[Federal Register Volume 77, Number 25 (Tuesday, February 7, 2012)]
[Proposed Rules]
[Pages 6310-6334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1726]



  Federal Register / Vol. 77, No. 25 / Tuesday, February 7, 2012 / 
Proposed Rules  

[[Page 6310]]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

[Docket No. CFPB-2011-0009]
RIN 3170-AA15


Electronic Fund Transfers (Regulation E)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Proposed rule; request for public comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
proposing to amend Regulation E, which implements the Electronic Fund 
Transfer Act, and the official interpretation to the regulation, which 
interprets the requirements of Regulation E. The proposal is related to 
a final rule, published elsewhere in today's Federal Register, that 
implements section 1073 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act regarding remittance transfers. The proposal 
requests comment on whether a safe harbor should be adopted with 
respect to the phrase ``normal course of business'' in the definition 
of ``remittance transfer provider.'' This definition determines whether 
a person is covered by the rule. The proposal also requests comment on 
several aspects of the final rule regarding remittance transfers that 
are scheduled in advance, including preauthorized remittance transfers. 
In developing the final rule, the Bureau believes that these issues 
would benefit from further public comment.

DATES: Comments must be received on or before April 9, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-
0009 or RIN 3170-AA15, by any of the following methods:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1700 G Street, NW., 
Washington, DC 20006.
     Hand Delivery/Courier in Lieu of Mail: Monica Jackson, 
Office of the Executive Secretary, Bureau of Consumer Financial 
Protection, 1700 G Street, NW., Washington, DC 20006.
    All submissions must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. In general, 
all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public 
inspection and copying at 1700 G Street, NW., Washington, DC 20006, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Time. You can make an appointment to inspect the documents by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or social 
security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Mandie Aubrey, Dana Miller, or Stephen 
Shin, Counsels, or Krista Ayoub and Vivian Wong, Senior Counsels, 
Division of Research, Markets, and Regulations, Bureau of Consumer 
Financial Protection, 1700 G Street, NW., Washington, DC 20006, at 
(202) 435-7000.

SUPPLEMENTARY INFORMATION: 

I. Overview

    Section 1073 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) \1\ mandates a new comprehensive 
consumer protection regime for remittance transfers sent by consumers 
in the United States to individuals and businesses in foreign 
countries. The Bureau of Consumer Financial Protection (Bureau) is 
publishing a final rule (January 2012 Final Rule) elsewhere in today's 
Federal Register to implement the new regime. The Bureau is publishing 
this notice of proposed rulemaking to seek comment on whether to 
provide additional safe harbors and flexibility in applying the final 
rule to certain transactions and remittance transfer providers.
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    \1\ Public Law 111-203, 124 Stat. 1376, section 1073 (2010).
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    The Dodd-Frank Act, which was enacted July 21, 2010, amends the 
Electronic Fund Transfer Act (EFTA) \2\ to create a multi-faceted 
regime governing most electronic transfers of funds sent by consumers 
in the United States to recipients in other countries. For covered 
transactions conducted by ``remittance transfer providers'' as defined 
by the statute, the regime requires: (i) The provision of disclosures 
concerning the exchange rate and amount to be received by the 
remittance recipient, prior to and at the time of payment by the 
consumer for the transfer; (ii) Federal rights regarding transaction 
cancellation periods; (iii) investigation and remedy of errors by 
remittance transfer providers; and (iv) standards for the liability of 
remittance transfer providers for the acts of their agents. Authority 
to implement the new Dodd-Frank Act provisions transferred from the 
Board of Governors of the Federal Reserve System (Board) to the Bureau 
effective July 21, 2011.\3\
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    \2\ 15 U.S.C. 1693 et seq. EFTA section 919 is codified in 15 
U.S.C. 1693o-1.
    \3\ Because the Dodd-Frank Act requires that regulations to 
implement certain provisions be issued by January 21, 2012, the 
Board issued a Notice of Proposed Rulemaking in May 2011 (May 2011 
Proposed Rule) with the expectation that the Bureau would complete 
the rulemaking process. 76 FR 29902 (May 23, 2011).
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    This proposal has two parts. First, it seeks comment on addition of 
a possible safe harbor to the definition of the term ``remittance 
transfer provider'' to make it easier to determine when certain 
companies are excluded from the statutory scheme because they do not 
provide remittance transfers in ``the normal course of business.'' 
Second, it seeks comment on a possible safe harbor and other 
refinements to disclosure and cancellation requirements for certain 
transfers scheduled in advance, including ``preauthorized'' remittance 
transfers that are scheduled in advance to recur at substantially 
regular intervals. The Bureau believes that providing additional 
guidance on these issues may help both to reduce compliance burden for 
providers and to increase the benefits of the disclosure and 
cancellation requirements for consumers.
    The final rule adopted by the Bureau provides a one-year 
implementation period. The Bureau expects to complete any further 
rulemaking on matters raised in this proposal on an expedited basis 
before the January 2013 effective date for the final rule. As detailed 
in the SUPPLEMENTARY INFORMATION to the January 2012 Final Rule, the 
Bureau will work actively with consumers, industry, and other 
regulators in the coming months to facilitate implementation of the new 
regime.

II. Summary of Final Rule

    Elsewhere in today's Federal Register, the Bureau is publishing the 
final rule (January 2012 Final Rule) to implement the remittance 
transfer provisions in section 1073 of the Dodd-Frank Act. The final 
rule largely adopts the proposal as published in the May 2011 Proposed 
Rule, with several amendments and clarifications based on commenters' 
suggestions. The final rule incorporates the definitions of 
``remittance transfer,'' ``sender,'' ``remittance transfer provider,'' 
and ``designated recipient'' set forth in the statute. With regard to 
statutory language excluding any person

[[Page 6311]]

that does not provide remittance transfers in the ``normal course of 
its business'' from the definition of ``remittance transfer provider,'' 
the rule adopts a facts and circumstances test.
    The final rule generally requires a remittance transfer provider to 
provide a written pre-payment disclosure to a sender containing 
information about the specific transfer requested by the sender, such 
as the exchange rate, applicable fees and taxes, and the amount to be 
received by the designated recipient. Under the final rule, the 
remittance transfer provider also is required generally to provide a 
written receipt when payment is made for the transfer, which is when 
the payment is authorized. The receipt must include the information 
provided on the pre-payment disclosure, as well as additional 
information such as the date of availability, the recipient's contact 
information, and information regarding the sender's error resolution 
and cancellation rights. Consistent with the statute, which permits 
remittance transfer providers to provide estimates only in two narrow 
circumstances, the final rule generally requires that disclosures 
provide the actual exchange rate and amount to be received.
    The final rule also sets forth special requirements for the timing 
and accuracy of disclosures with respect to ``preauthorized remittance 
transfers,'' which are defined as remittance transfers authorized in 
advance to recur at substantially regular intervals. As explained in 
the SUPPLEMENTARY INFORMATION to the January 2012 Final Rule, the 
Bureau recognizes that the market for preauthorized remittance 
transfers is still developing. The Bureau is concerned that if 
providers were required to provide accurate disclosures for subsequent 
preauthorized remittance transfers at the time those transfers are 
authorized, in many cases providers would not be able to offer 
preauthorized remittance transfer products, which could limit consumer 
access to a potentially valuable product.
    The final rule treats the first transaction in a series of 
preauthorized remittance transfers the same as all other remittances 
transfers. Accordingly, the provider must issue a pre-payment 
disclosure at the time the sender requests the transfer and a receipt 
at the time when payment for the transfer is authorized, and the 
disclosures must be accurate when payment for the transfer is 
authorized, unless the statutory exceptions apply.
    But in recognition of the potential risks associated with setting 
exchange rates and the potential difficulty of determining the amount 
to be provided to a designated recipient weeks or months in advance of 
subsequent transfers, the final rule does not require that disclosures 
for the entire series of preauthorized transfers be provided at the 
time of the consumer's initial request and payment authorization. 
Instead, providers must issue pre-payment disclosures and receipts for 
each subsequent transfer at later times. Specifically, under the final 
rule, the pre-payment disclosure for each subsequent transfer must be 
provided within a reasonable time prior to the scheduled date of the 
transfer. The receipt for each subsequent transfer generally must be 
provided no later than one business day after the date on which the 
transfer is made. However, if the transfer involves the transfer of 
funds from the sender's ``account'' (as defined by Regulation E) held 
by the provider, the receipt may be provided on or with the next 
regularly scheduled periodic statement for that account or within 30 
days after payment is made for the remittance transfer if a periodic 
statement is not required. The pre-payment disclosure and receipt for 
each subsequent transfer must be accurate when the respective transfer 
is made, unless the statutory exceptions apply.
    The final rule also provides senders specified cancellation and 
refund rights. Under the final rule, a sender generally has 30 minutes 
after payment for the transfer is made to cancel the transfer. The 
final rule, however, contains special cancellation procedures for any 
remittance transfer scheduled by the sender at least three business 
days before the date of the transfer, including preauthorized 
remittance transfers. In that case, the sender must notify the provider 
at least three business days before the scheduled date of the transfer 
to cancel the transfer.

III. Summary of the Proposed Rule

    The proposal relates to two provisions in the January 2012 Final 
Rule. First, the proposal solicits comment on a possible safe harbor to 
define when a person does not provide transfers in the ``normal course 
of business'' for purposes of the definition of ``remittance transfer 
provider.'' Second, the proposal solicits comment on possible changes 
to the rules applicable to remittance transfers that are scheduled in 
advance, including preauthorized remittance transfers. In developing 
the January 2012 Final Rule, the Bureau recognized that additional safe 
harbors and flexibility for providers in complying with certain 
requirements related to these provisions may be needed to facilitate 
compliance with the final rule, and to minimize compliance burden. In 
addition, the Bureau wants to ensure that the disclosures required 
under the final rule for preauthorized remittance transfers are 
beneficial to senders, and are provided at a time that is most useful 
to senders in understanding the terms of the transfers. Moreover, the 
Bureau wants to ensure that the special cancellation procedures for 
remittance transfers scheduled in advance as set forth in the final 
rule provide appropriate protections for senders and do not impose 
undue burden on providers. The Bureau also wants to ensure that senders 
are informed properly of the right to cancel a transfer and the 
deadline to cancel, without undue burden on providers in providing 
these disclosures. The Bureau believes that these issues would benefit 
from further public comment, as summarized below.

Definition of ``Remittance Transfer Provider''

    Consistent with the statute, the January 2012 Final Rule provides 
that a ``remittance transfer provider'' means any person that provides 
remittance transfers for a consumer in the normal course of its 
business, regardless of whether the consumer holds an account with such 
person. A ``remittance transfer provider,'' as defined in the final 
rule, is required to comply with the disclosure and substantive 
protections set forth in subpart B of Regulation E relating to 
remittance transfers. The final rule provides guidance in the 
commentary regarding the phrase ``normal course of business'' using a 
facts and circumstances test, but does not give a numerical threshold.
    The proposal solicits comment on whether the Bureau should adopt a 
safe harbor for determining whether a person is providing remittance 
transfers in the ``normal course of its business,'' and thus is a 
``remittance transfer provider.'' Under the proposed safe harbor, if a 
person makes no more than 25 remittance transfers in the previous 
calendar year, the person does not provide remittance transfers in the 
normal course of business for the current year if it provides no more 
than 25 remittance transfers in the current year. If that person, 
however, makes a 26th remittance transfer in the current calendar year, 
the person would be evaluated under the facts and circumstances test to 
determine whether that person is a remittance transfer provider for 
that transfer and any additional transfers provided through the rest of 
the year. The Bureau requests comment on the proposed safe harbor 
generally, and, if such a safe harbor is appropriate, whether the 
maximum

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number of transfers per calendar year to qualify for the safe harbor 
should be higher or lower than 25 transfers, such as 10 or 50 
transfers, or some other number.

Disclosure Rules For Advance Remittance Transfers

    The January 2012 Final Rule sets forth special requirements for the 
timing and accuracy of disclosures relating to preauthorized remittance 
transfers, which are remittance transfers authorized in advance to 
recur at substantially regular intervals. This proposal seeks comment 
both on a relatively narrow question regarding whether to provide a 
safe harbor regarding certain timing requirements under the final rule 
and more broadly on whether to make further adjustments in the 
disclosure rules for preauthorized remittance transfers and certain 
other remittance transfers requested in advance of the transfer date 
(advance transfers). The options presented explore whether there are 
ways to better balance consumer benefits and potential industry 
compliance burdens in light of the potential costs of setting exchange 
rates and the potential difficulty of determining the amount to be 
received by designated recipients far in advance of a particular 
transfer.
    The proposal first addresses whether the Bureau should modify the 
final rule for a transfer scheduled more than a certain number of days 
(e.g., 10 days) in advance of the consumer's requested transfer date, 
whether that transfer is a standalone transaction or the first in a 
series of preauthorized remittance transfers. The proposal also 
solicits comments on modifications of the final rule as applied to the 
first transfer in a series of preauthorized remittance transfers where 
the amount of the transfers can vary, and the provider does not know 
the exact amount of the first transfer at the time the disclosures for 
that transfer are given. The proposal then seeks comment on whether the 
Bureau should modify the disclosure rules for subsequent transfers in a 
preauthorized series.

Initial Advance Transfers

    The January 2012 Final Rule treats the first transaction in a 
series of preauthorized remittance transfers the same as all other 
remittances transfers by requiring disclosure of the actual exchange 
rate and amount to be provided to the designated recipient unless one 
of the statutory exceptions permitting use of estimates applies. As the 
final rule recognizes with regard to subsequent transfers in the same 
preauthorized series, however, setting exchange rates and determining 
the amount to be received far in advance may pose risks and remittance 
transfer providers may choose not to offer advance scheduling rather 
than developing new risk management strategies or finding partners that 
are willing to do so. The Bureau lacks data on how frequently consumers 
request transfers many days in advance, and seeks comment on whether 
further adjustment of the disclosure regime is warranted to address 
such situations.
    The proposal therefore solicits comment on two potential changes to 
the disclosure requirements: (i) Whether a provider should be permitted 
additional flexibility to provide estimates for certain information in 
the pre-payment disclosure and receipt; and (ii) if additional 
estimates are permitted, whether a provider that uses this additional 
flexibility to provide estimates in the disclosures given at the time 
the transfer is requested and authorized should be required to provide 
a second receipt with accurate information closer to the time the 
transfer is scheduled to occur. The Bureau also solicits comment on 
whether in lieu of providing an estimate of the exchange rate on the 
disclosures for an advance transfer, the Bureau should allow a provider 
to disclose a formula that will be used to calculate the exchange rate 
that will apply to a transfer, and that is based on information that is 
publicly available prior to the time of transfer. The Bureau is 
contemplating these changes to minimize compliance burden on providers 
and to ensure that senders receive accurate information about transfers 
at a time that is most useful to them.
    Specifically, the proposal solicits comment on whether use of 
estimates should be permitted in the following two circumstances: (i) A 
consumer schedules a one-time transfer or the first in a series of 
preauthorized transfers to occur more than 10 days after the transfer 
is authorized; or (ii) a consumer enters into an agreement for 
preauthorized remittance transfers where the amount of the transfers 
can vary and the provider does not know the exact amount of the first 
transfer at the time the disclosures for that transfer are given. For 
the first proposed use of estimates, the Bureau has structured the 
proposed 10-day threshold to mesh with the safe harbor proposed below 
regarding provision of disclosures relating to subsequent preauthorized 
transfers within a ``reasonable time'' prior to the individual 
transfer. The Bureau requests comment on whether this linkage is 
appropriate and whether 10 days is the appropriate cut off for both 
purposes.
    The Bureau also requests comment on whether a provider that uses 
estimates in the pre-payment disclosure and receipt given at the time 
the transfer is requested and authorized in the two situations 
described above should be required to provide a second receipt with 
accurate information within a reasonable time prior to the scheduled 
date of the transfer. The Bureau requests comment on any tradeoffs 
between compliance burdens to providers of allowing an estimate-and-
redisclosure option and the benefit to senders of receiving a second, 
more accurate disclosure. The Bureau also solicits comment on whether 
providing multiple disclosures (one pre-payment disclosure and two 
receipts) for each transfer described above would create information 
overload for consumers.

Subsequent Advance Transfers

    Under the January 2012 Final Rule, a provider must provide a pre-
payment disclosure and receipt for each subsequent transfer in a series 
of preauthorized remittance transfers. The pre-payment disclosure for 
each subsequent transfer must be provided within a reasonable time 
prior to the scheduled date of the transfer. The receipt for each 
subsequent transfer generally must be provided no later than one 
business day after the date on which the transfer is made. The proposal 
solicits comment on two alternative approaches to possible changes to 
the disclosures rules for subsequent transfers: (i) whether the Bureau 
should retain the requirement that a provider give a pre-payment 
disclosure for each subsequent transfer, and should provide a safe 
harbor interpreting the ``within a reasonable time'' standard for 
providing this disclosure; or (ii) whether the Bureau instead should 
eliminate the requirement to provide a pre-payment disclosure for each 
subsequent transfer.
    With respect to the first alternative approach, the Bureau would 
retain the requirement that a provider mail or deliver a pre-payment 
disclosure within a reasonable time prior to the scheduled date of the 
transfer. The Bureau solicits comment on whether it should provide a 
safe harbor interpreting the ``within a reasonable time'' standard for 
providing this disclosure. The proposal specifically solicits comment 
on a safe harbor under which a provider would be deemed to have 
provided the pre-payment disclosure within a reasonable time prior to 
the scheduled date of a subsequent transfer, if the provider mails or 
delivers the pre-payment

[[Page 6313]]

disclosure not later than 10 days before the scheduled date of the 
respective subsequent transfer. The Bureau believes that this proposed 
safe harbor would facilitate compliance with the final rule with 
respect to the timing of the disclosures required for subsequent 
preauthorized remittance transfers. The Bureau requests comment on 
whether the length of time for the safe harbor should be longer or 
shorter than 10 days, and whether different safe harbors should be 
provided based on whether the disclosures are mailed or provided 
electronically.
    With respect to the second alternative approach, the Bureau 
solicits comment on whether the Bureau instead should eliminate the 
requirement that a provider mail or deliver a pre-payment disclosure 
for each subsequent transfer. Specifically, the Bureau solicits comment 
on whether the benefit to senders of receiving a pre-payment disclosure 
for each subsequent transfer justifies the cost to providers of 
providing this disclosure for each subsequent transfer. The Bureau 
solicits comment on whether senders will find the pre-payment 
disclosures useful, for example, (i) to ensure that their deposit or 
other accounts have sufficient funds to cover the upcoming transfers; 
or (ii) to evaluate whether to cancel the subsequent transfers and 
discontinue the preauthorized remittance transfer arrangement. The 
Bureau also requests comment on the relative trade off in compliance 
burdens to providers in providing pre-payment disclosures for each 
subsequent transfer.

