[Federal Register Volume 78, Number 157 (Wednesday, August 14, 2013)]
[Rules and Regulations]
[Pages 49365-49366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19503]



[[Page 49365]]

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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

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


Electronic Fund Transfers (Regulation E); Correction

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official interpretation; correction.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is making 
a clarificatory amendment and technical correction to a final rule and 
official interpretation (the 2013 Final Rule) that appeared in the 
Federal Register on Wednesday, May 22, 2013. 78 FR 30662. The 2013 
Final Rule modifies the final rules issued by the Bureau in February, 
July, and August 2012 (collectively the 2012 Final Rule) that implement 
section 1073 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) regarding remittance transfers. This 
rule makes a clarificatory amendment and a technical correction to the 
2013 Final Rule, which amends Regulation E.

DATES: The clarificatory amendment and technical correction to the 2013 
Final Rule are effective on October 28, 2013.

FOR FURTHER INFORMATION CONTACT: Eric Goldberg, Ebunoluwa Taiwo, or 
Lauren Weldon, Counsels; Division of Research, Markets & Regulations, 
Bureau of Consumer Financial Protection, 1700 G Street NW., Washington, 
DC 20552, at (202) 435-7700 or [email protected]. Please also visit the following Web 
site for additional information: http://www.consumerfinance.gov/regulations/final-remittance-rule-amendment-regulation-e/.

SUPPLEMENTARY INFORMATION: 

I. Overview

    On May 22, 2013, the Bureau published the 2013 Final Rule, which 
along with three other final rules \1\ implements the Electronic Fund 
Transfer Act's provisions regarding remittance transfers and the 
official interpretations to the regulation, which interpret the 
requirements of Regulation E.
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    \1\ 77 FR 6194 (February 7, 2012), 77 FR 40459 (July 10, 2012), 
and 77 FR 50244 (August 20, 2012).
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    The 2013 Final Rule addresses, among other things, three specific 
issues. First, the 2013 Final Rule modifies the 2012 Final Rule to make 
optional, in certain circumstances, the requirement to disclose fees 
imposed by a designated recipient's institution. Second and relatedly, 
the 2013 Final Rule also makes optional the requirement to disclose 
taxes collected by a person other than the remittance transfer 
provider. In place of these two former requirements, the 2013 Final 
Rule requires, where applicable, disclaimers to be added to the rule's 
disclosures indicating that the recipient may receive less than the 
disclosed total due to the fees and taxes for which disclosure is now 
optional. Finally, the 2013 Final Rule revises the error resolution 
provisions that apply when a remittance transfer is not delivered to a 
designated recipient because the sender provided incorrect or 
insufficient information, and, in particular, when a sender provides an 
incorrect account number or recipient institution identifier that 
results in the transferred funds being deposited into the wrong 
account.
    This rule makes a clarificatory amendment and technical correction 
to the 2013 Final Rule. First, this rule makes a clarificatory 
amendment to Sec.  1005.33(c)(2)(iii). That section sets forth the 
remedies for errors that occur because a sender provided incorrect or 
insufficient information to the remittance transfer provider. 
Specifically, the provision requires providers to refund or, at the 
consumer's request, reapply to a new transfer ``the amount of funds 
provided by the sender in connection with the remittance transfer that 
was not properly transmitted.'' This provision also permits providers 
to ``deduct from the amount refunded or applied towards a new transfer 
any fees actually imposed on or, to the extent not prohibited by law, 
taxes actually collected on the remittance transfer as part of the 
first unsuccessful remittance transfer attempt.''
    The Bureau believes that properly understood this provision 
requires a provider to refund or, at the consumer's request, reapply to 
a new transfer, the total amount that the sender paid to the provider 
but to permit the provider to deduct from this amount fees actually 
imposed and, where not otherwise prohibited by law, taxes actually 
collected as part of the first unsuccessful remittance transfer 
attempt. The Bureau further explained this provision in comment 33(c)-
12, which sets forth several examples regarding how to apply Sec.  
1005.33(c)(2)(iii) in situations where an error occurred because the 
sender provided incorrect or insufficient information. The Bureau is 
concerned, however, that the rule might be misinterpreted as 
authorizing providers to deduct such fees and taxes from just the 
principal amount provided by the sender to the provider.
    To clarify the meaning of this provision, this rule revises the 
first sentence of Sec.  1005.33(c)(2)(iii) so that it now states: ``In 
the case of an error under paragraph (a)(1)(iv) of this section that 
occurred because the sender provided incorrect or insufficient 
information in connection with the remittance transfer, the remittance 
transfer provider shall provide the remedies required by paragraphs 
(c)(2)(ii)(A)(1) and (B) within three business days of providing the 
report required by paragraph (c)(1) or (d)(1) of this section except 
that the provider may agree to the sender's request, upon receiving the 
results of the error investigation, that the funds be applied towards a 
new remittance transfer, rather than be refunded, if the provider has 
not yet processed a refund.'' (Emphasis added.)
    Second, the 2013 Final Rule incorrectly numbered comment 33(c)-6, 
Form of refund, in the 2013 Final Rule as comment 33(c)-5. As a result, 
the Bureau inadvertently deleted from the 2013 Final Rule what was, in 
the 2012 Final Rule, comment 33(c)-5, Amount appropriate to resolve the 
error. In this rule, the Bureau is correcting this numbering error and, 
as a result, restoring in the rule what was previously comment 33(c)-5.

