MCUL, CUNA Push for Delay of New Remittance Regulation (Misc News: August 3, 2012)
With new remittance regulations set to go into effect early next year, MCUL and CUNA are among those leading a growing call for regulators to push back the implementation date.
The Consumer Financial Protection Bureau's (CFPB) final remittance transfer rule is scheduled to take effect on Feb. 7, 2013. The new rule would require remittance transfer providers to disclose the exchange rate, all fees associated with a transfer, and the amount of money that will be received on the other end. Remittance transfer providers will also be required to investigate disputes and fix mistakes.
MCUL CEO David Adams has just sent a letter to every member of the Michigan congressional delegation, urging them to support delaying this measure by joining a letter written by Reps. Blaine Luetkemeyer (R-Missouri) and Yvette Clarke (D-New York), so that its impact on consumers, businesses, and the entire financial industry can be thoroughly investigated.
“Credit unions provide one of the most economical international transfer services in the financial service industry,” Adams wrote in the letter to lawmakers. “While we strongly support appropriate consumer disclosures of fees and product terms, this rule will make the offering of these services in the already-safe and regulated environment of a financial institution almost impossible, and very costly to the consumer if they are continued. This is clearly not what Congress intended. “
CUNA CEO Bill Cheney has also written to legislators, urging them to co-sign the letter, a chorus which has been echoed by The American Bankers Association, the Independent Community Bankers of America, the National Association of Federal Credit Unions and the National Bankers Association.
CUNA News Now reports that while the remittance rules are intended to provide greater transparency and certainty, smooth error resolution procedures, and increase access to low-cost transfer services for consumers who utilize remittances and international wire transfer services, they would add dramatically to the costs of providing these services, and create mandates that are simply not possible for community-based institutions to implement.
MCUL has a long history of actively advocating on behalf of credit unions on this issue. Before the CFPB assumed oversight of the issue, MCUL sent a comment letter to the Federal Reserve Board in response to the original proposal. Another comment letter was sent to the CFPB in response to its follow-up proposal.