. As for the disclosure of covered third-
party fees, the Bureau believes that the benefit may be relatively 
greater to the extent that such estimation is more frequent.
    An additional benefit of extending the temporary exception may be 
that it could provide additional time for insured institutions to 
search for efficient and cost-effective ways to disclose actual 
exchange rates and covered third-party fees in lieu of disclosing 
estimates. For instance, the Bureau believes that by 2020, insured 
institutions may develop more effective methods of communication 
between members of an open network that would allow for on-time 
verification of third-party fees and exchange rates.
2. Application of the Remittance Rule to U.S. Military Installations 
Abroad
    The analysis below discusses the potential benefits and costs for 
consumers and covered persons that may result from clarifying that for 
purposes of the Remittance Rule: (1) Where a sender specifies that the 
funds will be received at a U.S. military installation that is 
physically located in a foreign country, a transfer will be considered 
as having been received in a State (and thus the Remittance Rule would 
not apply); (2) where a sender specifies that the funds will be 
received in an account that is located on a U.S. military installation 
abroad, the transfer will be considered as having been received in a 
State; and (3) a sender located on a U.S. military installation that is 
physically located in a foreign country is considered to be located in 
a State.
a. Benefits and Costs to Consumers
    This clarification should not affect consumers who send remittance 
transfers to U.S. military installations located abroad using 
remittance transfer providers that currently treat such transfers as 
exempt from the Remittance Rule. As stated above, the Bureau

[[Page 55988]]

understands that the majority of providers already treat transfers to 
U.S. military installations abroad in this manner. A smaller number of 
consumers who send transfers to U.S. military installations using 
providers who are providing disclosures in such instances may incur a 
cost, insofar as their provider currently applies the Remittance Rule 
to such transfers, but will no longer be required to do so in the light 
of this clarification. However, the Bureau believes this cost to be 
minimal, for the following reasons.
    The Bureau believes that transfers to U.S. military installations 
located abroad share many of the characteristics of domestic transfers, 
and as such harbor less risk related to, for example, disclosures of 
fees, inaccuracies in exchange rates, and the timing of availability of 
funds, than a typical remittance transfer. A majority of commenters 
agree. Therefore, the benefit to consumers of the additional 
protections provided by the Remittance Rule for the affected transfers 
is likely to be insubstantial. Further, to the extent that some 
providers treated U.S. military installations abroad as being in a 
foreign location, consumers may also receive potential benefits from 
this clarification in the form of more consistent service across 
providers. Finally, consumers who send transfers from a U.S. military 
installation to a designated recipient in a foreign country will 
benefit from the protections of the rule including, for example, 
cancellation and error resolution rights, if previously those transfers 
were not subject to its requirements.
b. Benefits and Costs to Covered Persons
    As the Bureau explained in the April Proposal, it believed that 
without clarification, there was a potential for confusion about 
whether the requirements of the Remittance Rule apply to remittance 
transfers sent to and from U.S. military installations located in 
foreign countries. Accordingly, the Bureau believes that this 
clarification may benefit remittance transfer providers by facilitating 
compliance without the added cost of determining how to interpret the 
Remittance Rule as it relates to transfers involving U.S. military 
installations. The Bureau understands that most remittance transfer 
providers currently treat U.S. military installations located in 
foreign countries as being located in States for the purposes of the 
Rule. Because this clarification is consistent with most providers' 
existing practices, the Bureau does not expect any material costs on 
covered persons. To the extent that certain providers have interpreted 
the Remittance Rule to require disclosures to consumers sending 
remittance transfers to U.S. military installations located in foreign 
countries, those providers will now benefit from the cost savings 
associated with being able to stop providing those disclosures. 
Conversely, there may be a cost to providers to the extent that 
previously they did not apply the rule to transfers sent from a U.S. 
military installation abroad to a designated recipient in a foreign 
country and now will have to apply the rule to those transfers.
3. Application of the Remittance Rule to Consumer and Non-Consumer 
Accounts
    The Remittance Rule only applies to transfers that are requested 
primarily for personal, family, or household purposes. This final rule 
clarifies that a remittance transfer provider may generally deem that 
the transfer is requested primarily for personal, family, or household 
purposes if the transfer is sent from an account that was established 
primarily for personal, family, or household purposes. The final rule 
also clarifies that a provider may deem that a transfer sent from a 
non-consumer account, such as a business account or account held by a 
financial institution under a bona fide trust agreement pursuant to 
Sec.  1005.2(b)(3), as not being requested primarily for personal, 
family, or household purposes.
a. Benefit and Costs to Consumers
    As discussed below, the Bureau believes that remittance transfer 
providers are currently treating transfers from non-consumer accounts 
as being outside the scope of the Remittance Rule, and transfers from 
consumer accounts as being within the scope of the rule. Thus, the 
Bureau does not foresee any material impact on the costs or benefits to 
consumers from the clarification.
b. Benefits and Costs to Covered Persons
    The Bureau believes that remittance transfer providers are 
currently treating transfers from non-consumer accounts as being 
outside the scope of the Remittance Rule, and transfers from consumer 
accounts as being within the scope of the rule. Thus, the Bureau does 
not foresee any material impact on the costs or benefits to providers 
from the clarification. The Bureau also generally believes that it is 
less costly to determine whether a transfer is subject to the Rule on 
the account level than having to make a transfer-by-transfer 
determination of whether the Rule applies. To the extent that some 
covered persons are using the more costly transfer-by-transfer method 
to identify whether the Remittance Rule applies to a particular 
transfer and choose to change to this method, this final rule may 
reduce their compliance costs.
4. Disclosures Made by Fax; Disclosures for Oral Telephone 
Transactions; Bureau's Web Site on Receipts
    The Bureau is adopting several clarifications regarding the format 
of disclosures. First, the final rule clarifies that disclosures 
provided pursuant to Sec.  1005.31 and Sec.  1005.36 that are 
transmitted by fax may be considered a ``writing'' under the Remittance 
Rule. Second, the final rule permits providers to treat a written or 
electronic communication as an inquiry in cases where treating such 
communication as a request would be impractical. In response to such 
inquiries, the provider may provide pre-payment disclosures orally--but 
only when transactions are conducted orally and entirely by telephone. 
Third, this final rule specifies that remittance transfer providers may 
satisfy the requirement to disclose the Bureau's Web site on the 
receipts by listing either the Bureau's main Web page, or the Bureau's 
Web page that provides information about remittance transfers, or the 
Bureau's Web page in a language other than English, if it exists, 
insofar as a provider is making disclosures in that language pursuant 
to Sec.  1005.31(g).
a. Benefits and Costs to Consumers
    The Bureau believes that the clarification regarding the treatment 
of faxes is consistent with current practice. Thus, the Bureau does not 
believe that there are any material benefits or costs to consumers. The 
clarification regarding written or electronic inquiries is unlikely to 
create any material benefits or costs to consumers, because the Bureau 
believes that the clarification would conform the rule to providers' 
current practice. As the Bureau develops its Web page dedicated to 
remittance transfers, including creating Web pages in languages other 
than English, consumers may benefit from more direct access to these 
resources. The Bureau does not expect any material cost to consumers 
from this clarification.
b. Benefits and Costs to Covered Persons
    The Bureau believes that to the extent remittance transfer 
providers already send disclosures via fax, they treat those faxes as a 
``writing.'' Accordingly, the Bureau does not expect any material 
benefits or costs to covered persons.
    As discussed above, the Bureau believes that the clarification 
regarding

