Wire Transfer Remittance Rule

When the bureau reached the current normal course of business threshold of 100 secure port transfers in August 2012, it did not have the benefit of knowing the information it now knows about the industry`s experience in the remittance market since the remittance rule came into effect in October 2013. As described in the August 2012 definitive regime, in determining the appropriate threshold for determining whether an entity makes transfers in the normal course of its business, the Bureau primarily considered the frequency of transfers. The Bureau stated at the time that it considered that: The full text of the final provision adopting the amendments to the article can be found here (opens in a new tab). The additional information on the definitive regime explains the purpose and application of these amendments. However, the Bureau recognizes the severe impact of the COVID-19 pandemic on consumers and the business operations of many businesses. In addition, the Bureau recognizes that for insured institutions that offer transfers to their clients, the expiry of the legal temporary exemption from the requirement of the remittance rule to disclose the exact cost of transfers will exacerbate the potential impact on those clients. In addition, insured institutions that are remittance providers play a crucial role in ensuring that consumers can send money abroad. This access is particularly important to address the dramatic impact on consumer finances in the U.S. and abroad due to the coronavirus crisis.

The Presidium therefore gave the 10th. April 2020 to announce that for transfers made on or after July 21, 2020 and before January 1, 2021, the Bureau does not intend to cite in an audit an enforcement action related to the disclosure of actual fees and third-party exchange rates against insured institutions or to initiate an enforcement action that expires after the temporary exemption. [73] Permanent exception for transfers to certain countries The second exception is permanent and applies to all suppliers. It allows estimates in two circumstances: 1) where a remittance provider cannot determine the exact amounts, where disclosure is required by the laws of a receiving country, or (2) the methods by which transfers are made to a receiving country do not allow the providers to know the amount of currency to be received.35 The latter circumstance applies only to an international ACH under the terms and conditions, negotiated between the U.S. government and the government of the receiving country where the exchange rate is determined by the central bank of the receiving country or another government agency on the business day following the seller`s shipment of the transfer.36 The commentary to ยง 1005.32 provides useful guidance in determining whether either of the two exceptions applies. 1. Determination of the exact exchange rate. For the purposes of article 1005.32 (b) (4) (i) (B), an insured institution may not, at the time it is required to provide the applicable information, determine the exact exchange rate to be disclosed in accordance with article 1005.31 (b) (1) (iv) for a transfer to a specified country where the designated recipient of the transfer receives funds in the national currency of the country; if a person other than the insured institution determines the exchange rate of the transfer. Except in cases where that person has a correspondence relationship with the insured institution, that person is a service provider to the insured institution or acts as a representative of the insured institution.

Consumer groups also stated that the bureau did not provide data to support the assertion that a safe harbor threshold for a normal course of business of 500 transfers might be better suited to identify individuals who occasionally make transfers, but not in the ordinary course of business. These commenters noted that the Bureau rejected proposals to raise the normal safe harbor threshold for the ordinary course of business to more than 100 in 2012 when it set the current threshold, and that the Commission did not adequately explain or justify its change of position. In addition, these commentators have stated that a threshold of 500 referrals per year (an average of about ten transfers per week) seems quite normal, not occasionally. These commentators added that the issue of the normal safe harbor threshold for doing business is whether companies offer remittances normally, rather than whether they are trying to attract new customers or offer services to existing customers. In addition, consumer groups stated that the Agency`s assertion that compliance costs for businesses making 500 transfers or less were disproportionate is not supported by the results of the assessment report and does not justify the proposal, since the concept of normal course of business is not related to a company`s business costs […].