Cancellation Requirements Applicable to Certain Remittance Transfers 
Scheduled in Advance, Including Preauthorized Remittance Transfers

    The January 2012 Final Rule provides senders specified cancellation 
and refund rights. Under the final rule, a sender generally has 30 
minutes after payment for the transfer is made to cancel the transfer. 
The final rule, however, contains special cancellation procedures for 
any remittance transfer scheduled by the sender at least three business 
days before the date of the transfer, including preauthorized 
remittance transfers. In that case, the sender must notify the provider 
at least three business days before the scheduled date of the transfer 
to cancel the transfer. In the final rule, the Bureau adopted special 
cancellation provisions for these transfers scheduled in advance (in 
lieu of the general 30 minute cancellation rule) because the Bureau 
believes it is appropriate to provide senders with additional time to 
change their minds about sending a transfer if, for example, 
circumstances change between when the transfer is authorized and when 
the transfer is to be made. At the same time, the Bureau believes that 
it is necessary to give providers sufficient time to process any 
cancellation requests before a transfer is made.
    The Bureau wants to ensure that the special cancellation procedures 
for remittance transfers scheduled in advance as set forth in the final 
rule provide appropriate protections for senders and do not impose 
undue burden on providers. As a result, the Bureau solicits comment on 
whether the three-business-day deadline to cancel accomplishes these 
goals, or whether the deadline to cancel these transfers should be more 
or less than three business days before the scheduled date of the 
transfer.

Notice of Deadline to Cancel

    The Bureau also wants to ensure that senders are informed properly 
of the right to cancel a transfer and the deadline to cancel, without 
undue burden on providers in providing these disclosures. The January 
2012 Final Rule requires that a provider disclose the deadline to 
cancel in the receipt. Under the final rule, a provider must only 
disclose in the receipt for a transfer the deadline to cancel that is 
applicable to that transfer. Thus, for any remittance transfer 
scheduled by the sender at least three business days before the date of 
the transfer, a provider may solely disclose in the receipt information 
about the three-business-day deadline to cancel the transfer. For other 
transfers, the receipt may solely disclose the 30 minute deadline to 
cancel. In addition, in disclosing the three-business-day deadline to 
cancel, under the final rule, the provider is not required to disclose 
a specific date on which the right to cancel will expire, such as 
disclosing: ``You can cancel for a full refund no later than [insert 
calendar date].'' Thus, under the final rule, a provider could use a 
generic disclosure, such as disclosing: ``You can cancel for a full 
refund no later than three business days prior to the scheduled date of 
the transfer.'' The Bureau solicits comment on three issues related to 
the disclosure of the deadline to cancel as set forth in the final 
rule: (i) Whether the three-business-day deadline to cancel transfers 
scheduled in advance should be disclosed in a different manner to 
consumers, such as by requiring a provider to disclose in the receipt 
the specific date on which the right to cancel will expire; (ii) 
whether a provider should be allowed on a receipt to describe both the 
three-business-day and 30 minute deadline-to-cancel time frames and 
either describe to which transfers each deadline to cancel is 
applicable, or alternatively, use a check box or other method to 
indicate which deadline is applicable to the transfer; and (iii) 
whether a provider should be required to disclose the deadline to 
cancel in the pre-payment disclosure for each subsequent transfer, 
rather than in the receipt given for each subsequent transfer.

IV. Legal Authority

    Section 1073 of the Dodd-Frank Act creates a new section 919 of the 
EFTA and requires remittance transfer providers to provide disclosures 
to senders of remittance transfers, pursuant to rules prescribed by the 
Bureau. In particular, providers must give senders a written pre-
payment disclosure containing specified information applicable to the 
sender's remittance transfer. The remittance transfer provider must 
also provide a written receipt that includes the information provided 
on the pre-payment disclosure, as well as additional specified 
information. EFTA section 919(a).
    In addition, EFTA section 919 provides for specific error 
resolution procedures. The Act directs the Bureau to promulgate error 
resolution standards and rules regarding appropriate cancellation and 
refund policies. EFTA section 919(d). Finally, EFTA section 919 
requires the Bureau to establish standards of liability for remittance 
transfer providers, including those that act through agents. EFTA 
section 919(f). Except as described below, the proposed changes are 
proposed under the authority provided to the Bureau in EFTA section 
919, and as more specifically described in this SUPPLEMENTARY 
INFORMATION.
    In addition to the statutory mandates set forth in the Dodd-Frank 
Act, EFTA section 904(a) authorizes the Bureau to prescribe regulations 
necessary to carry out the purposes of the title. The express purposes 
of the EFTA, as amended by the Dodd-Frank Act, are to establish ``the 
rights, liabilities, and responsibilities of participants in electronic 
fund and remittance transfer systems'' and to provide ``individual 
consumer rights.'' EFTA section 902(b). EFTA section 904(c) further 
provides that regulations prescribed by the Bureau may contain any 
classifications, differentiations, or other provisions, and may provide 
for such adjustments or exceptions for any class of electronic fund 
transfers or remittance transfers that the Bureau deems necessary or 
proper to effectuate the purposes of the

[[Page 6314]]

title, to prevent circumvention or evasion, or to facilitate 
compliance.
    As described in more detail in the SUPPLEMENTARY INFORMATION, the 
provisions proposed in part or in whole pursuant to the Bureau's 
authority in EFTA sections 904(a) and 904(c) include: \4\ Sec.  
1005.32(b)(2).\5\ The Bureau also solicits comments on various 
regulatory provisions some of which would require use of EFTA sections 
904(a) and (c) authority but for which proposed regulatory text is not 
provided.
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    \4\ Throughout the SUPPLEMENTARY INFORMATION, the Bureau is 
citing its authority under both EFTA section 904(a) and EFTA section 
904(c) for purposes of simplicity. The Bureau notes, however, that 
with respect to some of the provisions referenced in the text, use 
of only one of the authorities may be sufficient.
    \5\ The consultation and economic impact analysis requirement 
previously contained in EFTA sections 904(a)(1)-(4) were not amended 
to apply to the Bureau. Nevertheless, the Bureau consulted with the 
appropriate prudential regulators and other Federal agencies and 
considered the potential benefits, costs, and impacts of the rule to 
consumers and covered persons as required under section 1022 of the 
Dodd-Frank Act, and through these processes would have satisfied the 
requirements of these EFTA provisions if they had been applicable.
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VI. Section-by-Section Analysis

Section 1005.30 Remittance Transfer Definitions

30(f) Remittance Transfer Provider
    As adopted in the January 2012 Final Rule, Sec.  1005.30(f) and the 
accompanying interpretations implement the definition of ``remittance 
transfer provider'' in EFTA section 919(g)(3). Section 1005.30(f) 
states that a ``remittance transfer provider'' means any person that 
provides remittance transfers for a consumer in the normal course of 
its business, regardless of whether the consumer holds an account with 
such person. A ``remittance transfer provider,'' as defined in Sec.  
1005.30(f), is required to comply with disclosure and substantive 
protections set forth in subpart B of Regulation E relating to 
remittance transfers.
    Comment 30(f)-2 provides guidance interpreting the phrase ``normal 
course of business'' for purposes of the definition of ``remittance 
transfer provider'' in Sec.  1005.30(f). Specifically, comment 30(f)-2 
states that whether a person provides remittance transfers in the 
normal course of business depends on the facts and circumstances, 
including the total number and frequency of remittance transfers sent 
by the provider. For example, if a financial institution generally does 
not make international consumer wire transfers available to customers, 
but sends a couple of international consumer wire transfers in a given 
year as an accommodation for a customer, the institution does not 
provide remittance transfers in the normal course of business. In 
contrast, if a financial institution makes international consumer wire 
transfers generally available to customers (whether described in the 
institution's deposit account agreement, or in practice) and makes 
transfers multiple times each month, the institution provides 
remittance transfers in the normal course of business.
    Under the final rule, comment 30(f)-2 does not provide any de 
minimis numerical threshold under which a person would be deemed not to 
be providing remittance transfers in the normal course of business, and 
thus would not be a ``remittance transfer provider'' for purposes of 
Sec.  1005.30(f). However, the Bureau recognizes that a bright-line 
safe harbor may minimize compliance burden. Thus, the Bureau proposes 
to revise comment 30(f)-2 to provide that if a person provided no more 
than 25 remittance transfers in the previous calendar year, the person 
does not provide remittance transfers in the normal course of business 
for the current calendar year if it provides no more than 25 remittance 
transfers in the current calendar year. If that person, however, makes 
a 26th remittance transfer in the current calendar year, the person 
would be evaluated under the facts and circumstances test to determine 
whether the person is a remittance transfer provider for that transfer 
and any other transfer provided through the rest of the year.
    The proposed comment provides several examples to demonstrate how 
this proposed safe harbor would apply. For instance assume that in 
calendar year 2012, a person provided 20 remittance transfers. This 
person is not providing remittance transfers in the normal course of 
business for calendar year 2013 if it provides no more than 25 
remittance transfers in calendar year 2013. Assume further that the 
person makes 15 transfers in calendar year 2013. Because this person 
limited its remittance transfers to no more than 25 in 2013, it would 
not be required to comply with the rules in subpart B for any of its 
transfers in 2013. However, if the person provides a 26th transfer in 
calendar year 2013, then the person will be evaluated under the facts 
and circumstances test for determining whether the person is a 
remittance transfer provider for that and any other transfer provided 
through the rest of the calendar year. In addition, if the person 
provides a 26th transfer for calendar year 2013, this person would not 
qualify for the safe harbor in 2014 because the person did not make 25 
or fewer remittance transfers in 2013. In this case, in 2014, the 
person would be evaluated under the facts and circumstances test in 
determining whether the person is a remittance transfer provider for 
all transfers made in 2014. Under the proposed safe harbor, a person 
would not be subject to the definition of ``remittance transfer 
provider'' and thus, would not be required to comply with the 
disclosure and substantive protections set forth in subpart B of 
Regulation E relating to remittance transfers if it made no more than 
25 remittance transfers for each calendar year.
    The proposed threshold number of no more than 25 transfers per 
calendar year for the safe harbor is consistent with the general 
threshold for coverage under the Bureau's Regulation Z, which relates 
to credit transactions. Under Regulation Z, 12 CFR part 1026, a 
``creditor'' as defined by the regulation, must comply with certain 
disclosure requirements and substantive protections related to credit 
transactions contained in Regulation Z. Under Regulation Z, a creditor 
is an entity that regularly extends consumer credit under specified 
circumstances. Generally, under Regulation Z, a person regularly 
extends consumer credit in the current calendar year when it either 
extended consumer credit more than 25 times in the preceding calendar 
year or more than 25 times in the current calendar year.\6\ See Sec.  
1026.2(a)(17) and comment 2(a)(17)(i)-4.\7\ However, the Bureau 
solicits comment on whether a threshold safe harbor is appropriate in 
this context, and if so, whether other threshold numbers for the safe 
harbor, such as 10 or 50 transfers, may be appropriate as the threshold 
number to carve out persons that provide remittance transfers on a 
limited basis, primarily as an accommodation to the customers of its 
regular business.
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    \6\ Regulation Z in some cases provides additional protections 
for credit secured by a dwelling and certain high cost mortgages. 
For example, with respect to whether a person is a creditor, a 
person regularly extends consumer credit in the current calendar 
year if it either extended consumer credit for more than five times 
for transactions secured by a dwelling in the previous calendar year 
or more than five times in the current calendar year. In addition, a 
person regularly extends consumer credit if it extends consumer 
credit for just one high-cost mortgage in a 12 month period. See 12 
CFR 1026.2(a)(17).
    \7\ The Bureau notes that it has issued a separate notice of 
request for information on whether it should revise these threshold 
numbers in Regulation Z. See 76 FR 75825 (Dec. 5, 2011).
---------------------------------------------------------------------------

    Without a safe harbor, persons who currently provide remittance 
transfers, or are contemplating doing so, may face

[[Page 6315]]

uncertainty and litigation risk as to whether they meet the definition 
of ``remittance transfer provider'' when they provide a small number of 
transfers in a given year. These persons may decide to discontinue 
providing these transfers, or choose not to start making these 
transfers, to the detriment of their customers, rather than taking on 
the burden of complying with the remittance transfer rules for only a 
small number of transfers per year. The Bureau believes that the safe 
harbor may be particularly useful to relatively small financial 
services providers that provide remittance transfers on an infrequent 
basis.
    The Bureau recognizes that if a safe harbor is adopted, in some 
cases, consumers would not receive the disclosures and protections set 
forth in the remittance transfer rules because the person providing 
these transfers would not be deemed a ``remittance transfer provider'' 
for purposes of subpart B of Regulation E. However, Congress itself 
created this result by providing that the disclosure and other 
provisions apply only to persons that provide remittance transfers in 
the normal course of business. The statutory language, by defining 
``remittance transfer provider'' as any person that provides remittance 
transfers for a consumer in the normal course of its business, implies 
that there will be persons that provide remittance transfers outside 
the normal course of business that are not subject to the statutory 
disclosure and protection requirements related to remittance transfers. 
The Bureau believes that the inclusion of the phrase ``normal course of 
business'' in the statutory definition was meant to exclude persons 
that provide remittance transfers on a limited basis, such as an 
accommodation to the customers of its regular business. In addition, as 
described above, the Bureau is concerned that persons may discontinue 
providing a small number of transfers per year to accommodate customers 
of its regular business, or choose not to start making these transfers, 
to the detriment of their customers, rather than taking on the burden 
of complying with the remittance transfer rules for only a small number 
of transfers per year.
    The Bureau notes that industry commenters in response to the 
Board's May 2011 Proposed Rule provided suggestions for a de minimis 
threshold amount that were extremely high. Suggestions ranged from 
1,200 or fewer transfers annually to 2,400 transfers annually, per 
method (i.e., 2,400 wire transfers plus 2,400 international ACH 
transfers). The commenters did not provide any data on the overall 
distribution and frequency of remittance transfers across various 
providers to support treating such high numbers of transactions as 
being outside the normal course of business. Nor did they suggest other 
means of determining when remittance transfer providers are engaging in 
transfers merely as an accommodation to occasional consumer requests 
rather than part of a business line of payment services. Absent 
significant additional information, the Bureau is skeptical that 
Congress intended to exclude companies averaging 100 or more remittance 
transfers per month from the statutory scheme. Based on the data 
presented by commenters, such a range would appear to exclude the 
majority of providers of open network transfers, such as international 
wire transfers and ACH transactions, from the rule. For example, one 
trade association commenter stated that most respondents to an 
information request said that they make fewer than 2,400 international 
transactions per year. As discussed in the SUPPLEMENTARY INFORMATION to 
the January 2012 Final Rule, the Bureau believes that the statute 
clearly covers open network transfers, such as wire transfers and ACH 
transactions. Providing an exception based on the ranges suggested by 
these commenters would allow many financial institutions that arguably 
regularly and in the normal course of business provide remittance 
transfers to not be subject to the regulation. The Bureau believes in 
general that the term ``normal course of business'' covers remittance 
transfer activities at a level significantly lower than the ranges 
suggested by these commenters.
    The Bureau requests comment on the proposed safe harbor. As 
discussed above, the Bureau requests comment on whether a threshold 
safe harbor is appropriate in this context, and whether the maximum 
number of transfers per calendar year to qualify for the safe harbor 
should be higher or lower than 25 transfers, and if so, what the 
maximum number should be and why. The Bureau also specifically seeks 
information regarding how many persons would likely qualify for any 
such a safe harbor; whether such a safe harbor would be more or less 
likely to apply to particular types of businesses, as compared to 
others; the potential benefits for consumers if a higher or lower 
number were chosen; and any specific costs that would be implicated by 
a higher or lower figure. The Bureau would benefit from comments both 
from companies or other persons that send far more than 25 transfers 
per year and from companies or other persons that send around 25 
transfers per year.

Section 1005.31 Disclosures

    Section 1005.31 generally sets forth the disclosure requirements 
for remittance transfers, except for disclosures provisions for 
preauthorized remittance transfers which are set forth in Sec.  
1005.36. Under Sec.  1005.31, remittance providers are required to 
provide two sets of disclosures to a sender in connection with a 
remittance transfer: (i) a pre-payment disclosure when a sender 
requests a transfer; and (ii) a written receipt to the sender when 
payment is made, which is when the payment is authorized. The pre-
payment disclosure provides information about the transfer, such as the 
exchange rate, fees, and the amount to be received by the designated 
recipient. The receipt includes the information provided on the pre-
payment disclosure, as well as additional information, such as the 
promised date of delivery, contact information for the designated 
recipient, and information regarding the sender's error resolution 
rights. Consistent with the statute, which permits remittance transfer 
providers to provide estimates only in two narrow circumstances as set 
forth in Sec.  1005.32, the final rule generally requires that 
disclosures provide the actual exchange rate and amount to be received.
    For the reasons discussed in the section-by-section analysis to 
Sec.  1005.36, the Bureau solicits comment on whether a provider should 
be permitted to use estimates for certain information in the pre-
payment disclosures and receipts where a consumer schedules a one-time 
transfer or the first in a series of preauthorized transfers to occur 
more than 10 days after the transfer is authorized. See proposed Sec.  
1005.32(b)(2). Also, as discussed in more detail in the section-by-
section analysis to Sec.  1005.36, the Bureau also solicits comment on 
whether a provider that uses estimates in the situation described above 
should be required to provide a second receipt with accurate 
information within a reasonable time prior to the scheduled date of the 
transfer.

Section 1005.32 Estimates

    Generally, remittance transfer providers are not permitted to use 
estimates for the information provided in the pre-payment disclosures 
and receipts. The January 2012 Final Rule implements the two statutory 
exceptions that permit a remittance transfer provider to disclose an 
estimate of the amount of currency to be

[[Page 6316]]

received, as well as other information such as the exchange rate that 
is used to calculate the amount of currency. Section 1005.32(a) 
contains the first exception, which applies to depository institutions 
that cannot determine certain disclosed amounts for reasons beyond 
their control. Section 1005.32(b) contains the second exception, which 
applies when the provider cannot determine certain amounts to be 
disclosed because of: (i) the laws of a recipient country; or (ii) the 
method by which transactions are made in the recipient country.
    To effectuate the purposes of the EFTA and facilitate compliance, 
the Bureau proposes to use its EFTA section 904(a) and (c) authority to 
add a third exception in a new Sec.  1005.32(b)(2) that would provide 
additional flexibility for providers to use estimates in pre-payment 
disclosures and receipts where a consumer schedules a one-time transfer 
or the first in a series of preauthorized transfers to occur more than 
10 days after the transfer is authorized. This exception is discussed 
in more detail in the section-by-section analysis to Sec.  1005.36 
below. The current exception relating to transfers to certain countries 
that is contained in Sec.  1005.32(b) would be moved to Sec.  
1005.32(b)(1), and conforming changes would be made to interpretation 
provisions that reference this exception.

