The Consumer Financial Protection Bureau released its finalremittance rule April 28 and gave providers six months to comply,setting an Oct. 28 effective date. The bureau had originallyproposed a 90-day compliance window following its release of thefinal rule.

That’s good news for credit unions that have to create requireddisclosure forms and train staff, said CUNA Mutual ComplianceManager Lauren Capitini. However, she said, credit unions shouldhave already researched their remittance services and havedeveloped a game plan, as the original proposed rule was introducedmore than a year ago.

As expected, the CFPB didn’t increase the exemption above 100transactions per year, because it wasn’t included in its amendedproposed rule released last December. In a February webinar hosted by the NCUA, CFPB Director Richard Cordray saidthe agency determined 100 transactions per yet to be a “normalcourse of business,” a term mandated by Congress in the Dodd-FrankAct. To increase that threshold because credit unions don’t likethe rule, not because they do less business than a normal course ofbusiness, would violate the Dodd-Frank mandate, he said.

Capitini said the CFPB can tinker with the 100-transaction rule,raising the exemption threshold if it determines the number to betoo low. Additionally, she said Congress could rewrite the CFPB’slegislative mandate by setting a numerical threshold, rather thanthe normal course of business requirement currently in theDodd-Frank Act.

Changes to the final rule covered two areas, disclosures anderror resolution.

First, the CFPB eliminated all requirements to disclose foreigntaxes as well as fees charges by the receiving financialinstitution. Those back-end charges were burdensome to creditunions, Capitini said, because obtaining that information would bedifficult and time consuming. The elimination of all foreign taxesprovided even more regulatory relief than the amended proposedrule, Capitini said, because it only proposed eliminating thedisclosure of local taxes.

However, she said, remittance providers must still include adisclaimer in their disclosure forms that informs the sender thatthe receiver could receive a smaller amount than expected becauseof foreign taxes and fees charges by the receiving institution.

And fees charged by intermediary entities must also be includedin the transaction’s disclosures, she said. However, Capitini saidthat requirement should be easier to comply with, becauseintermediary institutions are typically located in the UnitedStates, making it easier to obtain fee information.

The final rule also addressed error liability, rewriting therule to eliminate the requirement that the provider bear the costof recovering funds deposited into the wrong account or institutiondue to sender error. However, providers are still required toattempt to recover the funds. The CFPB also provided modeldisclosures for remittance providers to use as a guide in releasingthe final rule.

Angel Hernandez, president/CEO of the $28 million CaliforniaAgribusiness Credit Union in Buena Park, Calif., said hisinstitution will continue to provide in-house remittance services,despite the additional regulatory burden.

“We have a good segment of our membership that send moneyinternationally,” he said. “We understand the rule and where ourrisks are, but it’s a service we can’t discontinue.”

However, Hernandez won’t have to worry about complying with thenew regulation this year because he said his remittancetransactions have dropped from pre-recession levels, and he didn’texceed the 100 transactions per year threshold in 2012.

The CFPB will use 2012’s remittance transaction counts todetermine if a provider must meet the Oct. 28 compliance deadline,Capitini said. The final rule can be found on the CFPB’s website.