FAQ International Wire Remittance Rule. Q: How do we know if our credit union has to comply with this regulation?

Transcription

1 FAQ International Wire Remittance Rule Q: How do we know if our credit union has to comply with this regulation? A: The CFPB rules apply when a threshold of remittance transfers have been exceeded in the course of business. Remittance transfer providers or provider means any person that provides remittance transfers for a consumer in the normal course of its business, regardless of whether the consumer holds an account with such person. Remitters must comply if they provided more than 100 remittance transfers in the previous calendar year; or provides more than 100 remittance transfers in the current calendar year. Q: Who is considered the remitter? A: Remittance transfer provider -- (1) General definition. Remittance transfer provider or provider means any person that provides remittance transfers for a consumer in the normal course of its business, regardless of whether the consumer holds an account with such person. Your credit union would be considered the remitter on all funds transfers sent by your credit union through Alloya. Q: Will Alloya provide disclosures for domestic wires that are sent with a destination of an international beneficiary bank? A: No, Alloya processes domestic wires through the Fedwire system which does not produce disclosure level details of downstream fees involved in processing wires to beneficiaries outside the U.S. Alloya will not be able to render disclosures for transactions initiated through the domestic wire module for beneficiaries outside the U.S. Credit unions that process international payments through a domestic wire correspondent should contact the U.S. financial institution (FI) to obtain a bilateral agreement. This will allow the credit union to obtain the necessary information from the other FI to create the required disclosures. As an alternative, credit unions may enter these types of wires into the International Wire module, in order to obtain the required disclosures. Q: What transactions apply to the 100 transactions annually as stated in the regulation? A: The CFPB considers a remittance transfer to mean the electronic transfer of funds requested by a sender to a designated recipient that is sent by a remittance transfer provider. The remittance rule exempts small value transactions below $15.00, or securities and commodities transfers. 1

2 Examples of remittance transfers include: A. Transfers where the sender provides cash or another method of payment to a money transmitter or financial institution and requests that funds be sent to a specified location or account in a foreign country. B. Consumer wire transfers, where a financial institution executes a payment order upon a sender s request to wire money from the sender s account to a designated recipient in a specified location or account in a foreign country. C. An addition of funds to a prepaid card by a participant in a prepaid card program, such as a prepaid card issuer or its agent that is directly engaged with the sender to add these funds where the prepaid card is sent or was previously sent by a participant in the prepaid card program to a person in a foreign country, even if a person located in a State (including a sender) retains the ability to withdraw such funds. D. International ACH transactions sent by the sender s financial institution at the sender s request. E. Online bill payments and other electronic transfers that a sender schedules in advance, including preauthorized remittance transfers made by the sender s financial institution at the sender s request to a designated recipient. Q: Today our tellers obtain the international wire transaction information from our natural person member and our back office team keys the transactions into Premier View. Does this process have to change? What if we have multiple branches that take the transactions and funnel them all through to our operations center at our main branch? A: In order to provide the consumer disclosure information and receipt details about the transfer required by the CFPB s remittance rule, your process may need to be adjusted for back office staff to relay pre-transaction disclosures and receipt documents presented in Premier View to the credit union branch staff for the natural person member during the processing of international wires. According to the CFPB rules, a receipt generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. Q: How do I opt out of having a disclosure produced since we don t fit the requirements of the regulation? A: The OPT OUT Disable setting should be updated within the International Profile section of Premier View for your credit union if you do not meet the thresholds established by the CFPB. The International Profile screen is available now to all users that have Created International Wire authority. The screen is located under the Electronic Services menu heading in Premier View. A Quick Reference Guide is also available on the Help screen of Premier View. 2

3 Q: When does the 30 minute cancellation waiting period begin for the natural person member to change their mind? A: The CFPB rule requires the consumer has a 30 minute cancellation window; for our purposes this window begins at the time the consumer receipt for the transaction is available. This is the time the transaction is submitted in Premier View and the funds are committed. The rule indicates the sender has the right to cancel a remittance transfer no later than 30 minutes after the sender makes payment in connection with the remittance transfer. Q: Will the cutoff time for international wires change? A: No, the cutoff time will remain unchanged for International wires. A wire will be able to be cancelled after the cutoff time if it falls within the 30 minute cancellation window. Q: Does the regulation apply to our business account members? A: The CFPB remittance rule applies to consumer transactions when the sender, meaning a consumer who primarily for personal, family, or household purposes, requests a remittance transfer provider to send a remittance transfer to a designated recipient. Transactions originating from a business account would not be considered consumer transfers. Q: Can a natural person member waive their need for a disclosure? A: No, the CFPB rule does not provide the sending Consumer an opt out option for disclosures. Q: Can we disclosures to our members? A: According to the CFPB rules, a receipt generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. Written and electronic disclosures. Disclosures required by this subpart generally must be provided to the sender in writing. Disclosures required by paragraph (b)(1) of this section may be provided electronically, if the sender electronically requests the remittance transfer provider to send the remittance transfer. Written and electronic disclosures required by this subpart generally must be made in a retainable form. Disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, need not be retainable. 3

