Remittance Transfers & More An electronic transfer of funds - - PowerPoint PPT Presentation

1

Remittance Transfers & More

• An electronic transfer of funds >$15
• To designated recipient
• In foreign country
• Initiated by a Remittance Transfer Provider
• At request of consumer (in the US)

Examples

• International Wire Transfers
• International ACH Transfers
• Electronic payment of a consumer’s bill to a

foreign recipient, initiated by consumer, via

• nline bill pay

2

What they are not

• Bill pay via check, draft or other paper

instrument

• Withdrawals from US account by

authorized user who is in foreign country

• Using debit card abroad
• Electronic payment of bill through a foreign

merchant’s website

3

Providers

• That would be “You”—
• Providing remittance transfers in the

“normal course of business”

4

Normal Course of Business

• Generally available
• Multiple times per month
• See Comment 1005.30(f)(2)
• Safe Harbor threshold—
• <=100 in prior calendar year
• <=100 in current calendar year
• Transition period if exceed safe harbor

5

Disclosures

• Two Options:
• 1—Pre-payment and separate Receipt
• 2—Combined Pre-payment and Receipt
• Must also provide proof of payment after 2

6

Pre-Payment Disclosures

• Transfer Amount (in currency transferred)
• Transfer Fees and Taxes
• Total Amount of Transaction
• Exchange rate**

7

Pre-Payment—II

• Transfer Amount (in currency received)**
• Other Taxes and Fees (from others)**
• Amount Received (in currency received)**
• Model Form A-30

8

Timing

• One-time transfers or First in a Series of

transfers…

• Time of request + prior to authorization
• Subsequent transfers in series…
• Not required

9

Combined Disclosures

• Recap the Pre-Payment disclosures
• Date Available
• Recipient’s name / contact information
• Error resolution / cancellation rights
• Provider, state regulator and CFPB contact

information

10

Combined Disclosures—II

• Transfer Date(s)
• Required for 1-time transfer scheduled at

least 3 business days in advance

• Not required if less than 3 days in advance
• Future Transfer Date(s): Required for

recurring transfers only

11

Estimates-Temp Exception

• Transfer from sender’s account
• Determination of exact amount outside

provider’s control

• May estimate: Exchange rate, transfer

amount, other taxes/fees, and total amount to recipient (amts in recipient’s currency)

• Sunset date July 21, 2015

12

Estimates—Permanent Exceptions

• 1. Certain countries—safe harbor list
• 2. Transfers scheduled 5 or more business

days in advance

• All above items may be estimated
• Plus the sender’s currency items IF transfer

amount to be received in foreign currency is FIXED

13

Methods of Estimation Exchange (FX) Rate

• Transfers scheduled 5 or more business

days in advance:

• FX rate or estimated FX rate used by

provider that day to send same-day transfers

14

Methods of Estimation Exchange Rate—II

• All other transfers:
• FRB FX rate for recipient for Int’l. ACH

transfers only

• Publicly available source (WSJ, recipient

country central bank, etc.)

• Most recent FX rate offered/used by

intermediary or recipient institution

15

Methods of Estimation Other Fees

• If percentage of amount transferred, use

estimated FX rate

• If imposed by other institution, use most

recent transfer to institution or use “representations” made by institution in potential transmittal route reasonably believed may be used

16

Methods of Estimation Taxes

• Imposed in Recipient Country
• May only estimate if taxes are percentage of

amount transferred

• Base on estimated exchange rate and

estimated fees

17

Cancellation

• When is transfer request received?
• Less than 3 business days in advance: may

cancel no later than 30 minutes after payment

• At least 3 business days in advance: must

cancel at least 3 business days before transfer date

• Request may be oral or in writing

18

Cancellation—II

• Assuming funds not picked up/deposited
• Must refund total amount within 3 business

days of request, including all fees and taxes if not prohibited by law

19

Error Resolution Incorrect Account Number

• Member provided incorrect account number
• Sender knew he could lose transfer amount
• Provider required to make prompt

reasonable efforts to recover

• Not liable if unsuccessful

20

Error Resolution

• Definition of “error:”
• 1. Incorrect amount paid by sender
• 2. Computation/bookkeeping error made by

provider

• 3. Failing to make available the amount of

currency in the disclosure unless disclosure uses estimates or extraordinary circumstances outside provider’s control

