[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]
[Rules and Regulations]
[Pages 6025-6027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-01595]



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 Rules and Regulations
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  Federal Register / Vol. 78, No. 19 / Tuesday, January 29, 2013 / 
Rules and Regulations  

[[Page 6025]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

[Docket No. CFPB-2012-0050]
RIN 3170-AA33


Electronic Fund Transfers (Regulation E) Temporary Delay of 
Effective Date

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing this final rule to delay the February 7, 2013, effective date 
of final rules published by the Bureau on February 7, 2012, and August 
20, 2012 (collectively, 2012 Final Rule), that amend Regulation E, 
which implements the Electronic Fund Transfer Act (EFTA). The 2012 
Final Rule implements statutory requirements set forth in section 1073 
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) regarding remittance transfers. The Bureau is delaying the 
effective date of the 2012 Final Rule pending the finalization of a 
proposal, published on December 31, 2012 (December 2012 Proposal), that 
would address three narrow issues in the 2012 Final Rule. The Bureau 
will determine the new effective date when it finalizes the December 
2012 Proposal.

DATES: The effective date of the Final Rules published February 7, 2012 
(77 FR 6194) and August 20, 2012 (77 FR 50244) and technical correction 
published July 10, 2012 (77 FR 40459) is delayed. The Bureau will 
publish a document in the Federal Register announcing the new effective 
date.

FOR FURTHER INFORMATION CONTACT: Eric Goldberg or Lauren Weldon, 
Counsels, or Dana Miller, Senior Counsel, Division of Research, 
Markets, and Regulations, Bureau of Consumer Financial Protection, 1700 
G Street NW., Washington, DC 20552, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Overview

    Section 1073 of the Dodd-Frank Act \1\ amended the EFTA \2\ to 
create a new comprehensive consumer protection regime for remittance 
transfers sent by consumers in the United States to individuals and 
businesses in foreign countries. For covered transactions sent by 
remittance transfer providers, section 1073 creates a new EFTA section 
919, and generally requires: (i) The provision of disclosures prior to 
and at the time of payment by the sender for the transfer; (ii) 
cancellation and refund rights; (iii) the investigation and remedy of 
errors by providers; and (iv) liability standards for providers for the 
acts of their agents.
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    \1\ Public Law 111-203, 124 Stat. 1376, section 1073 (2010).
    \2\ 15 U.S.C. 1693 et seq. EFTA section 919 is codified in 15 
U.S.C. 1693o-1.
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    On February 7, 2012, the Bureau published a final rule to implement 
section 1073 of the Dodd-Frank Act. 77 FR 6194 (February Final 
Rule).\3\ On August 20, 2012, the Bureau published a supplemental rule 
adopting a safe harbor for determining which companies are not 
remittance transfer providers subject to the February Final Rule 
because they do not provide remittance transfers in the normal course 
of business, and modifying several aspects of the February Final Rule 
regarding remittance transfers that are scheduled before the date of 
transfer. 77 FR 50244. The 2012 Final Rule adopted an effective date of 
February 7, 2013. In the February Final Rule, the Bureau stated that it 
would continue to monitor implementation of the new statutory and 
regulatory requirements. The Bureau has subsequently engaged in 
dialogue with both industry and consumer groups regarding 
implementation efforts and compliance concerns.
---------------------------------------------------------------------------

    \3\ A technical correction to the February Final Rule was 
published on July 10, 2012. 77 FR 40459. For simplicity, that 
technical correction is incorporated into the term ``February Final 
Rule.''
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    Upon further review and analysis of these concerns, the Bureau 
published the December 2012 Proposal to refine several narrow aspects 
of the 2012 Final Rule. 77 FR 77188 (Dec. 31, 2012). The Bureau also 
proposed to extend the 2012 Final Rule's effective date until 90 days 
after the finalization of the December 2012 Proposal. The comment 
period on both the proposed substantive changes and the new effective 
date of the 2012 Final Rule closes on January 30, 2013.\4\ The Bureau 
intends to finalize the proposal expeditiously following the close of 
this comment period.
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    \4\ Details on how to submit a comment on both the substantive 
changes in the proposal and the new effective date of the Final 
Rule, are available at 77 FR 77188 (Dec. 31, 2012) or at https://www.federalregister.gov/articles/2012/12/31/2012-31170/electronic-fund-transfers-regulation-e. Comments must be submitted on or before 
January 30, 2013.
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    Given the impending February 7, 2013 effective date of the 2012 
Final Rule, the Bureau simultaneously solicited comment on whether it 
should temporarily delay the effective date pending finalization of the 
December 2012 Proposal. The comment period on this narrow aspect of the 
December 2012 Proposal closed on January 15, 2013.

