[Federal Register Volume 82, Number 56 (Friday, March 24, 2017)]
[Proposed Rules]
[Pages 15009-15014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05681]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1005

[Docket No. CFPB-2017-0004]


Request for Information Regarding Remittance Rule Assessment

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice of assessment of remittance rule and request for public 
comment.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
conducting an assessment of certain of the Bureau's regulations related 
to consumer remittance transfers under the Electronic Fund Transfer Act 
(subpart B of Regulation E) in accordance with section 1022(d) of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act. The Bureau 
is requesting public comment on its plans for assessing these 
regulations as well as certain recommendations and information that may 
be useful in conducting the planned assessment.

DATES: Comments must be received on or before: May 23, 2017.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2017-
0004, by any of the following methods:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Email: [email protected]. Include Docket 
No. CFPB-2017-0004 in the subject line of the email.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 
20552.
     Hand Delivery/Courier: Monica Jackson, Office of the 
Executive Secretary, Consumer Financial Protection Bureau, 1275 First 
Street NE., Washington, DC 20002.
    Instructions: All submissions should include the document title and 
docket number. Because paper mail in the Washington, DC area and at the 
Bureau is subject to delay, commenters are encouraged to submit 
comments electronically. 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 1275 
First Street NE., Washington, DC 20002 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 generally will not 
be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Scott Fulford, Economist; Paul 
Rothstein, Section Chief; Jane Raso, Counsel; Max Bentovim, Financial 
Analyst; Division of Research, Markets, and Regulations at (202) 435-
9798.

SUPPLEMENTARY INFORMATION: 

I. Background

    Congress established the Bureau in the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act).\1\ In the Dodd-
Frank Act, Congress generally consolidated in the Bureau the rulemaking 
authority for Federal consumer financial laws previously vested in 
certain other Federal agencies. Congress also provided the Bureau with 
the authority to, among other things, prescribe rules as may be 
necessary or appropriate to enable the Bureau to administer and carry 
out the purposes and objectives of the Federal consumer financial laws 
and to prevent evasions thereof.\2\ Since 2011, the Bureau has issued a 
number of rules adopted under Federal consumer financial law.\3\
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ 12 U.S.C. 5512(b)(1).
    \3\ 12 U.S.C. 5512(d).
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    Section 1022(d) of the Dodd-Frank Act requires the Bureau to 
conduct an assessment of each significant rule or order adopted by the 
Bureau under Federal consumer financial law. The Bureau must publish a 
report of the assessment not later than five years after the effective 
date of such rule or order. The assessment must address, among other 
relevant factors, the rule's effectiveness in meeting the purposes and 
objectives of title X of the Dodd-Frank Act and the specific goals 
stated by the Bureau. The assessment must reflect available evidence 
and any data that the Bureau reasonably may collect. Before publishing 
a report of its assessment, the Bureau must invite public comment on 
recommendations for modifying, expanding, or eliminating the 
significant rule or order.
    In February 2012, the Bureau published a final rule concerning 
consumer remittance transfers to individuals and businesses in foreign 
countries in the Federal Register titled ``Electronic Fund Transfers 
(Regulation E)'' (February 2012 Final Rule) to implement section 1073 
of the Dodd

[[Page 15010]]

Frank Act.\4\ The Bureau amended the February 2012 Final Rule on 
several occasions both before and after it took effect on October 28, 
2013.\5\ As discussed further below, the Bureau has determined that the 
February 2012 Final Rule and all the amendments related to it that the 
Bureau made and that took effect on October 28, 2013 collectively make 
up a significant rule for purposes of section 1022(d) and will conduct 
an assessment of the rule. This document refers to the February 2012 
Final Rule as amended when it took effect on October 28, 2013 as the 
``Remittance Rule.'' Further, the Bureau will consider certain 
amendments to it that the Bureau issued shortly after the Remittance 
Rule's October 28, 2013 effective date to the extent doing so will 
facilitate a more meaningful assessment of the Remittance Rule. 
Specifically, the Bureau is incorporating into the assessment certain 
amendments related to the extension of an exception in the Remittance 
Rule that permits insured institutions to provide estimated amounts 
instead of exact amounts under certain circumstances. Those amendments 
were published in a final rule in the Federal Register in September 
2014 and became effective in November 2014.\6\ In this document, the 
Bureau is requesting public comment on the issues identified below 
regarding the Remittance Rule and these certain subsequent amendments.
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    \4\ 77 FR 6194 (February 7, 2012).
    \5\ As discussed below, one of the amendments is a temporary 
delay of the original effective date, February 7, 2013.
    \6\ 78 FR 55970 (Sept. 18, 2014).
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II. Assessment Process