[[Page 55989]]

written or electronic inquiries would conform the rule to providers' 
current practice. Accordingly, the Bureau believes that the 
clarification would have minimal impact on covered persons. To the 
extent that it has any impact, the impact may be a positive one in that 
the clarification may benefit covered persons by clarifying that they 
have the option to respond to such inquiries orally if treating the 
communication as a request would be impractical. Further, because the 
clarification represents an option, but not a requirement, the Bureau 
does not believe that there will be material costs to covered persons, 
because it does not require a change in their current practices. The 
Bureau also does not believe that the clarification regarding Bureau's 
Web site will impose any material costs or benefits on covered persons. 
The clarification merely provides them with an option to display Bureau 
Web pages other than the Bureau's main Web site, but does not require a 
change in current practices.
5. Delays Related to Fraud Screening
    The current Remittance Rule provides that a delay in relaying the 
funds is not an ``error'' if it is 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. This final rule 
clarifies that a delay does not constitute an ``error'' if such delay 
is related to the provider's or any third party's investigation 
necessary to address potentially suspicious, blocked or prohibited 
activity, and the provider did not have, and could not have reasonably 
obtained, sufficient information about the delay to enable it to timely 
disclose an accurate date of availability when providing the sender 
with a receipt or combined disclosure.
a. Benefits and Costs to Consumers
    The Bureau believes that this clarification will benefit consumers 
who currently experience delays due to fraud screening procedures, 
insofar as remittance transfer providers have or could have reasonably 
obtained sufficient information about the delay to enable them to 
timely disclose an accurate date of availability. As discussed above, 
the Bureau expects that the clarification will lead to some providers 
adjusting their existing disclosure practices to ensure compliance with 
the final rule. The Bureau believes that the consumers who are the 
customers of these providers will benefit from more accurate disclosure 
of the date of availability. The Bureau does not foresee any material 
costs on consumers from this clarification.
b. Benefits and Costs to Covered Persons
    This change to the Remittance Rule is a clarification of what the 
Bureau intended the rule to be in the first instance. (The Bureau is 
making this revision because the Bureau believes the original rule may 
have been unclear.) This change does not impose any material costs on 
those providers that already include delays due to fraud screening in 
their method of disclosing the date of availability of funds to 
recipient. Other providers may incur costs to make adjustments to their 
practices to ensure that they are complying with the Rule; however, 
these are only costs intended to bring the disclosure practices up to 
the intended understanding of the Remittance Rule, and do not 
constitute additional costs imposed by this final rule.
6. Refunds in Case of Errors Resulting From the Sender Providing 
Incorrect or Insufficient Information
    In cases of errors resulting from the sender providing incorrect or 
insufficient information, Sec.  1005.33(c)(2)(iii) now explicitly 
states that a remittance transfer provider may not deduct its own fees 
from the amount refunded or applied to a new transfer.\30\ This 
clarifies what was already required by the current Remittance Rule--a 
refund of the provider's own fee for errors that occur pursuant to 
Sec.  1005.33(a)(1)(iv). Related to Sec.  1005.33(c)(2)(iii), the 
Bureau is also adding an example to further explain how a remittance 
transfer provider should determine the appropriate amount to resolve 
any error under Sec.  1005.33(a)(1)(iv).
---------------------------------------------------------------------------

