The Consumer Financial Protection Bureau's proposed remittance regulations could force credit unions to stopproviding the service to members, CUNA and NAFCU said in commentletters submitted this week to the CFPB.

The central issue is credit unions' use of so-called “opennetworks” like international wires and ACH, compared toorganizations that specialize in remittances and use their ownnetworks. Credit unions don't have easy access through opennetworks to all the information required to meet the regulations,wrote NAFCU President/CEO Fred Becker.

Proposed disclosures include an estimate of exchange rates andfees when a pre-scheduled transaction is originally authorized, asecond receipt 10 days before the transaction will take place, anda third and final receipt when the transfer is received.

The goal is to allow consumers to comparison shop; however,Becker said consumers who set up reoccurring remittancetransactions are more interested in simplicity and are lessconcerned with comparison shopping.

The rule would require “massive reconfiguration” of the wayremittances are offered, which would be an inefficient use ofresources for non-profit credit unions. And, Becker said, creditunions would have a difficult time managing exchange rate risk for10 days.

The CFPB would further mandate the ability for consumers tocancel a transaction up to three days before it is scheduled, afterreceiving cost and exchange rate estimates.

CUNA Senior Vice President and Deputy General Counsel Mary Dunnsaid the rule would impose “unsustainably high compliance costs andlegal liabilities” for credit unions. Furthermore, if credit unionsare forced to discontinue the service due to regulatory burdens, itwould result in increased fees for consumers and fewer choices.

Both organizations also agree that multiple disclosures forpre-authorized remittances would be overkill for consumers whileincreasing compliance costs.

To provide relief to credit unions, both trades propose raisingthe CFPB's current threshold of 25 transactions per year. NAFCUsuggests raising the number to 600, while CUNA suggested providingsafe harbor to organizations that receive less than 30% of theirtotal net income from remittance transactions.