[Federal Register Volume 76, Number 230 (Wednesday, November 30, 2011)]
[Rules and Regulations]
[Pages 73993-73994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30365]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 230 / Wednesday, November 30, 2011 / 
Rules and Regulations  

[[Page 73993]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 701

RIN 3133-AD94


Remittance Transfers

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: NCUA is amending its rules to conform to amendments made to 
the Federal Credit Union Act (FCU Act) by the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act). The final rule 
adds remittance transfers, as now defined under the Electronic Fund 
Transfer Act (EFTA), as an example of money transfer instruments 
federal credit unions (FCUs) may provide to persons within their fields 
of membership.

DATES: Effective on November 30, 2011 NCUA is adopting the interim 
final rule published on July 27, 2011, 76 FR 44761, without change.

FOR FURTHER INFORMATION CONTACT: Chrisanthy Loizos, Staff Attorney, 
Office of General Counsel, at the above address or telephone: (703) 
518-6540.

SUPPLEMENTARY INFORMATION:

I. Background
II. Summary of Public Comments
III. Final Rule
IV. Regulatory Procedures

I. Background \1\
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    \1\ President Obama signed the Plain Writing Act of 2010 (Pub. 
L. 111-274) into law on October 13, 2010 ``to improve the 
effectiveness and accountability of federal agencies to the public 
by promoting clear Government communication that the public can 
understand and use.'' This preamble is written to meet plain writing 
objectives.
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Why is NCUA adopting this rule?

    Since 2006, FCUs have had the authority to provide certain 
financial services to all persons within their fields of membership 
under the Financial Services Regulatory Relief Act of 2006 (Reg Relief 
Act), Public Law 109-351. Congress intended to allow FCUs ``to sell 
negotiable checks, money orders, and other similar transfer 
instruments, including international and domestic electronic fund 
transfers, to anyone eligible for membership, regardless of their 
membership status.'' S. Rpt. 109-256, p. 5; H. Rpt. 109-356 Part 1, p. 
63. As a result, NCUA created a rule, Sec.  701.30, to address an FCU's 
authority to provide financial services to persons within its field of 
membership. 71 FR 62875 (Oct. 27, 2006) (interim final rule); 72 FR 
7927 (Feb. 22, 2007) (final rule).
    Section 1073 of the Dodd-Frank Act added a new Section 919 to the 
EFTA, entitled ``Remittance Transfers.'' Public Law 111-203, Sec.  
1073, 124 Stat. 2066 (2010). The new Section 919 of the EFTA creates 
protections for consumers who, through remittance transfer providers, 
send money to designated recipients located in foreign countries. 15 
U.S.C. 1693o-1. Paragraph (d) of Section 1073 of Dodd-Frank amended the 
FCU Act to specify that a remittance transfer, as defined by new 
Section 919 of the EFTA, is an example of a money transfer instrument 
that FCUs may sell to persons within their fields of membership. 12 
U.S.C. 1757(12)(A).
    Section 919(g)(2) of the EFTA, defines a remittance transfer as an 
electronic transfer of funds requested by a sender to a designated 
recipient that is initiated by a remittance transfer provider, 
regardless of whether the sender has an account with the remittance 
transfer provider or whether the transfer meets the statute's 
definition of an electronic funds transfer (EFT). 15 U.S.C. 1693o-
1(g)(2). The law excludes small value transactions from the definition. 
Remittance transfers, typically consumer to consumer payments, may be 
executed through a variety of means, including international wire 
transfers, international automated clearing house transactions, other 
account-to-account or account-to-cash products, and reloadable prepaid 
cards. The law requires remittance transfer providers to give consumers 
certain disclosures, including a receipt that contains remittance 
transfer fees, the exchange rate to be used by the remittance transfer 
provider, the amount of currency to be received by the recipient and 
the estimated date of delivery. In addition, the law requires the 
sender to receive a statement that addresses error resolution rights.
    The Board of Governors of the Federal Reserve proposed a remittance 
transfer rule, which addresses disclosure requirements and error 
resolution, and provides a detailed analysis of the services offered by 
remittance transfer providers. 99 FR 29902 (May 23, 2011). The Consumer 
Financial Protection Bureau assumed responsibility for issuing the 
final remittance transfer rule after the close of the comment period on 
July 22, 2011.
    FCUs have had the authority to transfer funds at the request of 
consumers within their fields of membership to recipients 
internationally since the adoption of the Reg Relief Act. The amendment 
to the FCU Act's powers provision by the Dodd-Frank Act makes plain 
that FCUs may offer all variations of remittance transfers, as now 
defined by the EFTA, for the benefit of consumers within their fields 
of membership, subject to certain consumer protections. The addition of 
remittance transfers as an example of permissible money transfer 
instruments, in addition to the newly-enacted consumer disclosures and 
rights, demonstrate the clear intention of Congress to promote access 
to remittance transfers and ensure protections for consumers.
    Finally, Section 1073(d) of the Dodd-Frank Act adjusted Section 
107(12) of the FCU Act by removing the reference to the receipt of 
international and domestic EFTs from subparagraph (B). As explained 
below, this simply eliminates a redundancy and does not affect the 
ability of FCUs to offer EFT services.

