In preparation for the Feb. 2013 final ruling: Example:
If we send a transfer in US dollars to Poland, we need to disclose how much the recipient will get. Do we have to disclose the foreign currency amount or the US dollar amount? To someone’s point, unless the beneficiary has a US dollar account in a foreign country (which I am guessing most consumers do not have), they are going to get foreign currency. Would this be a correct statement? Thank you!

We have people send US dollars to other countries.
The customer is suppose to let you know what currency they want to use and the disclosures are based on that.

Have you updated your wire forms for this new information to be added? What did you add to the form? We may no longer do international wires for consumers but still need to update for business accounts.

Business accounts are not affected by the Remittance Transfer rules in subpart B of Regulation E.

My understanding is you need to ask the consumer how the funds will be accepted. If they are not sure, or know it will remain US currency you don't have to disclose the exchange. If they know it will be exchanged, you have to disclose.

So, if we only transfer US$ to foreign recipients, the new model forms are not needed? What if the US$ are exchanged without our knowing?

Yes, this rule does apply. Look at Model form A-34. It is for dollar to dollar.


(should've asked me first ;))

Thanks Minion. I do believe that this is one of the most ridiculous regs I have read to date...

Does this new '100 remittances' referring to domestic and international transfers or just international.

Example: We have 1000 domestic and foreign ACH and wire transfers per year, but only 50 international. Are we exempt for this new disclosure?

Yes.

I'm sorry, which question were you answerng "Yes" to?

Sorry I wasn't clear--

Yes, if you have only 50 foreign/international transfers per year, you are exempt. Just don't go over 100.

The 100 minimum was the best news to ever come out of the CFPB. We do about 10 a year, so I was hoping for a minimum of 25. Phew!

I am copying this from another post of mine:

Has to meet all these tests to be counted:

• Requested by an individual (the Sender)
• Transfer for personal, family or household purposes
• The Sender (or the sender's account funding the transfer) must be located in a State
• The designated recipient, which may be an individual, organization, business or other entity, or the recipient's account, must not be located in a state
• The transfer must be made electronically
• The transfer amount in USD is more than $15.00

The types of transfers included are wire transfers, outbound ACH IAT entries, bill-pay transactions that meet the definition of EFT under subpart A of Regulation E, some prepaid access transactions, and certain other electronic transfers.

A unique example -- A U.S. bank that is owned by a Canadian bank has a consumer customer with a USD denominated account in the U.S. bank and a CAD denominated account at the "mother bank." The bank provides a service allowing the customer to move funds from one account to the other, using the bank's online banking portal. Transfers from the USD account to the CAD account will be subject to the rule, unless the amount is USD 15 or less.

I attended the BOL webinar on the new rules on 7/18 and have been doing quite a bit of reading since. From what I am seeing, it seems as though banks (using an open network) "will not be able to comply" with the rules because of the open network set up. Is someone able to clarify the following for me:

1) Is it that it is impossible to comply, meaning we need to discontinue offering international wires unless we move to a closed network?; or

2) Is it that it will be difficult to comply (due to estimates etc.), but not impossible?

I am not proficient in wire operations and am trying to figure out if we should even bother trying to work on complying by 2/7/13 using an open network environment, or if we must move to a closed network set up if we want to continue offering the service and have any chance of being in compliance.

Can someone help?

A lot depends on what information you can get from your correspondent banks, if you use them. Can they provide you with fee, tax and exchange rate information? Remember that if the correspondent sets the exchange rate, you can't use an estimate.

I do think that banks that have sufficient volume of these transactions to fall under the rule are going to have a very challenging time complying unless they connect up to a closed network service provider.

Agreed...

Since the rule applies to consumers, not businesses, does the "100 minimum" apply to just consumer foreign remittance transactions, or is it based on the number of all foreign transfers?

It only applies to the remittance transfers that would be subject to the rule. By definition under the rule, a remittance transfer is one ordered for personal, family or household purposes by an individual in a state for delivery to a person not in a state.

I am trying to clarify whether or not the following scenario is covered by the new Reg E Remittance Transfer Rules:

A consumer adds a person in another country (e.g. Canada) as an authorized user on their checking or savings account based in the U.S., which may be denominated in dollars or in a foreign currency. A Debit Card linked to the consumer’s account is then provided to the authorized user (who would be considered the “recipient”), who can use it to withdraw funds at an ATM or point of sale.

If this scenario is covered, do we have to be concerned with EXISTING customers that currently have authorized users (who are located in foreign countries) set up on their accounts, or just new set ups after 2/6/13?

As always, any help would be appreciated.

You might need to check your card issuer rules as you used to need a special issuer's license to issue cards to non-US person. From a BSA/AML perspective, why would a bank agree to run such a program?

It's not covered. Sending the debit card is not a transfer of funds. Individual transactions, including withdrawals, from the U.S.-based account using ATMs outside the U.S. are not foreign remittances because they are not EFTs requested by a Sender of a Remittance Transfer Provider. Your bank is not initiating transfers -- the cardholder in the foreign country is initiating them using the ATM network, not your bank.

Ditto on POS transactions, which are initiated by the merchant and network, not by your bank.

A card transaction that WOULD be covered is your loading of value to a prepaid card that the bank knows to be in, or will deliver to, a foreign country, at the request of an individual in the U.S. or from an account resident in the U.S.

Just confirming...a customer using their debit card to make a purchase in a foreign country is NOT a "foreign remittance transfer" that would need to be counted towards the 100 exemption?

Correct. And once your business volume creeps over that 100 threshold, it would not be a remittance transfer under the definition of that term, so you would not have any compliance requirements under subpart B of Reg E.