Compliance Blog

Written by Bernadette Clair, Regulatory Compliance Counsel

NCUA recently released the following Regulatory Alerts:

• Regulatory Alert 13-RA-04, Garnishment of Accounts Containing Federal Benefit Payments

• Regulatory Alert 13-RA-05, New Escrow Requirements under the Truth in Lending Act

• Regulatory Alert 13-RA-06, CFPB’s Amended Remittance Transfer Rule

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Today, I want to highlight guidance contained in Regulatory Alert 13-RA-06 regarding the CFPB’s Amended Remittance Transfer Rule.  The alert addresses recent changes to the CFPB’s remittance transfer rule and reminds credit unions of the October 28, 2013 compliance deadline.  The guidance also provides an overview of the types of remittances covered by the rule, eligibility for the safe harbor exemption, and general disclosure requirements under the final rule.

In particular, the following guidance may be helpful for credit unions determining whether they are eligible for the safe harbor exemption:

 â€œWhich Credit Unions Are Exempt?

Credit unions that do not provide international wire/ACH transfers in the normal course of business are exempt from the remittance transfer rule. For purposes of the rule, “normal course of business” is defined as providing more than 100 remittance transfers in the previous calendar year and in the current calendar year. Credit unions that facilitate lower volumes (100 or fewer remittance transfers per year) are eligible for the safe harbor exemption.

The safe harbor exemption is not related to your credit union’s asset size or complexity, number of members, or number of accounts engaged in money transfer services. Instead, you must count the actual number of international transactions you provide to determine whether the safe harbor exemption applies. For example, if one member routinely sends money outside the United States twice a month beginning in January, you will have provided 24 remittance transfers by the end of December for that calendar year.

You are expected to track the number of remittance transfers conducted annually to confirm eligibility for the safe harbor exemption. When your credit union is no longer eligible for the exemption, you will have up to six months to begin complying with the regulatory requirements. 

If you currently exceed the safe harbor threshold, you must begin complying with the regulatory requirements on October 28, 2013.”

 For complete details, the alert is available in its entirety here.