OCC Bulletin 2019-16, "Consumer Compliance: Revised Interagency Examination Procedures," which conveyed the 2019 interagency examination procedures for the EFTA and for the Truth in Lending Act. For example, assume that a sender concurrently asserts an error with his or her account-holding institution and remittance transfer provider for the same error, and the sender receives credit from the account-holding institution for the error within 45 days of the notice of error. In connection with a remittance transfer, a provider imposes a $15 tax that it then remits to a State taxing authority. 7 For more information, refer to 12 CFR 1005.30(f)(2)(i). Under 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, if a remittance transfer provider incorrectly charged a sender's credit card account for US$150, and US$120 was sent, plus a transfer fee of US$10, the sender could assert an error with the remittance transfer provider for the incorrect charge under 1005.33(a)(1)(i). Incorrect amount of currency received - extraordinary circumstances. Proposed 205.30(d)(1) further stated that the term applies regardless of whether the sender holds an account with the remittance transfer provider and regardless of whether the transfer is also an electronic fund transfer, as defined in Regulation E. Section 1005.30(e)(1) of the final rule incorporates the definition generally as proposed . (c) Time limits and extent of investigation . Regulation E at 12 CFR Part 1005 (76 Fed. Similarly, if no reasonably available means exist to verify the accuracy of the recipient institution identifier, 1005.33(h)(2) would be satisfied and thus the exception in 1005.33(a)(1)(iv)(D) also will apply, again assuming the provider can satisfy the other conditions in 1005.33(h). (1) Relation to Regulation E 1005.11 for incorrect EFTs from a sender's account. ii. Section 1005.33(a)(1)(iii) also covers circumstances in which the remittance transfer provider transmits an amount that differs from the amount requested by the sender. The remittance transfer provider's report of the results of the investigation shall include a written explanation of the provider's findings and shall note the sender's right to request the documents on which the provider relied in making its determination. Remittance Transfers under the Electronic Fund Transfer Act (Regulation i. Providers may also rely on other commercially available databases or directories to check other recipient institution identifiers. | As discussed in more detail below, the 2020 Final Rule: However, when the relative picks up the transfer in Mexico a day later, he only receives 1150 Mexican pesos because the exchange rate applied by the recipient agent in Mexico was lower than the exchange rate used by the provider, prior to any rounding of the exchange rate, to disclose the amount of currency to be received by the designated recipient on the receipt. Electronic Fund Transfer Act: Supplemental OCC Examination Procedures Section 1005.33(h)(5) requires that a remittance transfer provider act promptly in using reasonable efforts to recover the amount that was to be received by the designated recipient. Explore guides to help you plan for big financial goals, Subpart B - Requirements for Remittance Transfers 1005.301005.36, Supplement I to Part 1005 - Official Interpretations, Official interpretation of 33(a) Definition of Error, Official interpretation of 33(b) Notice of Error From Sender, Official interpretation of 33(c) Time Limits and Extent of Investigation, Official interpretation of 33(d) Procedures if Remittance Transfer Provider Determines No Error or Different Error Occurred, Official interpretation of 33(e) Reassertion of Error, Official interpretation of 33(f) Relation to Other Laws, Official interpretation of 33(g) Error Resolution Standards and Recordkeeping Requirements, Official interpretation of 33(h) Incorrect Account Number Supplied. iv. A consumer requests to send US$250 to a relative in India to a U.S. dollar-denominated account held by the relative at an Indian bank. PDF International Fund Transfers - Consumer Financial Protection Bureau For example, if a sender requests to send US$100 to a designated recipient at a designated location, but the designated recipient requests the amount in a different currency (either at the sender-designated location or another location requested by the recipient) and the remittance transfer provider accommodates the recipient's request, the change does not constitute an error. Requirements for overdraft services. Notice of error provided to agent. Federal Register :: Electronic Fund Transfers (Regulation E) 1005.34 Procedures for cancellation and refund of remittance transfers. However, a provider may not deduct those fees and taxes that will ultimately be refunded to the provider. The final rule is effective July 21, 2020. Elective Pay and Transferability Frequently Asked Questions For example, when the amount that was disclosed pursuant to 1005.31(b)(1)(vii) was received by the designated recipient before the provider must determine the appropriate remedy for an error under 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 1005.33(c)(2)(ii)(B) or (c)(2)(iii), as applicable. 