    Assessments pursuant to section 1022(d) of the Dodd-Frank Act are 
for informational purposes only and are not part of any formal or 
informal rulemaking proceedings under the Administrative Procedure 
Act.\7\ The Bureau plans to consider relevant comments and other 
information received as it conducts the assessment and prepares an 
assessment report. The Bureau does not, however, expect that it will 
respond in the assessment report to each comment received pursuant to 
this document. Furthermore, the Bureau does not anticipate that the 
assessment report will include specific proposals by the Bureau to 
modify any rules, although the findings made in the assessment will 
help to inform the Bureau's thinking as to whether to consider 
commencing a rulemaking proceeding in the future.\8\ Upon completion of 
the assessment, the Bureau plans to issue an assessment report no later 
than October 28, 2018.
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    \7\ Public Law 79-404, 60 Stat. 237 (1946).
    \8\ The Bureau announces its rulemaking plans in semiannual 
updates of its rulemaking agenda, which are posted as part of the 
federal government's Unified Agenda of Regulatory and Deregulatory 
Actions. See http://www.reginfo.gov/public/do/eAgendaMain.
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III. The Remittance Rule

    Section 1073 of the Dodd Frank Act amended the Electronic Fund 
Transfer Act (EFTA) to create a comprehensive new system of consumer 
protection for remittance transfers sent by consumers in the United 
States to individuals and businesses in foreign countries. Consumers 
transfer tens of billions of dollars from the United States each year. 
However, these transactions were generally excluded from existing 
Federal consumer protection regulation in the United States until the 
Dodd-Frank Act expanded the scope of the EFTA to provide for their 
regulation.\9\
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    \9\ 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 the February 2012 Final 
Rule in the Federal Register to implement section 919 of the EFTA, as 
set forth in section 1073 of the Dodd-Frank Act. The rule was published 
in a new subpart B to the Bureau's Regulation E.\10\ The February 2012 
Final Rule, among other things, defined remittance transfers \11\ and 
which persons must comply with the rule because they are remittance 
transfer providers; \12\ established certain consumer disclosures that 
must be given to consumers who send remittance transfers and certain 
exceptions to these disclosures; provided consumers with cancellation 
and refund rights, and required providers to resolve errors. Further, 
the February 2012 Final Rule implemented a statutory exception that 
permits remittance transfer providers that are insured institutions to 
estimate, under certain circumstances, the amount of currency that a 
designated recipient will receive (the ``temporary exception'').\13\
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    \10\ 77 FR 6194 (Feb. 7, 2012).
    \11\ 12 CFR 1005.30(e) (defining a remittance transfer generally 
to be a transfer of funds requested by a sender to a designated 
recipient that is sent by a remittance transfer provider). There are 
specific exclusions for certain kinds of transfers, specifically, 
small value transactions of $15 or less, and transfers for the 
purchase or sale of securities or commodities provided that certain 
conditions are met. A designated recipient is any natural person or 
organization such as a corporation specified by the sender as the 
authorized recipient of a remittance transfer to be received at a 
location in a foreign country. 12 CFR 1003.30(c) and comment 30(c)-
1.
    \12\ 77 FR 6194, 6285 (providing that a remittance transfer 
provider is 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).
    \13\ EFTA section 919(a)(4) established that the temporary 
exception would expire on July 21, 2015, but permitted the Bureau to 
extend the exception for up to ten years after the enactment of the 
Dodd-Frank Act (i.e., July 21, 2020), if it determined that the 
expiration of the exception on July 21, 2015, would negatively 
affect the ability of insured institutions to send remittances to 
locations in foreign countries. The Bureau extended the exception to 
July 21, 2020, in September 2014 based on its determination that the 
expiration of the exception on July 21, 2015, would negatively 
affect the ability of insured institutions to send remittances to 
locations in foreign countries. See 79 FR 55970 (Sept. 18, 2014).
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    As discussed above, the Bureau subsequently amended the February 
2012 Final Rule several times before the effective date of October 28, 
2013 to revise the rule, temporarily delay the effective date of the 
February 2012 Final Rule,\14\ and to address important questions raised 
by industry, consumer advocacy groups, and other stakeholders. The 
Bureau believed that these amendments were warranted to increase 
certain consumer protections, avoid potentially significant disruption 
to the provision of remittance transfers, and clarify the regulations 
by making technical corrections and conforming changes.
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    \14\ 78 FR 6025 (Jan. 29, 2013). The February 2012 Final Rule 
had an effective date of February 7, 2013. The Bureau temporarily 
delayed the effective date because it had published additional 
proposed amendments to the February 2012 Final Rule in December 
2012. In a final rule published in May 2013, the Bureau finalized 
these amendments and set the effective date as October 28, 2013.
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    First, in July 2012, the Bureau published amendments to correct 
certain technical aspects of the February 2012 Final Rule and to make 
certain non-substantive, conforming changes.\15\ Then, in August 2012, 
the Bureau published amendments to the February 2012 Final Rule that, 
among other things, added a safe harbor that clarified that persons 
that provide 100 or fewer remittance transfers in both the prior and 
the current calendar years are deemed not to be providing remittance 
transfers in the normal course of business, and thus are not remittance 
transfer providers and are not required to comply with the February 
2012 Final Rule.\16\ The August 2012 final rule also contained 
provisions that apply to remittance transfers scheduled in advance of 
the transfer date, including a provision that permits a remittance 
transfer provider to provide estimates for certain disclosures for 
certain of these transfers.\17\
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    \15\ 77 FR 40459 (July 10, 2012).
    \16\ 12 CFR 1005.30(f)(2)(i).
    \17\ 12 CFR 1005.32(b)(2); 1005.36.
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    Subsequently, as noted above, the Bureau temporarily delayed the

