CFPB Announces Increase to Remittance Rule Threshold
Both NAFCU and CUNA agree that the agency could and should have gone higher with the new threshold.
On Monday, the CFPB announced it will increase the transaction threshold for its updated final rule on remittances.
According to a statement by the CFPB, the Remittance Rule “allows certain banks and credit unions to continue to provide estimates of the exchange rate and certain fees under certain conditions.”
The final rule increases the threshold from 100 to 500 or fewer remittance transfers each year. “Entities making 500 or fewer transfers annually in the current and prior calendar years would not be subject to the Rule. This will reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances — less than .06% of all remittances,” the CFPB said in a statement.
NAFCU’s Director of Regulatory Affairs, Ann Kossachev, believed the CFPB could have done more to help credit unions.
“While the rule is a step in the right direction, the increase in the transaction threshold fell short of NAFCU’s recommendations,” she said in a released statement.
Kossachev continued, “More so, the rule failed to expand the exemption on fee estimates at a time when credit unions are in need of regulatory relief. To date, a number of credit unions have effectively been prevented from offering remittance transfer services because of the high compliance costs and associated burdens.”
According to a statement released by CUNA President/CEO Jim Nussle, he praised the CFPB for addressing the issue for credit unions and believed the agency could have gone further with its final rule.
“While we continue to believe an even higher exemption threshold is appropriate, this rule should result in more options for consumers, which is always important, but even more so during the COVID-19 pandemic,” Nussle said.
The final rule becomes effective on July 21, 2020.
Last month, CFPB Director Kathy Kraninger said the rule will not be enforced until the end of the year so that credit unions and members can send remittances without interruption during the coronavirus crisis.