Section 1005.36 Transfers Scheduled in Advance

    The January 2012 Final Rule sets forth special requirements for the 
timing and accuracy of disclosures relating to preauthorized remittance 
transfers, which are remittance transfers authorized in advance to 
recur at substantially regular intervals. This proposal seeks comment 
both on a relatively narrow question regarding whether to provide a 
safe harbor regarding certain timing requirements under the final rule 
and more broadly on whether to make further adjustments in the 
disclosure rules for preauthorized remittance transfers and other 
remittance transfers requested more than a certain number of days 
(e.g., 10 days) in advance of the transfer date (advance transfers). 
The options presented explore whether there are ways to better balance 
consumer benefits and potential industry compliance burdens in light of 
the potential risks associated with setting exchange rates and the 
potential difficulty of determining the amount to be received by 
designated recipients far in advance of a particular transfer. The 
proposal first considers modification of the final rule as applied to a 
transfer scheduled more than a certain number of days (e.g., 10 days) 
in advance of the consumer's requested transfer date, whether that 
transfer is a standalone transaction or the first in a series of 
preauthorized remittance transfers. The proposal also solicits comment 
on modifications of the final rule for the first transfer in a series 
of preauthorized remittance transfers where the amount of the 
preauthorized remittance transfers can vary, and the provider does not 
know the exact amount of the first transfer at the time the disclosures 
for that transfer are given. The proposal then also requests comment on 
whether the Bureau should modify the disclosure rules for subsequent 
transfers in a preauthorized series.
    The Bureau recognizes that the market for preauthorized remittance 
transfers is still developing. The Bureau is concerned that without 
specific rules and flexibility for providers in complying with certain 
disclosure requirements, providers may either discontinue providing 
preauthorized remittance transfer products, or may not begin to offer 
those products in the future, to the detriment of senders who may enjoy 
the convenience that these products provide. The final rule provides 
remittance transfer providers some relief by allowing them to shift 
their obligation to provide pre-payment disclosures for subsequent 
transfers to a ``reasonable time'' prior to the particular transfer; 
this provision should reduce the potential costs associated with 
setting exchange rates far in advance of a transfer. However, the 
Bureau recognizes that similar issues may arise in situations in which 
a consumer schedules the first in a series of preauthorized transfers 
or a single standalone transfer significantly in advance of the 
transfer date.
    The Bureau also solicits comment on possible changes to the 
cancellation requirements for certain remittance transfers scheduled in 
advance. The Bureau wants to ensure that the three-business-day 
deadline to cancel remittance transfers scheduled in advance as set 
forth in the final rule provides appropriate protections for senders 
and does not impose undue burden on providers, and that senders are 
informed properly of the right to cancel a transfer.
Timing and Accuracy Requirements for Disclosures About Initial Advance 
Transfers
    The January 2012 Final Rule treats the first transaction in a 
series of preauthorized remittance transfers the same as all other 
remittances transfers by requiring disclosure of the actual exchange 
rate and amount to be provided to the designated recipient unless one 
of the statutory exceptions permitting use of estimates applies. The 
final rule recognizes for subsequent transfers in the same 
preauthorized series, however, that setting exchange rates far in 
advance may require more sophisticated risk management strategies and 
remittance transfer providers may choose not to offer advance 
scheduling rather than developing such strategies (or finding partners 
that are willing to do so). The Bureau lacks data on how frequently 
consumers request transfers many days in advance, and seeks comment on 
whether further adjustment of the disclosure regime is warranted to 
address such situations.
    As discussed in more detail below, the proposal solicits comment on 
whether use of estimates should be permitted in the following two 
circumstances: (i) A consumer schedules a one-time transfer or the 
first in a series of preauthorized transfers to occur more than 10 days 
after the transfer is authorized; or (ii) a consumer enters into an 
agreement for preauthorized remittance transfers where the amount of 
the transfers can vary, and the provider does not know the exact amount 
of the first transfer at the time the disclosures for that transfer are 
given. The Bureau also solicits comment on whether a provider that uses 
estimates in the two situations described above should be required to 
provide a second receipt with accurate information within a reasonable 
time prior to the schedule date of the transfer.
Estimates Where the Transfer Is Scheduled To Occur More Than 10 Days 
After the Transfer Is Authorized
    The Bureau proposes to add an exception in Sec.  1005.32 that would 
provide additional flexibility for providers to use estimates in 
disclosures for certain transfers scheduled in advance. Under proposed 
Sec.  1005.32(b)(2)(i), a provider would be permitted to use estimates 
for certain information in the pre-payment disclosure and receipt for a 
one-time transfer or the first in a series of preauthorized transfers 
to occur more than 10 days after the transfer is authorized. 
Specifically, under proposed Sec.  1005.32(b)(1)(i), a provider 
generally would be allowed to provide estimates in accordance with 
Sec.  1005.32(c) for the following information contained in the pre-
payment disclosure and receipt, as applicable: (i) The exchange rate 
used by the provider for the remittance

[[Page 6317]]

transfer; (ii) the amount that will be transferred to the designated 
recipient, in the currency in which the funds will be received by the 
designated recipient, if required to be disclosed under Sec.  
1005.31(b)(1)(v); (iii) any fees and taxes imposed on the remittance 
transfer by a person other than the provider, in the currency in which 
the funds will be received by the designated recipient; and (iv) the 
amount that will be received by the designated recipient, in the 
currency in which the funds will be received. See Sec. Sec.  
1005.36(b)(1), 1005.31(b)(1)(iv) through (vii), 1005.31(b)(2) and 
1005.31(f); see also proposed comment 32-1.
    Under proposed Sec.  1005.32(b)(2)(ii), a provider would be 
permitted to estimate taxes imposed on the remittance transfer by a 
person other than the provider, in the currency in which the funds will 
be received by the designated recipient, for transfers scheduled more 
than 10 days in advance only if those taxes are a percentage of the 
amount transferred to the designated recipient. Thus, a provider would 
be permitted to estimate taxes imposed in a recipient country only if 
they are calculated as a percentage of the estimated amount transferred 
to the designated recipient. The provider does not need additional 
flexibility to estimate taxes imposed in a recipient country in other 
cases, because in such instances, the taxes do not depend on an 
estimate of the amount of the funds transferred to the recipient.
    Under proposed Sec.  1005.32(b)(2)(iii), fees imposed on the 
remittance transfer by a person other than the provider, in the 
currency in which the funds will be received by the designated 
recipient, may be estimated in only two circumstances: (i) Where the 
fees are calculated as a percentage of the estimated amount transferred 
to the designated recipient, as described in Sec.  1005.31(b)(1)(v); or 
(2) where an ``insured institution'' as defined in Sec.  1005.32(a)(3) 
is permitted to estimate fees under the temporary exemption in Sec.  
1005.32(a). See proposed comment 32(b)(2)-1. Thus, a provider would not 
be permitted to estimate these fees for transfers scheduled more than 
10 days in advance if the fees are a specific sum fee, unless a 
depository institution is otherwise allowed to estimate that fee under 
the temporary exemption in Sec.  1005.32(a).
    The Bureau believes that a provider might be reluctant to allow a 
sender to schedule a transfer too far in advance if the provider is 
required to fix the exchange rate that will apply to the transfer 
(i.e., the retail rate) at the time that it is scheduled. This 
reluctance could arise due to the risk associated with participating in 
foreign exchange markets, and the manners in which providers and their 
partners manage such risk. Many retail exchange rates are set through 
reference to wholesale currency markets in which rates can fluctuate 
frequently.\8\ As a result, whenever there are time lags in between the 
time when the retail rate applied to a transfer is set, the time when 
the relevant foreign currency is purchased, and the time when funds are 
delivered, a provider (and/or its business partner) may face losses due 
to unexpected changes in the value of the relevant foreign currency. 
Providers (and/or their partners) generally use a variety of pricing, 
business processes, or hedging techniques to manage or minimize this 
exchange rate risk. For some, and perhaps many providers (or their 
partners), the task of managing or minimizing exchange risk may become 
more complicated or more costly if the amount of time between when the 
rate is set for a customer and when the transfer is sent increases. 
Setting the retail rate that applies to a transfer far in advance of 
when that transfer is sent may require the provider or other parties 
involved in processing the remittance transfer to use additional or 
more sophisticated risk management tools.
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    \8\ Some foreign exchange rates are set by monetary authorities. 
There are a variety of business models that providers use to 
purchase currency and fund transfers that are received in foreign 
currency. The timing of when foreign currency is purchased, the role 
of the provider in such a purchase, and the role of other 
intermediaries, partners, agents, and other parties can vary.
---------------------------------------------------------------------------

    As a result, the Bureau is concerned that providers--particularly 
relatively small remittance transfer providers--may choose not to offer 
remittance transfers scheduled too far in advance, particularly 
preauthorized remittance transfers that may extend over a series of 
months. The Bureau believes that the market for preauthorized 
remittance transfers is still in its nascent stages. Reluctance to 
further develop and/or offer such products could reduce consumers' 
access to the convenience of advance transfers. In other cases, 
providers may pass any additional costs of risk management on to 
consumers who schedule preauthorized transfers, in the form of less 
favorable exchange rates or higher fees.
    The proposal would give providers an option to schedule advance 
remittance transfers, while potentially limiting the need for 
additional exchange rate risk assumption, management, or minimization 
techniques. Under the proposal, if a transfer is scheduled to occur 
more than 10 days after the transfer is authorized, a provider could 
disclose an estimate of the exchange rate, and other information that 
depends on the exchange rate. The proposal links the time frame for use 
of estimates to the proposed safe harbor described below for when a 
provider would be deemed to have provided the pre-payment disclosure 
for subsequent preauthorized transfers within a ``reasonable time'' 
prior to the scheduled transfer of the respective subsequent transfer. 
Accordingly, remittance transfer providers would be able to use 
estimates under proposed Sec.  1005.32(b)(2) only where a consumer 
requests a transfer more than 10 days in advance, but would be expected 
to provide actual exchange rates and the amount to be provided to the 
recipient if the transfer is scheduled 10 or fewer days in advance. To 
effectuate the purposes of the EFTA and facilitate compliance, the 
Bureau proposes to use its authority under EFTA sections 904(a) and (c) 
to permit this additional flexibility to provide estimates.
    The Bureau solicits comment on the proposed changes allowing 
providers additional flexibility to provide estimates on pre-payment 
disclosures and receipts when the transfer is scheduled by the sender 
to be made more than 10 days after it is authorized. Specifically, the 
Bureau requests comment on whether estimates should be allowed in such 
cases, and if so, the number of days in each case should be more or 
less than 10 days and why. The Bureau specifically seeks information 
and comment regarding the nature of any burden or cost associated with 
setting exchange rates more than 10 days in advance of a payment, and 
the potential effect on consumers to doing so. The Bureau has 
structured the proposed threshold number of days to mesh with the safe 
harbor proposed below regarding provision of disclosures relating to 
subsequent preauthorized transfers within a ``reasonable time'' prior 
to the individual transfer. The Bureau requests comment on whether this 
linkage is appropriate and whether 10 days is the appropriate cut off 
for both purposes.
    The Bureau also recognizes that compared to disclosure of exact 
exchange rates, disclosure of estimated exchange rates will likely 
provide consumers less clear information about the service that they 
are buying, and whether that service is more or less expensive than the 
services offered by competitors. The Bureau therefore also solicits 
comment as described below on whether remittance transfer providers 
should be required to provide a follow-

[[Page 6318]]

up disclosure listing the actual exchange rate and related numbers. 
Finally, the Bureau solicits comment on whether in lieu of providing an 
estimate of the exchange rate on the disclosures for an advance 
transfer, the Bureau should allow a provider to disclose a formula that 
will be used to calculate the exchange rate that will apply to a 
transfer, and that is based on information that is publicly available 
prior to the time of transfer, such that a sender could use that 
formula to calculate the exchange rate that will apply to the transfer.
Estimates When the Amount of the Preauthorized Remittance Transfers Can 
Vary
    In some cases, a sender may set up a preauthorized remittance 
transfer arrangement where the amount of the first transfer and the 
scheduled date of the first transfer are not known at the time the 
arrangement is established. This may occur where the preauthorized 
remittance transfer arrangement is established to pay a bill each month 
(such as a utilities bill) and the amount of the bill and the date the 
bill is due may vary each month. In this case, the sender may not have 
received the next bill at the time the sender is establishing the 
preauthorized remittance transfer arrangement, and thus would not know 
the amount of the next bill and the date it is due.
    The Bureau requests comment on whether a provider should be given 
flexibility to estimate certain information in the disclosures for the 
first scheduled transfer where the preauthorized remittance transfers 
can vary in amount, and the provider does not know the exact amount of 
the first transfer at the time the disclosures for that transfer are 
given. Specifically, the Bureau requests comment on whether the Bureau 
should allow providers in this case to use estimates for the following 
information included on the pre-payment disclosure and receipt given at 
the time the first transfer is requested and authorized: (i) The amount 
of the transfer (in the currency in which the transfer is funded); (ii) 
fees and taxes if they depend on the amount of the transfer; (iii) the 
total amount of the transfer and fees; (iv) the date in the foreign 
country on which the funds will be available, if the provider does not 
know the exact due date of the next bill; (v) the exchange rate used by 
the provider for the remittance transfer; (vi) the amount that will be 
transferred to the designated recipient, in the currency in which the 
funds will be received by the designated recipient, if required to be 
disclosed under Sec.  1005.31(b)(1)(v); (vii) any fees and taxes 
imposed on the remittance transfer by a person other than the provider, 
in the currency in which the funds will be received by the designated 
recipient; and (viii) the amount that will be received by the 
designated recipient, in the currency in which the funds will be 
received. To effectuate the purposes of the EFTA and facilitate 
compliance, the Bureau proposes to use its authority under EFTA 
sections 904(a) and (c) to permit this additional flexibility to 
provide estimates.
    If these estimates are allowed, what should be the basis for the 
estimates for the transfer amount and the date the funds will be 
available? Should a provider be allowed to rely on estimates from the 
consumer of the transfer amount and the date the next bill is due? 
Section 1005.32(c) sets forth a basis for estimating the other 
disclosures described above. Where the amount of the preauthorized 
remittance transfers can vary, will providers need the flexibility to 
estimate the amount of the first transfer where the transfer is 
scheduled to occur within 10 days of when the preauthorized remittance 
transfer was established? Or in this case is it likely that senders at 
the time of establishing the preauthorized remittance transfer 
arrangement will have received the next bill to be paid under this 
arrangement and thus, would know the exact amount of the first transfer 
and when it is due?
    As discussed above, the Bureau solicits comment on whether a 
provider should be permitted to estimate the date in the foreign 
country on which the funds will be available, if the amount of the 
transfers under the preauthorized transfers arrangement varies, and the 
provider does not know the exact amount of the first transfer and the 
exact due date of the next bill at the time the disclosures are given 
for the first transfer. The Bureau solicits specific comment on whether 
this additional flexibility to estimate the date in the foreign county 
on which the funds will be available is necessary. The Bureau notes 
that under the January 2012 Final Rule, a provider must disclose in the 
receipt the date in the foreign country on which the funds will be 
available and may provide a statement that funds may be available to 
the designated recipient earlier than the date disclosed, using the 
term ``may be available sooner'' or a substantially similar term. See 
Sec.  1005.31(b)(2)(ii). In the case described above, will providers 
have sufficient information to know the time frame of when the next 
bill will be due (such that the next bill will be due within the next 
month), even if the provider does not know the exact date the next bill 
is due at the time the disclosures are given? If so, the Bureau 
solicits comment on whether the January 2012 Final Rule already 
provides providers with sufficient flexibility to handle situations 
where the provider does not know the exact date the next bill is due 
when the disclosures are given for the first transfer. Similarly, the 
Bureau also solicits comments on whether there are preauthorized 
remittance arrangements where the amount of the transfers will not 
vary, but the date on which the bills are due each payment period 
varies. If so, do providers need additional flexibility for the first 
transfer to estimate the date in the foreign country on which the funds 
will be available, if the provider does not know the exact due date of 
the next bill at the time the disclosures for the first transfer are 
given?
Second Receipt
    As discussed above, the proposal solicits comment on whether 
providers should be allowed additional flexibility to provide estimates 
for certain information in the pre-payment disclosure and receipt given 
at the time the transfer is requested and authorized if: (i) The 
transfer is scheduled to occur more than 10 days after the transfer is 
authorized; or (ii) the amount of the transfers under the preauthorized 
remittance transfer arrangement can vary, and the provider does not 
know the exact amount of the first transfer at the time the disclosures 
for that transfer are given. The Bureau recognizes that if providers 
are allowed to provide estimates in these two situations, there is an 
increased likelihood that the pre-payment disclosure and receipt given 
at the time the sender requests the transfer will contain estimates.
    If estimates are used, the sender will not receive precise 
information related to the exchange rate, the amount of currency to be 
received, and other information for that transfer, unless the provider 
is required to provide another disclosure to the sender with accurate 
information closer to the time the transfer is scheduled to occur. For 
example, assume a transfer is scheduled to occur more than 10 days 
after the transfer is authorized. Under the proposal, a provider would 
be permitted to use an estimate of the exchange rate and other 
information that depend on the exchange rate, such as the amount of 
currency to be received by the designated recipient, in providing the 
pre-payment disclosure and receipt that are given at the time the 
transfer is requested and authorized. Under the

