On September 20, the CFPB announced a proposed rule which would make a minor yet noteworthy amendment to the guidelines for the disclosures that remittance providers are required to provide to consumers in connection with certain international money transfers, or remittances.
Under the Electronic Fund Transfer Act and Regulation E, remittance companies are required to provide senders with a disclosure at the time of payment, which includes essential information on the receipt, such as contact details for both state regulators and the CFPB. The current rule governing these disclosure informs remittance senders they can contact the appropriate state licensing agency or the CFPB with their questions or complaints.
The proposed rule revises the content requirements for this disclosure by advising consumers to directly contact their remittance provider for issues specific to their money transfer. According to the Bureau, the proposed amendment will provide consumers clearer guidelines regarding what types of issues are better suited for resolution with their remittance provider. The amendment aims to expedite resolution of customer inquiries and reduce the number of inquiries sent to states and the CFPB, which would be better addressed by the remittance providers themselves.
Outside of the narrow adjustment to remittance provider disclosure requirements, the proposed rule also accounts for changes to the model forms, which would make the remittance provider's contact information more apparent to consumers.
Comments on the rule are due November 4, 2024.
Putting It Into Practice: This proposed rule signals a shift with the CFPB – is actively monitoring the remittance providers and other payments industry players for potentially harmful practices and ways to optimize consumers' payments experience (a trend previously discussed here, here, and here). Remittance providers should closely monitor this development, as their disclosures may soon need an update.
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