Few credit unions are subject to the CFPB's rule on remittances because most do not issue more than 100 remittances each year, the bureau said in a new study.
Fewer than 25% of the credit unions that offer remittance services offer 100 or more remittances each year—the threshold necessary to have to comply with the agency rule.
Still, credit union trade groups have complained to Congress and the CFPB about the cost of complying with the rule.
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Dodd-Frank required the agency to issue rules governing remittances, which generally include almost all international electronic transfers of money by consumers. The rule requires disclosures of all costs and the date of availability, cancellation and refund rights and error resolution procedures.
The agency reported that the number of credit unions offer remittance services has been relatively steady since 2014.
The agency also reported that:
- The number of credit unions that issued more than 100 remittances fell from 372 in 2013 to 330 in 2018. Part of that drop likely resulted from a decrease in the number of credit unions.
- Credit unions that offer and transfer more than 100 remittances generally are larger institutions. The median asset size of credit unions that offered but did not transfer more than 100 remittances was well below $20 million. The median asset size of credit unions that transferred more than 100 remittances exceeds $125 million each year.
- Between April 1, 2013 and Dec. 31, 2017, the bureau received about 1.3 million consumer complaints. However, only 4,700 of those complaints were about remittances.
- Banks and credit unions are not likely to offer required disclosures in any language other than English.
- On-time compliance costs for financial institutions amounted to less than $0.30 per remittance in 2014. Ongoing compliance costs amounted to $0.07 per remittance in 2017.
- Most credit unions are not limiting their remittances to stay below the 100 threshold.
Credit union trade groups have opposed the rule.
NAFCU has cited "highly burdensome compliance costs" and have called for the CFPB to exempt all credit unions from the rule.
CUNA has recommended that the bureau increase the compliance threshold from 100 to 1,000 annually.
The trade group said that based on its research, the rule has driven some credit unions out of the remittance business.
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