[[Page 6319]]

final rule, these are the only disclosures that a sender would receive 
about the transfer, and the sender would not receive precise 
information about the exchange rate, the amount of currency to be 
received by the designated recipient, and other information about the 
transfer. Thus, if the Bureau allows providers additional flexibility 
to use estimates in the two situations described above in disclosures 
for the transfer that are given at the time the transfer is requested 
and authorized, the Bureau requests comment on whether it should also 
require a provider to provide a second receipt with accurate 
information within a reasonable time prior to the scheduled date of the 
transfer.
    The Bureau contemplates that this second receipt would be required 
only if the provider uses estimates because: (i) The transfer is 
scheduled to occur more than 10 days after the transfer is authorized; 
or (ii) the amount of the transfers under the preauthorized remittance 
transfer arrangement can vary, and the provider does not know the exact 
amount of the first transfer at the time the disclosures for that 
transfer are given. In other words, this second receipt would be 
required only for certain transfers that are one-time or the first 
transactions in series of preauthorized transfers. To effectuate the 
purposes of the EFTA and facilitate compliance, the Bureau proposes to 
use its authority under EFTA sections 904(a) and (c) to require this 
second receipt if a provider uses estimates in the two situations 
described above. The Bureau does not contemplate that this second 
receipt would be required if providers are otherwise permitted to use 
estimates under current Sec. Sec.  1005.32(a) and (b). See discussion 
of Sec.  1005.32 above.
    The timing and accuracy standards for this second receipt would be 
the same as those that apply to the disclosure of the pre-payment 
disclosure for subsequent transfers. For example, the Bureau would 
require that this second receipt must be mailed or delivered within a 
reasonable time prior to the scheduled date of the transfer. The Bureau 
would provide a safe harbor for meeting the ``reasonable time'' 
standard consistent with the one proposed for subsequent transfers. 
Thus, the safe harbor could provide that a provider meets the 
``reasonable time'' standard if the provider mails or delivers the 
second receipt no later than 10 days before the schedule date of the 
transfer. The error resolution procedures in Sec.  1005.33 would relate 
to information disclosed in this second receipt. This second receipt 
would ensure that senders receive accurate information with respect to 
the transfer, where estimates are permitted in the two situations 
above. In this case, for certain transfers that are one-time transfers 
or the first transaction in a series of preauthorized transfers, the 
sender would receive three disclosures for a transfer: (i) A pre-
payment disclosure given at the time the transfer is requested that 
contains estimated information about the transfer; (ii) a receipt given 
at the time the transfer is authorized that contains estimated 
information about the transfer; and (iii) a second receipt given within 
a reasonable time prior to the schedule date of the transfer that 
contains accurate information about the transfer. The Bureau requests 
comment on the burden to providers of providing this second receipt and 
the benefit to senders of receiving this additional disclosure. 
Specifically, the Bureau requests comment on whether providing multiple 
disclosures (one pre-payment disclosure and two receipts) for each 
transfer described above would create information overload for 
consumers.
The Timing and Accuracy Requirements for Disclosures About Subsequent 
Transfers
    For subsequent preauthorized remittance transfers under the January 
2012 Final Rule, the remittance transfer provider must provide a pre-
payment disclosure as described in Sec.  1005.31(b)(1) to the sender 
for each subsequent transfer. The pre-payment disclosure must be mailed 
or delivered within a reasonable time prior to the scheduled date of 
each subsequent transfer. See Sec.  1005.36(a)(2)(i). The remittance 
transfer provider also must provide a receipt as described in Sec.  
1005.31(b)(2) to the sender for each subsequent transfer. The receipt 
generally must be mailed or delivered to the sender no later than one 
business day after the date on which the transfer is made. If the 
transfer involves the transfer of funds from the sender's ``account'' 
(as defined by Regulation E) held by the provider, the receipt may be 
provided on or with the next regularly scheduled periodic statement for 
that account or within 30 days after payment is made for the remittance 
transfer if a periodic statement is not required. See Sec.  
1005.36(a)(2)(ii). The pre-payment disclosure and the receipt provided 
for each subsequent transfer must be accurate when the respective 
subsequent transfer is made, except to the extent estimates are allowed 
under Sec.  1005.32. See Sec.  1005.36(b)(2).
    The proposal solicits comment on two alternative approaches to 
possible changes to the disclosures rules for subsequent transfers: (i) 
Whether the Bureau should retain the requirement that a provider give a 
pre-payment disclosure for each subsequent transfer, and should provide 
a safe harbor interpreting the ``within a reasonable time'' standard 
for providing this disclosure; or (ii) whether the Bureau instead 
should eliminate the requirement to provide a pre-payment disclosure 
for each subsequent transfer.
First Alternative Approach for Revising the Disclosure Requirements for 
Subsequent Transfers
    As discussed above, Sec.  1005.36(a)(2)(i) provides that the pre-
payment disclosure for subsequent transfers must be mailed or delivered 
within a reasonable time prior to the scheduled date of the respective 
subsequent transfer. However, the final rule does not provide further 
guidance on what constitutes a ``reasonable time.'' With respect to the 
first alternative approach to revising the disclosure requirements for 
subsequent transfers, the Bureau would retain the requirement that a 
provider mail or deliver a pre-payment disclosure within a reasonable 
time prior to the scheduled date of the transfer. The Bureau solicits 
comment on whether it should provide a safe harbor interpreting the 
``within a reasonable time'' standard for providing this disclosure. 
Specifically, the Bureau proposes to add comment 36(a)-1 to specify 
that if a provider mails or delivers the pre-payment disclosure not 
later than 10 days before the scheduled date of the respective 
subsequent transfer, the provider will be deemed to have provided that 
disclosure within a reasonable time prior to the scheduled date of the 
respective subsequent transfer. Without a safe harbor, providers may 
face uncertainty and litigation risk over whether they are complying 
with the requirement to provide the pre-payment disclosure within a 
reasonable time prior to the scheduled date of the respective 
subsequent transfer.
    The Bureau is proposing 10 days for the safe harbor because it 
believes that this length of time ensures that a sender is provided 
timely advance notice of the upcoming transfer. The pre-payment 
disclosure would notify the sender of the amount of the upcoming 
transfer and other important information about the transfer. Senders 
may need time to make sure that sufficient funds are in their deposit 
or other accounts to fund the upcoming transfers. This pre-payment 
disclosure may be particularly useful in cases where the amount that 
will be transferred to the designated recipient will vary. The 10-day 
period

[[Page 6320]]

would also facilitate consumers' ability to exercise their cancellation 
rights as discussed further below.
    The Bureau also notes that this 10-day period for the safe harbor 
is consistent with a 10-day notice provision in Sec.  1005.10(d)(1) 
that relates to preauthorized EFTs. Specifically, under Sec.  
1005.10(d)(1), when a preauthorized EFT from the consumer's account 
will vary in amount from the previous transfer under the same 
authorization or from the preauthorized amount, the designated payee or 
the financial institution must send the consumer written notice of the 
amount and date of the electronic fund transfer at least 10 days before 
the scheduled date of the transfer.\9\
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    \9\ The Bureau notes that there are several exceptions to the 
notice requirement in Sec.  1005.10(d)(1) related to preauthorized 
EFTs, as set forth in Sec.  1005.10(d)(2) and comment 10(d)(2)-2.
---------------------------------------------------------------------------

    The Bureau solicits comment on the proposed safe harbor in comment 
36(a)-1. Specifically, the Bureau requests comment on whether the 
length of time for the safe harbor should be more or less than 10 days 
and if so, what the length of time for the safe harbor should be and 
why. In addition, the Bureau solicits comment on whether the safe 
harbor also should include a limit on how far in advance of the 
specified transfer the pre-payment disclosure may be given, such as 
also specifying that under the safe harbor the pre-payment disclosure 
could be given no earlier than a certain number of days before the 
scheduled date of the transfer. The Bureau also requests comment on 
whether two safe harbors should be provided--one applicable to 
disclosures that are mailed and one applicable to disclosures provided 
electronically--and if so, what the length of time for each safe harbor 
should be and why. The Bureau recognizes that a shorter time frame for 
a safe harbor for electronic disclosures may be appropriate, given that 
this safe harbor would not need to account for time needed for the 
disclosures to reach senders through the mail. The Bureau also requests 
comment on cases where the amount of the preauthorized remittance 
transfers can vary or the date the bill is due each payment period may 
vary. How far in advance will providers typically receive the next bill 
to be paid under preauthorized remittance arrangements? Are there cases 
where providers will not have received the next bill at least 10 days 
prior to when the bill must be paid, so that the providers will not 
know the amount of the transfer and the scheduled date of the transfer 
at least 10 days prior to the scheduled date of the transfer? The 
Bureau solicits comment on whether a special safe harbor should be 
provided for preauthorized remittance transfers where the amount of the 
transfers may vary or the date the bill is due each payment period may 
vary, and if so, what the length of time for that safe harbor should be 
and why.
    In setting the proper length of time for the safe harbor(s), the 
Bureau also requests comment on the potential impact on senders, and in 
particular whether senders are likely to use the pre-payment 
disclosures to decide whether to cancel preauthorized remittance 
transfers. As discussed in more detail below, the Bureau requests 
comment on whether the pre-payment disclosures will be useful to a 
sender in his or her decision about whether to continue the 
preauthorized remittance transfer arrangement. In setting the proper 
length of time for the safe harbor(s), is it important to ensure that a 
sender has sufficient time to review the disclosure and cancel the 
scheduled transfer in accordance with Sec.  1005.36(c)? Or are senders 
likely to use the pre-payment disclosures only for other purposes, such 
as reminders of the upcoming transfers so that the senders can ensure 
that sufficient funds are in their deposit or other accounts to fund 
the upcoming transfers?
    The Bureau also requests comment on the burden to providers of 
providing an accurate pre-payment disclosure 10 days before the 
scheduled date of the transfer, to the extent the provider is not 
allowed to use estimates for certain disclosures under Sec.  1005.32, 
and how those benefits and burdens compare to those associated with a 
longer or shorter disclosure period. The Bureau notes that under Sec.  
1005.36(b)(2), the pre-payment disclosure for each subsequent transfer 
must be accurate when the transfer is made, except to the extent 
estimates are permitted by Sec.  1005.32. The Bureau recognizes that 
the further in advance that the pre-payment disclosure is given, the 
greater need there may be for the provider or other parties involved in 
processing the remittance transfer to use more sophisticated risk 
management tools to protect themselves against exchange rate 
fluctuations.
Second Alternative Approach for Revising Disclosure Requirements for 
Subsequent Transfers
    With respect to the second alternative approach for revising the 
disclosure requirements for subsequent transfers, the Bureau solicits 
comment on whether the Bureau instead should eliminate the requirement 
that a provider mail or deliver a pre-payment disclosure for each 
subsequent transfer. To effectuate the purposes of the EFTA and 
facilitate compliance, the Bureau proposes to use its authority under 
EFTA sections 904(a) and (c) to eliminate this disclosure requirement 
for subsequent transfers.
    The Bureau solicits comment on how the benefit to senders of 
receiving a pre-payment disclosure for each subsequent transfer compare 
to the cost to providers of providing this disclosure for each 
subsequent transfer. Specifically, the Bureau requests comment on how 
senders are likely to use pre-payment disclosures given for each 
subsequent transfer. Is a sender like to use the pre-payment disclosure 
in preparing for each subsequent transfer? For example, a sender may 
need time to make sure that sufficient funds are in his or her deposit 
or other account to fund the subsequent transfer. The Bureau also 
solicits comment on whether the pre-payment disclosure would be helpful 
to a sender in verifying that the transfer is scheduled as expected 
(e.g., that the amount to be transferred is accurate). Alternatively, 
the Bureau solicits comment on whether a pre-payment disclosure would 
be most useful to a sender in certain circumstances, such as when the 
amount that will be transferred to the designated recipient will vary, 
and the amount to be transferred for the upcoming transfer falls 
outside a specified range or differs by more than a specified amount 
from the most recent transfer.
    The Bureau also requests comment on whether senders will likely use 
pre-payment disclosures for each subsequent transfer in deciding 
whether to continue preauthorized remittance transfer arrangements. For 
example, if a sender receives a pre-payment disclosure where the 
exchange rate seems significantly less advantageous to the sender than 
the exchange rate used for the previous transfer, will the sender 
cancel that transfer and end the entire preauthorized remittance 
transfer arrangement? Is it important that senders receive pre-payment 
disclosures for the purpose of deciding whether to continue 
preauthorized remittance transfer arrangements, or will the receipts 
that are provided for each subsequent transfer provide senders with 
sufficient information in a timely manner to make decisions about 
whether to continue the preauthorized remittance transfer arrangement? 
In evaluating whether to continue preauthorized remittance transfer 
arrangements, will senders tend to review the receipts over a period of 
time (e.g., review the receipts they received in the past six months) 
to decide whether to continue the arrangements?

[[Page 6321]]

The Bureau also requests comment on the burden to providers in 
providing pre-payment disclosures for each subsequent transfer. The 
Bureau solicits comment on whether the benefit to senders of receiving 
a pre-payment disclosure for each subsequent transfer justifies the 
cost to providers of providing this disclosure for each subsequent 
transfer.
Cancellation of Certain Remittance Transfers Scheduled in Advance, 
Including Preauthorized Remittance Transfers
    The January 2012 Final Rule implements a special cancellation rule 
for certain remittance transfers scheduled in advance by a sender, 
including preauthorized remittance transfers. Specifically, where the 
sender schedules a remittance transfer at least three business days 
\10\ before the date of the transfer, the sender must notify the 
provider at least three business days before the scheduled date of the 
transfer to cancel the transfer. See Sec.  1005.36(c). The general 
cancellation rule applies where the sender schedules a remittance 
transfer within three business days of the date of the transfer. In 
these cases, the sender must notify the provider within 30 minutes of 
when the sender makes payment in connection with the remittance 
transfer to cancel the transfer. See Sec.  1005.34(a). For purposes of 
subpart B, payment is considered made when the payment is authorized. 
See comment 31(e)-2. In any event, the receipt for the transfer must 
include a disclosure of the deadline for cancelling the transfer. See 
Sec.  1005.31(b)(2)(iv). As discussed in more detail below, the Bureau 
wants to ensure that the three-business-day deadline to cancel 
remittance transfers scheduled in advance as set forth in the final 
rule provides appropriate protections for senders and does not impose 
undue burden on providers, and that senders are informed properly of 
the right to cancel a transfer.
---------------------------------------------------------------------------

    \10\ The term ``business day'' is defined in the January 2012 
Final Rule to mean ``any day on which the offices of a remittance 
transfer provider are open to the public for carrying on 
substantially all business functions.'' See Sec.  1005.30(b).
---------------------------------------------------------------------------

Three-Business-Day Deadline To Cancel
    In the final rule, the Bureau adopted special cancellation 
provisions for transfers scheduled more than three-business-days in 
advance (in lieu of the general 30 minute cancellation rule) because 
the Bureau believes it is appropriate to provide senders with 
additional time to change their minds about sending a transfer if, for 
example, circumstances change between when the transfer is authorized 
and when the transfer is to be made. At the same time, the Bureau 
believes that it is necessary to give providers sufficient time to 
process any cancellation requests before a transfer is made.
    The Bureau wants to ensure that the special cancellation procedures 
for remittance transfers scheduled in advance as set forth in the final 
rule provide appropriate protections for senders and do not impose 
undue burden on providers. As a result, the Bureau solicits comment on 
whether the three-business-day deadline to cancel accomplishes these 
goals, or whether the deadline to cancel these types of remittance 
transfers should be set earlier or later than three business days prior 
to the scheduled date of the transfer, and if so, why. The current 
three-business-day deadline for cancelling this type of remittance 
transfer is consistent with the three-business-day deadline for 
cancelling a preauthorized EFT under Sec.  1005.10(c)(1). Specifically, 
under Sec.  1005.10(c)(1), a consumer may stop payment of a 
preauthorized EFT from the consumer's account by notifying the 
financial institution orally or in writing at least three business days 
before the scheduled date of the transfer. The Bureau requests comment 
on whether it is important to maintain consistency between the deadline 
for cancellation for preauthorized remittance transfers and the 
deadline for cancellation for preauthorized EFTs. The Bureau notes that 
the transfers that would be subject to the special cancellation rule in 
Sec.  1005.36(c) would change depending on whether the deadline to 
cancel was earlier or later than three business days before the 
scheduled transfer. For example, if the deadline to cancel was no later 
than two business days prior to the scheduled date of the transfer, the 
transfers that would be subject to the special cancellation rule in 
Sec.  1005.36 would be those where the sender schedules the remittance 
transfer at least two days before the date of the transfer.
Disclosure of Deadline To Cancel
    The Bureau also wants to ensure that senders are informed properly 
of the right to cancel a transfer and the deadline to cancel, without 
undue burden on providers in providing these disclosures. The January 
2012 Final Rule requires that a provider disclose the deadline to 
cancel in the receipt. Under the final rule, a provider must only 
disclose in the receipt for a transfer the deadline to cancel that is 
applicable to that transfer. Thus, for any remittance transfer 
scheduled by the sender at least three business days before the date of 
the transfer, a provider may solely disclose in the receipt information 
about the three-business-day deadline to cancel the transfer. For other 
transfers, the receipt may solely disclose the 30 minute deadline to 
cancel. In addition, in disclosing the three-business-day deadline to 
cancel, under the final rule, the provider is not required to disclose 
a specific date on which the right to cancel will expire, such as 
disclosing: ``You can cancel for a full refund no later than [insert 
calendar date].'' Thus, under the final rule, a provider could use a 
generic disclosure, such as disclosing: ``You can cancel for a full 
refund no later than three business days prior to the scheduled date of 
the transfer.'' The Bureau solicits comment on three issues related to 
the disclosure of the deadline to cancel as set forth in the final 
rule: (i) Whether the three-business-day deadline to cancel transfers 
scheduled in advance should be disclosed in a different manner to 
consumers, such as by requiring a provider to disclose in the receipt 
the specific date on which the right to cancel will expire; (ii) 
whether a provider should be allowed on a receipt to describe both the 
three-business-day and 30 minute deadline-to-cancel time frames and 
either describe to which transfers each deadline to cancel is 
applicable, or alternatively, use a check box or other method to 
indicate which deadline is applicable to the transfer; and (iii) 
whether a provider should be required to disclose the deadline to 
cancel in the pre-payment disclosure for each subsequent transfer, 
rather than in the receipt given for each subsequent transfer.
Disclosure of Deadline To Cancel Transfers Scheduled in Advance
    Under the final rule, where the sender schedules a remittance 
transfer at least three business days before the date of the transfer, 
the sender must notify the provider at least three business days before 
the scheduled date of the transfer to cancel the transfer. See Sec.  
1005.36(c). The term ``business day'' is defined in the final rule to 
mean ``any day on which the offices of a remittance transfer provider 
are open to the public for carrying on substantially all business 
functions.'' See Sec.  1005.30(b). Under the final rule, an abbreviated 
statement about the sender's cancellation rights generally must be 
disclosed in the receipt for the transfer. See Sec.  1005.31(b)(2)(iv). 
Under the final rule, the provider is not required to disclose a 
specific date on which the right to cancel will expire, such as 
disclosing: ``You can cancel for a full refund no later than [insert 
calendar date].'' Thus,