[[Page 15011]]

effective date of the February 2012 Final Rule pending the finalization 
of proposed amendments it published in the Federal Register in December 
2012 to further amend the February 2012 Final Rule.\18\ Then, in May 
2013, the Bureau finalized the proposed amendments it published in 
December 2012 in a final rule. Among other things, the May 2013 final 
rule created a permanent exception for transfers through open networks 
that made optional in certain circumstances the disclosure of fees 
imposed by the designated recipient's institution and the disclosure of 
taxes collected on the remittance transfer by a person other than the 
provider.\19\ It also provided that for these charges, estimates may be 
provided.\20\ These amendments also created certain exceptions to the 
general error resolution provisions in situations in which a remittance 
transfer is not delivered to a designated recipient because the sender 
provided an incorrect account number or recipient institution 
identifier that results in the transferred funds being deposited in the 
wrong account.\21\ Lastly, in August 2013, the Bureau published a 
clarificatory amendment and a technical correction to the May 2013 
final rule.\22\
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    \18\ 77 FR 77188 (Dec. 31, 2012).
    \19\ 78 FR 30662 (May 22, 2013); 12 CFR 1005.31(b)(1)(vii).
    \20\ 12 CFR 1005.32(b)(3).
    \21\ 12 CFR 1005.33(h).
    \22\ 78 FR 49365 (Aug. 14, 2013).
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    As noted above and discussed further below, the Bureau has 
determined that the Remittance Rule is a significant rule for purposes 
of Dodd-Frank section 1022(d) and will conduct an assessment of the 
rule.\23\
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    \23\ As noted above, in September 2014, the Bureau published a 
final rule that, among other things, extended the temporary 
exception to July 21, 2020. The effective date of this final rule 
was November 17, 2014. In September 2014, the Bureau also published 
a final rule that extended its supervisory authority to any nonbank 
international money transfer provider that has at least one million 
aggregate annual international money transfers to determine 
compliance with, among other things, the Remittance Rule. 79 FR 
56631 (Sept. 23, 2014). In October 2016, the Bureau amended 
Regulation E by issuing two final rules. The first final rule 
focused on prepaid accounts and made clarificatory amendments to the 
Remittance Rule to clarify its application to prepaid accounts. As 
stated in the final rule, the effective date of these clarifications 
is October 1, 2017. 81 FR 83934 (Nov. 22, 2016). However, on March 
15, 2017, the Bureau published a proposal to extend the effective 
date by six months to April 1, 2018. 82 FR 13782 (Mar. 15, 2017). 
The second final rule made certain clerical and non-substantive 
corrections to errors it has identified in Regulation E, including 
in certain provisions of the Remittance Rule. 81 FR 70319 (Oct. 12, 
2016). This rule became effective on November 14, 2016. The Bureau 
has discretion to choose the relevant time frame for the analysis 
and thus the most appropriate way to address amendments to any 
particular significant rule for purposes of an assessment of such 
rule. In this notice, except with respect to amendments related to 
the extension of the temporary exception, the Bureau is not seeking 
comment on the amendments to the Remittance Rule that became or will 
become effective after the October 28, 2013 effective date.
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    The Remittance Rule applies to remittance transfers sent by 
traditional financial institutions such as banks and credit unions; 
non-banks, such as money transmitters; and Internet and mobile 
providers. Further, a remittance transfer could be a consumer-to-
consumer transfer, or it could be a consumer-to-business transfer. The 
Remittance Rule applies to remittance transfers sent over open 
networks. The most common form of open network remittance transfer is a 
wire transfer. The rule also applies to remittance transfers sent over 