    \30\ Prior to the adoption of this final rule, Sec.  
1005.33(c)(2)(iii), as clarified by current comment 33(c)-12, 
already prohibited remittance transfer providers from deducting 
their own fees from the amount refunded to a sender or applied to a 
new transfer in the case of an error pursuant to Sec.  
1005.33(a)(1)(iv) because the sender provided incorrect or 
insufficient information in connection with the transfer.
---------------------------------------------------------------------------

a. Benefits and Costs to Consumers
    The Bureau believes that there will be no material impact on 
consumers, because the Bureau believes that remittance transfer 
providers are not deducting their own fees when remedying an error 
pursuant to Sec.  1005.33(a)(1)(iv) because the sender provided 
incorrect or insufficient information in connection with the transfer.
b. Benefits and Costs to Covered Persons
    The Bureau believes that there will be no material benefits or 
costs on covered persons, because this final rule has simply clarified 
existing requirements under the rule that have been in place as of the 
effective date in October 2013.

C. Access to Consumer Financial Products and Services

    The Bureau expects that the amendments adopted in this final rule 
will not decrease consumers' access to consumer financial products and 
services. On the contrary, by extending the temporary exception, the 
Bureau believes that this final rule may preserve consumers' current 
set of options for sending remittance transfers to destinations for 
which insured institutions rely on the temporary exception, compared to 
a market in which the temporary exception expires in July of 2015. The 
Bureau believes that there will not be a material impact of the 
technical corrections and clarifications of this final rule on consumer 
access to remittance transfer services.

D. Impact on Depository Institutions and Credit Unions With $10 Billion 
or Less in Total Assets

    As discussed above, the Bureau understands that with regard to 
remittance transfers sent from accounts, the majority of insured 
institutions that are remittance transfer providers obtain information 
about exchange rates and covered third-party fees from a limited number 
of service providers that are either very large insured institutions or 
large nonbank service providers. The Bureau believes that this applies 
to depository institutions and credit unions with $10 billion or less 
in total assets. Given that reliance, the nature of the impacts on 
these institutions is likely be similar to the effects on larger 
depository institutions.
    In addition, the Bureau believes that the specific impacts of the 
extension of the temporary exception on depository institutions and 
credit unions depends on a number of factors, including whether such 
institutions are remittance transfer providers, the importance of 
remittance transfers for such institutions, the methods that such 
insured institutions use to send remittance transfers, and the number 
of institutions or countries to which they send remittance transfers. 
Information that the Bureau obtained during prior remittance rulemaking 
efforts, as well as data from the FFIEC and NCUA Call Reports, suggest 
that among depository institutions and credit unions that

[[Page 55990]]

provide any remittance transfers, an institution's asset size and the 
number of remittance transfers sent by the institution are positively, 
though imperfectly, related. The Bureau therefore expects that among 
depository institutions and credit unions with $10 billion or less in 
total assets that provide any remittance transfers, compared to such 
larger institutions, a greater share will qualify for the safe harbor 
related to the definition of ``remittance transfer provider'' and 
therefore would be entirely unaffected by the proposed extension, 
because they are not subject to the requirements of the Remittance 
Rule. See Sec.  1005.30(f)(2).