II. Overview of Comments and Outreach

    The Bureau received approximately 43 comments on its December 2012 
Proposal to delay the effective date of the 2012 Final Rule beyond 
February 7, 2013. Commenters generally supported, or did not oppose, 
the temporary delay. All commenters that addressed the effective date 
either directly expressed support for or did not object to the proposed 
delay or indirectly supported the proposed delay by addressing the 
December 2012 Proposal's 90-day proposed extension.

III. Summary of the Final Rule

    Based on comments received, the Bureau is temporarily delaying the 
effective date for the 2012 Final Rule pending finalization of the 
December 2012 Proposal. The new effective date will be determined when 
the substantive refinements to the December 2012 Proposal are 
finalized. The new effective date will be after February 7, 2013. As 
noted above, the Bureau proposed that the 2012 Final Rule and any 
revisions resulting from the December 2012 Proposal would become 
effective 90 days after the Bureau finalizes the proposal.

[[Page 6026]]

IV. Status of the Bureau's Remittance Rule Safe Harbor Countries List

    On September 26, 2012, the Bureau issued a safe harbor list of 
countries that qualify for an exception in the 2012 Final Rule that 
permits estimated disclosures of certain figures where the laws of the 
recipient country do not permit a determination of the exact 
amounts.\5\ In that issuance, the Bureau explained that it would not 
remove countries from the list before May 1, 2013. In light of the 
temporary delay of the effective date of the 2012 Final Rule, the 
Bureau will reassess the earliest date on which, if necessary, 
countries may be removed from the list in connection with the 
finalization of the December 2012 Proposal, although that date will not 
be before May 1, 2013.
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    \5\ See http://files.consumerfinance.gov/f/201209_CFPB_Remittance-Rule-Safe-Harbor-Countries-List.pdf (Sept. 26, 2012).
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    In the meantime, the Bureau continues to welcome input on possible 
amendments to the list. The Bureau's September 26, 2012 issuance on the 
safe harbor list of countries contains details on how to submit this 
feedback.

V. Legal Authority and Effective Date

    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 a sender a written pre-
payment disclosure containing specified information applicable to the 
sender's remittance transfer. The 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(d) directs the Bureau to 
promulgate rules regarding appropriate cancellation and refund policies 
and to investigate and remedy errors by providers.
    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 title, to prevent 
circumvention or evasion, or to facilitate compliance.
    This final rule will be effective on the date of publication in the 
Federal Register. Under section 553(d) of the Administrative Procedure 
Act (APA), the required publication or service of a substantive rule 
shall be made not less than 30 days before its effective date, except 
for (1) a substantive rule which grants or recognizes an exemption or 
relieves a restriction; (2) interpretative rules and statements of 
policy; or (3) as otherwise provided by the agency for good cause found 
and published with the rule. 5 U.S.C. 553(d). This final rule does not 
establish any requirements but rather delays the effective date of the 
2012 Final Rule pending the finalization of the December 2012 Proposal. 
Therefore, under section 553(d)(1) of the APA, the Bureau is publishing 
this final rule less than 30 days before its effective date because it 
is a substantive rule which grants or recognizes an exemption or 
relieves a restriction. 5 U.S.C. 553(d)(1). The Bureau further finds it 
has good cause pursuant to section 553(d)(3) of the APA to dispense 
with the 30-day delayed effective date requirement because, on balance, 
the need to implement immediately the delay of the 2012 Final Rule's 
February 7, 2013 effective date before that date occurs outweighs the 
need for affected parties to prepare for this delay.

