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#2009908 - 04/23/15 08:07 PM Remittance transfer and receipt requirements
DingoJ Offline
Member
Joined: Sep 2012
Posts: 75
I have a question for the correct way to handle a combined disclosure. There is an FI in the area that is handling remittance transfers in a way that I believe is not compliant with Reg-E. I was hoping someone could give me some feedback.

Process for remittance transfer:

1) Customer comes into branch and requests remittance transfer
2) FI inputs wire and debits customer’s account
3) Funds from customer are held in a general ledger for 30 minutes
4) FI provides customer with a “combined disclosure” with the receipt portion completed, showing they paid for the wire. This is the first and only disclosure the customer gets.
5) Customer signs disclosure and leaves
6) Once 30 minutes has elapsed, funds are released from the general ledger to the FI’s international wire processor.


The requirement for a pre-payment disclosure, whether part of a combined disclosure or not, in my opinion is not being met here. The FI argues that the wire is not paid for when the customer’s account is debited because they don’t’ actually release the wire until after 30 minutes has expired; they argue that the wire is paid for when the funds are released to the wire processor.

This logic seems to contradict itself in that a Receipt “…must be provided to the sender when payment is made for the remittance transfer.” On one hand the FI states the wire is not paid for (so their combined disclosure acts as a pre-payment disclosure) and on the other they say it is paid for (so their combined disclosure is a receipt).

Does this make sense to anyone else? Am I being too literal in my translation of the remittance rules?

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Remittance Transfer Rule
#2010393 - 04/25/15 10:10 PM Re: Remittance transfer and receipt requirements DingoJ
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
That's bull. There's language in the regulation that clearly says the Sender pays when the Sender gives the provider the OK to charge the Sender's account (for a deposit customer) or pays the funds. The disclosure must be provided before the provider gets the OK to send it.
  1. Sender asks for the transfer to be sent.
  2. Provider give sender a disclosure or combined disclosure so the sender can see the costs and approve the transaction
  3. Sender gives the go ahead and tenders the payment or gives the OK to charge Sender's account.
  4. Provider gives the sender a receipt (if pre-payment disclosure was used) or some other written documentation of the Sender's payment (if combined disclosure was used)
  5. Thirty-minute cancellation window begins on payment
  6. Whether the provider sits on the transfer for the 30 minutes or transmits it immediately is risk-based decision, based on knowledge the Sender can demand money back any time in that 30 minutes. If transmitted and recipient has not received funds within the 30 minutes and the Sender cancels, the provided has to refund everything. If the recipient has already received the funds (or they have been credited to recipient's account), the transfer cannot be cancelled.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#2010486 - 04/27/15 05:30 PM Re: Remittance transfer and receipt requirements DingoJ
DingoJ Offline
Member
Joined: Sep 2012
Posts: 75
Thank you for the reply John. I thought that would be the answer.

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