E. Impact of the Proposal on Consumers in Rural Areas

    Senders in rural areas may experience different impacts from this 
final rule than other senders. The Bureau does not have data with which 
to analyze these impacts in detail. To the extent that the extension of 
the temporary exception impacts remittance transfer providers by 
allowing them to continue to provide remittance transfer services, this 
final rule may disproportionately benefit senders living in rural 
areas. Consumers in rural areas may have fewer options for sending 
remittance transfers, and therefore may benefit more than other 
consumers from a change that keeps more providers in the market. The 
Bureau does not expect that any of the other changes will have a 
material impact on consumers in rural areas.

VIII. Regulatory Flexibility Act

A. Overview

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires each 
agency to consider the potential impact of its regulations on small 
entities, including small businesses, small governmental units, and 
small not-for-profit organizations.\31\ The RFA defines a ``small 
business'' as a business that meets the size standard developed by the 
Small Business Administration pursuant to the Small Business Act.\32\
---------------------------------------------------------------------------

    \31\ 5 U.S.C. 601, et seq. The Bureau is not aware of any small 
governmental units or not-for-profit organizations to which the 
proposal would apply.
    \32\ 5 U.S.C. 601(3) (the Bureau may establish an alternative 
definition after consultation with the Small Business Administration 
and an opportunity for public comment).
---------------------------------------------------------------------------

    The 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.\33\ The Bureau also is subject to certain additional 
procedures under the RFA involving the convening of a panel to consult 
with small entity representatives prior to proposing a rule for which 
an IRFA is required.\34\
---------------------------------------------------------------------------

    \33\ 5 U.S.C. 603-605.
    \34\ 5 U.S.C. 609.
---------------------------------------------------------------------------

    The Bureau is certifying this final rule. A FRFA is not required 
for this rule because it will not have significant economic impact on a 
substantial number of small entities.

B. Affected Small Entities

    The analysis below evaluates the potential economic impact of this 
final rule on small entities as defined by the RFA.\35\ This final rule 
applies to entities that satisfy the definition of ``remittance 
transfer provider,'' which is 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 Sec.  1005.30(f).\36\ Potentially affected small entities include 
insured depository institutions and credit unions that have $550 
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 annual receipts that do not exceed $20.5 million and that 
provide remittance transfers in the normal course of their 
business.\37\ With respect to the non-depository institutions, the 
affected small non-depository entities may include State-licensed money 
transmitters, broker-dealers, and other money transmission 
companies.\38\ This analysis examines the benefits, costs, and impacts 
of the key provisions of this final rule relative to the baseline 
provided by the current Remittance Rule. The Bureau has discretion in 
future rulemakings to choose the most appropriate baseline for that 
particular rulemaking.
---------------------------------------------------------------------------

    \35\ For purposes of assessing the impacts of this 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).
    \36\ The definition of ``remittance transfer provider'' includes 
a safe harbor under which a person who 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 Sec.  1005.30(f)(2).
    \37\ Small Bus. Admin., Table of Small Business Size Standards 
Matched to North American Industry Classification System Codes, 
http://www.sba.gov/sites/default/files/files/
SizeStandardsTable.pdf. Under what were the 
relevant size standards in place when the Bureau issued the April 
Proposal, the thresholds were $500 million for insured depository 
institutions and credit unions, and $19 million for non-depository 
institutions that are remittance transfer providers. The SBA 
increased the threshold from $500 to $550 million for insured 
depository institutions and credit unions, and from $19 million to 
$20.5 million for non-depository institutions remittance transfer 
providers, but the adjustments do not does not change the Bureau's 
analysis. The Bureau adopts NAICS code 522390 (``Other Activities 
Related to Credit Intermediation'') as the most relevant code for 
remittance transfer providers that are not depository institutions. 
See 79 FR 33647 (June 12, 2014).
    \38\ Many State-licensed money transmitters act through agents. 
However, the Remittance 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.
---------------------------------------------------------------------------

C. Extension of the Temporary Exception

    This final rule extends the temporary exception that permits 
insured institutions to provide estimated disclosures, instead of exact 
disclosures as is generally required under the Remittance Rule, under 
certain circumstances, from July 21, 2015, to July 21, 2020. The Bureau 
believes that the extension of the temporary exception would not impose 
a cost on any insured institutions, because the extension would not 
require them to alter current practices but instead maintain the status 
quo.