1005.30 Remittance transfer definitions. | Consumer Financial In the case a default remedy is provided, the provider must correct the error within one business day, or as soon as reasonably practicable, after the reasonable time for the sender to designate the remedy has passed, consistent with 1005.33(c)(2). Specifically, they clarify that for prepaid accounts other than payroll card accounts and government benefit accounts, the location of these . If an alleged error involves an incorrect electronic fund transfer from a sender's account in connection with a remittance transfer, and the sender provides a notice of error to the account-holding institution, the account-holding institution shall comply with the requirements of 1005.11 governing error resolution rather than the requirements of this section, provided that the account-holding institution is not also the remittance transfer provider. Federal law defines remittance transfers to include most electronic money transfers sent by consumers in the United States through "remittance transfer providers" to recipients in other countries. 1. The exception in 1005.33(a)(1)(iv)(D) applies where a sender gives the remittance transfer provider an incorrect account number or recipient institution identifier and all five conditions in 1005.33(h) are satisfied. The requirements take effect on February 7, 2013. Unless the sender provided incorrect or insufficient information and 1005.33(c)(2)(iii) applies, the remittance transfer provider may set a default remedy that the provider will provide if the sender does not designate a remedy within a reasonable time after the sender receives the report provided under 1005.33(c)(1). 12 CFR 1005.30 - Remittance transfer definitions. | Electronic Code Latin America and the Caribbean (LAC) are at the forefront of digital money adoption, offering valuable lessons for the rest of the world. 34870. A financial institution that is also the remittance transfer provider may have error obligations under both 1005.11 and 1005.33. Because the designated recipient received less than the amount of currency that was disclosed, an error has occurred. 9. i. Please contact Paul R. Reymann, Director for Consumer Compliance Policy, at (202) 649-5470. May 11, 2020 Executive Summary of the May 2020 Amendments to the Remittance Transfer Rule1 On May 11, 2020, the Consumer Financial Protection Bureau (Bureau) issued a final rule (2020 Final Rule) amending the Remittance Transfer Rule. See interpretation of 33(h) Incorrect Account Number Supplied in Supplement I. Address on notice of error. The following are examples of errors for failure to make funds available by the disclosed date of availability (assuming that none of the exceptions in 1005.33(a)(1)(iv)(A), (B), or (C) apply). Reasonably available means may include accessing a directory of Business Identifier Codes and verifying that the code provided by the sender matches the provided institution name, and, if possible, the specific branch or location provided by the sender. 1005.8 Change in terms notice; error resolution notice. 4 The interagency examination procedures for the Truth in Lending Act were revised in 2020. 2. 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). Remittance Transfers Under the Electronic Fund Transfer Act (Regulation E) A Proposed Rule by the Consumer Financial Protection Bureau on 12/06/2019 Document Details Printed version: PDF Publication Date: 12/06/2019 Agency: Bureau of Consumer Financial Protection Dates: Comments must be received on or before January 21, 2020. 6. However, if a delay could have been reasonably foreseen, the exception in 1005.33(a)(1)(iv)(B) would not apply. If an error occurs because the sender provides incorrect or insufficient information that results in non-delivery of the remittance transfer by the date of availability stated in the disclosure provided to the sender for the remittance transfer under 1005.31(b)(2) or (3), the provider is required to refund, or reapply if requested and the provider agrees, $105 unless the intermediary institution refunds to the provider the US$5 fee. 3 The agency responsible for supervising and enforcing compliance with Regulation E depends on the person subject to the EFTA (e.g., for financial institutions, jurisdiction depends on the institution's size and charter). A designated recipient may receive an amount of currency that differs from the amount of currency disclosed, for example, if an exchange rate other than the disclosed rate is applied to the remittance transfer, or if the provider fails to account for fees or taxes that may be imposed by the provider or a third party before the transfer is picked up by the designated recipient or deposited into the recipient's account in the foreign country. If the remittance transfer provider subsequently provides a credit of the same amount to the sender for the same error, the account-holding institution may reverse the amounts it had previously credited to the consumer's account, even after the 45-day error resolution period under 1005.11. Banks continue to be allowed to disclose the following estimates to consumers: the bank cannot determine the exact exchange rate for the remittance transfer at the time it is required to provide applicable disclosures. Whether a provider acts promptly to use reasonable efforts depends on the facts and circumstances. Designation of requested remedy. 