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#1749733 - 10/16/12 09:31 PM remittance transfer exemption
Baker Offline
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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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#1749735 - 10/16/12 09:34 PM Re: remittance transfer exemption Baker
Reads Regs Offline
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See the slide presentation from today's CFPB webinar on remittance transfers. http://files.consumerfinance.gov/f/201210_cfpb_remittance_rule_presentation.pdf

It does a good job of discussing the 100 transfers a year provision.
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#1749747 - 10/16/12 10:28 PM Re: remittance transfer exemption Baker
cbinder63 Offline

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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
Candice Offline
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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
Kathleen O. Blanchard Offline

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Yes.
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#1750091 - 10/17/12 09:06 PM Re: remittance transfer exemption Baker
ahkcompliance Offline
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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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#1750125 - 10/17/12 11:01 PM Re: remittance transfer exemption Baker
Buddy the Elf Offline
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Only international.
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#1750208 - 10/18/12 01:40 PM Re: remittance transfer exemption Baker
ahkcompliance Offline
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That is what I thought. Thanks!

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#1750228 - 10/18/12 02:15 PM Re: remittance transfer exemption Baker
nybanker66 Offline
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When counting remittance transfers, should we only count transfers that the recipients were consumers and exclude the transfers that went to businesses? Or does this consumer / business rule only apply to Originators?

Many Thanks for any help ….

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#1750230 - 10/18/12 02:21 PM Re: remittance transfer exemption Baker
Kathleen O. Blanchard Offline

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Consumer originated transfers to businesses are covered. The business exemption is for transfers originated by businesses.
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#1750233 - 10/18/12 02:25 PM Re: remittance transfer exemption Baker
nybanker66 Offline
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Thank you kathleen ... Ed C.

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#1750234 - 10/18/12 02:25 PM Re: remittance transfer exemption Kathleen O. Blanchard
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Deleted due to dumbness. grin
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#1750307 - 10/18/12 03:55 PM Re: remittance transfer exemption Baker
MarieR Offline
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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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#1750314 - 10/18/12 03:59 PM Re: remittance transfer exemption Baker
Kathleen O. Blanchard Offline

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Consumer purpose transfers by consumers. An individual conducting a business purpose transfer (not just a transfer to a business, like paying personal insurance or making a personal purchase) is a business purpose transaction.

Say I operate a printing business in my name and I am buying a new printer...business purpose.
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#1750352 - 10/18/12 05:05 PM Re: remittance transfer exemption Baker
Matt_B Offline
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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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#1750386 - 10/18/12 05:53 PM Re: remittance transfer exemption Matt_B
Dorothy W Offline
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I listened to the CFPB webinar. They did not directly answer my submitted question about PayPal transactions. If we have to count international debit card purchases via PayPal as OUR remittances, then we exceed the 100 threshold. If we do not have to count these because PayPal will be responsible for providing a remittance receipt, then my bank is way below the 100 threshold. How are you treating international debit card purchases via PayPal that are presented/processed as ACH - exempt or covered? THANKS.

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#1750394 - 10/18/12 06:03 PM Re: remittance transfer exemption Baker
BrianC Offline
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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
Compliance504 Offline
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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
Compliance504 Offline
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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
Kathleen O. Blanchard Offline

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Originally Posted By: Compliance504
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
Compliance504 Offline
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Thanks so much Kathleen.....

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#1750449 - 10/18/12 07:12 PM Re: remittance transfer exemption BrianC
Dorothy W Offline
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Originally Posted By: BrianC
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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#1752970 - 10/26/12 08:29 PM Re: remittance transfer exemption Dorothy W
Carolina Blue Offline
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So I found out that our customers can send international transfers through a PayPal p2p function in our online bill pay. Is PayPal still considered the ODFI in these situations and we do'nt have to worry about the remittance rules? Or are we the ODFI and PayPal is the intermediary?