D. Additional Clarifications

    With regard to changes in this final rule concerning the treatment 
of transfers sent from consumer and non-consumer accounts, the 
treatment of faxes, when a provider may treat a communication regarding 
a potential remittance transfer as an inquiry, the Web site addresses 
to be disclosed on consumer receipts, and error resolution provisions 
related to delays and remedies, the Bureau does not believe that any of 
the provisions would have any material cost impact on any remittance 
transfer providers for the reasons stated in the Section 1022(b)(2) 
Analysis.
    With respect to the provisions of this final rule concerning the 
treatment of U.S. military installations located in

[[Page 55991]]

foreign countries for purposes of the Remittance Rule, the Bureau 
believes that remittance transfer providers that are small entities 
will not be significantly impacted, for the following reasons. This 
final rule clarifies that an account that is located on a U.S. military 
installation that is physically located in a foreign country is 
considered to be located in a State. It does not change the current 
Remittance Rule, insofar as the current rule does not contain specific 
guidance regarding how to treat such transfers. The final rule provides 
similar clarification with respect to transfers sent and received by 
senders (rather than from an account). The Bureau understands that 
many, if not most, servicemembers and other consumers stationed at U.S. 
military bases abroad opened their accounts in the United States. 
Accordingly, the Bureau believes that the impact on small insured 
institutions and credit unions that provide account-based transfers 
should be relatively limited, because this rule is not adjusting how 
transfers to and from those accounts are to be treated. For transfers 
to and from accounts located on a U.S. military installation abroad and 
for non-account based transfers, the Bureau believes that the impact 
will similarly be limited because the Bureau understands that the 
changes in the rule are largely in accordance with providers' current 
practice.

E. Cost of Credit for Small Entities

    This 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, this final rule generally does not change or lowers the 
cost of compliance for depositories and credit unions, many of which 
offer small business credit. Any effect of this final rule on small 
business credit, however, would be highly attenuated. This 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.

F. Certification

    Accordingly, the undersigned hereby certifies that this rule will 
not have a significant economic impact on a substantial number of small 
entities.

IX. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.) 
(PRA), 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 information collection displays a 
valid OMB control number. Regulation E, 12 CFR Part 1005, currently 
contains collections of information approved by OMB. The Bureau's OMB 
control number for Regulation E is 3170-0014.
    As discussed elsewhere in this preamble, the Bureau solicited 
comments concerning the relative number of transfers sent to and from 
individuals and/or accounts located on U.S. military installations 
located in foreign countries and understands that remittance transfers 
to and from U.S. military installations abroad constitute a very small 
percentage of the overall remittance transfer market. Furthermore, the 
Bureau understands, and received comments to support the understanding, 
that remittance transfer providers currently treat such transfers as 
being within the United States, i.e., akin to domestic transfers not 
subject to the Remittance Rule. As such, the Bureau believes that 
remittance providers, in the ordinary course of their business, are in 
most instances already providing all applicable notices and disclosures 
required by this clarification, and therefore, there is no material 
change in burden of the previously identified information collections. 
Other changes required under this final rule do not affect information 
collection practices. Therefore, the Bureau does not believe that any 
of the changes adopted in this final rule will have a substantial 
impact on the Bureau's current collections of information pursuant to 
Regulation E approved by the Office of Management and Budget (OMB) 
under section 3507(d) of the PRA.

List of Subjects in 12 CFR Part 1005

    Banking, Banks, Consumer protection, Credit unions, Electronic fund 
transfers, National banks, Remittance transfers, Reporting and 
recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons set forth in preamble, the Bureau amends 12 CFR 
part 1005 to read as follows:

PART 1005--ELECTRONIC FUND TRANSFERS (REGULATION E)

0
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

0
2. Amend Sec.  1005.32 to revise paragraph (a)(2) to read as follows:

Sec.  1005.32  Estimates.

    (a) * * *
    (2) Sunset date. Paragraph (a)(1) of this section expires on July 
21, 2020.
* * * * *

0
3. Amend Sec.  1005.33 to revise paragraphs (a)(1)(iv)(B) and 
(c)(2)(iii) to read as follows:

Sec.  1005.33  Procedures for resolving errors.

    (a) * * *
    (1) * * *
    (iv) * * *
    (B) Delays related to a necessary investigation or other special 
action by the remittance transfer provider or a third party as required 
by the 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;
* * * * *
    (c) * * *
    (2) * * *
    (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 provide the remedies required by 
paragraphs (c)(2)(ii)(A)(1) and (c)(2)(ii)(B) of this section 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 except that the provider shall not deduct its own fee.
* * * * *

0
4. Appendix A to part 1005 is amended by revising Model Forms A-31 and 
A-40 to read as follows:

APPENDIX A TO PART 1005--MODEL DISCLOSURES AND FORMS

BILLING CODE 4810-AM-P

[[Page 55992]]

