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#1749733 - 10/16/12 09:31 PM
remittance transfer exemption
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Platinum Poster
Joined: Nov 2005
Posts: 800
Washington State
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If we are sending less than 100 remittance transfers in a year do we need to worry about any of the new Regulation E Remittance Transfer rules that become effective in February?
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#1749747 - 10/16/12 10:28 PM
Re: remittance transfer exemption
Baker
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Platinum Poster
Joined: Dec 2001
Posts: 674
Colorado
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From the Small Entity Compliance Guide released on 10/15/12, at the bottom of page 5, Companies that consistently send 100 or fewer remittance transfers a year do not qualify as remittance transfer providers and are not covered by the rule.
Last edited by cbinder63; 10/16/12 10:28 PM.
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#1749755 - 10/16/12 11:32 PM
Re: remittance transfer exemption
Baker
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100 Club
Joined: Sep 2004
Posts: 166
Southern California
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When counting remittance transfers, should we only count transfers for consumers and not businesses?
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#1749757 - 10/16/12 11:43 PM
Re: remittance transfer exemption
Candice
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10K Club
Joined: Dec 2000
Posts: 21,293
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#1750091 - 10/17/12 09:06 PM
Re: remittance transfer exemption
Baker
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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I looked at the slides and now a little more confused...when determining the 100 exception do you only include international or ALL transfers?
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#1750208 - 10/18/12 01:40 PM
Re: remittance transfer exemption
Baker
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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That is what I thought. Thanks!
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#1750307 - 10/18/12 03:55 PM
Re: remittance transfer exemption
Baker
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Platinum Poster
Joined: Nov 2005
Posts: 614
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Ken - I thought it also had to be primarily for personal, family or household purposes and not just done by a natural person? I read this in the definition of "sender".
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#1750352 - 10/18/12 05:05 PM
Re: remittance transfer exemption
Baker
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Diamond Poster
Joined: Sep 2011
Posts: 1,651
A CU, Where Regs Don't Apply
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As a currently exempt financial, I'm still worried about it.
You will need practices in place to be sure you'll know if you cross the 100 mark, since you've only got 6 months from that point to be compliant.
Our concern is that if several local competitors stop offering the product, we may see an influx that could push us over the mark.
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#1750394 - 10/18/12 06:03 PM
Re: remittance transfer exemption
Baker
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Power Poster
Joined: Nov 2004
Posts: 6,925
Illinois
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In the case of PayPal IATs, they are covered transfers for the ODFI. As the RDFI, you have no disclosure requirements and they don't count toward your 100. (They count toward PayPal's bank's 100.)
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#1750421 - 10/18/12 06:28 PM
Re: remittance transfer exemption
Baker
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Platinum Poster
Joined: Dec 2008
Posts: 731
Tennessee
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Consumer originated transfers to businesses are covered. The business exemption is for transfers originated by businesses.
Kathleen, I read the final rule and the reg a little differently. I understood that if a remittance transfer was not for personal, family our household purposes, then it wasn't covered by this reg. When I was doing our count, I did come across a couple of international wires that were done from consumer accounts but were well documented that they were for a business purpose....these were very odd situations....I did not include these in my count as they were NOT for personal, family or business purpose.
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#1750426 - 10/18/12 06:33 PM
Re: remittance transfer exemption
Baker
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Platinum Poster
Joined: Dec 2008
Posts: 731
Tennessee
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Should all consumer originated transfers count regardless of the purpose of the transfer?
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#1750431 - 10/18/12 06:40 PM
Re: remittance transfer exemption
Compliance504
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10K Club
Joined: Dec 2000
Posts: 21,293
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Consumer originated transfers to businesses are covered. The business exemption is for transfers originated by businesses.
Kathleen, I read the final rule and the reg a little differently. I understood that if a remittance transfer was not for personal, family our household purposes, then it wasn't covered by this reg. When I was doing our count, I did come across a couple of international wires that were done from consumer accounts but were well documented that they were for a business purpose....these were very odd situations....I did not include these in my count as they were NOT for personal, family or business purpose. A consumer purpose transfer by an individual is covered. A payment from an individual to a business for consumer purposes is covered....a normal consumer expense like buying a vacation home in another country, an international purchase of train tickets for a vacation, etc. A business purpose transfer by anyone is not covered, such as my example of me buying a printing press for my business.
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#1750433 - 10/18/12 06:42 PM
Re: remittance transfer exemption
Baker
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Platinum Poster
Joined: Dec 2008
Posts: 731
Tennessee
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Thanks so much Kathleen.....
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#1750449 - 10/18/12 07:12 PM
Re: remittance transfer exemption
BrianC
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100 Club
Joined: Aug 2004
Posts: 164
Upstate SC
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In the case of PayPal IATs, they are covered transfers for the ODFI. As the RDFI, you have no disclosure requirements and they don't count toward your 100. (They count toward PayPal's bank's 100.) Between the time I posted this and now, I went back & reread some posts. John Burnett used the example of our customer purchasing goods on eBay & paying for this internationl purchase via eBay as a remittance that is not covered, thus does not count toward our bank's 100 transactions threshold. I beleive eBay ownes PayPal, don't they? If so, then it seems John had addressed my question but I had not read the threads with this exact example in mind before.
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#1753986 - 10/31/12 07:18 PM
Re: remittance transfer exemption
Carolina Blue
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Those PayPal P2P remittances (if over $15) could be subject to the rule if they originate in the U.S. and are known to be paid outside the U.S. But if there is nothing in the transaction to identify where it's to be paid (nothing more than an email address is required, as I understand it), the provider can assume it's to be paid in the U.S. and not have to comply. Specifically, Comment 30(c)-2.iii. says, in pertinent part,
"Where the sender does not specify information about a designated recipient’s account, but instead provides information about the recipient, a remittance transfer provider may make the determination of whether the funds will be received at a location in a foreign country on information that is provided by the sender, and other information the provider may have, at the time the transfer is requested. For example, if a consumer in a State gives a provider the recipient’s email address, and the provider has no other information about whether the funds will be received by the recipient at a location in a foreign country, then the provider may determine that funds are not to be received at a location in a foreign country. However, if the provider at the time the transfer is requested has additional information indicating that funds are to be received in a foreign country, such as if the recipient’s email address is already registered with the provider and associated with a foreign account, then the provider has sufficient information to conclude that the remittance transfer will be received at a location in a foreign country."
Comment: "Other information the provider may have" could include the currency in which the P2P payment is to be made. If the currency is Czech, one might safely assume the remittance will be outside the U.S. In that case, the rule would apply. Someone will have to provide disclosures, IMHO, and who that someone is could depend on what "wrapper" is used to present the P2P service. If it's branded as a PayPal transaction, I think PayPal will have to disclose. If it's branded as a service provided by your bank or CU, the bank or CU might have to provide the disclosures. PayPal may actually drive those disclosures, but they'd appear to come from the bank or CU, again IMHO.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1754899 - 11/05/12 01:05 PM
Re: remittance transfer exemption
Baker
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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So, Carolina Blue, how do your customers access the PayPal P2P service? Through your bank's online banking services, or through a link out to PayPal where they enroll there and set up their profiles so that PayPal debits their account with you? Can you describe the process in detail so that we can get a better understanding of whether you or PayPal will be subject to subpart B?
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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