closed networks, in which a remittance transfer provider typically uses 
either its own operators or a network of agents or other partners to 
collect funds from senders in the United States and distribute those 
funds to the designated recipient abroad. The rule additionally applies 
to remittance transfers sent through the automated clearinghouse system 
(ACH), although use of ACH for consumer transfers is limited compared 
to its use for non-consumer (i.e., business-to-business) transfers.

A. Major Provisions of the Remittance Rule

    The Remittance Rule addressed three major topics, which are 
summarized below.
    1. Disclosures. Consistent with the disclosure requirements 
established by section 919(a) of EFTA, the Remittance Rule generally 
requires a remittance transfer provider to provide a written pre-
payment disclosure when the sender requests a transfer and generally 
requires the provider to provide a written receipt when payment is 
made.\24\ The pre-payment disclosure must contain specific information 
about a remittance transfer, such as the fee a remittance transfer will 
impose on the remittance transfer,\25\ the exchange rate, if any,\26\ 
certain applicable fees and taxes that will be imposed on the 
transfer,\27\ and the amount to be received by the designated 
recipient.\28\ The receipt must include the information provided on the 
pre-payment disclosure,\29\ as well as certain additional information, 
such as the date of availability of the funds \30\ and information 
regarding the sender's error resolution and cancellation rights.\31\ 
Disclosures must always be made in English. In certain circumstances, a 
remittance transfer provider must also provide foreign language 
disclosures.\32\
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    \24\ 12 CFR 1005.31(b)(1) and (2). As an alternative to 
providing a written receipt, the rule permits a remittance transfer 
provider to give a single written disclosure prior to payment 
containing all of the information required on the receipt, so long 
as the provider also provides proof of payment. 12 CFR 
1004.31(b)(3).
    \25\ 12 CFR 1005.31(b)(1)(ii).
    \26\ 12 CFR 1005.31(b)(1)(iv).
    \27\ 12 CFR 1005.31(b)(1)(ii) and (vi).
    \28\ 12 CFR 1005.31(b)(1)(vii).
    \29\ 12 CFR 1005.31(b)(2)(i).
    \30\ 12 CFR 1005.31(b)(2)(ii).
    \31\ 12 CFR 1005.31(b)(2)(iv).
    \32\ EFTA section 919(b); 12 CFR 1005.31(g). The remittance 
transfer provider must either provide a sender disclosures in each 
of the foreign languages principally used by the remittance transfer 
provider to advertise, solicit, or market remittance transfer 
services at the office in which a sender conducts a transaction or 
asserts an error, or provide disclosures in the language primarily 
used by the sender to conduct the remittance transfer or to assert 
an error.
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    The Remittance Rule requires that disclosures regarding the 
exchange rate and amount of currency that will be received by the 
designated recipient must be exact, unless an exception applies. The 
rule contains four exceptions to this general requirement, which permit 
providers to disclose estimates of certain amounts instead of actual 
amounts.\33\ Specifically, in addition to the temporary exception 
discussed above, the Remittance Rule implements a statutory exemption 
that permits estimates where a remittance transfer provider is unable 
to determine exact amounts due to either the laws of the recipient 
country or the method by which transactions are made in the recipient 
country.\34\ The third exception, as discussed above, makes it optional 
for remittance transfer providers to disclose fees imposed by the 
designated recipient's institution in certain circumstances and taxes 
collected on the remittance transfer by third parties, and that to the 
extent such charges are disclosed, a remittance transfer provider may 
disclose estimates instead of actual amounts.\35\ Lastly, also as 
discussed above, the Bureau permits a remittance transfer provider to 
provide certain estimates for certain transfers scheduled before the 
date of transfer.\36\ The temporary exception is generally limited to 
insured institutions (i.e.,

