Assessment of the CFPB’s Remittance Transfer Rule
The CFPB announced that it is conducting an assessment of certain regulations related to consumer remittance transfers under the Electronic Fund Transfer Act in order to determine their effectiveness and solicit public comment on, among other things, whether to modify, expand, or eliminate these regulations.
The CFPB published a final rule concerning consumer remittance transfers to individuals and businesses in foreign countries, titled “Electronic Fund Transfers (Regulation E),” in February 2012. Regulation E, which has been amended several times since enactment, established certain consumer disclosures that must be given to consumers who send remittance transfers, provided consumers with cancellation and refund rights, and required providers to resolve errors. The objectives of Regulation E include improving the predictability of remittance transfers, providing consumers with better information for comparison shopping, and, with regard to subsequent amendments to Regulation E, limiting potential market disruption that might have resulted from implementing the original version of Regulation E.
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the CFPB is conducting an assessment of certain aspects of Regulation E that will address, among other relevant factors, the effectiveness of the rule in meeting the general purposes and objectives of Dodd-Frank and the specific goals of the rule, as stated by the CFPB. The CFPB is also required to invite public comments on recommendations for modifying, expanding, or eliminating the rule.
The CFPB is focusing its assessment on: (1) whether the market for remittances has evolved after Regulation E in ways that promote access, efficiency, and limited market disruption by considering how remittance volumes, prices, and competition in the remittance market may have changed; and, (2) whether the new system of consumer protections has brought more information, transparency, and greater predictability of prices to the market. The CFPB will attempt to compare consumer outcomes to a baseline that would exist if Regulation E’s requirements were not in effect based on existing data sources and information that the CFPB plans to gather.
As part of the assessment, the CFPB is also soliciting public comment on: (1) the feasibility and effectiveness of the assessment plan, the objectives of Regulation E that the CFPB intends to emphasize in the assessment, and the outcomes, metrics, baselines and analytical methods for assessing the effectiveness of the rule; (2) data and other factual information that may be useful for executing the CFPB’s assessment plan; (3) recommendations to improve the assessment plan, as well as data, other factual information, and sources of data that would be useful and available to execute any recommended improvements to the assessment plan including data on the exceptions and provisions of Regulation E; (4) data and other factual information about the benefits and costs of Regulation E for consumers, remittance transfer providers, and others, and about the impacts of the rule on transparency, efficiency, access, and innovation in the remittance market; (5) data and other factual information about the rule’s effectiveness in meeting the purposes and objectives of Title X of Dodd-Frank; and (6) recommendations for modifying, expanding, or eliminating Regulation E.
The full text of the Federal Register notice can be viewed here: https://www.gpo.gov/fdsys/pkg/FR-2017-03-24/pdf/2017-05681.pdf.