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

    Section V of the December 2012 Proposal contained the Bureau's 
preliminary analysis under section 1022(b)(2) of the Dodd-Frank Act of 
the potential costs of the December 2012 Proposal to consumers and 
covered persons (as defined in Dodd-Frank Act section 1002(6), 12 
U.S.C. 5481(6)). In the final portion of that section, the Bureau 
addressed the impact of the proposed delay of the effective date on 
covered persons and consumers. See Section V.3. of the December 2012 
Proposal.
    In the proposal, the Bureau stated that the temporary delay of the 
2012 Final Rule's effective date would generally benefit remittance 
transfer providers by delaying the start of any ongoing compliance 
costs. The additional time might also enable providers (and their 
vendors) to build solutions that cost less than those that might 
otherwise have been possible.
    The Bureau also recognized that the proposed temporary delay of the 
effective date would impose some costs on senders by temporarily 
delaying the time when they would receive the benefits of Dodd-Frank 
section 1073 and the 2012 Final Rule from February 7, 2013 to the 
ultimate effective date. Thus, consumers at most will only lose 
benefits from Dodd-Frank section 1073 that would have accrued during 
the length of the temporary delay. (As noted above, the Bureau has not 
yet determined when the 2012 Final Rule will take effect but has 
proposed that it would become effective 90 days after the Bureau 
finalizes the December 2012 Proposal.) The Bureau also noted that 
senders may benefit from the temporary delay to the extent that both 
the proposed refinements and the additional time providers have to 
implement the 2012 Final Rule may eliminate any disruptions in the 
provision of remittance transfer services.
    Further, the Bureau is not aware of any unique impact that this 
final rule might have on insured depository institutions or insured 
credit unions with total assets of $10 billion or less as described in 
section 1026(a) of the Dodd-Frank Act, or on rural consumers.

VII. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires each 
agency to consider the potential impact of its regulations on small 
entities, including small businesses, small governmental units, and 
small not-for-profit organizations. The RFA generally requires an 
agency to conduct an initial regulatory flexibility analysis (IRFA) and 
a final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The Bureau did not perform an 
IFRA because it determined and certified that the December 2012 
Proposal, if adopted, would not have a significant economic impact on a 
substantial number of small entities. The Bureau did not receive any 
comments regarding its certification of the delayed effective date 
proposed in the December 2012 Proposal, and is adopting that aspect of 
the December 2012 Proposal without change.
    A FRFA is not required for this final rule because it will not have 
a significant economic impact on a substantial number of small 
entities. This final rule will temporarily delay the February 7, 2013 
effective date of

[[Page 6027]]

the 2012 Final Rule, pending the finalization of the December 2012 
Proposal that would address three narrow issues in the 2012 Final Rule. 
The Bureau will determine the new effective date when it finalizes the 
December 2012 Proposal. The delay in effective date will generally 
benefit small remittance transfer providers, by delaying the start of 
any ongoing compliance costs. The additional time might also enable 
providers (and their vendors) to build solutions that cost less than 
those that might otherwise have been possible.
    Accordingly, the undersigned hereby certifies that the final rule 
will not have a significant economic impact on a substantial number of 
small entities.

VIII. Paperwork Reduction Act Analysis

    The Bureau may not conduct or sponsor, and, notwithstanding any 
other provision of law, a respondent is not required to respond to, an 
information collection unless it displays a currently valid OMB control 
number. The Bureau determined that the December 2012 Proposal's 
proposed delay of the effective date of the 2012 Final Rule does not 
impose any new recordkeeping, reporting, or disclosure requirements on 
covered persons or members of the public that would be collections of 
information requiring OMB approval under the Paperwork Reduction Act 
(PRA), 44 U.S.C. 3501, et seq. The Bureau did not receive any comments 
regarding this conclusion, to which the Bureau adheres.

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.

    Dated: January 19, 2013.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2013-01595 Filed 1-25-13; 4:15 pm]
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