[[Page 15012]]

insured depository institutions or insured credit unions),\37\ but the 
other exceptions are available to any remittance transfer provider that 
meets their criteria.
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    \33\ The Remittance Rule also sets forth certain estimate 
methodologies.
    \34\ 12 CFR 1005.32(b)(1). The Bureau has published a safe 
harbor list of countries. See 78 FR 66251 (Nov. 5, 2013). A 
remittance transfer provider may provide estimates instead of exact 
amounts when sending to one of the countries on the list unless the 
provider has information that it is possible to disclose exact 
amounts. The rule permits a remittance transfer provider to make its 
own determination that the laws of countries, not on the list, do 
not permit a determination of exact amounts.
    \35\ 12 CFR 1005.32(b)(3).
    \36\ 12 CFR 1005.32(b)(2).
    \37\ Staff of the Securities and Exchange Commission (SEC) wrote 
a no-action letter on December 14, 2012, that concludes it will not 
recommend enforcement actions to the SEC under Regulation E if a 
broker-dealer provides disclosures as though the broker-dealer were 
an insured institution for purposes of the temporary exception. The 
letter is available at https://www.sec.gov/divisions/marketreg/mr-noaction/2012/financial-information-forum-121412-rege.pdf.
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    2. Cancellation and refund. The rule also provides consumers with 
cancellation and refund rights.\38\ As a general matter, if a 
remittance transfer provider receives an oral or written request from a 
sender to cancel a remittance transfer within 30 minutes after the 
sender pays for the remittance transfer, then the remittance transfer 
provider must comply with the request, provided that the request 
contains certain identifying information and the transferred funds have 
not been picked up by the designated recipient or deposited into the 
designated recipient's account.\39\ Within three business days of 
receiving a sender's cancellation request, a remittance transfer 
provider must provide a refund of the total amount of funds the sender 
provided in connection with the remittance transfer, including, to the 
extent not prohibited by law, taxes, at no additional cost to the 
sender.\40\
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    \38\ EFTA section 919(d)(3) (establishing that the Board must 
issue rules regarding remittance transfer cancellation and refund 
policies for consumers).
    \39\ 12 CFR 1005.34(a).
    \40\ 12 CFR 1005.34(b).
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    3. Error resolution. Consistent with EFTA section 919(d), the 
Remittance Rule requires remittance transfer providers to remedy 
certain errors related to remittance transfers.\41\ A remittance 
transfer provider is generally required to investigate errors upon 
receiving oral or written error notice from a sender within 180 days 
after the disclosed date of availability of the remittance transfer. 
The remittance transfer provider must investigate and determine whether 
an error has occurred within 90 days of receiving an error notice and 
must report its investigation results to the consumer in writing within 
three business days after completing the investigation. If an error 
occurred, the remittance transfer provider must correct the error 
within one business day of, or as soon as reasonably practicable, after 
receiving the sender's instructions regarding the appropriate remedy.
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    \41\ 12 CFR 1005.33. The Remittance Rule defines what ``error'' 
under the rule includes and also what it does not include. 12 CFR 
1005.33(a)(1) and (2).
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    The type of remedy that is available depends on the type of error 
that the remittance transfer provider has determined to have 
occurred.\42\ Additionally, the Remittance Rule requires remittance 
transfer providers to develop and maintain written policies and 
procedures to ensure compliance with the rule's error resolution 
requirements and to keep certain records related to error 
investigations. The rule also provides that remittance transfer 
providers are liable for the acts of their agents when those agents act 
on their behalf.
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    \42\ The May 2013 final rule adopted provisions that provide 
that mistakes due to senders providing incorrect account numbers or 
recipient institution identifiers are not errors under certain 
circumstances. This amendment and the amendment to make optional the 
disclosure of recipient institution fees and certain taxes in 
connection with open network transfers are examples of how the 
Bureau made significant changes to the February 2012 Final Rule to 
ease compliance and prevent market disruptions, especially for 
remittance transfers sent through open networks to bank accounts.
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B. Significant Rule Determination