21

Error Resolution—II

• 4. Failure to make funds available on

disclosed date unless:

• Extraordinary circumstances
• Delays due to BSA, OFAC, etc.
• Fraudulent intent on part of sender or

anyone acting with the senter

22

Error Resolution—III

• 5. Requests by sender for documents or

additional information/clarification, including request to determine whether an error exists

23

Errors are NOT:

• Status inquiry, unless funds not available on

disclosed date

• Request for info for tax/recordkeeping
• Changes requested by recipient
• Change in amount/type of currency if

provider relied on info provided by sender as permitted

24

Incorrect Information

• If sender provided incorrect information—
• You may impose 3rd party fees for

resending with corrected/additional information, if fees incurred

25

Notice Timing

• Error notice is timely if delivered:
• Within 180 days of disclosed date of

availability

• Or within 60 days of receiving additional

requested information from provider

• Notice must identify sender, particular

transaction, and why sender thinks error exists

26

Investigation—Timing

• Investigate and correct within 90 days of

notice of error

• Report results, including remedies available

to correct error, within 3 days after completion of investigation

• Correct error within 1 business day or as

soon as reasonably practicable by refund or

• ther means without additional cost

27

Investigation Results

• If no error, provide written explanation,

note right to request docs, and respond to specific complaint

• Must provide copies of docs upon which

you relied in making determination upon sender request

28

Recordkeeping

• Written policies & procedures
• Ensure agent complies with error resolution

requirements

• Retain records for not less than 2 years
• (see Commentary 33(g)-1)

29

Error Reasserted?

• No further responsibilities to sender if you

have fully complied with requirements, unless new information

• If notice is withdrawn, may be reasserted

unless provider has fully complied with all error resolution requirements

30

Other error resolution laws

• Reg E—if provider is the account-holding

institution, use RT rules

• If account-holding institution is NOT the

provider, use Reg E EFT error resolution

• Reg Z—involving extension of credit
• RT if sender provides notice to provider, or
• Reg Z if sender provides notice to creditor

31

Unauthorized remittances

• Reg E consumer liability applies to account-

holding institution

• Reg Z provisions apply to a creditor in

connection with unauthorized use of credit card

32

Telephone Transfers

• Oral pre-payment disclosure
• Or text or mobile app
• Written receipt required
• Mailed or delivered 1 business day after

date payment made

33

Actions of Agents

• Provider is liable for any violation by an

agent when agent acts for provider

• Provider’s policies, procedures and
• versight will be considered as mitigating

factors by enforcement agencies

34

Scheduled Transfers

• Transfer scheduled in advance or first

transfer in series of preauthorized transfers—same as all other transfers

• Subsequent transfers in series—
• Requires pre-payment disclosure and

receipt for each subsequent transfer

35

Scheduled Transfers—2

• Pre-payment disclosure—provide within

“reasonable time” prior to scheduled transfer date for each subsequent transfer

• Receipt—mail or deliver no later than 1

business day after date of transfer (if transferred from sender’s account, may provide receipt on/with periodic statement

• r within 30 days)

36

Scheduled Transfers--3

• Cancellation and refund—if scheduled at

least 3 business days before transfer date, sender must notify provider at least 3 business days prior to scheduled date to cancel

37

Model Forms

• Use them!
• See A-30 through A-41

38

Selected Topics Equal Credit Opportunity

• Your credit reporting obligations under:
• Equal Credit Opportunity Act (Reg. B)
• High-level ECOA/FHA/Reg. B review
• …please see handout

39

Regulation B

• Designate accounts to reflect both spouses’

participation

• New accounts: when spouse is authorized

user

• Existing accounts: when spouse makes

written request (comply within 90 days)

40

Regulation B—II

• If account is designated to reflect spousal

participation—

• Furnish info to CRA so CRA may provide

access to info in name of each spouse

41

Regulation B—III

• Inquiry on account reflecting spousal

participation:

• Furnish info in name of spouse for whom

request is made

42

Flood Insurance

• Recent changes/updates
• Entertaining(?) “real-life” examiner stories

43

Finally…

• Questions?

44

John Thomas

• Vice President, Compliance and Advocacy
• Missouri Credit Union Association
• 314-542-1385
• jthomas@mcua.org

45