Remittance Transfers & More • An electronic transfer of funds >$15 • To designated recipient • In foreign country • Initiated by a Remittance Transfer Provider • At request of consumer (in the US) 1
Examples • International Wire Transfers • International ACH Transfers • Electronic payment of a consumer’s bill to a foreign recipient, initiated by consumer, via online bill pay 2
What they are not • Bill pay via check, draft or other paper instrument • Withdrawals from US account by authorized user who is in foreign country • Using debit card abroad • Electronic payment of bill through a foreign merchant’s website 3
Providers • That would be “You”— • Providing remittance transfers in the “normal course of business” 4
Normal Course of Business • Generally available • Multiple times per month • See Comment 1005.30(f)(2) • Safe Harbor threshold — • <=100 in prior calendar year • <=100 in current calendar year • Transition period if exceed safe harbor 5
Disclosures • Two Options: • 1 — Pre-payment and separate Receipt • 2 — Combined Pre-payment and Receipt • Must also provide proof of payment after 2 6
Pre-Payment Disclosures • Transfer Amount (in currency transferred) • Transfer Fees and Taxes • Total Amount of Transaction • Exchange rate** 7
Pre-Payment — II • Transfer Amount (in currency received)** • Other Taxes and Fees (from others)** • Amount Received (in currency received)** • Model Form A-30 8
Timing • One-time transfers or First in a Series of transfers… • Time of request + prior to authorization • Subsequent transfers in series… • Not required 9
Combined Disclosures • Recap the Pre-Payment disclosures • Date Available • Recipient’s name / contact information • Error resolution / cancellation rights • Provider, state regulator and CFPB contact information 10
Combined Disclosures — II • Transfer Date(s) • Required for 1-time transfer scheduled at least 3 business days in advance • Not required if less than 3 days in advance • Future Transfer Date(s): Required for recurring transfers only 11
Estimates-Temp Exception • Transfer from sender’s account • Determination of exact amount outside provider’s control • May estimate: Exchange rate, transfer amount, other taxes/fees, and total amount to recipient (amts in recipient’s currency) • Sunset date July 21, 2015 12
Estimates — Permanent Exceptions • 1. Certain countries — safe harbor list • 2. Transfers scheduled 5 or more business days in advance • All above items may be estimated • Plus the sender’s currency items IF transfer amount to be received in foreign currency is FIXED 13
Methods of Estimation Exchange (FX) Rate • Transfers scheduled 5 or more business days in advance: • FX rate or estimated FX rate used by provider that day to send same-day transfers 14
Methods of Estimation Exchange Rate — II • All other transfers: • FRB FX rate for recipient for Int’l. ACH transfers only • Publicly available source (WSJ, recipient country central bank, etc.) • Most recent FX rate offered/used by intermediary or recipient institution 15
Methods of Estimation Other Fees • If percentage of amount transferred, use estimated FX rate • If imposed by other institution, use most recent transfer to institution or use “representations” made by institution in potential transmittal route reasonably believed may be used 16
Methods of Estimation Taxes • Imposed in Recipient Country • May only estimate if taxes are percentage of amount transferred • Base on estimated exchange rate and estimated fees 17
Cancellation • When is transfer request received? • Less than 3 business days in advance: may cancel no later than 30 minutes after payment • At least 3 business days in advance: must cancel at least 3 business days before transfer date • Request may be oral or in writing 18
Cancellation — II • Assuming funds not picked up/deposited • Must refund total amount within 3 business days of request, including all fees and taxes if not prohibited by law 19
Error Resolution Incorrect Account Number • Member provided incorrect account number • Sender knew he could lose transfer amount • Provider required to make prompt reasonable efforts to recover • Not liable if unsuccessful 20
Error Resolution • Definition of “error:” • 1. Incorrect amount paid by sender • 2. Computation/bookkeeping error made by provider • 3. Failing to make available the amount of currency in the disclosure unless disclosure uses estimates or extraordinary circumstances outside provider’s control 21
Error Resolution — II • 4. Failure to make funds available on disclosed date unless: • Extraordinary circumstances • Delays due to BSA, OFAC, etc. • Fraudulent intent on part of sender or anyone acting with the senter 22
Error Resolution — III • 5. Requests by sender for documents or additional information/clarification, including request to determine whether an error exists 23
Errors are NOT: • Status inquiry, unless funds not available on disclosed date • Request for info for tax/recordkeeping • Changes requested by recipient • Change in amount/type of currency if provider relied on info provided by sender as permitted 24
Incorrect Information • If sender provided incorrect information — • You may impose 3 rd party fees for resending with corrected/additional information, if fees incurred 25
Notice Timing • Error notice is timely if delivered: • Within 180 days of disclosed date of availability • Or within 60 days of receiving additional requested information from provider • Notice must identify sender, particular transaction, and why sender thinks error exists 26
Investigation — Timing • Investigate and correct within 90 days of notice of error • Report results, including remedies available to correct error, within 3 days after completion of investigation • Correct error within 1 business day or as soon as reasonably practicable by refund or other means without additional cost 27
Investigation Results • If no error, provide written explanation, note right to request docs, and respond to specific complaint • Must provide copies of docs upon which you relied in making determination upon sender request 28
Recordkeeping • Written policies & procedures • Ensure agent complies with error resolution requirements • Retain records for not less than 2 years • (see Commentary 33(g)-1) 29
Error Reasserted? • No further responsibilities to sender if you have fully complied with requirements, unless new information • If notice is withdrawn, may be reasserted unless provider has fully complied with all error resolution requirements 30
Other error resolution laws • Reg E — if provider is the account-holding institution, use RT rules • If account-holding institution is NOT the provider, use Reg E EFT error resolution • Reg Z — involving extension of credit • RT if sender provides notice to provider, or • Reg Z if sender provides notice to creditor 31
Unauthorized remittances • Reg E consumer liability applies to account- holding institution • Reg Z provisions apply to a creditor in connection with unauthorized use of credit card 32
Telephone Transfers • Oral pre-payment disclosure • Or text or mobile app • Written receipt required • Mailed or delivered 1 business day after date payment made 33
Actions of Agents • Provider is liable for any violation by an agent when agent acts for provider • Provider’s policies, procedures and oversight will be considered as mitigating factors by enforcement agencies 34
Scheduled Transfers • Transfer scheduled in advance or first transfer in series of preauthorized transfers — same as all other transfers • Subsequent transfers in series — • Requires pre-payment disclosure and receipt for each subsequent transfer 35
Scheduled Transfers — 2 • Pre-payment disclosure — provide within “reasonable time” prior to scheduled transfer date for each subsequent transfer • Receipt — mail or deliver no later than 1 business day after date of transfer (if transferred from sender’s account, may provide receipt on/with periodic statement or within 30 days) 36
Scheduled Transfers--3 • Cancellation and refund — if scheduled at least 3 business days before transfer date, sender must notify provider at least 3 business days prior to scheduled date to cancel 37
Model Forms • Use them! • See A-30 through A-41 38
Selected Topics Equal Credit Opportunity • Your credit reporting obligations under: • Equal Credit Opportunity Act (Reg. B) • High-level ECOA/FHA/Reg. B review • …please see handout 39
Regulation B • Designate accounts to reflect both spouses’ participation • New accounts: when spouse is authorized user • Existing accounts: when spouse makes written request (comply within 90 days) 40
Regulation B — II • If account is designated to reflect spousal participation — • Furnish info to CRA so CRA may provide access to info in name of each spouse 41
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