[GRAPHIC] [TIFF OMITTED] TR18SE14.015

[[Page 55993]]

[GRAPHIC] [TIFF OMITTED] TR18SE14.016

BILLING CODE 4810-AM-C

* * * * *

0
5. In Supplement I to Part 1005:
0
a. Under Section 1005.30--Remittance Transfer Definitions:

[[Page 55994]]

0
i. Under Paragraph 30(c), paragraphs 2.i and 2.ii are revised.
0
ii. Under Paragraph 30(g), paragraph 1 is revised and paragraphs 2 and 
3 are added.
0
b. Under Section 1005.31--Disclosures:
0
i. Under Paragraph 31(a)(2), paragraph 5 is added.
0
ii. Under Paragraph 31(a)(3), paragraphs 1 and 2 are revised.
0
iii. Under Paragraph 31(b)(2), paragraphs 4, 5, 6 are redesignated as 
paragraphs 5, 6, and 7.
0
iv. Under Paragraph 31(b)(2), paragraph 4 is added.
0
v. Under Paragraph 31(e), paragraph 1 is revised.
0
c. Under Section 1005.33--Procedures for Resolving Errors:
0
i. Under Paragraph 33(a), paragraphs 7, 8, 9, 10 are redesignated as 
paragraphs 8, 9, 10, and 11.
0
ii. Under Paragraph 33(a), paragraph 7 is added.
0
iii. Under Paragraph 33(c), paragraph 5 is revised.
0
iv. Under Paragraph 33(c), paragraph 12.i is revised.
    The revisions and additions read as follows:

Supplement I to Part 1005--Official Interpretations

* * * * *

Section 1005.30--Remittance Transfer Definitions

* * * * *

30(c) Designated Recipient

* * * * *
    2. Location in a foreign country.
    i. A remittance transfer is received at a location in a foreign 
country if funds are to be received at a location physically outside 
of any State, as defined in Sec.  1005.2(l). A specific pick-up 
location need not be designated for funds to be received at a 
location in a foreign country. If it is specified that the funds 
will be transferred to a foreign country to be picked up by the 
designated recipient, the transfer will be received at a location in 
a foreign country, even though a specific pick-up location within 
that country has not been designated. If it is specified that the 
funds will be received at a location on a U.S. military installation 
that is physically located in a foreign country, the transfer will 
be received in a State.
    ii. For transfers to a designated recipient's account, whether 
funds are to be received at a location physically outside of any 
State depends on where the recipient's account is located. If the 
account is located in a State, the funds will not be received at a 
location in a foreign country. Accounts that are located on a U.S. 
military installation that is physically located in a foreign 
country are located in a State.
* * * * *

30(g) Sender

    1. Determining whether a consumer is located in a State. Under 
Sec.  1005.30(g), the definition of ``sender'' means a consumer in a 
State who, primarily for personal, family, or household purposes, 
requests a remittance transfer provider to send a remittance 
transfer to a designated recipient. A sender located on a U.S. 
military installation that is physically located in a foreign 
country is located in a State. For transfers from a consumer's 
account, whether a consumer is located in a State depends on where 
the consumer's account is located. If the account is located in a 
State, the consumer will be located in a State for purposes of the 
definition of ``sender'' in Sec.  1005.30(g), notwithstanding 
comment 3(a)-3. Accounts that are located on a U.S. military 
installation that is physically located in a foreign country are 
located in a State. Where a transfer is requested electronically or 
by telephone and the transfer is not from an account, the provider 
may make the determination of whether a consumer is located in a 
State based on information that is provided by the consumer and on 
any records associated with the consumer that the provider may have, 
such as an address provided by the consumer.
    2. Personal, family, or household purposes. Under Sec.  
1005.30(g), a consumer is a ``sender'' only where he or she requests 
a transfer primarily for personal, family, or household purposes. A 
consumer who requests a transfer primarily for other purposes, such 
as business or commercial purposes, is not a sender under Sec.  
1005.30(g). For transfers from an account that was established 
primarily for personal, family, or household purposes, a remittance 
transfer provider may generally deem that the transfer is requested 
primarily for personal, family, or household purposes and the 
consumer is therefore a ``sender'' under Sec.  1005.30(g). But if 
the consumer indicates that he or she is requesting the transfer 
primarily for other purposes, such as business or commercial 
purposes, then the consumer is not a sender under Sec.  1005.30(g), 
even if the consumer is requesting the transfer from an account that 
is used primarily for personal, family, or household purposes.
    3. Non-consumer accounts. A provider may deem that a transfer 
that is requested to be sent from an account that was not 
established primarily for personal, family, or household purposes, 
such as an account that was established as a business or commercial 
account or an account held by a business entity such as a 
corporation, not-for-profit corporation, professional corporation, 
limited liability company, partnership, or sole proprietorship, as 
not being requested primarily for personal, family, or household 
purposes. A consumer requesting a transfer from such an account 
therefore is not a sender under Sec.  1005.30(g). Additionally, a 
transfer that is requested to be sent from an account held by a 
financial institution under a bona fide trust agreement pursuant to 
Sec.  1005.2(b)(3) is not requested primarily for personal, family, 
or household purposes, and a consumer requesting a transfer from 
such an account is therefore not a sender under Sec.  1005.30(g).
* * * * *