II. Basis for the Clarificatory Amendment and Technical Correction

    The Bureau is publishing the clarificatory amendment and technical 
correction as a final rule. The clarificatory amendment and technical 
correction to the 2013 Final Rule will be effective on October 28, 
2013, which is the same effective date as the 2013 Final Rule. Notice 
and comment are not necessary for the clarificatory amendment to Sec.  
1005.33(c)(2)(iii), which merely makes explicit in the regulation the 
Bureau's continuing interpretation that in the event of an error under 
Sec.  1005.33(a)(1)(iv) that occurred because the sender provided 
incorrect or insufficient information, the provider may deduct from the 
total amount that the sender paid to the provider the fees actually 
imposed and taxes actually collected as part of the first unsuccessful 
remittance transfer attempt. See, e.g., comment 33(c)-12.
    Moreover, the Bureau finds that there is good cause to publish this 
final rule without notice and comment. See 5 U.S.C. 553(b)(B). Notice 
and comment are unnecessary because the rule makes a merely technical 
change to clarify that

[[Page 49366]]

the 2013 Final Rule operates in a way that should already have been 
apparent to many market participants and because the rule corrects an 
inadvertent, technical error. The Bureau believes that there is 
minimal, if any, basis for substantive disagreement with the 
clarificatory amendment or the technical correction.

III. Corrections to FR Doc. 2013-10604

    In FR Doc. 2013-10604 appearing on page 30661 in the Federal 
Register on Wednesday May 22, 2013, the following corrections are made:


Sec.  1005.33  [Corrected]

0
1. On page 30705, in the first column, Sec.  1005.33 is corrected by 
revising paragraph (c)(2)(iii) to read as follows:
    (iii) In the case of an error under paragraph (a)(1)(iv) of this 
section that occurred because the sender provided incorrect or 
insufficient information in connection with the remittance transfer, 
the remittance transfer provider shall provide the remedies required by 
paragraphs (c)(2)(ii)(A)(1) and (B) within three business days of 
providing the report required by paragraph (c)(1) or (d)(1) of this 
section except that the provider may agree to the sender's request, 
upon receiving the results of the error investigation, that the funds 
be applied towards a new remittance transfer, rather than be refunded, 
if the provider has not yet processed a refund. The provider may deduct 
from the amount refunded or applied towards a new transfer any fees 
actually imposed on or, to the extent not prohibited by law, taxes 
actually collected on the remittance transfer as part of the first 
unsuccessful remittance transfer attempt.
* * * * *

Supplement I to Part 1005 [Corrected]

0
2. On page 30715, in the first column, amendatory instruction 7.D.ii. 
is corrected to read ``Under comment 33(c), paragraphs 2, 3, 4, 5 and 6 
are revised, and paragraphs 11 and 12 are added.''

0
3. On page 30719, in the second column, comment 33(c)-5 is redesignated 
as comment 33(c)-6 and republished, and comment 33(c)-(5) is added. 
These corrections read as follows:
    5. Amount appropriate to resolve the error. For purposes of the 
remedies set forth in Sec.  1005.33(c)(2)(i)(A), (c)(2)(i)(B), 
(c)(2)(ii)(A)(1), and (c)(2)(i)(A)(2) the amount appropriate to resolve 
the error is the specific amount of transferred funds that should have 
been received if the remittance transfer had been effected without 
error. The amount appropriate to resolve the error does not include 
consequential damages.
    6. Form of refund. For a refund provided under Sec.  
1005.33(c)(2)(i)(A), (c)(2)(ii)(A)(1), (c)(2)(ii)(B), or (c)(2)(iii), a 
remittance transfer provider may generally, at its discretion, issue a 
refund either in cash or in the same form of payment that was initially 
provided by the sender for the remittance transfer. For example, if the 
sender originally provided a credit card as payment for the transfer, 
the remittance transfer provider may issue a credit to the sender's 
credit card account in the appropriate amount. However, if a sender 
initially provided cash for the remittance transfer, a provider may 
issue a refund by check. For example, if the sender originally provided 
cash as payment for the transfer, the provider may mail a check to the 
sender in the amount of the payment.

    Dated: August 7, 2013.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2013-19503 Filed 8-13-13; 8:45 am]
BILLING CODE 4810-AM-P