THE LATEST REMITTANCE RULE CHANGES

On August 7, 2013 the CFPB published final rule that amends a May 22, 2013 Final Rule which along with three other final rules implements the Electronic Fund Transfer Act’s provisions regarding remittance transfers.

The August 7, 2013 Final Rule makes a clarificatory amendment and technical correction to the May 22, 2013 Final Rule. First, the rule makes a clarificatory amendment to § 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. 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.

Second, the May 22, 2013 Final Rule incorrectly numbered comment 33(c)-6, Form of refund as comment 33(c)-5. As a result, the CFPB 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 CFPB is correcting this numbering error and, as a result, restoring in the rule what was previously comment 33(c)-5.

Translation: We screwed up and dropped a paragraph. Now we are restoring the dropped paragraph, but we would rather call it a numbering error.

The CFPB is publishing the clarificatory amendment and technical correction as a final rule. The clarificatory amendment and technical correction to the May 22, 2013 Final Rule will be effective on October 28, 2013, which is the same effective date as the May 22, 2013 Final Rule. The CFPB believes notice and comment are unnecessary because the rule makes a merely technical change to clarify that the May 22, 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.

Translation: We screwed up and want to fix it really quickly without having to delay the effective date one more time.

Comment: If this were a bank advertisement I believe the CFPB would cite it as a UDAAP violation.

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