    The Bureau has determined that the Remittance Rule is a significant 
rule for purposes of Dodd-Frank section 1022(d). The Bureau makes this 
determination partly on the basis of the estimated aggregate annual 
cost to industry of complying with the rule.\43\ In addition, as the 
Bureau stated at the time of issuance, the Bureau expected the February 
2012 Final Rule to have important effects on remittance transfer 
service features, provider operations, and the overall market. For 
example, the Remittance Rule required providers to give consumers new 
pre-payment disclosures that contained information that providers did 
not uniformly provide consumers prior to the rule. The rule also 
established new procedures for resolving and remedying errors. The 
Bureau stated that these requirements would likely necessitate changes 
in business operations so firms could collect and provide consumers the 
information required in the disclosures and track and resolve errors 
consumers asserted. The improved disclosures might put downward 
pressure on pricing, but the Bureau also recognized in its 
consideration of benefits, costs and impacts (conducted pursuant to 
Dodd-Frank section 1022(b)(2)(A)) that the additional costs of the new 
regime might have the opposite effect. The Bureau was uncertain about 
the combined effect on price and quantity levels and observed that 
certain providers, though not necessarily providers with significant 
market shares, might attempt to increase prices or stop providing 
remittance transfers altogether at least in certain corridors. The 
Bureau also considered that the Remittance Rule would create important 
new compliance risks for providers although, as noted, there are 
several important exceptions that reduce these risks. The rule also 
states that providers are liable for violations by an agent when the 
agent acts for the provider.
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    \43\ In the Paperwork Reduction Act Analysis (PRA Analysis) 
published with the February 2012 Final Rule, the Bureau estimated an 
additional 4,253,000 in ongoing burden hours (as well as an 
additional 3,431,000 in one-time burden hours) from the February 
2012 Final Rule. 77 FR 6194, 6285 (Feb. 7, 2012). In the Supporting 
Statement submitted to OMB, the Bureau valued the ongoing burden 
hours at $29.64 per hour. Thus, there was approximately $126 million 
in additional ongoing burden from the February 2012 Final Rule. In 
the PRA Analysis published with the August 2012 Final Rule, the 
Bureau estimated that the amendments reduced annual burden by 
532,784 hours; and that the amendments in the May 2013 Final Rule 
reduced annual burden by an additional 276,000 hours. Taking into 
account these reductions, there was approximately $102 million in 
additional ongoing burden from the rule that took effect. The Bureau 
noted, however, that the decrease in burden was likely larger than 
the estimated amounts since the estimated reductions did not take 
full account of the downward revision in the number of state 
licensed money transmitters that offer remittance transfer services. 
See 77 FR 50244, 50282 (Aug. 20, 2012) and 78 FR 30662, 30701 (May 
22, 2013).
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    Information received by the Bureau related to these effects has 
generally been consistent with Bureau expectations. Taking all of these 
factors into consideration, including the annual costs of the 
Remittance Rule, the Bureau concludes that the Remittance Rule is 
``significant'' for purposes of section 1022(d).