[[Page 6322]]

under the final rule, in disclosing the three-business-day deadline to 
cancel, a provider could use a generic disclosure, such as disclosing: 
``You can cancel for a full refund no later than three business days 
prior to the scheduled date of the transfer.'' As discussed above, the 
current three-business-day deadline for cancelling this type of 
remittance transfer set forth in the January 2012 Final Rule is 
consistent with the three-business-day deadline for cancelling a 
preauthorized EFT under Sec.  1005.10(c)(1). In addition, the generic 
disclosure of the current three-business-day deadline for cancelling 
this type of remittance transfer set forth in the January 2012 Final 
Rule is consistent with the generic disclosure that is permitted under 
Sec.  1005.10(c)(1) in disclosing the three-business-day deadline for 
cancelling a preauthorized EFT.
    The Bureau is concerned that senders may have difficulty 
determining the specific date the right to cancel expires for a 
particular remittance transfer. This difficulty might arise because the 
sender may not know the exact business days of the provider. For 
example, assume the scheduled date of the transfer is Monday, March 11, 
2013. Also, assume that a provider's business days are Monday through 
Saturday, except for State and Federal holidays. In this example, if a 
sender believed that the provider's business days generally were Monday 
through Friday, the sender might calculate the deadline to cancel as 
Wednesday, March 6, 2013, when the deadline to cancel actually is 
Thursday, March 7, 2013. If the sender believed that the provider's 
business days generally were Monday through Sunday, the sender might 
calculate mistakenly the deadline to cancel as Friday, March 8, 2013. 
In addition, the fact in this example that a provider's business days 
do not include State and Federal holidays could also make it difficult 
for senders to calculate the exact date on which the right to cancel a 
particular transfer expires. For example, assume in the example above 
that Friday is a State holiday. The sender would need to know that 
Friday is a State holiday in calculating the date the right to cancel 
expires.
    The Bureau solicits comments on whether the disclosure in the final 
rule of the three-business-day deadline to cancel adequately informs 
senders of their right to cancel. The Bureau also solicits comments on 
alternatives for disclosing the three-business-day deadline to cancel. 
Under the first alternative, the Bureau solicits comment on whether a 
provider should be required to disclose its business days on the 
receipt, so that senders will know this information and could use it in 
calculating the deadline to cancel the particular transfer. In the 
example above, the provider would disclose in the receipt that its 
business days are Monday through Saturday, excluding State and Federal 
holidays. The Bureau notes that under Regulation E, in Sec.  
1005.7(b)(3), a financial institution is required to disclose its 
business days in the disclosures required at the time a consumer 
contracts for an electronic fund transfer service or before the first 
electronic fund transfer is made involving the consumer's account. 
Nonetheless, not all providers are ``financial institutions,'' as that 
term is defined in Sec.  1005.2(i). In addition, even in cases where a 
financial institution has provided a disclosure of its business days to 
a sender under Sec.  1005.7(b)(3), the sender may not recall this 
information when a remittance transfer is conducted at a significantly 
later time than when the consumer contracts for an electronic fund 
transfer service.
    Specifically, the Bureau solicits comment on whether disclosure of 
a provider's business days in receipts are necessary for senders to 
determine the date the right to cancel expires for a particular 
transfer. Are senders likely to be familiar with the State and Federal 
holidays to know when to take them into account in calculating the 
deadline? Will senders that are contemplating cancelling transfers 
consult the receipt and attempt to calculate the three-business-day 
deadline to cancel based on information in the receipt, or will senders 
typically call providers to find out when the right to cancel expires 
for those transfers?
    Under a second alternative, the Bureau solicits comment on whether 
the provider should be required to disclose in the receipt a specific 
date on which the right to cancel will expire, such as disclosing ``You 
can cancel for a full refund no later than [insert calendar date].'' 
This alternative would relieve senders from the potential difficulty of 
calculating the deadline to cancel. The provider would know its 
business days and would be able to calculate the deadline date for the 
sender. Nonetheless, the Bureau solicits comments on any operational 
burdens on providers in providing the specific deadline on the receipt. 
As noted above, the current three-business-day deadline for cancelling 
remittance transfers scheduled in advance is consistent with the three-
business-day deadline for cancelling a preauthorized EFT under Sec.  
1005.10(c)(1). The Bureau requests comment on whether it is important 
to maintain consistency between the deadline for cancellation for 
preauthorized remittance transfers and the deadline for cancellation 
for preauthorized EFTs.
    The Bureau also solicits comment on other alternatives for 
improving the disclosure of the deadline to cancel for transfers 
scheduled in advance. The Bureau notes that it considered whether the 
deadline to cancel might be easier for the sender to calculate if the 
deadline to cancel were based on calendar days instead of business 
days. For example, in this case, the deadline to cancel could be three 
calendar days prior to the scheduled date of the transfers, instead of 
three business days. Nonetheless, the Bureau is concerned that if 
calendar days were used to calculate the deadline to cancel, the date 
of deadline could fall on a non-business day for the provider. For 
example, assume the scheduled date of the transfer is Wednesday, 
February 20, 2013 and that Monday, February 18, 2013 is a Federal 
holiday. Also, assume that a provider's business days are Monday 
through Friday, except for State and Federal holidays. In addition, 
assume that a sender could cancel the transfer no later than three 
calendar days prior to scheduled date of the transfer. In this example, 
the deadline to cancel would be Sunday, February 17, 2013. In this 
case, though, Sunday is not a business day for the provider. The sender 
may not be able to exercise his or her right to cancel on that Sunday 
because the provider would not be open for business that day. In 
addition, to the extent a sender could notify the provider of the 
desire to cancel on Sunday, such as sending an email to the provider, 
the provider may not have sufficient time to process the cancellation 
once it receives the notice. In this example, the next business day 
would be Tuesday, February 19, 2013 (because Monday, February 18, 2013 
is a Federal holiday), and the provider would have only one business 
day to act on this cancellation. Thus, the Bureau does not believe that 
using calendar days is an alternative to business days for structuring 
the deadline to cancel, but solicits comment on this.
    The Bureau also considered whether redefining the term ``business 
day'' for purposes of the deadline to cancel might help senders better 
understand how to calculate the deadline to cancel. For example, the 
Bureau could define ``business day'' for purposes of calculating the 
deadline to cancel as ``Monday through Friday excluding Federal 
holidays.'' Nonetheless, it is not clear that redefining ``business 
day'' in this way would help senders calculate the deadline to cancel. 
Senders would

[[Page 6323]]

still need to know that a particular date is a Federal holiday in 
calculating the deadline to cancel for a particular transfer. In 
addition, redefining the term ``business day'' in this way might 
actually in some cases cause the deadline to cancel to be set earlier 
than if the provider's actual business days were used (i.e., any day on 
which the offices of a remittance transfer provider are open to the 
public for carrying on substantially all business functions). For 
example, assume that a provider's actual business days were Monday 
through Saturday, except Federal and State holidays. Assume also that 
the scheduled date of a transfer is Monday, March 11, 2013. If the term 
``business day'' was defined as ``Monday through Friday, excluding 
Federal holidays'' for purposes of the deadline to cancel, the deadline 
to cancel would be Wednesday, March 6, 2013. Nonetheless, if the 
provider's actual business days were used to calculate the deadline to 
cancel, the deadline to cancel would be Thursday, March 7, 2013. Thus, 
the Bureau does not believe that redefining the term ``business day'' 
in this way is a preferable alternative, but the Bureau solicits 
comment on this.
Disclosure of Both the Three-Business-Day Deadline and the 30 Minute 
Deadline in Same Receipt
    Under the final rule, the notice of the deadline to cancel a 
transfer must be disclosed in the receipt for the transfer. Under the 
final rule, a provider must disclose in the receipt for a transfer the 
deadline to cancel that is applicable to that transfer. Thus, for any 
remittance transfer scheduled by the sender at least three business 
days before the date of the transfer, a provider may solely disclose in 
the receipt information about the three-business-day deadline to cancel 
the transfer. For other transfers, the receipt may solely disclose the 
30 minute deadline to cancel. Thus, under the final rule, a provider 
that offers both types of transfers must create two receipts--one that 
contains the three-business-day deadline to cancel and one that 
contains the 30 minute deadline to cancel. The provider also must 
ensure that it gives the sender the proper receipt.
    To ease burden on providers in developing two different receipts 
and making sure they give a sender the proper receipt, the Bureau is 
requesting comment on whether a provider that provides both types of 
transfers should be permitted to describe both cancellation provisions 
on one receipt. For example, the provider could disclose on the receipt 
both the three-business-day and the 30 minute time frames and either: 
(i) describe to which transfers each deadline is applicable; or (ii) 
use a check box or other method to indicate which deadline is 
applicable to the transfer. A provider using the option in the first 
scenario would provide, on one receipt, the language describing each 
deadline to cancel and describe to which types of transfers each 
deadline applies. A provider using the option in the second scenario 
would describe both cancellation provisions on one receipt, but would 
also use a check box or other method to indicate which deadline is 
applicable to the transfer. The Bureau solicits comment on whether 
senders receiving this type of notice under either the first scenario 
or the second scenario would be able to understand easily which 
deadline to cancel applies to their particular transfers. The Bureau 
also solicits comment on the operational burdens on providers to comply 
with the final rule, if the providers make both types of transfers. The 
Bureau recognizes that whether the Bureau should adopt this type of 
provision depends on how the three-business-day day deadline to cancel 
is disclosed to the sender, such as whether it is a generic disclosure 
or a specific date, as discussed in more detail above.
Disclosure of Deadline To Cancel for Subsequent Transfers
    Under the final rule, a sender may not receive a receipt for each 
subsequent transfer until the transfer has already occurred. When this 
happens, the deadline to cancel that transfer will have already expired 
by the time a sender receives the receipt for that subsequent transfer. 
As discussed above, the Bureau solicits comment on whether it should 
eliminate the requirement that a provider mail or deliver a pre-payment 
disclosure for each subsequent transfer. Nonetheless, to the extent the 
pre-payment disclosure requirement for each subsequent transfer is 
retained, the Bureau solicits comment on whether a provider should be 
required to disclose the deadline to cancel in the pre-payment 
disclosure for each subsequent transfer, rather than in the receipt 
given for each subsequent transfer, to ensure that senders receive 
disclosure of the deadline to cancel a subsequent transfer prior to the 
time that deadline expires. If the requirement to provide a pre-payment 
disclosure for each subsequent transfer is not retained, the Bureau 
would leave the disclosure of the deadline to cancel in the receipt for 
each subsequent transfer. In this case, the Bureau recognizes that it 
would be confusing to consumers to disclose the three-business-day 
deadline to cancel as a specific date, rather than as a generic 
disclosure, where the pre-payment disclosure is not retained because 
the specific date by which the sender may cancel the transfer may have 
passed by the time the sender receives the receipt for the transfer. 
Nonetheless, a generic disclosure about the three-business-day deadline 
to cancel in the receipt may still provide helpful information to the 
sender about the deadline to cancel upcoming subsequent transfers and 
help ensure that senders are informed of their cancellation rights 
before the cancellation period has passed for those subsequent 
transfers.

VII. Section 1022(b)(2) of the Dodd-Frank Act

    In developing the proposed rule, the Bureau has conducted an 
analysis of potential benefits, costs, and impacts as required by 
section 1022(b)(2)(A) of the Dodd-Frank Act.\11\ The Bureau also 
consulted with appropriate Federal agencies regarding the consistency 
of the proposed rule with prudential, market, or systemic objectives 
administered by such agencies as required by section 1022(b)(2)(B) of 
the Dodd-Frank Act.\12\
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    \11\ Section 1022(b)(2)(A) of the Dodd-Frank Act requires the 
Bureau to consider the potential benefits and costs of its 
regulations to consumers and industry, including the potential 
reduction of access by consumers to consumer financial products or 
services. The statute also requires the Bureau to consider the 
impact of proposed rules on depository institutions and credit 
unions with $10 billion or less in total assets (as described in 
section 1026 of the Dodd-Frank Act) and the impact on consumers in 
rural areas.
    \12\ Section 1022(b)(2)(B) of the Dodd-Frank Act requires that 
the Bureau consult with the appropriate prudential regulators or 
other Federal Agencies prior to proposing a rule and during the 
comment process regarding consistency of the proposed rule with 
prudential, market, or systemic objectives administered by such 
agencies.
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    In this rulemaking, the Bureau is proposing to amend Regulation E, 
which implements the EFTA, and the official interpretation to the 
regulation, which interprets the requirements of Regulation E. The 
proposal is related to the January 2012 Final Rule, published elsewhere 
in today's Federal Register, that implements section 1073 of the Dodd-
Frank Act regarding remittance transfers. The proposal requests comment 
on a safe harbor with respect to the phrase ``normal course of 
business'' in the definition of ``remittance transfer provider.'' The 
proposal also requests comment on several aspects of the final rule 
regarding remittance transfers that are scheduled in advance, including 
preauthorized remittance transfers.

[[Page 6324]]

    The proposal contains both specific proposed provisions with 
regulatory or commentary language (proposed provisions) as well as 
requests for comment on modifications where regulatory or commentary 
language was not specifically included (additional proposed 
modifications). The analysis below considers the benefits, costs and 
impacts of each proposed provision and the additional proposed 
modifications. It bears note that one of the purposes of the proposed 
provisions and the additional proposed modifications is to remove 
barriers to the development of the market for remittance transfers that 
are scheduled in advance. Since the market for these services is still 
developing, there is little information with which to evaluate the 
proposed provisions and modifications that will be most useful to 
providers and consumers. The Bureau generally requests comment on the 
proposed provisions and additional proposed modifications and on the 
Bureau's assessment of the benefits, costs and impacts of the proposed 
provisions and additional proposed modifications.
    The analysis generally examines the benefits, costs and impacts of 
the provisions of the proposed provisions and additional proposed 
modifications against the baseline of the January 2012 Final Rule 
published elsewhere in today's Federal Register. This baseline focuses 
the discussion of benefits, costs and impacts on the incremental effect 
of this rulemaking on the development of the market for remittance 
transfers scheduled in advance.
    The Bureau will further consider the benefits, costs and impacts of 
the proposed provisions and additional proposed modifications before 
finalizing the proposal. The Bureau asks interested parties to provide 
general information, data, and research results on the number of firms 
that schedule remittance transfers in advance, the number of transfers 
they schedule over a given period of time, the characteristics of the 
transfers (e.g., the typical amount of the transfers and whether 
multiple transfers are scheduled in advance), the revenue earned from 
these transfers, and related general information. The Bureau also 
requests specific information on the number and characteristics of 
consumers who send remittance transfers via remittance transfer 
providers who would meet the conditions of the safe harbor for normal 
course of business in the proposed rule, information on the number and 
characteristics of the remittance transfer providers just described, 
and the quantitative and qualitative characteristics of the service 
provided and the transfers. The Bureau asks for similar factual 
information regarding consumers who schedule remittance transfers in 
advance, the number and characteristics of providers of this service, 
and the quantitative and qualitative characteristics of the service and 
the transfers.

Costs and Benefits to Consumers and Covered Persons

    The analysis below discusses (i) the proposed provisions; and (ii) 
the additional proposed modifications.

Proposed Provisions

    Each specific proposed provision reduces the cost of complying with 
the January 2012 Final Rule for some remittance transfer providers and 
leaves the costs of other providers unaffected. The proposed rule 
provisions therefore provide only benefits to covered persons and no 
costs.
    The proposed provisions include a proposed revision to comment 
30(f)-2 of the January 2012 Final Rule. Comment 30(f)-2 in the January 
2012 Final Rule states that whether a person provides remittance 
transfers in the ``normal course of business'' depends on the ``facts 
and circumstances.'' The proposed revision provides a safe harbor under 
which this facts and circumstances test is met. Specifically, a person 
that performs 25 or fewer remittance transfers in the previous calendar 
year will not be deemed to be providing remittance transfers ``in the 
normal course of business'' on the first 25 remittance transfers in the 
current year. If that person, however, makes a 26th remittance transfer 
in the current calendar year, the person would be evaluated under the 
facts and circumstance test to determine whether the person is a 
remittance transfer provider for that transfer and any additional 
transfers provided through the rest of the year.
    Consumers may experience benefits and costs from the proposed safe 
harbor provision for ``normal course of business.'' Some consumers will 
benefit if the entities they use to send remittance transfers would 
stop offering remittance transfers if not for the safe harbor. Other 
consumers may incur costs associated with not receiving the disclosures 
and protections set forth in the remittance transfer rules from 
entities who do not provide remittance transfers ``in the normal course 
of business.'' Businesses should only benefit. The proposed provision 
removes the burden from businesses that perform few remittance 
transfers from having to argue that they meet a general facts and 
circumstances test. This reduces the cost of complying with the January 
2012 Final Rule. The proposed provision imposes no new burden on 
providers that do not meet the safe harbor. Thus, these other providers 
are not affected by the proposed provision.
    Proposed Sec.  1005.32(b)(2) mitigates the burden on providers 
imposed by Sec. Sec.  1005.31(f) and 1005.36(b)(1) of the January 2012 
Final Rule. This proposed provision allows providers to estimate 
certain amounts in the pre-payment disclosure and receipt for certain 
standalone transfers or the first scheduled transfer in a series of 
preauthorized transfers. Specifically, proposed Sec.  1005.32(b)(2) 
would permit estimates for these transfers when they are scheduled by 
the sender more than 10 days in advance of the consumer's requested 
transfer date.
    There may be both benefits and costs for consumers from the 
proposed provision relative to the January 2012 Final Rule. Certain 
providers may not schedule transfers more than 10 days in advance 
without the option of estimating certain information in the 
disclosures. Consumers who want to schedule transfers more than 10 days 
in advance may therefore find it easier to find a provider or they may 
find more competition among providers of this service. Some consumers 
may incur costs from receiving estimated disclosures instead of 
accurate disclosures. The cost would depend on the size of any 
discrepancy between estimated and accurate disclosures.
    Providers can only benefit from the proposed provision. The 
proposed provision removes from providers the burden of having to give 
accurate pre-payment disclosures and receipts for transfers scheduled 
more than 10 days in advance. The proposed provision does not affect 
providers that would not allow senders to schedule transfers more than 
10 days in advance, and it benefits all others.
    Proposed comment 36(a)-1 provides guidance on the ``within a 
reasonable time'' requirement for pre-payment disclosures in Sec.  
1005.36(a)(2)(i). Under Sec.  1005.36(a)(2)(i), a provider must provide 
a pre-payment disclosure for each subsequent transfer (after the first 
scheduled transfer) in a series of preauthorized remittance transfers, 
and the pre-payment disclosure for each subsequent transfer must be 
provided ``within a reasonable time'' prior to the scheduled date of 
the transfer. The proposed comment clarifies that a provider is deemed 
to have provided a pre-payment disclosure within a reasonable time 
prior to the scheduled date of the transfer if the provider mails

[[Page 6325]]

or delivers the disclosure 10 or more days prior to the scheduled date 
of the transfer.
    There may be both benefits and costs for consumers from the 
proposed provision relative to the January 2012 Final Rule. Consumers 
will benefit from the proposed provision relative to the January 2012 
Final Rule if some consumers use providers that would not schedule 
transfers in advance without clarification of the ``within a reasonable 
time'' requirement. It is possible that a provider might shorten the 
time between the issuance of the pre-payment disclosure and the 
transfer because of the safe harbor (e.g., from more than 10 days 
without the safe harbor to just 10 days with it). This might impose a 
cost on some consumers who benefit from having the longer period 
between receiving the pre-payment disclosure and the transfer.
    Providers can benefit from the proposed provision relative to the 
January 2012 Final Rule. The proposed provision removes the burden of 
uncertainty and litigation risk from providers that meet the terms of 
the proposed provision in regards to whether they are complying with 
the requirement to provide the pre-payment disclosure within a 
reasonable time prior to the scheduled date of the respective 
subsequent transfer. The proposed provision does not impact providers 
that choose not to comply with the safe harbor.
    Regarding access to remittance transfer services by consumers, each 
proposed provision reduces the cost of complying with the January 2012 
Final Rule for some remittance transfer providers and leaves other 
providers unaffected. For this reason, the Bureau believes that all 
provisions of this rulemaking will tend to increase access by consumers 
to consumer financial products or services.
    As stated above, in finalizing the proposal, the Bureau will 
further consider the benefits, costs and impacts of the provisions of 
the proposed rule. The Bureau asks interested parties to provide data, 
research results and other factual information that may be useful for 
this analysis.