Section 1005.31--Disclosures

31(a) General Form of Disclosures

* * * * *

31(a)(2) Written and Electronic Disclosures

* * * * *
    5. Disclosures provided by fax. For purposes of disclosures 
required to be provided pursuant to Sec.  1005.31 or Sec.  1005.36, 
disclosures provided by facsimile transmission (i.e., fax) are 
considered to be provided in writing for purposes of providing 
disclosures in writing pursuant to subpart B and are not subject to 
the requirements for electronic disclosures set forth in Sec.  
1005.31(a)(2).

31(a)(3) Disclosures for Oral Telephone Transactions

    1. Transactions conducted partially by telephone. Except as 
provided in comment 31(a)(3)-2, for transactions conducted partially 
by telephone, providing the information required by Sec.  
1005.31(b)(1) to a sender orally does not fulfill the requirement to 
provide the disclosures required by Sec.  1005.31(b)(1). For 
example, a sender may begin a remittance transfer at a remittance 
transfer provider's dedicated telephone in a retail store, and then 
provide payment in person to a store clerk to complete the 
transaction. In such cases, all disclosures must be provided in 
writing. A provider complies with this requirement, for example, by 
providing the written pre-payment disclosure in person prior to the 
sender's payment for the transaction, and the written receipt when 
the sender pays for the transaction.
    2. Oral telephone transactions. Section 1005.31(a)(3) applies to 
transactions conducted orally and entirely by telephone, such as 
transactions conducted orally on a landline or mobile telephone. A 
remittance transfer provider may treat a written or electronic 
communication as an inquiry when it believes that treating the 
communication as a request would be impractical. For example, if a 
sender physically located abroad contacts a U.S. branch of the 
sender's financial institution and attempts to initiate a remittance 
transfer by first sending a mailed letter, further communication 
with the sender by letter may be impractical due to the physical 
distance and likely mail delays. In such circumstances, a provider 
may conduct the transaction orally and entirely by telephone 
pursuant to Sec.  1005.31(a)(3) when the provider treats that 
initial communication as an inquiry and subsequently responds to the 
consumer's inquiry by calling the consumer on a telephone and orally 
gathering or confirming the information needed to identify and 
understand a request for a remittance transfer and otherwise 
conducts the transaction orally and entirely by telephone.
* * * * *

31(b) Disclosure Requirements

* * * * *

[[Page 55995]]

31(b)(2) Receipt

* * * * *
    4. Web site of the Consumer Financial Protection Bureau. Section 
1005.31(b)(2)(vi) requires a remittance transfer provider to 
disclose the name, toll-free telephone number(s), and Web site of 
the Consumer Financial Protection Bureau. Providers may satisfy this 
requirement by disclosing the Web site of the Consumer Financial 
Protection Bureau's homepage, www.consumerfinance.gov, as shown on 
Model Forms A-32, A-34, A-35, and A-39. Alternatively, providers 
may, but are not required to, disclose the Bureau's Web site as the 
address of a page on the Bureau's Web site that provides information 
for consumers about remittance transfers, currently, 
consumerfinance.gov/sending-money, as shown on Model Form A-31. In 
addition, providers making disclosures in a language other than 
English pursuant to Sec.  1005.31(g) may, but are not required to, 
disclose the Bureau's Web site as a page on the Bureau's Web site 
that provides information for consumers about remittance transfers 
in the relevant language, if such Web site exists. For example, a 
provider that is making disclosures in Spanish under Sec.  
1005.31(g) may, but is not required to, disclose the Bureau's Web 
site on Spanish-language disclosures as the page on the Bureau's Web 
site that provides information regarding remittance transfers in 
Spanish, currently consumerfinance.gov/envios. This optional 
disclosure is shown on Model A-40. The Bureau will publish a list of 
any other foreign language Web sites that provide information 
regarding remittance transfers.
* * * * *