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#1753986 - 10/31/12 07:18 PM Re: remittance transfer exemption Carolina Blue
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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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#1754899 - 11/05/12 01:05 PM Re: remittance transfer exemption Baker
John Burnett Offline
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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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#1755281 - 11/06/12 11:02 AM Re: remittance transfer exemption Baker
Compliance504 Offline
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We do not want to offer remittance transfers any longer; however we do want the option to continue servicing some of our customers who have relied on this service and be able to honor requests of other customers that Mgmt would like to keep happy….we realize that to do this we need to make sure we are at 100 or below by Dec 31 2012 and that we monitor our count through 2013 to make sure we are under the Safe Harbor threshold.

Unfortunately, we have made this decision rather late in the year and just removed the service from our fee schedule and have notified branch managers that we will only do these upon request for our "very best" customers. We are pushing close to the 100 mark for this year…Mgmt is aware that if we go over 100 by the end of this year, after Feb 13 we will not be able to provide this service upon request for anyone unless we are in compliance. But a thought has occurred to me….to qualify for the safe harbor you must not offer the service in our routine course of business….If we have it thoroughly documented that we have made the decision to no longer offer this service in our routine course of business and have removed the service from our fee schedule but go over the 100 threshold by a few this year by honoring only "special" requests, would the safe harbor still apply for next year?

Thanks in advance...

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#1755283 - 11/06/12 11:59 AM Re: remittance transfer exemption Baker
Kathleen O. Blanchard Offline

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If you review Reg E you will see that normal courseof business is dfined as less than 100 In previous and urrent calendar yer.
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#1755380 - 11/06/12 03:14 PM Re: remittance transfer exemption Baker
Compliance504 Offline
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Thanks so much Kathleen...just making absolutely sure about some things....

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#1755628 - 11/06/12 08:33 PM Re: remittance transfer exemption Baker
John Burnett Offline
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Actually, you could be on to something. The "safe harbor" provision is just that. You don't have to be concerned about whether you offer the service in the normal course of business. If you don't qualify for the safe harbor, the definition of "remittance transfer provider" says whether your bank is one becomes a matter of facts and circumstances. You might attempt to argue that because you don't offer the service except in very limited cases, you aren't offering the service in the normal course of business, and won't be subject to the rule.

However, it leaves you open to the risk that an examiner will say that his interpretation of "facts and circumstances" qualifies you for the definition. It's a poorly-crafted definition because it leaves too much to interpretation, and it's usually the case that where there is doubt, things get construed in favor of the consumer.
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#1755719 - 11/06/12 10:04 PM Re: remittance transfer exemption John Burnett
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I know that staying under 100 would not spark any argument with examiners as that is spelled out in the Reg and we are planning to keep them under 100 as we will no longer offer them. However, we would still like to be able to accommodate "special" customers through the end of this year and into next year. I'm afraid if we honor some requests this year, we may go over 100 and not qualify for the safe harbor which means beginning in Feb we could not accommodate any customers unless we are in full compliance...we will not have the 6 month window to comply if we do in fact reach a 101st transaction this year....

So we could still accommodate some customers this year, I was hoping some kind of argument could be made if we do go over 100....because we in fact made the decision to no longer offer the service and will only accommodate some customers on a limited basis.

I know we should have monitored this way before now...but we didn't....honestly based on a review from last year we thought we would be well within the safe harbor limit...but this years figures are telling a much different story....apparently other banks in the area raised their wire fees and we've had an influx because our fees remained comparitively low....

Thanks for your input, John....

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#1755734 - 11/06/12 10:21 PM Re: remittance transfer exemption Baker
John Burnett Offline
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When counting to 100 (are we playing "hide and seek"?) did you only count transactions by consumers to be paid in a foreign location and for a consumer purpose?
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#1755755 - 11/06/12 11:17 PM Re: remittance transfer exemption Baker
Compliance504 Offline
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I'm not sure what you mean by hide and seek...