Additional Proposed Modifications to the January 2012 Final Rule

    The Bureau is requesting for comment on a number of additional 
proposed modifications to the final rule but has not included specific 
regulatory or commentary language in the proposal on them. In addition, 
the Bureau requests comment on whether to allow providers to provide 
estimates in the pre-payment disclosure and receipt for certain 
standalone transfers or the first scheduled transfer in a series of 
preauthorized transfers, subject to the requirement that providers who 
disclose estimates give a second and accurate receipt. Consumers would 
benefit from this proposed modification to the extent that the 
additional option to provide initial disclosures with estimates and a 
second accurate receipt after the transfer causes more providers to 
schedule remittance transfers in advance compared to the final rule, 
which requires that they provide accurate pre-payment disclosures and 
receipts at the time the transfer is requested and authorized. Even 
more providers might schedule remittance transfers in advance if the 
proposed modification did not require the second receipt, but, in that 
circumstance, the proposed modification would provide greater access 
but less precise disclosures. Providers are no worse off under these 
proposed modifications to the January 2012 Final Rule compared with the 
requirements under the final rule since they would still have the 
option to provide accurate disclosures at the time the transfers are 
authorized, as currently required under the final rule. Providers in 
this case would not be required to provide a second receipt.
    The Bureau is also requesting comment on an additional proposed 
modification to mitigate the burden on providers imposed by Sec.  
1005.36(b)(1) of the final rule by allowing providers to use estimates 
for the first preauthorized remittance transfer if the amount of the 
transfer can vary. Another additional proposed modification to the 
proposal would require providers who use estimates for this purpose to 
give a second and accurate receipt. The analysis of these additional 
proposed modifications are identical to the analysis for proposed Sec.  
1005.32(b)(2) and the additional proposed modification to that 
provision discussed above.
    The Bureau is also requesting comment on mitigating the burden on 
providers imposed by Sec.  1005.31(b)(1) in the January 2012 Final Rule 
as it pertains to subsequent transfers by eliminating the pre-payment 
disclosure for transfers that occur after the first transfer in a 
series of preauthorized remittance transfers. See Sec.  
1005.36(a)(2)(i). Consumers may benefit from the proposed modification 
insofar as it provides an incentive for more providers to offer 
preauthorized remittance transfers. However, consumers would forego any 
benefits from the reminder that a transfer is going to occur and from 
knowing some of the terms of the transfer prior to the transfer. The 
proposed provision would not impose any additional costs on providers.
    The Bureau is also soliciting comment on whether changes should be 
made to the cancellation rights for certain transfers, as provided for 
in Sec.  1005.36(c). Under the January 2012 Final Rule, when a sender 
schedules a remittance transfer at least three business days before the 
date of the transfer, the provider must cancel the transfer if the 
sender notifies the provider to cancel the transfer at least three 
business days before the scheduled date of the transfer. Requiring 
providers to allow senders to cancel the transfer less than three 
business days before the date of the transfer likely provides greater 
benefits to consumers but imposes greater costs on providers. Senders 
may benefit from the flexibility to cancel the transfer closer to the 
transfer date if circumstances change for the senders, and they decide 
they do not want to complete the transfer. On the other hand, providers 
may have difficulty processing the sender's request to cancel the 
transfer in time to stop the transfer if the notice of cancellation is 
given too close to the date of the transfer. Requiring senders to 
cancel the transfer more than three business days from the date of the 
transfer likely has the opposite benefits and costs for consumers and 
providers, respectively, compared with a shorter cancellation period.
    The remaining issues on which the Bureau is soliciting comment 
concern the disclosure of the sender's cancellation rights (deadline to 
cancel). Under Sec.  1005.31(b)(2)(iv) in the January 2012 Final Rule, 
a provider must only disclose the deadline to cancel that is applicable 
to a transfer in the receipt for the transfer. Thus, under the January 
2012 Final Rule, providers must prepare receipts with different 
descriptions of cancellation rights for remittance transfers scheduled 
more than three business days before the date of the transfer and for 
remittance transfers scheduled within three business days of the date 
of the transfer and make sure they give the sender the proper receipt.
    One modification on which the Bureau is requesting comment allows a 
provider that provides both types of transfers to describe both 
cancellation provisions on one receipt. For example, the provider could 
disclose on the receipt both the three-business-day and the 30 minute 
time frames and either: (i) describe to which transfers each deadline 
is applicable; or (ii) use a check box or other method to indicate 
which deadline is applicable to the transfer.

[[Page 6326]]

    A provider using the option in the first scenario would provide, on 
one receipt, the language describing each deadline to cancel and 
describe to which types of transfers each deadline applies. Relative to 
the January 2012 Final Rule, providers would be relieved of the burden 
of developing two different receipts and making sure they give a sender 
the proper receipt. This option may lower costs for providers. This 
additional proposed modification would be optional, such that providers 
might, at their discretion, instead comply with the notice provision in 
the January 2012 Final Rule. Thus, this additional proposed 
modification to the January 2012 Final Rule would not increase costs 
for providers relative to the January 2012 Final Rule. On the other 
hand, it is possible that senders given the type of notice permitted by 
the additional proposed modification would not understand which 
deadline to cancel applied to their particular transfers compared with 
the notice requirements under the January 2012 Final Rule. The Bureau 
solicits comment on this consideration of costs and benefits.
    A provider using the option in the second scenario under the 
additional proposed modification would describe both cancellation 
provisions on one receipt, but would also use a check box or other 
method to indicate which deadline is applicable to the transfer. This 
disclosure would therefore be customized to the particular transaction. 
The cost of this option might be lower than the cost of the notice 
provision in the January 2012 Final Rule. In addition, under the 
additional proposed modification, providers could, at their discretion, 
still comply with the notice provision in the January 2012 Final Rule. 
Thus, the additional proposed modification to the January 2012 Final 
Rule would not increase costs for providers relative to the January 
2012 Final Rule.
    The Bureau does not have data from which it could evaluate whether 
the disclosure in the second scenario or the disclosure required under 
the January 2012 Final Rule provides senders with a better 
understanding of the deadline to cancel for their particular transfers. 
Both disclosures are customized to the transaction, but the 
customization is different. Both of them may cause senders to better 
understand which deadline to cancel applies to their transaction than 
would the disclosure from the first scenario, which may be the least 
expensive for providers. Again, the Bureau solicits comments on this 
consideration of costs and benefits.
    The Bureau is also requesting comment on whether a provider should 
be required to provide the disclosure of the deadline to cancel in the 
pre-payment disclosure for transfers subsequent to the first in a 
series of preauthorized remittance transfers. Under the January 2012 
Final Rule, a sender may not receive a receipt for transfers subsequent 
to the first (and with it, the disclosure of the deadline to cancel) 
until the transfer has already occurred. At that point, the deadline to 
cancel will generally have expired. See Sec. Sec.  1005.31(b)(2)(iv) 
and 1005.36(a)(2)(ii).
    This proposed modification to the January 2012 Final Rule requires 
providers to have two standard types of pre-payment disclosures and 
possibly three standard types of receipts. One pair of disclosures 
would be used for individual remittance transfers and the first 
transfer in a series of preauthorized remittance transfers that are 
scheduled within three business days of the scheduled date of the 
transfer. The 30-minute deadline to cancel would be on the receipt 
only. Another pair of disclosures would be used for individual 
remittance transfers and the first transfer in a series of 
preauthorized remittance transfers that are scheduled more than three 
business days prior to the scheduled date of the transfer. The three-
business-day deadline to cancel would appear only on the receipt. The 
final pair would be used for transfers subsequent to the first in a 
series of pre-authorized remittance transfers. The three-business-day 
deadline to cancel would be on the pre-payment disclosure. Relative to 
the January 2012 Final Rule, the provider would have the additional 
cost of preparing another type of pre-payment disclosure and possibly 
another type of receipt and ensuring that senders receive the correct 
pre-payment disclosure and receipt for each type of transfer. Providers 
would not have to prepare a third standard type of receipt, however, if 
they could use the receipt with the three-business-day deadline to 
cancel as the receipt for both the first and for transfers subsequent 
to the first in a series of pre-authorized remittance transfers.
    On the other hand, under these additional proposed modifications to 
the January 2012 Final Rule, consumers sending preauthorized remittance 
transfers would receive a disclosure that would more effectively inform 
them of their cancellation rights. However, consumers who wished to 
cancel would benefit from the proposed modification only insofar as 
they are not already aware of the deadline to cancel from prior 
disclosures, including prior receipts.
    Finally, the Bureau is considering two modifications to make 
consumers aware of when they can cancel a remittance transfer scheduled 
more than three days in advance of the transfer. Under the January 2012 
Final Rule, consumers can cancel these transactions up to three 
business days before the transfer. Consumers also receive a disclosure 
on the receipt stating their cancellation rights. The statement of 
rights contains the term ``business day,'' however, and consumers may 
not know a particular provider's business days.
    The Bureau is requesting comment on whether a provider should be 
required to state the provider's business days on the receipt. There 
may be little cost to this modification, since under the January 2012 
Final Rule providers must already generate a different receipt for 
transfers scheduled more than three days in advance from receipts for 
transfers scheduled within three business days of the transfer date. 
Under the additional proposed modification, however, providers would 
have to update the form if they were to change their business days.
    The Bureau is also soliciting comment on whether the receipt should 
actually state the specific date on which the right to cancel expires. 
This proposed modification would provide the sender with the most 
precise information about cancellation rights. The cost to providers of 
this modification would likely be greater, however, than a disclosure 
of the provider's business days because it would require customization 
for each transfer.

Potential Reduction of Access by Consumers to Consumer Financial 
Products or Services

    Regarding access to consumer financial products and services by 
consumers, each proposed provision would reduce the cost of complying 
with the January 2012 Final Rule for some remittance transfer providers 
and leave other providers unaffected. For this reason, the Bureau 
believes that all proposed provisions would tend to increase access by 
consumers to consumer financial products or services. However, some of 
the additional proposed modifications on which the Bureau is soliciting 
comment would provide greater consumer protections that might increase 
certain costs of certain providers. These include modifications to 
allow consumers to cancel remittance transfers scheduled in advance to 
cancel less than three days before the transfer, to require providers 
to disclose the deadline to cancel in the

[[Page 6327]]

pre-payment disclosure instead of the receipt for subsequent 
preauthorized transfers, and to provide consumers with a specific 
expiration date for the right to cancel when the transfer is scheduled 
more than three days in advance of the transfer. The Bureau therefore 
asks interested parties to provide data, research results and other 
factual information that may be useful for further analysis of the 
effect of the proposed provisions and the additional proposed 
modifications on access by consumers to consumer financial products and 
services.

Impact of the Proposed Provisions and the Additional Proposed 
Modifications on Depository Institutions and Credit Unions With Total 
Assets of $10 Billion or Less as Described in Section 1026

    All depository institutions and credit unions that provide 25 or 
fewer remittance transfers per year would benefit from the proposed 
safe harbor provision, which would deem them not to be providing 
remittance transfers in the ``normal course of business.'' All 
depository institutions and credit unions that schedule remittance 
transfers in advance would benefit from the option to estimate certain 
information in disclosures given for standalone transfers or the first 
transfer in a series of preauthorized remittance transfers that are 
scheduled by the sender more than 10 days in advance. All depository 
institutions and credit unions that schedule remittance transfers in 
advance would benefit from the clarification of the ``within a 
reasonable time'' requirement in the proposal for pre-payment 
disclosures given for subsequent preauthorized remittance transfers.
    As discussed above, some of the additional proposed modifications 
on which the Board is seeking comment provide greater consumer 
protections that may increase certain costs of providers. These include 
modifications to allow consumers to cancel remittance transfers 
scheduled in advance to cancel less than three days before the 
transfer, to require providers to disclose the deadline to cancel in 
the pre-payment disclosure instead of the receipt for subsequent 
preauthorized transfers, and to provide consumers with a specific 
expiration date for the right to cancel when the transfer is scheduled 
more than three days in advance of the transfer.
    The Bureau does not have data to estimate how many depository 
institutions and credit unions with total assets of $10 billion or less 
as described in section 1026 of the Dodd-Frank Act will incur the 
benefits and costs provided by the proposed rule and additional 
proposed modifications to the final rule. The Bureau therefore asks 
interested parties to provide data, research results, and other factual 
information useful for the further consideration of the impact of the 
proposed provisions and additional proposed modifications to the 
January 2012 Final Rule.

Impact of the Proposed Provisions and the Additional Proposed 
Modifications on Consumers in Rural Areas

    Consumers in rural areas may experience benefits from the proposed 
provisions that are different in certain respects to those experienced 
by consumers in general. If consumers in rural areas choose among fewer 
remittance transfer providers than do consumers elsewhere, these 
consumers may benefit more from the tendency of the proposed provisions 
to reduce the costs of compliance than do consumers elsewhere.
    Similarly, the benefits and costs to consumers from the additional 
proposed modifications to the January 2012 Final Rule may be different 
for consumers in rural areas. The demand by consumers for remittance 
transfers scheduled in advance, including preauthorized remittance 
transfers, may be different in rural areas. As a result, the impact on 
consumers of the additional proposed modifications that may improve 
certain rights and disclosures but may also increase the costs to 
providers may be different in rural areas.
    The Bureau will further consider the impact of the proposed 
provisions and additional proposed modifications on consumers in rural 
areas. The Bureau therefore asks interested parties to provide data, 
research results, and other factual information on the numbers and 
characteristics of rural consumers who send remittance transfers, the 
types of businesses through which they send these transfers, and the 
quantitative and qualitative characteristics of the service provided 
and the transfers.

VIII. Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to, ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis,'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.
    The proposal contains both specific proposed provisions with 
regulatory or commentary language (proposed provisions) as well as 
requests for comment on modifications where regulatory or commentary 
language was not specifically included (additional proposed 
modifications). The analysis below first discusses the proposed 
provisions before discussing the additional proposed modifications.
    The analysis generally examines the regulatory impact of the 
provisions of the proposed rule and additional proposed modifications 
against the baseline of the January 2012 Final Rule published elsewhere 
in today's Federal Register.

Proposed Provisions

    The proposal sets forth regulation text or commentary on three 
specific provisions. First, the proposal provides a safe harbor through 
which a person can establish that it is not a ``remittance transfer 
provider'' because it does not provide remittance transfers in the 
normal course of business and thus is not required to comply with the 
remittance transfer rules set forth in Subpart B of Regulation E. 
Second, the proposal allows providers to estimate certain amounts in 
the pre-payment disclosure and receipt for a standalone transfer or the 
first scheduled transfer in a series of preauthorized remittance 
transfers, where those transfers are scheduled more than 10 days in 
advance. Third, the proposal provides a safe harbor for complying with 
the requirement to provide a pre-payment disclosure for subsequent 
preauthorized remittance transfers ``within a reasonable time'' prior 
to the scheduled date of the transfer.
    These three proposed provisions are designed to facilitate 
compliance with the January 2012 Final Rule and ease possible 
compliance burden. All methods of compliance under the January 2012 
Final Rule would remain available to remittance transfer providers if 
these provisions were adopted. However, certain business practices that 
may not be compliant, or about which a provider is uncertain whether 
they are compliant, under the January 2012 Final Rule would be deemed 
compliant under the proposal. Thus, the effect of these provisions is 
to give remittance transfer providers additional certainty about how to 
comply, flexibility in complying with the final rule, and additional 
methods for complying.

Normal Course of Business

    Comment 30(f)-2 under the January 2012 Final Rule states that 
whether a

[[Page 6328]]

person provides remittance transfers in the normal course of business 
depends on the facts and circumstances. The proposal would amend this 
comment to provide a safe harbor through which a person can establish 
that it does not provide remittance transfers in the normal course of 
business. Under the proposed safe harbor provision, if a person makes 
no more than 25 remittance transfers in the previous calendar year, the 
person will not be deemed to be providing remittance transfers in the 
normal course of business for the current year if it provides no more 
than 25 remittance transfers in the current year. The proposed safe 
harbor provision relieves the person of having to meet the facts and 
circumstances test.
    Under the proposed provision, small businesses that meet the 
pattern and frequency requirements of the proposed safe harbor would be 
relieved of uncertainty about whether they provide remittance transfers 
in the normal course of business. In particular, those businesses that 
provide 25 or fewer remittance transfers in a particular year 
(including 2012, before providers must comply with the January 2012 
Final Rule) and continue to do so in the subsequent year (e.g., 2013) 
would benefit by being relieved of the obligation to evaluate their 
activities under the facts and circumstances test for that subsequent 
year. Small businesses that provide more than 25 remittance transfers 
in a particular year would not experience any impact from the proposed 
provision. Thus, small businesses that provide remittance transfers 
would only benefit from the proposed provision.