31(e) Timing

    1. Request to send a remittance transfer. Except as provided in 
Sec.  1005.36(a), pre-payment and combined disclosures are required 
to be provided to the sender when the sender requests the remittance 
transfer, but prior to payment for the transfer. Whether a consumer 
has requested a remittance transfer depends on the facts and 
circumstances. A sender that asks a provider to send a remittance 
transfer, and provides transaction-specific information to the 
provider in order to send funds to a designated recipient, has 
requested a remittance transfer. A sender that has sent an email, 
fax, mailed letter, or similar written or electronic communication 
has not requested a remittance transfer if the provider believes 
that it is impractical for the provider to treat that communication 
as a request and if the provider treats the communication as an 
inquiry and subsequently responds to that inquiry by calling the 
consumer on a telephone and orally gathering or confirming the 
information needed to process a request for a remittance transfer. 
See comment 31(a)(3)-2. Likewise, a consumer who solely inquires 
about that day's rates and fees to send to Mexico has not requested 
the provider to send a remittance transfer. Conversely, a sender who 
asks the provider at an agent location to send money to a recipient 
in Mexico and provides the sender and recipient information to the 
provider has requested a remittance transfer.
* * * * *

Section 1005.33 Procedures for Resolving Errors

33(a) Definition of Error

* * * * *
    7. Failure to make funds available by disclosed date of 
availability--fraud and other screening procedures. Under Sec.  
1005.33(a)(1)(iv)(B), a remittance transfer provider's failure to 
deliver funds by the disclosed date of availability is not an error 
if such delay is related to the provider's or any third party's 
investigation necessary to address potentially suspicious, blocked 
or prohibited activity, and the provider did not and could not have 
reasonably foreseen the delay so as to enable it to timely disclose 
an accurate date of availability when providing the sender with a 
receipt or combined disclosure. For example, no error occurs if 
delivery of funds is delayed because, after the receipt is provided, 
the provider's fraud screening system flags a remittance transfer 
because the designated recipient has a name similar to the name of a 
blocked person under a sanctions program and further investigation 
is needed to determine that the designated recipient is not actually 
a blocked person. Similarly, no error occurs where, after disclosing 
a date of availability to the sender, a remittance transfer provider 
receives specific law enforcement information indicating that the 
characteristics of a remittance transfer match a pattern of 
fraudulent activity, and as a result, the provider deems it 
necessary to delay delivery of the funds to allow for further 
investigation. However, if a delay could have been reasonably 
foreseen, the exception in Sec.  1005.33(a)(1)(iv)(B) would not 
apply. For example, if a provider knows in time to make a disclosure 
that all remittance transfers to a certain geographic area must 
undergo screening procedures that routinely delay such transfers by 
two days, the provider's failure to include the additional two days 
in its disclosure of the date of availability constitutes an error 
if delivery of the funds is indeed delayed beyond the disclosed date 
of availability.
* * * * *

33(c) Time Limits and Extent of Investigation

* * * * *
    5. Amount appropriate to resolve the error. For purposes of the 
remedies set forth in Sec.  1005.33(c)(2)(i)(A), (c)(2)(i)(B), 
(c)(2)(ii)(A)(1), and (c)(2)(i)(A)(2) the amount appropriate to 
resolve the error is the specific amount of transferred funds that 
should have been received if the remittance transfer had been 
effected without error. The amount appropriate to resolve the error 
does not include consequential damages. For example, when the amount 
that was disclosed pursuant to Sec.  1005.31(b)(1)(vii) was received 
by the designated recipient before the provider must determine the 
appropriate remedy for an error under Sec.  1005.33(a)(1)(iv), no 
additional amounts are required to resolve the error after the 
remittance transfer provider refunds the appropriate fees and taxes 
paid by the sender pursuant to Sec.  1005.33(c)(2)(ii)(B) or 
(c)(2)(iii), as applicable.
* * * * *
    12. * * *
    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 thus the sender pays 
the provider $110). The provider's correspondent imposes a fee of 
US$15 that it deducts from the amount of the transfer. 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 Sec.  1005.33(c)(1) or (d)(1) and inform the 
sender, pursuant to Sec.  1005.33(c)(1) or (d)(1), that it will 
refund US$95 to the sender within three business days, unless the 
sender chooses to apply the US$95 towards a new remittance transfer 
and the provider agrees. Of the $95 that is refunded to the sender, 
$10 reflects the refund of the provider's transfer fee, and $85 
reflects the refund of the amount of funds provided by the sender in 
connection with the transfer which was not properly transmitted. The 
provider is not required to refund the US$15 fee imposed by the 
correspondent (unless the $15 will be refunded to the provider by 
the correspondent).
* * * * *

    Dated: August 21, 2014.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2014-20681 Filed 9-17-14; 8:45 am]
BILLING CODE 4810-AM-P
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