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NAFCU addresses remittances, safe harbor with CFPB
NAFCU's Senior Counsel for Research and Policy Andrew Morris urged the CFPB to preserve credit unions' ability to provide remittance services by reinstating the temporary exception under equivalent, statutory authority. Morris also called on the CFPB to increase the safe harbor transfer threshold in response to the bureau's request for information (RFI) regarding its remittance rule.
The association has long expressed concerns about the rule's highly burdensome compliance costs and previously urged the bureau to exempt credit unions from the rule.
In his letter sent Friday, Morris notes that "since the 2012 Remittance Rule took effect, credit unions have incurred significant costs associated with the rule’s complex disclosure requirements and error resolution framework, and many have ceased offering remittances as a result."
Morris also recommended for the bureau to reconstitute the temporary exception allowing insured depository institutions to provide estimates of exchange rates and fees set by third parties to prevent "negative impact on credit unions’ ability to continue providing affordable remittance services."
NAFCU asks that the bureau increase the rule's current safe harbor threshold to at least 1000 transfers "improve consumer access to affordable remittance services at credit unions, regardless of whether the Bureau determines that the substance of § 1005.32(a)(1) (the temporary exception) can be saved." To provide alternative relief, the letter also requests that the Bureau consider adopting a credit union exception to the Remittance Rule.
Last year, NAFCU witness and Senior Vice President of Corporate Affairs & General Counsel John Lewis testified at a House Financial Services subcommittee hearing, sharing the challenges his credit union – United Nations Federal Credit Union – faced due to changes in remittance requirements, including increased costs for the credit union and their members. Lynette Smith, President and CEO of TruEnergy Federal Credit Union, also testified on the remittance rule's impact in 2012.
NAFCU will continue to push the CFPB to reduce the remittance rule's burden on credit unions.