Transfers Scheduled in Advance

    Proposed Sec.  1005.32(b)(2) allows providers to estimate certain 
amounts in the pre-payment disclosure and receipt for a standalone 
transfer or the first scheduled transfer in a series of preauthorized 
remittance transfers where the transfer is scheduled more than 10 days 
in advance. This provision would remove the burden to providers of 
having to give an accurate, as opposed to an estimated, pre-payment 
disclosure and receipt for a standalone transfer scheduled more than 10 
days in advance of the transfer date or the first scheduled transfer in 
a series of preauthorized remittance transfers scheduled more than 10 
days in advance of the transfer date. The provision would not impact 
providers providing a standalone transfer within 10 days of the 
scheduled transfer date or the first scheduled transfer in a series of 
preauthorized remittance transfers scheduled within 10 days of the 
transfer date. For those transfers, providers would still be required 
under the January 2012 Final Rule to provide accurate pre-payment 
disclosures and receipts.
    Proposed comment 36(a)-1 would provide guidance on the ``within a 
reasonable time'' requirement for pre-payment disclosures in Sec.  
1005.36(a)(2)(i). Under Sec.  1005.36(a)(2)(i) of the January 2012 
Final Rule, a provider must provide a pre-payment disclosure for each 
subsequent transfer (after the first scheduled transfer) in a series of 
preauthorized remittance transfers within a reasonable time prior to 
the scheduled date of the transfer. The proposed comment would clarify 
that a provider is deemed to have provided the pre-payment disclosure 
within a reasonable time prior to the scheduled date of the transfer if 
the provider mails or delivers the pre-payment disclosure 10 or more 
days prior to the scheduled date of the transfer. For providers that 
meet this condition, this proposed provision would remove the burden of 
uncertainty and litigation risk regarding whether they are complying 
with the requirement to provide the pre-payment disclosure within a 
reasonable time prior to the scheduled date of the respective 
subsequent transfer. The proposed provision would not impact providers 
that choose not to comply with the safe harbor; they would still need 
to meet the ``within a reasonable time'' requirement in providing the 
pre-payment disclosure for subsequent transfers under the January 2012 
Final Rule. This provision imposes no burden on small providers that do 
not provide preauthorized remittance transfers.
    With respect to proposed Sec.  1005.32(b)(2) and proposed comment 
36(a)-1, small providers that currently permit standalone transfers to 
be scheduled more than 10 days in advance or that provide preauthorized 
remittance transfers would benefit from the proposed provisions. Other 
small remittance transfer providers would not experience any impact 
from these proposed provisions. Thus, small businesses that provide 
remittance transfers would only benefit from these proposed provisions.

Additional Proposed Modifications to the Final Rule

    The Bureau has asked for comment on a number of additional 
modifications to the January 2012 Final Rule but did not include 
specific regulatory or commentary language in the proposal on these 
modifications.
    As discussed above, the Bureau is proposing to allow providers to 
estimate certain amounts in the pre-payment disclosure and receipt for 
certain standalone transfers or the first scheduled transfer in a 
series of preauthorized transfers for transfers scheduled (see proposed 
Sec.  1005.32(b)(2)). Additionally, the Bureau is requesting comment on 
whether providers taking advantage of such ability to estimate should 
be required to give a second and accurate receipt.\13\ This proposed 
modification to the January 2012 Final Rule would have no negative 
impact on small providers since they would still have the option to 
provide accurate disclosures at the time the transfers are authorized, 
as required under the January 2012 Final Rule.\14\
---------------------------------------------------------------------------

    \13\ This proposed modification to the final rule is the same as 
the proposed provision that allows estimated disclosures discussed 
above with the addition of the second disclosure requirement.
    \14\ Providers in this case would not be required to provide a 
second receipt.
---------------------------------------------------------------------------

    The Bureau is also requesting comment on a proposed modification to 
mitigate the burden on providers imposed by Sec.  1005.36(b)(1) of the 
January 2012 Final Rule by allowing providers to use estimates for the 
first preauthorized remittance transfer if the amount of the transfer 
can vary. Similar to the proposed modification in connection with the 
ability to estimate under proposed Sec.  1005.32(b)(2) for transfers 
scheduled more than 10 days in advance, the Bureau is further seeking 
comment on a proposed modification under which providers may use 
estimates for the first preauthorized remittance transfer if the amount 
of the transfer can vary, provided they give a second and accurate 
receipt closer to the date of transfer. The Bureau is also seeking 
comment on whether, for an advance transfer, a provider should be 
allowed to disclose a formula that will be used to calculate the 
exchange rate that will apply to a transfer. The analysis of these 
proposed modifications is identical to the analysis for proposed Sec.  
1005.32(b)(2) and the modification to that provision discussed above. 
Again, the proposed modification to the final rule would have no 
negative impact on small providers since they would still have the 
option to provide accurate disclosures at the time the transfers are 
authorized.
    The Bureau is also requesting comment on mitigating the burden on 
providers imposed by Sec.  1005.31(b)(1) in the January 2012 Final Rule 
as it pertains to subsequent transfers that occur after the first 
transfer in a series

[[Page 6329]]

of preauthorized remittance transfers by eliminating the pre-payment 
disclosure for such transfers. See Sec.  1005.36(a)(2)(i). The proposed 
modification to the January 2012 Final Rule would have no negative 
impact on small providers since it reduces the number of disclosures 
they must provide.
    The Bureau is also soliciting comment on whether changes should be 
made to the cancellation rights for certain transfers, as provided for 
in Sec.  1005.36(c). Under the January 2012 Final Rule, when a sender 
schedules a remittance transfer at least three business days before the 
date of the transfer, the provider must cancel the transfer if the 
sender notifies the provider to cancel the transfer at least three 
business days before the scheduled date of the transfer. The Bureau is 
soliciting comment on whether the deadline to cancel should be more or 
less than three business days. The net impact of any change in this 
deadline is difficult to predict, because the Bureau has no data from 
which to predict how a change in the cancellation period will affect 
consumers' likelihood of cancellation or a providers' costs relative to 
the cancellation deadline. In any case, the Bureau believes that few 
providers, including small providers, have a large share of their 
business in transfers scheduled at least three business days in advance 
of the transfer. Thus, the Bureau does not believe that the proposed 
modification to the January 2012 Final Rule would cause a substantial 
number of small providers to incur a significant increase in overall 
costs.
    The remaining issues on which the Bureau is soliciting comment 
concern the disclosure of the sender's cancellation rights (deadline to 
cancel). Under Sec.  1005.31(b)(2)(iv) in the January 2012 Final Rule, 
a provider must only disclose in the receipt for a transfer the 
deadline to cancel that is applicable to that transfer. Thus, under the 
January 2012 Final Rule, providers must prepare a different receipt for 
remittance transfers scheduled more than three business days before the 
date of the transfer from the one they use for remittance transfers 
scheduled within three business days of the date of the transfer and 
make sure they give the sender the proper receipt.
    One modification on which the Bureau is requesting comment allows a 
provider that provides both types of transfers to describe both 
cancellation provisions on one receipt. For example, the provider could 
disclose on the receipt both the three-business-day and the 30 minute 
time frames and either: (i) describe to which transfers each deadline 
is applicable; or (ii) use a check box or other method to indicate 
which deadline is applicable to the transfer.
    A provider using the option in the first scenario would provide, on 
one receipt, the language describing each deadline to cancel and 
describe to which types of transfers each deadline applies. Relative to 
the January 2012 Final Rule, providers would be relieved of the burden 
of developing two different receipts and making sure they give a sender 
the proper receipt. This option may lower costs for providers. Under 
the additional proposed modification, rather than comply with the 
modified provision providers could, instead, at their discretion, 
comply with the notice provision in the January 2012 Final Rule. Thus, 
this additional proposed modification to the January 2012 Final Rule 
would not have a negative impact on small providers.
    A provider using the option in the second scenario would need to 
describe both cancellation provisions on one receipt and use a check 
box or other method to indicate which deadline is applicable to the 
transfer. This disclosure would therefore be customized to the 
particular transaction. Under the additional proposed modification, 
rather than comply with the modified provision providers could, 
instead, at their discretion, comply with the notice provision in the 
January 2012 Final Rule. Therefore, this proposed modification to the 
January 2012 Final Rule would not increase costs for providers relative 
to the final rule. Thus, this proposed modification to the January 2012 
Final Rule would have no negative impact on small providers.
    The Bureau is also requesting comment on whether providers should 
be required to disclose the deadline to cancel in the pre-payment 
disclosure for transfers subsequent to the first in a series of 
preauthorized remittance transfers, rather than being required to 
provide this disclosure in the receipt for such transfers. Under the 
January 2012 Final Rule, a sender may not receive a receipt for 
transfers subsequent to the first (and with it the disclosure of the 
deadline to cancel) until the scheduled date of transfer has passed. At 
that point, the deadline to cancel will generally have expired. See 
Sec. Sec.  1005.31(b)(2)(iv) and 1005.36(a)(2)(ii).
    This proposed modification to the January 2012 Final Rule would 
require providers to have two standard types of pre-payment disclosures 
and possibly three standard types of receipts. One pair of disclosures 
would be used for individual remittance transfers and the first 
transfer in a series of preauthorized remittance transfers that are 
scheduled within three business days of the scheduled date of the 
transfer. The 30-minute deadline to cancel would be on the receipt 
only. Another pair of disclosures would be used for individual 
remittance transfers and the first transfer in a series of 
preauthorized remittance transfers that are scheduled more than three 
business days prior to the scheduled date of the transfer. The three-
business-day deadline to cancel would appear only on the receipt. The 
final pair would be used for transfers subsequent to the first in a 
series of pre-authorized remittance transfers. The deadline to cancel 
would be on the pre-payment disclosure. A third standard type of 
receipt would not be required if a provider were permitted to include 
the disclosure of the deadline to cancel in the receipt, in addition to 
the pre-payment disclosure.
    Under the additional proposed modification, relative to the January 
2012 Final Rule, the provider would have the additional cost of 
preparing another type of pre-payment disclosure and possibly another 
type of receipt and ensuring that the sender received the correct pre-
payment disclosure and receipt for each type of transfer. However, the 
Bureau believes that few providers, including small providers, have a 
large share of their business in preauthorized remittance transfers. 
Thus, the Bureau does not believe that the proposed modification to the 
final rule would cause a substantial number of small providers to incur 
a significant increase in overall costs.
    Finally, the Bureau is considering two modifications to make 
consumers aware of when they can cancel a remittance transfer scheduled 
more than three business days in advance of the transfer. Under the 
January 2012 Final Rule, consumers can cancel these transactions up to 
three business days before the transfer. Consumers also receive a 
disclosure on the receipt stating their cancellation rights. The 
statement of rights contains the term ``business day,'' however, and 
consumers may not know a particular provider's business days.
    The Bureau is requesting comment on whether a provider should be 
required to state the provider's business days on the receipt. There 
may be little cost to this modification relative to the January 2012 
Final Rule, since under the final rule providers must already generate 
a different receipt for transfers scheduled more than three days in 
advance from receipts for transfers scheduled within three business 
days of the transfer date. Providers would have to change the

[[Page 6330]]

form if they changed their business days, however. The Bureau does not 
believe that this proposed modification to the January 2012 Final Rule 
would cause a substantial number of small providers to incur a 
significant increase in overall costs.
    The Bureau is also soliciting comment on whether the receipt should 
actually state the specific date on which the right to cancel expires. 
This modification would provide the sender with the most precise 
information about cancellation rights. The cost to providers could be 
greater than a disclosure of the provider's business days because it 
would require customization for each transfer, which might not be 
automated in all circumstances. However, as stated above, the Bureau 
believes that few providers, including small providers, have a large 
share of their business in remittance transfers scheduled at least 
three business days in advance of the transfer. Thus, the Bureau does 
not believe that the proposed modification to the January 2012 Final 
Rule would cause a substantial number of small providers to incur a 
significant increase in overall costs.

Certification

    Accordingly, the Director of the Bureau of Consumer Financial 
Protection hereby certifies that if promulgated, this rule will not 
have a significant economic impact on a substantial number of small 
entities. The Bureau invites comment from members of the public who 
believe there will be a significant impact on a substantial number of 
small entities.

IX. Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget 
(OMB) for review in accordance with the Paperwork Reduction Act of 1995 
(44 U.S.C. 3507(d)). Under the Paperwork Reduction Act, the Bureau may 
not conduct or sponsor, and a person is not required to respond to, 
this information collection unless the information collection displays 
a currently valid control number. Comments on the collection of 
information requirements should be sent to the Office of Management and 
Budget, Attention: Desk Officer for the Consumer Financial Protection 
Bureau, Office of Information and Regulatory Affairs, Washington, DC 
20503, or by the internet to http://[email protected], with 
copies to the Bureau at the address previously specified.
    Comments are specifically requested concerning: (i) Whether the 
proposed collections of information are necessary for the proper 
performance of the functions of the Bureau, including whether the 
information will have practical utility; (ii) the accuracy of the 
estimated burden associated with the proposed collections of 
information; (iii) how to enhance the quality, utility, and clarity of 
the information to be collected; and (iv) how to minimize the burden of 
complying with the proposed collections of information, including the 
application of automated collection techniques or other forms of 
information technology.
    The collection of information that is subject to the Paperwork 
Reduction Act in this proposed regulation is in 12 CFR part 1005. The 
Bureau's OMB control number for Regulation E is 3170-0014. This 
information collection is required to provide benefits for consumers 
and is mandatory. See 15 U.S.C. 1693 et seq. The respondents and/or 
recordkeepers are financial institutions and entities involved in the 
remittance transfer business, including small businesses. Respondents 
are required to retain records for 24 months, but this proposed 
regulation does not specify the types of records that must be 
maintained.
    This information is required to provide pre-payment disclosures and 
receipts to consumers in the United States who wish to send a 
remittance transfer to a recipient in a foreign country. The 
disclosures provide pricing information and information regarding 
cancellation and error resolution rights. This information can be used 
by consumers for budgeting and shopping purposes and by consumers and 
Federal agencies to determine when violations of the underlying rules 
and statute have occurred.
    As detailed in the SUPPLEMENTARY INFORMATION above, the Bureau is 
publishing the January 2012 Final Rule elsewhere in today's Federal 
Register to implement the remittance transfer provision in section 1073 
of the Dodd-Frank Act. The Bureau is publishing this notice of proposed 
rulemaking to seek comment on whether to provide additional safe 
harbors and flexibility in applying the January 2012 Final Rule to 
certain transfers and remittance transfer providers. The proposal, if 
adopted, and the January 2012 Final Rule will be implemented on the 
same date.
    The proposal contains both specific proposed provisions with 
regulatory or commentary language (proposed provisions) as well as 
requests for comment on modifications where regulatory or commentary 
language was not specifically included (additional proposed 
modifications). Disclosures provided under the proposed provisions (new 
disclosures) would replace certain disclosures already required by the 
January 2012 Final Rule (old disclosures) and are not in addition to 
them. The new disclosures required under the proposed provisions are 
generally similar in format and content requirements to the old 
disclosures, except respondents may provide estimates of information in 
certain circumstances.
    Specifically, in proposed Sec.  1005.32(b)(2), providers would be 
permitted to estimate certain information in pre-payment disclosures 
and receipts given at the time of the request and authorization for 
standalone transfers or the first scheduled transfer in a series of 
preauthorized transfers that are scheduled by the sender more than 10 
days in advance of the consumer's requested transfer date.
    The proposed provisions also provide guidance on the ``within a 
reasonable time'' requirement for when pre-payment disclosures must be 
mailed or delivered for each subsequent transfer (after the first 
scheduled transfer) in a series of preauthorized remittance transfers. 
Specifically, proposed comment 36(a)-1 provides a safe harbor under 
which a provider is deemed to have provided a pre-payment disclosure 
within a reasonable time prior to the scheduled date of the transfer if 
the provider mails or delivers the disclosure 10 or more days prior to 
the scheduled date of the transfer. In addition, the proposed 
provisions provide respondents with additional flexibility that would 
also reduce burden, such as providing a safe harbor to determine when 
certain respondents are excluded from the rule because they are not 
deemed to be providing remittance transfers in the ``normal course of 
business.'' See proposed comment 30(f)-2.
    Because the proposed provisions provide safe harbors and additional 
flexibility to provide estimates that respondents may use at their 
option in order to reduce compliance burden, the proposed provisions do 
not impose any additional burden on respondents for PRA purposes. 
Accordingly, the proposed provisions would not increase the one-time or 
ongoing burden estimates provided by the Bureau for PRA purposes in the 
January 2012 Final Rule. Section IX of the SUPPLEMENTARY INFORMATION to 
the January 2012 Final Rule, which is published elsewhere in today's 
Federal Register, sets forth the Bureau's analysis and determinations 
under the PRA with respect to the burden associated with aspects of the

[[Page 6331]]

January 2012 Final Rule. Because the proposed provisions, if adopted, 
do not increase the Bureau's estimates in Section IX of the 
SUPPLEMENTARY INFORMATION of the January 2012 Final Rule, the Bureau 
continues to rely on that analysis and determination for the purposes 
of this rulemaking.
    The Bureau's current annual burden to comply with the provision of 
Regulation E is estimated to be 4,003,000 hours for the 155 large 
depository institutions and credit unions (including their depository 
and credit union affiliates) and money transmitters (accounting for the 
Bureau's allocation of burden) supervised by the Bureau that are deemed 
to be respondents for the purposes of the PRA.
    The Bureau expects that the amount of time required to implement 
the proposed provisions for a given provider may vary based on the size 
and complexity of the respondent as well as whether the respondent 
qualifies for and elects to use the proposed safe harbors or additional 
flexibility to provide estimates. However, as discussed above, the 
Bureau believes that the burden associated with providing disclosures 
under the proposed provisions is already accounted for in the Bureau's 
January 2012 Final Rule estimates because the final rule already 
requires certain disclosures addressed by the proposed provisions. 
Specifically, the Bureau expects respondents that rely on proposed 
Sec.  1005.32(b)(2) to provide estimates for certain disclosures would 
incorporate these changes into the updates to their systems already 
required in order to comply with the disclosure requirements addressed 
in Sec.  1005.31. Accordingly, for the reasons stated above, the Bureau 
estimates that there would be no increase in the one-time or ongoing 
burden to comply with the requirements under proposed Sec.  
1005.32(b)(2).
    However, the Bureau notes that some of the additional proposed 
modifications to the January 2012 Final Rule could affect the burden 
for PRA purposes. As discussed above in the SUPPLEMENTARY INFORMATION 
to the proposal, the proposal solicits comment on whether use of 
estimates should be permitted in the following two circumstances: (i) a 
consumer schedules a one-time transfer or the first in a series of 
preauthorized transfers to occur more than 10 days after the transfer 
is authorized; or (ii) a consumer enters into an agreement for 
preauthorized remittance transfers where the amount of the transfers 
can vary and the provider does not know the exact amount of the first 
transfer at the time the disclosures for that transfer are given. The 
Bureau also requests comment on whether in lieu of providing an 
estimate of the exchange rate on the disclosures for an advance 
transfer, a provider may disclose a formula and whether a provider that 
uses estimates in the pre-payment disclosure and receipt given at the 
time the transfer is requested and authorized in the two situations 
described above should be required to provide a second receipt with 
accurate information within a reasonable time prior to the scheduled 
date of the transfer.
    The Bureau notes these proposed modifications would provide 
additional flexibility and that the second receipt would only be 
required if the provider used estimates (or formula), at their option, 
in the two circumstances described above. Generally, these proposed 
modifications could lower ongoing costs from estimating certain amounts 
in the pre-payment disclosure and receipt given at the time the 
transfer is requested and authorized instead of determining accurate 
amounts; however, the additional accurate receipt could increase burden 
for PRA purposes. The Bureau notes, however, that this potential 
increase in burden would be voluntary.
    The Bureau estimates that for the 155 large depository institutions 
and credit unions (including their depository and credit union 
affiliates) supervised by the Bureau, these proposed modifications 
would increase the one-time burden by 620 hours and would increase the 
ongoing burden by 7,440 hours. In addition, the Bureau estimates that 
for money transmitters, these proposed modifications would increase the 
one-time burden by 24,000 hours and would increase the ongoing burden 
by 44,468 hours.
    The Bureau is soliciting comment concerning the disclosure of the 
sender's cancellation rights (deadline to cancel). One proposed 
modification allows, at their option, providers that provide both 
transfers scheduled more than three business days in advance and within 
three business days before the date of transfer to describe both 
cancellation provisions on one receipt. Under another proposed 
modification, the Bureau is requesting comment on whether providers 
should be required to disclose the deadline to cancel in the pre-
payment disclosure for transfers subsequent to the first in a series of 
preauthorized remittance transfers, instead of being required to make 
that disclosure in the receipt for the transfer.
    The Bureau estimates that for the 155 large depository institutions 
and credit unions (including their depository and credit union 
affiliates) supervised by the Bureau, the first proposed modification 
would increase the one-time burden by 620 hours and the ongoing burden 
by 7440 hours. In addition, the Bureau estimates that for money 
transmitters, the proposed modification would increase the one-time 
burden by 24,000 hours and the ongoing burden by 44,468 hours. The 
Bureau estimates that for the 155 large depository institutions and 
credit unions (including their depository and credit union affiliates) 
supervised by the Bureau, the second proposed modification would 
increase the one-time burden by 1,240 hours and the ongoing burden by 
14,880 hours. In addition, the Bureau estimates that for money 
transmitters, the second proposed modification would increase the one-
time burden by 48,000 hours and the ongoing burden by 88,936 hours.\15\
---------------------------------------------------------------------------

