Hello,

Below please see questions regarding Reg E - Remittance Rule:

If a customer provides a wrong account number who is responsible for the error? Is the provide/Bank liable for the Loss?

Can a Bank refuse to conduct transfers to certain countries (other than the OFAC countries)? For instances, can a bank state they only wish to conduct wires to China?

If you can turn in, the CFPB webinar on this topic is now live at
http://www.consumerfinance.gov/blog/remittance-rule-session/

I tried multiple times to 'tune-in' to this webinar - was unsuccesful.

The bank is liable, see the commentary to subpart B

5. Failure to make funds available by disclosed date of availability – coverage. Section 1005.33(a)(1)(iv) generally covers disputes about the failure to make funds available in connection with a remittance transfer to a designated recipient by the disclosed date of availability. If only a portion of the funds were made available by the disclosed date of availability, then § 1005.33(a)(1)( iv) does not apply, but § 1005.33(a)(1)(iii) may apply instead. The following are examples of errors for failure to make funds available by the disclosed date of availability (assuming that none of the exceptions in § 1005.33(a)(1)(iv)(A), (B), or (C) apply).

i. Late or non-delivery of a remittance transfer;

ii. Delivery of funds to the wrong account;

iii. The fraudulent pick-up of a remittance transfer in a foreign country by a person other than the designated recipient;

iv. The recipient agent or institution’s retention of the remittance transfer, instead of making the funds available to the designated recipient.



There is no requirement in Subpart B that you send remittance transfers. Unless a contract with a coorspondant bank or wire agency requires that you send transfers to all countries, you can designate countries for which you are willing to provide services.

BOL Guru John Burnett will be offering a webinar on this topic Friday, October 26th.

Foreign Remittance Transfers - An Update

Here's the slide presentation for today's CFPB webinar. http://files.consumerfinance.gov/f/201210_cfpb_remittance_rule_presentation.pdf They didn't deviate too much from it.

I am trying to determine if using bill pay would be a foreign remittance transfer? For example our customer uses our US bank's bill pay system to make a loan payment to a bank in Canada.

Yes, according to the webinar.

If you send a paper check, no.

Oops. Not so. This is one part of subpart B that carries over from subpart A. If the bill pay program delivers payments using paper checks drawn on a central account (not the consumer's account), and funds the payments with a debit to the consumer's account, the bill payment transactions are subject to subpart A (see the portion of section 1005.3 commentary dealing with bill payment transactions -- 3(b)(1)-1.vi).

Bill payment checks are EFTs under 1005.3(b) "unless the terms of the bill-payment service explicitly state that all payments, or all payments to a particular payee or payees, will be solely by check, draft, or similar paper instrument drawn on the consumer's account, and the payee or payees that will be paid in this manner are identified to the consumer."

If the bill payment checks are addressed for delivery in a foreign country, comment 30(e)-1 includes verbiage that is virtually identical to the language quoted from the section 3 comment. In fact, if the check is an EFT subject to subpart A of the regulation and is addressed to and delivered to a location outside the U.S., it will be subject to subpart B.

I was basing my answer on this...and CFPB comments to this effect. I will re-read and re-listen!

My organization performs Foreign Wires for our depositors. We require that these out-going wires get sent to a US correspondent bank first so the wire is never sent directly from our bank to a foreign bank. Since we do go over the 100 threshold identified, my question is in regards to the receipt. I see the example language in the A-34 model form where it states the Transfer Amount, Other Fees and Other Taxes to the recipient. Does anyone know a way around this format since we don’t know at the point of the origination what the intermediary bank and the receiving foreign bank will apply as fees for the wire or does it not apply to us because we require that the wire be in US funds to the intermediary bank?

All assistance is appreciated ….

We were unable to connect to yesterday's webinar (typical government foul-up?) but we did get the presentation material. On slide #19 it describes a temporary exception to insured banks to providing exact amounts. Since we could not hear the speaker can someone please explain in detail what this means. I assume we still have to provide the disclosure but can estimate the exchange rate and 3rd party bank fees; is this correct? How exact must our estimates be? Any help will be appreciated.

According to the CFPB International Fund Transfers Guide

Generally, all disclosed amounts must be exact. However, there are several exceptions that allow providers to estimate the applicable exchange rate, back-end fees and taxes, and total funds to be received. These exceptions include a temporary exception for insured depository institutions and credit unions, and a permanent exception for transfers to certain countries.b These exceptions are limited, so you should make sure the transfer at issue qualifies before you rely on an exception. If estimates are permitted, you generally must use the methods described in the rule for determining estimated amounts.
i. Temporary exception for insured depository institutions and credit unions
To take advantage of this exception, you must meet the following criteria.
1. Insured depository institution or credit union
You must be an insured depository institution or credit union, or an uninsured U.S. branch or agency of a foreign depository institution.
2. Account-based transfers
The remittance transfer must be sent from the sender’s account with you.
3. Unable to determine exact amounts
You must be unable to determine exact amounts for reasons outside your control. For example, you may not be able to determine the exchange rate if it is set by the designated recipient’s institution, and you have no correspondent relationship with that institution. Comment 32(a) provides guidance on other qualifying situations.
4. Time Period
This is a temporary exception that will be available for qualified transfers through July 21, 2015. The Dodd-Frank Act permits the exception to be extended for up to five additional years if certain conditions are met. The CFPB expects to assess those conditions and decide whether to extend the deadline several months before it expires in July 2015.