12. For example, assume that a sender initially asserts an error with a remittance transfer provider with respect to a remittance transfer alleging that US$130 was debited from his checking account, but the sender only requested a remittance transfer for US$100, plus a US$10 transfer fee. The remedies in 1005.33(c)(2)(iii) do not apply if the sender provided an incorrect account number or recipient institution identifier and the provider has met the requirements of 1005.33(h) because under 1005.33(a)(1)(iv)(D) no error would have occurred. The error resolution procedures of this section apply only when a notice of error is received from the sender, and not when a notice of error is received from the designated recipient or when the remittance transfer provider itself discovers and corrects an error. In February 2012, the CFPB added subpart B (Requirements for Remit-tance Transfers) to Regulation E to implement the new remittance protections set forth in the Dodd Frank Act (77 Fed. An error occurs because the sender provided incorrect or insufficient information that resulted in non-delivery of the transfer to the designated recipient. 11. If an alleged error involves an unauthorized use of a credit account for payment in connection with a remittance transfer, the provisions of Regulation Z, 12 CFR 1026.12(b), if applicable, and 1026.13, apply with respect to the creditor. rule to April 1, 2018. 1005.11 Procedures for resolving errors. The remittance transfer provider provides the sender a receipt stating an amount of currency that will be received by the designated recipient, which does not reflect the additional foreign taxes that will be collected in Colombia on the transfer but does include the statement required by 1005.31(b)(1)(viii). If an alleged error involves an incorrect extension of credit in connection with a remittance transfer, an incorrect amount received by the designated recipient under paragraph (a)(1)(iii) of this section that is an extension of credit for property or services not delivered as agreed, or the failure to make funds available by the disclosed date of availability under paragraph (a)(1)(iv) of this section that is an extension of credit for property or services not delivered as agreed, and the sender provides a notice of error to the creditor extending the credit, the provisions of Regulation Z, 12 CFR 1026.13, governing error resolution apply to the creditor, rather than the requirements of this section, even if the creditor is the remittance transfer provider. Federal Register :: Electronic Fund Transfers (Regulation E) 1005.16. This transition period allows these banks to continue to deliver estimates for a reasonable period of time, while they came into compliance with the requirement to provide exact amounts. Regulation E Remittance Rule Amendment: Safe Harbor Threshold - FORVIS Regulation E specifies the information that must be disclosed to consumers who send remittance transfers. The reasonable amount of time must not exceed the later of six months after exceeding the 1,000- or 500-transfer threshold in the current calendar year or January 1 of the next year.8 Comment 32(b)(5)-5 applies the same reasonable amount of time to the transition period for third-party fees. The remittance transfer provider promptly calls or otherwise contacts the institution that received the transfer, either directly or indirectly through any correspondent(s) or other intermediaries or service providers used for the particular transfer, to request that the amount that was to be received by the designated recipient be returned, and if required by law or contract, by requesting that the recipient institution obtain a debit authorization from the holder of the incorrectly credited account. It can include transfers from retail "money transmitters" as well as banks and credit unions that transfer funds through wire transfers,2 automated clearing house (ACH) transactions,3 or other methods. Therefore, remittance transfer providers must retain documentation, including documentation related to error investigations, for a period of not less than two years from the date a notice of error was submitted to the provider or action was required to be taken by the provider. A remittance transfer provider that has fully complied with the error resolution requirements of this section has no further responsibilities under this section should the sender later reassert the same error, except in the case of an error asserted by the sender following receipt of information provided under paragraph (a)(1)(v) of this section. These amendments became effective on November 17, 2014. 