I reviewed international wires that were sent through our correspondent bank that transmits these wires on our behalf. I identified entries listed as individual names, then reviewed the the copy of the wire transfer form used to process the transaction for the wire's purpose....

If a business was logged I did not further review those transactions.

I'm pretty sure I've counted correctly....

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#1755765 - 11/06/12 11:28 PM Re: remittance transfer exemption Baker
Compliance504 Offline
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Would help if I said what I counted...I only counted the ones logged as individuals that appeared to have consumer purpose on the wire form....

Hope that's right...

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#1755809 - 11/07/12 01:51 PM Re: remittance transfer exemption Baker
waldensouth Offline
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We also looked at the type of account the funds were coming from - if from a business account, then we counted that as business purpose. Some sole proprietors may send wires for business purposes.
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#1755825 - 11/07/12 02:16 PM Re: remittance transfer exemption Compliance504
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I had another thought....I understand that the Safe Harbor Test for determining whether you are conducting remittance transfers in the normal course of business is...

100 previous year AND 100 current year....

Since we have removed this service and will only be doing a very limited only as courtesy for a very few....we should NOT go over 100 next year (which would be the current year)

So it really doesn't matter how many we have on Dec 31 2012....if we do go over 100 but are for sure under 100 in 2013 we're ok....


IF we did reach the 101st in 2013 (we shouldn't but planning for the worst), then we would have 6 months to comply....

Am I understanding correctly...or is there some fault in the logic I'm not seeing....

Thanks in advance....
Last edited by Compliance504; 11/07/12 02:29 PM.
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#1755873 - 11/07/12 03:18 PM Re: remittance transfer exemption Compliance504
John Burnett Offline
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"Hide and seek" was a tongue-in-cheek reference to "counting to 100." No more, no less.
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#1755882 - 11/07/12 03:25 PM Re: remittance transfer exemption Baker
John Burnett Offline
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Compliance 504:

Because the "safe harbor" is available only if you have 100 or fewer remittance transfers in both the previous year and in the current year, it would not help you, at least not during 2013. On 2/7/13, when the rule becomes effective, you'd be ineligible for the safe harbor exemption if you exceeded 100 in 2012. So, unless you can demonstrate that you do not provide remittance transfer services in the normal course of business (using the "facts and circumstances" test, which has never been defined), you'll have to comply during 2013.

If you manage to stay at or under 100 for 2013, you should qualify for the safe harbor exemption starting on 1/1/2014, unless you hit 101 transactions in 2014, at which time you'd start a 6-month transition period.
Last edited by John Burnett; 11/07/12 03:26 PM.
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#1756141 - 11/07/12 06:50 PM Re: remittance transfer exemption Baker
Compliance504 Offline
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Thanks for making that very clear to me, John....

I was hoping the hide and seek was something unrelated...I thought maybe you thought I was trying to hide something to avoid complying with the rule...I've been cramming on this Reg and getting myself confused...which I'll admit is not hard to do at times....

Thanks, again...

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#1756287 - 11/07/12 11:57 PM Re: remittance transfer exemption Compliance504
Buddy the Elf Offline
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Originally Posted By: Compliance504
...have notified branch managers that we will only do these upon request for our "very best" customers.


Is there a risk of discrimination if the "very best" customers are of a certain race or live in a particular area? What criteria is used to determine "very best"? I'm curious because we had this discussion here and decided against it because we were worried about discrimination issues.
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#1756510 - 11/08/12 07:33 PM Re: remittance transfer exemption Baker
Compliance504 Offline
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Justin Case....I would be interested in what others have to say about the issue you have raised...

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#1756970 - 11/09/12 07:59 PM Re: remittance transfer exemption Baker
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I would be worried about the "very best" designation. Are only those customers with high balances "very best"? How will this be determined? I could see many opportunities for someone to cry foul.

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#2079225 - 05/18/16 06:29 PM Re: remittance transfer exemption Baker
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Redacted - figured it out.
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