IV. The Assessment Plan

    Because the Bureau has determined that the Remittance Rule is a 
significant rule for purposes of 1022(d), section 1022(d) requires the 
Bureau to assess the rule's effectiveness in meeting the purposes and 
objectives of title X of the Dodd-Frank Act and the specific goals 
stated by the Bureau. Section 1021 of the Dodd-Frank Act states that 
the Bureau's purpose is to implement and, where applicable, enforce 
Federal consumer financial law consistently for the purpose of ensuring 
that all consumers have access to markets for consumer financial 
products and services and that markets for consumer financial products 
and services are fair, transparent, and competitive. Section 1021 also 
sets forth the Bureau's objectives, which are to ensure that, with 
respect to consumer financial products and services:
     Consumers are provided with timely and understandable 
information

[[Page 15013]]

to make responsible decisions about financial transactions;
     Consumers are protected from unfair, deceptive, or abusive 
acts and practices and from discrimination;
     Outdated, unnecessary, or unduly burdensome regulations 
are regularly identified and addressed in order to reduce unwarranted 
regulatory burdens;
     Federal consumer financial law is enforced consistently, 
without regard to the status of a person as a depository institution, 
in order to promote fair competition; and
     Markets for consumer financial products and services 
operate transparently and efficiently to facilitate access and 
innovation.
    Section 1022(d) also requires the Bureau to assess the Remittance 
Rule's effectiveness in meeting the specific goals stated by the 
Bureau. As discussed above, the Remittance Rule provides three 
significant consumer protections: (1) Reliable disclosures including 
the price of a remittance transfer, the amount of currency to be 
delivered to the recipient, and the date of availability; (2) 
cancellation rights following a transfer; (3) error resolution 
provisions requiring providers to investigate disputes and remedy 
errors.\44\ The objectives of the Remittance Rule include improving the 
predictability of remittance transfers,\45\ providing consumers with 
better information for comparison shopping,\46\ and, with regard to 
amendments made in 2012 and 2013, limiting potential market disruption 
that might have resulted from implementing the February 2012 Remittance 
Rule as originally adopted.\47\
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    \44\ 77 FR 6193, 6194 (Feb. 7, 2012).
    \45\ 77 FR 6193, 6194 (Feb. 7, 2012).
    \46\ Id.
    \47\ See e.g., 78 FR at 30683 (May 22, 2013).
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    To assess the effectiveness of the Remittance Rule in meeting these 
purposes, goals, and objectives, the Bureau intends to focus its 
assessment of the Remittance Rule in two areas: (1) Whether the market 
for remittances has evolved after the Remittance Rule in ways that 
promote access, efficiency, and limited market disruption by 
considering how remittance volumes, prices, and competition in the 
remittance market may have changed; and, (2) whether the new system of 
consumer protections has brought more information, transparency, and 
greater predictability of prices to the market.
    To assess the Remittance Rule, the Bureau plans to analyze a 
variety of metrics and data to the extent feasible. Feasibility will 
depend on the availability of data and the cost to obtain any new data. 
The Bureau will seek to gather information about activities and 
outcomes including the ones listed below and seek to understand how 
these activities and outcomes relate to each other:
    (1) Provider activities undertaken to comply with the Remittance 
Rule such as provision of disclosures; responses to errors; and 
provision of cancellation rights;
    (2) Consumer activities including utilization of their error 
resolution rights;
    (3) Consumer outcomes that the Remittance Rule sought to affect 
including whether the new system has brought greater transparency and 
predictability of the costs of sending remittances and allowed for 
comparison shopping; and
    (4) Other market outcomes that the Remittance Rule may have 
affected including the number and types of providers, the number of 
remittances sent, and the price of transfers.
    In conducting the assessment, the Bureau will seek to compare 
consumer outcomes to a baseline that would exist if the Remittance 
Rule's requirements were not in effect. Doing so is challenging because 
the Bureau cannot directly observe what the remittance market would 
look like had the Remittance Rule not come into effect. The Bureau may 
have access to data from before the effective date of the Remittance 
Rule that is informative about the outcomes absent the Remittance Rule. 
In addition, some of the provisions of the rule that allow exemptions, 
applicable State laws in effect before the rule, or other institutional 
factors may allow the Bureau to observe outcomes similar to outcomes 
one might observe without the rule. The Bureau will draw conclusions as 
supported by the data, taking into account that factors other than the 
rule itself may affect observable outcomes.
    The Bureau may also seek to compare outcomes observed with the 
Remittance Rule to counterfactual outcomes if specific elements of the 
Remittance Rule had not been in effect. For example, the Bureau may 
seek to understand the effects of specific amendments, provisions, or 
exceptions, which only makes sense when compared to a baseline in which 
the balance of the Remittance Rule is in effect. In addition, the 
Bureau may consider how other possible provisions might have changed 
the effects of the rule.
    The Bureau has existing data sources, currently available or in 
development, with which to undertake these analyses, and the Bureau is 
also planning to secure additional data. Existing data sources include 
the World Bank Migration and Remittance Database,\48\ consumer 
complaints submitted to the Bureau, and information obtained from 
Bureau supervision and enforcement activities. The Bureau plans to use 
information provided by banks and credit unions in their Call Reports 
on their remittance activities. The Bureau is also exploring the 
availability and utility of other sources of data including State level 
assessments and reports on money transmitters operating within 
individual States.
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    \48\ The database is available at https://www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data, accessed February 14, 2017.
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    The Bureau intends to interview various market participants, 
including remittance transfer providers and potential remittance 
transfer providers, as it analyzes the data described above and 
interprets the findings. The Bureau may also request information from 
remittance transfer providers about, for example, error assertions and 
resolutions and sample disclosures, including, if applicable, foreign 
language disclosures.
    As it conducts its assessment of the Remittance Rule, the Bureau 
expects to consider effects of specific provisions of the rule to the 
extent feasible. For example, the Bureau may collect and analyze 
information about the use of the temporary exception allowing insured 
institutions to estimate certain third-party fees and exchange rates 
that expires in July 2020. In addition, where practical and reasonable 
the Bureau may also collect and analyze information about: (1) The 100-
transfer safe harbor; (2) exceptions to the rule's error resolution 
regime for certain sender mistakes involving incorrect account numbers 
and recipient institution identifiers; (3) optional disclosure of 
recipient institution fees for remittance transfers conducted over open 
networks; (4) optional disclosure of taxes imposed on a remittance 
transfer by a person other than the remittance transfer provider; and 
(5) the requirement to provide foreign language disclosures under 
certain circumstances.