4 (2) Except as provided in (a), a receipt required by paragraph (b)(2) of this section generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt required by paragraph (b)(2) of this section may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. Q: The regulation also mentions error resolution and complaints. Who do we call if an error or complaint occurs? A: In the case of a transaction error, your credit union should continue the practice of contacting Alloya for resolution of the transaction. For consumer complaints, the CFPB s remittance rule requires the receipt disclosure document to contain a statement that the sender can contact the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer and the Consumer Financial Protection Bureau for questions or complaints about the remittance transfer provider. The international wire profile page in Premier View allows for State agency information to be keyed in by your credit union, if applicable. All disclosures from Premier View will automatically contain the CFPB contact information. Q: Our credit union only receives incoming ACH IAT transactions. Do we have to comply with the remittance rule? A: The CFPB s Remittance rule disclosures and error resolution conditions apply to consumer initiated international remittances. Incoming credit transactions are not counted as remittance transfers. Q: How will Alloya know what fees are going to be taken out of the transaction, along the path of the wire until it reaches its final destination? What if a foreign institution won t or doesn t provide their fees? A: Alloya s correspondent processor has established processing and pricing for international remittances with their counterparties. The Premier View front-end will provide fee details for individual transactions depending upon the amount, currency type and involved parties. Some countries will have an estimated amount, and the disclosure and receipt will indicate that. There are some countries known as Safe Harbor Countries where estimates will always be used. The laws of these countries do not allow for the exact disclosure of this information. Those countries are Aruba, Brazil, China, Ethiopia and Libya. 4

5 Q: If a member comes into our branch and doesn t want to wait for us to key in the transaction and provide the disclosure, can we get them the receipt/disclosure later? A: According to the CFPB rules, a receipt generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. 2) Written and electronic disclosures. Disclosures required by this subpart generally must be provided to the sender in writing. Disclosures required by paragraph (b)(1) of this section may be provided electronically, if the sender electronically requests the remittance transfer provider to send the remittance transfer. Written and electronic disclosures required by this subpart generally must be made in a retainable form. Disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, need not be retainable. (2) Except as provided in (a), a receipt required by paragraph (b)(2) of this section generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt required by paragraph (b)(2) of this section may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. Q: How will Alloya determine the expected delivery date to the beneficiary account? A: Alloya s correspondent processor has established time frames with their counterparties. The delivery time frames will be based on the country being sent to. Some countries will have an estimated delivery time and the disclosure and receipt will indicate that. There are some countries known as Safe Harbor Countries where estimates will always be used. The laws of these countries do not allow for the exact disclosure of this information. Those countries are Aruba, Brazil, China, Ethiopia and Libya. Q: Will I be able to include on the pre-transaction disclosure and receipt document the fee my credit union charges the natural person member to send a remittance transfer? A: Yes, if at the time of the transaction, credit union fees are being added in addition to the amount that will be sent, the credit union fee amount can be included in the Transfer Fees section of the consumer disclosure(s) and added to the Total: Amount field. The total amount would reflect the amount the credit union debits from the senders account at the time the transaction occurs (debit amount would be higher than the amount sent). The credit union fee amount can be set up in the credit union s International Wire Profile form Standard Transfer Fee field. 5

6 If the credit union s Profile Fee information is not populated, the Premier View individual Wire screen will allow the addition of a credit union fee in the Transfer Fee field. Q: Can Alloya provide my credit union with the number of International wires we completed last year? A: Alloya can assist with advising where on your billing statements to retrieve the International Wire information. Note: However, the CFPB s rule applies to the transfer of funds through wire transfers, automated clearing house transactions, and/or other methods including wires entered in as domestic wires with a foreign beneficiary bank and prepaid cards that are sent to a foreign country. It is the responsibility of each credit union to track the number of International remittances that are originated by the credit union. Q: What do I need to do to get set-up? A: To assist you with creating an International Wire profile, please refer to the Quick Reference: International Wire Profile located in Premier View. Q: Will there be any changes to fees? A: Additional fees will be charged for international wires involving disclosures, whether they are being sent as foreign currency or in U.S. Dollars. Beginning on October 28, these international wires will be assessed a $10.00 fee, in addition to other established fees currently charged for processed items. Domestic wires will be unaffected. Q: What is the retention timeframe is for the consumer receipts? A: The CFPB s rule states that the remittance transfer provider does not need to maintain records of individual disclosures that it has provided to each sender; and they only need to retain evidence demonstrating that its procedures reasonably ensure the sender s receipt. Alloya does make the consumer receipt available for transactions in Premier View s Transaction Review. The receipt will be available for a couple of years. Q: Are sample disclosures and receipts readily available? A: Yes. Sample disclosures and receipts are available on Premier View, located under Help Manuals > International Wires, please click here to view these samples. In addition, the CFPB has provided sample disclosure documents. These have been posted to our Additional Resources section on the Foreign Remittance microsite, click here. 6