The session was recorded and will be posted.

We received an agreement recently from our correspondent bank which they are insisting we sign to conduct foreign wires. It states we will comply with the remittance rule even though we are well under the 100 treshhold. No signature-no foreign wires. That does nto seem right, anyone else getting that from their correspondent bank?

I'll have to listen to the webinar again once it is posted, but I believe they stated in the webinar yesterday that if your correspondent bank does over 100 but you do not, the rule does not apply to you.

Have banks acting as correspondent banks for smaller entities been given any guidance on how to offer the service for smaller entities with RMTs under 100?

I can't blame them for not wanting to take on the risk....

We haven't received anything from our correspondent bank yet....

I'm looking for feedback on using FEDLine to send foreign wires. After listening to the CFPB presentation, we are thinking it isn't going to be a viable option because it doesn't provide us with appropriate information to disclose.

How are others looking at this?

I'm curious about this as well. Yes, the webinar confirmed that if you (the bank) aren't sending more than 100, you are not required to comply, although the correspondant may be. I'm just wondering how that's really supposed to work with the correspondant. We haven't received anything from ours, but how are they supposed to comply if we're not? It's more out of my curiousity and wondering how this is really supposed to all work.

In the scenarios you are asking about, the community bank's consumer customer contacts the community bank to send the wire. If the community bank has not yet tripped the safe harbor limit or is still in the transition period after exceeding the safe harbor limit, the community bank would not be required by the regulation to comply with the rule. I don't see that the correspondent bank would be required to comply, either, unless the community bank was operating under an agency agreement for the correspondent (unlikely). After all, the consumer is not requesting the wire of the correspondent bank.

I'm hoping that the correspondent bank is operating out of some hyperconcern brought on by a myopic attorney who, after rereading the rules, will relax and understand that the compliance responsibility lies with the bank dealing with the consumer, not with the upstream correspondent.

Quick Clarification- IAT's are only included in the 100 exception if the financial institution is the ODFI. Correct?

If a financial institution is the RDFI then they would not be included in 100 exception. Correct?

Background, I had a peer that mentioned that clients that purchase items on the internet and it comes through as an IAT then it would count. That doesn't make sense seeing as the client is in control not the financial institution.

Fine Print, that is correct. Only transactions originated by your institution at the request of a consumer are counted, not transactions that you receive from others.

When you say "it states we will comply with the remittance rule", what exactly is being required of your bank? Providing the pre-disclosure and receipt? If that's the case, then they appear to be overreacting.

Otherwise, you'll be monitoring the number of foreign wires to ensure they don't go above 100, correct? To me that's complying with the regulation and I think you could sign a document stating so.

We are awaiting the DVD of John's presentaiton on the 26th. I had thought that the CFPB discussed some flexibility before they went into the their main presentaiton on their webinar, but have not heard any follow-up. Did John have anyhting new? Are the error resolution liabilities the same as in the final rule or have they been at all changed, updated, to put lessof the liability on the financial institution if hte curstomer provides incorrect informaiton? Thanks to all.

No, John didn't have anything new on the CFPB news that they might have some flexibility on the strict provider liability that's currently found in 1005.33 or on the CFPB speaker's statement that bill-pay checks issued from an omnibus account might be excluded from coverage (which is a direct contradiction of the written regulation). And so far, the Bureau hasn't issued anything in writing to expand upon either statement.

I did mention in my webinar that Director Cordray had dropped that little morsel of hope about the strict liability during the Bureau's webinar, along with a comment that the presentation included that unexplainable statement about bill-pay checks, but I could not provide any insight into when or if we'll see something more tangible from the Bureau.

Our bank uses a correspondent for the majority of our international wires. I’ve already confirmed that we are well over 100 remittance transfers for the past two years, so we do not fall in safe harbor. A representative from our correspondent bank has communicated to our deposit operations liaison that they will produce the combined disclosure for our bank. However, I’m struggling with how they plan to accomplish this. I was told that the contact information at the top would be that of the correspondent bank and not our own, but the regulation states that this should be the actual transfer providers information (makes sense for the purpose of error resolution). In addition to this, there just seem to be too many parts of the receipt that need to be customized for each bank (fees, state regulator, website, phone, etc.). I just don’t see are correspondent doing this for all the banks they service. Am I over thinking this. I just don’t see how we comply without producing our own disclosures.