The Consumer Finance Protection Bureau has approved changes to its remittance rules.
The Consumer Finance Protection Bureau (CFPB) has approved changes to its remittance rules upon request of the American Bankers Association (ABA) and several other trade groups.
The key change, according to ABA Vice President and Senior Counsel Rob Rowe, was the rule requiring disclosures on foreign taxes and third party fees.
“It was requiring information that banks don’t have and couldn’t get,” Rowe said of the original rule. “For instance, on foreign taxes, we all know how our own taxes are to interpret, so multiply that by 200 plus jurisdictions around the world and it’s mind-boggling.”
In its revised document, the CFPB made sending bank’s requirement to disclose fees that a recipient’s financial institution may charge optional in certain circumstances. It also made it optional for the sending bank to disclose how much tax might be deducted before the funds reach the recipient. Instead, a simple disclaimer that foreign taxes and recipient bank fees may apply is required.
The CFPB also reduced institutions’ liability for losses due to sender’s errors.
“With error resolution, one of concerns that the bureau noted in their final rule was the possibility that the bank being responsible for sender’s errors was invitation for fraud,” Rowe said.
Overall, Rowe said those who requested the changes are pleased with the results.
“We’re pleasantly surprised,” he said. “This addresses some of the real concerns that we had.”
The CFPB extended the rule's compliance deadline to October 28, 2013.