What changes did the interim final rule make?

    In the interim final rule, the NCUA Board (Board) amended Sec.  
701.30 to directly track the statutory provisions of Section 1073 of 
the Dodd-Frank Act. 76 FR 44761 (Jul. 27, 2011). The Board added 
remittance transfers as defined by Section 919 of the EFTA as an 
example of permissible money transfer instruments in paragraph (a). The 
Board also amended paragraph (b) to remove the language referring to an 
FCU's receipt of international and domestic EFTs.

[[Page 73994]]

    The Board notes the amendment to Sec.  701.30(b) will have no 
effect on FCUs. The Board views the deletion of the phrase ``and 
receive international and domestic electronic fund transfers'' from the 
Section 107(12)(B) of the FCU Act as a housekeeping amendment. When 
Congress adopted the phrase in Section 107(12)(B) through the Reg 
Relief Act, it simply clarified the authority it granted to FCUs in 
Section 107(12)(A). 12 U.S.C. 1757(12). Section 903 of the EFTA defines 
``electronic fund transfer'' as ``any transfer of funds * * * initiated 
through an electronic terminal, telephonic instrument, or computer or 
magnetic tape so as to order, instruct, or authorize a financial 
institution to debit or credit an account.'' 15 U.S.C. 1693a(6); see 
also 12 CFR 205.3(b). By allowing FCUs ``to sell'' international and 
domestic EFTs in Section 107(12)(A) of the FCU Act, Congress permitted 
FCUs to send or receive funds upon instruction because, by definition, 
EFTs are authorizations to debit or credit an account. To read the 
power ``to sell'' EFT services separately from the ability to 
``receive'' EFTs would be wholly inconsistent with Congressional intent 
to provide EFT services to persons in the field of membership, 
particularly for those who may not have ready and affordable access to 
these services. It would also be unfeasible for an FCU to offer 
consumers the ability to initiate transfers from their accounts but not 
receive EFTs. As discussed above, Congress clearly intended to promote 
the availability of services to consumers under Section 1073 of the 
Dodd-Frank Act by explicitly referencing remittance transfers services. 
The amendment to FCU Act Section 107(12)(B) was not meant to restrict 
or otherwise limit an FCU's ability to effectively provide services to 
consumers.

II. Summary of Public Comments

    In response to the Board's request for comments, NCUA received only 
one comment letter. The commenter, a credit union trade association, 
fully supported the interim rule and the Board's reading of Section 
1073 of the Dodd-Frank Act. The commenter agreed the Dodd-Frank Act did 
not change FCUs' authorized business activities but simply added 
``remittance transfers,'' as now defined by and regulated under the 
EFTA, as an example of a type of international electronic funds 
transfer service. The commenter also had the understanding that 
Congress's deletion from FCU Act Section 107(12) of the express 
authority for persons within the field of membership to receive 
electronic funds transfers was simply to remove redundant language and 
has no substantive effect.

III. Final Rule

    As discussed above, the Board is adopting the interim final rule 
published on July 27, 2011, 76 FR 44761, without change.

IV. Regulatory Procedures

Regulatory Flexibility Act

    NCUA must prepare an analysis to describe any significant economic 
impact a proposed rule may have on a substantial number of small 
entities (primarily those under ten million dollars in assets) the 
Regulatory Flexibility Act. This proposed rule reduces compliance 
burden and extends regulatory relief while maintaining existing safety 
and soundness standards. NCUA has determined this rule will not have a 
significant economic impact on a substantial number of small credit 
unions, so NCUA is not required to conduct a regulatory flexibility 
analysis.

Paperwork Reduction Act

    NCUA has determined that this rule will not increase paperwork 
requirements under the Paperwork Reduction Act of 1995 and regulations 
of the Office of Management and Budget.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. 
NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the executive order to adhere to fundamental 
federalism principles. This would not have a substantial direct effect 
on the states, on the relationship between the national government and 
the states, or on the distribution of power and responsibilities among 
the various levels of government. NCUA has determined that this rule 
does not constitute a policy that has federalism implications for 
purposes of the executive order.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    NCUA has determined that this rule will not affect family well-
being within the meaning of section 654 of the Treasury and General 
Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 
(1998).

Small Business Regulatory Enforcement Fairness Act

    When NCUA issues a final rule, as defined in the Section 551 of the 
Administrative Procedure Act, it triggers a reporting requirement for 
congressional review of agency rules, under the Small Business 
Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 
(SBREFA). The Office of Management and Budget has determined that this 
rule is not a major rule for purposes of SBREFA.

List of Subjects in 12 CFR Part 701

    Credit unions.


    By the National Credit Union Administration Board on November 
17, 2011.
Mary Rupp,
Secretary of the Board.

PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS

    Accordingly, the interim final amending 12 CFR part 701 which was 
published at 76 FR 44761 on July 27, 2011, is adopted as a final rule 
without change.

[FR Doc. 2011-30365 Filed 11-29-11; 8:45 am]
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