Credit union trade groups said Monday that the long-awaited CFPB final rule governing remittances does not go far enough in exempting financial institutions that make a relatively small number of transactions each year.
“NAFCU will continue to advocate for the Bureau to exempt credit unions from this onerous and costly rule altogether,” NAFCU Director of Regulatory Affairs Ann Kossachev, said, following the rule’s release Monday.
The final rule will allow banks and credit unions to estimate the exchange rate for a remittance transfer if, among other things, the person receiving the funds will receive them in the country’s local currency and if the institutions made less than 1,000 transfers to that nation in the past year.
The rule also exempts banks and credit unions that make fewer than 500 remittances a year from compliance with the rule. The current rule exempts financial institutions that make fewer than 100 such transfers a year.
The CFPB said the threshold increase will reduce the regulatory burden on almost 250 credit unions that make a small number of remittances each year.
“While the rule is a step in the right direction, the increase in the transaction threshold fell short of NAFCU’s recommendations,” Kossachev said. “More so, the rule failed to expand the exemption on fee estimates at a time when credit unions are in need of regulatory relief. To date, a number of credit unions have effectively been prevented from offering remittance transfer services because of the high compliance costs and associated burdens.”
CUNA President/CEO Jim Nussle said the final rule will help credit members gain access to safe and affordable remittance services from their credit union.
“While we continue to believe an even higher exemption threshold is appropriate, this rule should result in more options for consumers which is always important, but even more so during the COVID-19 pandemic,” he added.