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Tuesday, October 23, 2012

ABA, Trade Groups Reiterate Concerns About Remittance Rule

ABA and four other financial trade groups in a letter to CFPB Director Richard Cordray reiterated their concerns about provisions in the bureau’s remittance rule that will hurt consumers if they’re not addressed.

The trade groups sent the letter in response to Cordray’s recent request for ways to prevent disruptions to the consumer international transfer market. They noted that they previously discussed with Cordray their strong concerns about the rule’s provider liability for sender error; the requirement to disclose foreign taxes; the requirement to disclose fees the receiving bank imposes; and the rule’s February 2013 effective date.
Although you have indicated that you do not think these issues merit relief, we continue to hear from our members that these issues remain critical.

[W]e firmly believe that, despite the best efforts of the industry, if these concerns are not addressed, there will be significant negative consequences for consumers.
The trade groups recommended, among other things, that the CFPB eliminate: the rule’s provider liability for a sender’s incorrect account-number instruction; the foreign taxes disclosure requirement (and, if not, add disclosure flexibility and issue additional guidance); and the requirement to disclose fees the receiving bank imposes.

They also again strongly urged the bureau to permit a phased implementation of the rule’s requirements.

Read the full letter.

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