3501 et seq. Regulation E implements the Electronic Fund Transfer Act (EFTA), which establishes a basic framework of the rights, liabilities, and responsibilities of participants in the electronic fund and remittance transfer systems. Such policies and procedures must ensure, at a minimum, the retention of any notices of error submitted by a sender, documentation provided by the sender to the provider with respect to the alleged error, and the findings of the remittance transfer provider regarding the investigation of the alleged error. No substantive change is intended by the corrections herein. 2. the bank cannot determine the exact covered third-party fees for the remittance transfer at the time it is required to provide applicable disclosures. 12 CFR Part 1005 - Electronic Fund Transfers (Regulation E) (a) Sender right of cancellation and refund. (1) General definition. When the provider deducts fees or taxes from the amount refunded pursuant to 1005.33(c)(2)(iii), the provider must inform the sender of the deduction as part of the notice required by either 1005.33(c)(1) or (d)(1) and the reason for the deduction. 11. 8. Failure to make funds available by disclosed date of availability - fraud and other screening procedures. The examination procedures are prepared for use by OCC examiners as a supplement to the Federal Financial Institutions Examination Council's1 interagency Electronic Fund Transfer Act (EFTA) procedures that the OCC adopted in 2019. These regulations became effective October 28, 2013. Remittance Transfers) to Regulation E to implement the new remittance protections set forth in 1 . Effective July 21, 2020, the Consumer Financial Protection Bureau ("CFPB") is amending Regulation E pertaining to certain protections for consumers sending U.S. outbound international money transfers or remittance transfers ("Remittance Rule").The following highlights the amended provisions. The comment for 1005.34 is part of 12 CFR Part 1005 (Regulation E). Such error may be asserted by a sender regardless of the form or method of payment provided, including when a debit, credit, or prepaid card is used to fund the transfer and an excess amount is paid. the remittance transfer is initiated from the sender's account to a recipient's account within the same bank. Remedies for incorrect amount paid. Temporary regulations were also issued today, providing rules that relate to a mandatory IRS pre-filing registration process, which will be through an electronic portal. PDF 1700 G Street NW, Washington, DC 20552 - Consumer Financial Protection 7. (B) Refunding to the sender any fees imposed and, to the extent not prohibited by law, taxes collected on the remittance transfer; (iii) In the case of an error under paragraph (a)(1)(iv) of this section that occurred because the sender provided incorrect or insufficient information in connection with the remittance transfer, the remittance transfer provider shall 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. PDF Remittance transfer rule factsheet - Consumer Financial Protection Bureau The Electronic Fund Transfer Act (EFTA) of 1978, 15 U.S.C. For example, suppose a sender requests U.S. dollars to be deposited into an account of the designated recipient and represents that the account is U.S. dollar-denominated. Laws and Regulations EFTA . However, if the creditor is the remittance transfer provider, paragraph (b) of this section will apply instead of 12 CFR 1026.13(b). (2) Normal course of business - (i) Safe harbor. (1) Types of transfers or inquiries covered. Regulation E Changes for Consumer Remittances 3. (5) The provider promptly used reasonable efforts to recover the amount that was to be received by the designated recipient. The notice of error is effective so long as the remittance transfer provider is able to identify the elements in 1005.33(b)(1)(ii). The remittance transfer provider is an insured institution. 1005.33 Procedures for resolving errors. | Consumer Financial Because 1005.32(b) permits the remittance transfer provider to disclose an estimate of the amount of currency to be received, no error has occurred unless the estimate was not based on an approach set forth under 1005.32(c). 8 For example, assume an insured institution did not exceed the 1,000-transfer threshold to a particular country pursuant to 12 CFR 1005.32(b)(4)(i)(C) in 2020 but does exceed the 1,000-transfer threshold on December 1, 2021. The final rule makes several revisions to the rules governing remittance transfers in subpart B of Regulation E that are intended to continue the current application of those rules to prepaid products. A sender requests that his bank send US$120 to a designated recipient's account at an institution in a foreign country. and have been assigned OMB No . For example, if the sender originally provided cash as payment for the transfer, the provider may mail a check to the sender in the amount of the payment. The information-collection requirements have been approved by the Office of Management and Budget under 44 U.S.C. (2) Copies of documentation. The remittance transfer provider promptly uses a messaging service through a funds transfer system to contact institution that received the transfer, either directly or indirectly through any correspondent(s) or other intermediaries or service providers used for the particular transfer, to request that the amount that was to be received by the designated recipient be returned, in accordance with the messaging service's rules and protocol, and if required by law or contract, by requesting that the recipient institution obtain a debit authorization from the holder of the incorrectly credited account. Correction without investigation. If the sender instead provides a notice of error to the remittance transfer provider that is not also the creditor, then the error-resolution provisions of this section apply to the remittance transfer provider. 