V. Request for Comment

    To inform the assessment, the Bureau hereby invites members of the 
public to submit information and other comments relevant to the issues 
identified below, as well as any information relevant to assessing the 
effectiveness of the Remittance Rule in meeting the purposes and 
objectives of title X of the Dodd-Frank Act (section 1021) and the 
specific goals of the Bureau (enumerated

[[Page 15014]]

above). In particular, the Bureau invites the public, including 
consumers and their advocates, remittance transfer providers and other 
industry representatives, industry analysts, and other interested 
persons to submit the following:
    (1) Comments on the feasibility and effectiveness of the assessment 
plan, the objectives of the Remittance Rule that the Bureau intends to 
emphasize in the assessment, and the outcomes, metrics, baselines and 
analytical methods for assessing the effectiveness of the rule as 
described in part IV above;
    (2) Data and other factual information that may be useful for 
executing the Bureau's assessment plan, as described in part IV above;
    (3) Recommendations to improve the assessment plan, as well as 
data, other factual information, and sources of data that would be 
useful and available to execute any recommended improvements to the 
assessment plan including data on the exceptions and provisions 
discussed at the end of part IV;
    (4) Data and other factual information about the benefits and costs 
of the Remittance Rule for consumers, remittance transfer providers, 
and others; and about the impacts of the rule on transparency, 
efficiency, access, and innovation in the remittance market;
    (5) Data and other factual information about the rule's 
effectiveness in meeting the purposes and objectives of Title X of the 
Dodd-Frank Act (section 1021), which are listed in part IV above;
    (6) Recommendations for modifying, expanding, or eliminating the 
Remittance Rule.

    Dated: March 15, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-05681 Filed 3-23-17; 8:45 am]
 BILLING CODE 4810-AM-P