    \15\ The Bureau notes that there may be other entities that 
serve as remittance transfer providers and that are not depository 
institutions, credit unions, or money transmitters, as traditionally 
defined. These entities could include, for example, brokerages that 
send remittance transfers. Though the Bureau does not have an 
estimate of the number of any such providers, the Bureau believes 
that they would account for a number of entities that is 
significantly less than the sum of money transmitters and their 
agents.
---------------------------------------------------------------------------

    The Bureau also is soliciting comment on whether the disclosure of 
the three-business-day deadline to cancel in the receipt for these 
transfers should include a description of the provider's business days 
or whether the provider should be required to disclose in the receipt 
the specific date on which the right to cancel that transfer expires.
    The Bureau estimates that for the 155 large depository institutions 
and credit unions (including their depository and credit union 
affiliates) supervised by the Bureau, the proposed modification to 
provide a specific date on the receipt would increase the one-time 
burden by 620 hours and the ongoing burden by 7,440 hours. In addition, 
the Bureau estimates that for money transmitters, the proposed 
modification would increase the one-time burden by 24,000 hours and the 
ongoing burden by 44,468 hours.
    The Bureau is requesting comment on mitigating the burden on 
providers imposed by Sec.  1005.31(b)(1) as it pertains to subsequent 
transfers by eliminating the pre-payment disclosure for transfers that 
occur after the first transfer in a series of preauthorized remittance 
transfers. See Sec.  1005.36(a)(2)(i). The Bureau is also soliciting 
comment on whether changes should be made to the three-business-day 
cancellation deadline that applies to transfers

[[Page 6332]]

scheduled by the sender more than three business days prior to the 
scheduled date of the transfer, such as whether the deadline to cancel 
these transfers should be earlier or later than three business days. 
The Bureau believes that these proposed modifications, if adopted, 
would not increase the one-time or ongoing burden for PRA purposes. 
However, the Bureau solicits comment on these modifications or any 
other aspect of the proposal for purposes of the PRA.

Text of Proposed Revisions

    Certain conventions have been used to highlight the proposed 
changes to the text of the regulation and official interpretation. New 
language is shown inside [rtrif]bold-faced arrows[ltrif], while 
language that would be deleted is set off with [lsqbb]bold-faced 
brackets[rsqbb].

List of Subjects in 12 CFR Part 1005

    Banking, Banks, Consumer protection, Credit unions, Electronic fund 
transfers, National banks, Remittance transfers, Reporting and 
recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons set forth above, the Bureau of Consumer Financial 
Protection proposes to amend 12 CFR part 1005, as amended February 7, 
2012 and effective February 7, 2013, as follows:

PART 1005--ELECTRONIC FUND TRANSFERS (REGULATION E)

    1. The authority citation for part 1005 continues to read as 
follows:

    Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1693b. Subpart B is 
also issued under 12 U.S.C. 5601; Pub. L. 111-203, 124 Stat. 1376 
(2010).

Subpart B--Requirements for Remittance Transfers

    2. In Sec.  1005.32, revise paragraph (b) to read as follows:


Sec.  1005.32  Estimates.

* * * * *
    (b) [rtrif]Permanent exceptions. (1)[ltrif][lsqbb]Permanent 
exception for t[rsqbb][rtrif]T[ltrif]ransfers to certain countries. 
[rtrif] (i)[ltrif][lsqbb](1)[rsqbb] General. For disclosures described 
in Sec. Sec.  1005.31(b)(1) through (3) and 1005.36(a)(1) and (2), 
estimates may be provided for transfers to certain countries in 
accordance with paragraph (c) of this section for the amounts required 
to be disclosed under Sec. Sec.  1005.31(b)(1)(iv) through (vii), if a 
remittance transfer provider cannot determine the exact amounts at the 
time the disclosure is required because:
    [rtrif](A)[ltrif][lsqbb](i)[rsqbb] The laws of the recipient 
country do not permit such a determination, or
    [rtrif](B)[ltrif][lsqbb](ii)[rsqbb] The method by which 
transactions are made in the recipient country does not permit such 
determination.
    [rtrif](ii)[ltrif] [lsqbb](2)[rsqbb] Safe harbor. A remittance 
transfer provider may rely on the list of countries published by the 
Bureau to determine whether estimates may be provided under paragraph 
(b)(1) of this section, unless the provider has information that a 
country's laws or the method by which transactions are conducted in 
that country permits a determination of the exact disclosure amount.
    [rtrif](2) Transfers scheduled in advance. (i) Except as provided 
in paragraphs (ii) and (iii) of this section, for disclosures described 
in Sec. Sec.  1005.31(b)(1) through (3) and 1005.36(a)(1), estimates 
may be provided in accordance with paragraph (c) of this section for 
the amounts to be disclosed under Sec. Sec.  1005.31(b)(1)(iv) through 
(vii), if the transfer is scheduled by a sender to be made more than 10 
days after the date on which the sender authorizes the transfer.
    (ii) Taxes described in Sec.  1005.31(b)(1)(vi) may be estimated 
under paragraph (i) of this section only if those taxes are a 
percentage of the amount transferred to the designated recipient, as 
described in Sec.  1005.31(b)(1)(v).
    (iii) Fees described in Sec.  1005.31(b)(1)(vi) may be estimated 
under paragraph (i) of this section only if:
    (A) The fees are calculated as a percentage of the amount 
transferred to the designated recipient, as described in Sec.  
1005.31(b)(1)(v); or
    (B) A remittance transfer provider is an insured institution as 
defined in Sec.  1005.32(a)(3), the provider cannot determine the exact 
amount of the fees for reasons beyond its control, and the remittance 
transfer is sent from the sender's account with the institution. This 
paragraph (b)(2)(iii)(B) of this section expires on July 21, 
2015.[ltrif]
* * * * *
    3. In Supplement I to part 1005:
    a. Under Section 1005.30--Remittance Transfer Definitions, 30(f) 
Remittance Transfer Provider, paragraph 2 is revised.
    b. Under Section 1005.32--Estimates:
    1. Paragraph 1 is revised;
    2. The heading 32(b) Permanent Exceptions for Transfers to Certain 
Countries is revised to read as 32(b) Permanent Exceptions;
    3. Under 32(b) Permanent Exceptions, a new heading 32(b)(1) 
Transfers to Certain Countries is added.
    4. Under new heading 32(b)(1) Transfers to Certain Countries, 
paragraphs 4, 5, and 7 are revised;
    5. Under 32(b) Permanent Exceptions, a new heading 32(b)(2) 
Transfers Scheduled in Advance is added.
    6. Under new heading 32(b)(2) Transfers Scheduled in Advance, 
paragraph 1 is added;
    7. Under 32(c) Bases for Estimates, 32(c)(1) Exchange Rate, 
paragraph 1 is revised; and
    8. Under 32(c)(3) Other Fees, paragraph 1 is revised.
    c. Under Section 1005.36--Transfers Scheduled in Advance:
    1. The heading 36(a) Timing and paragraph 1 is added; and
    2. The heading 36(b) Accuracy and paragraph 1 is added.
    The revisions and additions read as follows:

Supplement I to Part 1005--Official Interpretations

* * * * *

Section 1005.30--Remittance Transfer Definitions

* * * * *

30(f) Remittance Transfer Provider.

* * * * *
    2. Normal course of business. Whether a person provides 
remittance transfers in the normal course of business depends on the 
facts and circumstances, including the total number and frequency of 
remittance transfers sent by the provider. For example, if a 
financial institution generally does not make international consumer 
wire transfers available to customers, but sends a couple of 
international consumer wire transfers in a given year as an 
accommodation for a customer, the institution does not provide 
remittance transfers in the normal course of business. In contrast, 
if a financial institution makes international consumer wire 
transfers generally available to customers (whether described in the 
institution's deposit account agreement, or in practice) and makes 
transfers multiple times per month, the institution provides 
remittance transfers in the normal course of business. [rtrif]If a 
person provided no more than 25 remittance transfers in the previous 
calendar year, the person does not provide remittance transfers in 
the normal course of business for the current calendar year if it 
provides no more than 25 remittance transfers in that year. If that 
person, however, makes a 26th remittance transfer in the current 
calendar year, the person would be evaluated under the facts and 
circumstances test to determine whether the person is a remittance 
transfer provider for that transfer and any other transfer provided 
through the rest of the year. For instance, assume that in calendar 
year 2012, a person provided 20 remittance transfers. This person is 
not providing remittance transfers in the normal course of business 
for calendar year 2013 if it provides no more than 25 remittance 
transfers in calendar year 2013. Assume further that the

[[Page 6333]]

person makes 15 transfers in calendar year 2013. Because this person 
limited its remittance transfers to no more than 25 in 2013, it 
would not be required to comply with the rules in subpart B of this 
regulation for any of its transfers in 2013. On the other hand, 
assume the person provides 25 transfers by July 2013 and a 26th 
transfer in August 2013. In that case, the person would be evaluated 
under the facts and circumstances test to determine whether the 
person is a remittance transfer provider for the 26th transfer and 
any other transfer provided through the rest of the calendar year. 
In addition, if the person provides a 26th transfer for calendar 
year 2013, this person would not qualify for the safe harbor in 2014 
because the person did not make 25 or fewer remittance transfers in 
2013. In this case, in 2014, the person would be evaluated under the 
facts and circumstances test in determining whether the person is a 
remittance transfer provider for all transfers made in 2014.[ltrif]
* * * * *

Section 1005.32--Estimates

    1. Disclosures where estimates can be used. Sections 1005.32(a) 
and (b)[rtrif](1)[ltrif] permit estimates to be used in certain 
circumstances for disclosures described in Sec. Sec.  1005.31(b)(1) 
through (3) and 1005.36(a)(1) and (2). To the extent permitted in 
Sec. Sec.  1005.32(a) and (b)[rtrif](1)[ltrif], estimates may be 
used in the pre-payment disclosure described in Sec.  1005.31(b)(1), 
the receipt disclosure described in Sec.  1005.31(b)(2), the 
combined disclosure described in Sec.  1005.31(b)(3), and the pre-
payment disclosures and receipt disclosures for both first and 
subsequent preauthorized remittance transfers described in 
Sec. Sec.  1005.36(a)(1) and (a)(2). [rtrif]Section 1005.32(b)(2) 
permits estimates to be used for certain information if the transfer 
is scheduled by a sender to be made more than 10 days after the date 
on which the sender authorizes the transfer, for disclosures 
described in Sec. Sec.  1005.31(b)(1) through (3) and 1005.36(a)(1). 
To the extent permitted by Sec.  1005.32(b)(2), estimates may be 
used in the pre-payment disclosure described in Sec.  1005.31(b)(1), 
the receipt disclosure described in Sec.  1005.31(b)(2), the 
combined disclosure described in Sec.  1005.31(b)(3), and the pre-
payment disclosure and receipt disclosure for the first 
preauthorized remittance transfer described in Sec.  1005.36(a)(1). 
Section 1005.32(b)(2) does not apply to the pre-payment disclosures 
and receipt disclosures for subsequent preauthorized remittance 
transfers described in Sec.  1005.36(a)(2).[ltrif]
* * * * *

[rtrif]32(b) Permanent Exceptions[ltrif]

32(b)[rtrif](1)[ltrif] [lsqbb]Permanent Exception 
for[rsqbb]Transfers to Certain Countries

* * * * *
    4. Example illustrating when exact amounts can and cannot be 
determined because of the method by which transactions are made in 
the recipient country.
    i. The method by which transactions are made in the recipient 
country does not permit a remittance transfer provider to determine 
the exact exchange rate required to be disclosed under Sec.  
1005.31(b)(1)(iv) when the provider sends a remittance transfer via 
international ACH on terms negotiated between the United States 
government and the recipient country's government, under which the 
exchange rate is a rate set by the recipient country's central bank 
on the business day after the provider has sent the remittance 
transfer.
    ii. In contrast, a remittance transfer provider would not 
qualify for the Sec.  
1005.32(b)(1)[rtrif](i)(B)[ltrif][lsqbb](ii)[rsqbb] methods 
exception if it sends a remittance transfer via international ACH on 
terms negotiated between the United States government and a private-
sector entity or entities in the recipient country, under which the 
exchange rate is set by the institution acting as the entry point to 
the recipient country's payments system on the next business day. 
However, a remittance transfer provider sending a remittance 
transfer using such a method may qualify for the Sec.  1005.32(a) 
temporary exception.
    iii. A remittance transfer provider would not qualify for the 
Sec.  1005.32(b)(1)[rtrif](i)(B)[ltrif][lsqbb](ii)[rsqbb] methods 
exception if, for example, it sends a remittance transfer via 
international ACH on terms negotiated between the United States 
government and the recipient country's government, under which the 
exchange rate is set by the recipient country's central bank before 
the sender requests a transfer.
    5. Safe harbor list. If a country is included on a safe harbor 
list published by the Bureau under Sec.  
1005.32(b)[rtrif](1)(ii)[ltrif][lsqbb](2)[rsqbb], a remittance 
transfer provider may provide estimates of the amounts to be 
disclosed under Sec. Sec.  1005.31(b)(1)(iv) through (vii). If a 
country does not appear on the Bureau's list, a remittance transfer 
provider may provide estimates under Sec.  
1005.32(b)(1)[rtrif](i)[ltrif] if the provider determines that the 
recipient country does not legally permit or method by which 
transactions are conducted in that country does not permit the 
provider to determine exact disclosure amounts.
* * * * *
    7. Change in laws of recipient country. i. If the laws of a 
recipient country change such that a remittance transfer provider 
can determine exact amounts, the remittance transfer provider must 
begin providing exact amounts for the required disclosures as soon 
as reasonably practicable if the provider has information that the 
country legally permits the provider to determine exact disclosure 
amounts.
    ii. If the laws of a recipient country change such that a 
remittance transfer provider cannot determine exact disclosure 
amounts, the remittance transfer provider may provide estimates 
under Sec.  1005.32(b)(1)[rtrif](i)[ltrif] even if that country does 
not appear on the list published by the Bureau.
* * * * *

[rtrif]32(b)(2) Transfers Scheduled in Advance

    1. Fees imposed on the remittance transfer by a person other 
than the provider. The exception in Sec.  1005.32(b)(2)(iii) only 
allows estimates for fees disclosed in Sec.  1005.31(b)(1)(vi) in 
two circumstances: (i) where the fees are calculated as a percentage 
of the amount transferred to the designated recipient, as described 
in Sec.  1005.31(b)(1)(v); or (ii) where an ``insured institution'' 
as defined in Sec.  1005.32(a)(3) is permitted to estimate fees 
under the temporary exemption in Sec.  1005.32(a). See Sec.  
1005.32(a) and accompanying comments.[ltrif]

32(c) Bases for Estimates

32(c)(1) Exchange Rate

    1. Most recent exchange rate for qualifying international ACH 
transfers. If the exchange rate for a remittance transfer sent via 
international ACH that qualifies for the Sec.  
1005.32(b)(1)[rtrif](i)(B)[ltrif][lsqbb](ii)[rsqbb] exception is set 
the following business day, the most recent exchange rate available 
for a transfer is the exchange rate set for the day that the 
disclosure is provided, i.e. the current business day's exchange 
rate.
* * * * *

32(c)(3) Other Fees

    1. Potential transmittal routes. A remittance transfer from the 
sender's account at an insured institution to the designated 
recipient's institution may take several routes, depending on the 
correspondent relationships each institution in the transmittal route 
has with other institutions. In providing an estimate of the fees 
required to be disclosed under Sec.  1005.31(b)(1)(vi) pursuant to the 
Sec.  1005.32(a) temporary exception [rtrif]or the Sec.  1005.32(b)(2) 
exemption[ltrif], an insured institution may rely upon the 
representations of the designated recipient's institution and the 
institutions that act as intermediaries in any one of the potential 
transmittal routes that it reasonably believes a requested remittance 
transfer may travel.
* * * * *

Section 1005.36--Transfers Scheduled in Advance

* * * * *

[rtrif]36(a) Timing.

    1. Reasonable time. If a provider mails or delivers the pre-payment 
disclosure not later than 10 days before the scheduled date of the 
subsequent transfer, the provider is deemed to have provided that 
disclosure within a reasonable time prior to the scheduled date of the 
respective subsequent transfer.

36(b) Accuracy

    1. Estimates. In providing the disclosures described in Sec.  
1005.36(a), providers may use estimates to the extent permitted by 
Sec. Sec.  1005.32(a) and (b)(1). In addition, Sec.  1005.32(b)(2) 
provides that providers may use estimates for certain information for 
the first scheduled preauthorized

[[Page 6334]]

remittance transfer, if this transfer is scheduled by a sender to be 
made more than 10 days after the date on which the sender authorizes 
the transfer. When estimates are permitted, they must be disclosed in 
accordance with Sec.  1005.31(d).[ltrif]

    Dated: January 23, 2012.
Richard Cordray,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2012-1726 Filed 1-30-12; 11:15 am]
BILLING CODE 4810-AM-P