1. (iv) In the case of a request under paragraph (a)(1)(v) of this section, providing the requested documentation, information, or clarification. 3. A designated recipient's account does not, however, include a credit card, prepaid card, or a virtual account held by an Internet-based or mobile telephone company that is not a bank, savings association, credit union or equivalent institution. Section 1005.33(c)(2)(iii) generally requires a remittance transfer provider to refund the transfer amount to the sender even if the sender's previously designated remedy was a resend or if the provider's default remedy in other circumstances is a resend. The foreign institution is not an agent of the provider. 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. 1005.31 (a) (2). See, e.g., comments 31(b)(1)(iv)-1 and 31(b)(1)(vi)-1. Under 1005.33(c)(2)(ii), the sender may generally choose to obtain a refund of funds that were not properly transmitted or delivered to the designated recipient or, request redelivery of the amount appropriate to correct the error at no additional cost unless the error is determined to have occurred because the sender provided incorrect or insufficient information. However, 1005.33(c)(2)(iii) does not obligate the provider to agree to a sender's request to send a new remittance transfer. 31 (a) (2) Written and Electronic Disclosures. If the remittance transfer provider refunds US$20 to the sender to correct the error, and the sender subsequently asserts the same error with his account-holding institution, the account-holding institution has no error resolution responsibilities under Regulation E because the error has been fully corrected. 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. 11. Holder in due course. A consumer requests to send funds to a relative in Mexico to be received in local currency. PDF Laws and Regulations EFTA - FDIC VI. Amount appropriate to resolve the error. Complete a transfer election statement with the transferee (as described in Q6 below). 82 Fed. An official website of the United States government, OCC Bulletin2021-33 Notice to sender of finding of error. Current Regulation E inadvertently contains several errors, as described below. Nothing in this section limits a sender's rights to assert claims and defenses against a card issuer concerning property or services purchased with a credit card under Regulation Z, 12 CFR 1026.12(c)(1), as applicable. The Bureau has subsequently . Correction of an error if funds not available by disclosed date. PDF Remittance Transfers Small Entity Compliance Guide But for crypto assets to safely remain part of the payment system, they need to be regulated. Except as provided in paragraph (c)(2)(iii) of this section, if, following an assertion of an error by a sender, the remittance transfer provider determines an error occurred, the provider shall, within one business day of, or as soon as reasonably practicable after, receiving the sender's instructions regarding the appropriate remedy, correct the error as designated by the sender by: (i) In the case of any error under paragraphs (a)(1)(i) through (iii) of this section, as applicable, either: (A) Refunding to the sender the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to resolve the error; or. 2. A sender is not considered to have provided incorrect or insufficient information for purposes of 1005.33(c)(2)(iii) if the provider discloses the incorrect location where the transfer may be picked up, gives the wrong confirmation number/code for the transfer, or otherwise miscommunicates information necessary for the designated recipient to pick-up the transfer. 1. However, if a sender asserts an error under 1005.33 with a remittance transfer provider that holds the sender's account, and the error is also an error under 1005.11 (such as when the amount the sender requested to be deducted from the sender's account and sent for the remittance transfer differs from the amount that was actually deducted from the account and sent), then the error-resolution provisions of 1005.33 exclusively apply to the error. Federal Register :: Electronic Fund Transfers(Regulation E) 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). In addition and for purposes of this exception, the term designated recipient's account in 1005.33(a)(1)(iv)(D) refers to an asset account, regardless of whether it is a consumer asset account, established for any purpose and held by a bank, savings association, credit union, or equivalent institution.
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