Remittance Transfer Rule Temporary Exception Experience Interviews

1700 G Street, N.W., Washington, DC 20552

REMITTANCE TRANSFER RULE INTERVIEWS: QUESTIONS FOR
NONBANK MONEY TRANSMITTERS
This document is an overview of the type of questions that we would like to ask regarding the
temporary exception in the Remittance Transfer Rule. First, there is an overview of the
temporary exception. Below that overview are the questions that we will use in our discussions
with you. We may not cover every question; however, we hope this list will serve as a useful
guide for the types of topics that we would like to cover.

OVERVIEW OF THE TEMPORARY EXCEPTION
The Remittance Transfer Rule requires regulated institutions to provide disclosures to remittance
senders containing information about the price of the transfer, including fees and exchange rates.
Generally, all disclosed amounts must be exact. However, the rule contains several exceptions that
allow providers to estimate the applicable exchange rate, back-end fees and taxes, and total funds
to be received. Some of these exceptions are permanent. The focus of this interview is a
temporary exception for insured depository institutions and credit unions. 1 The exception is
described in section 1005.32(a) of Regulation E. It is currently set to expire on July 21, 2015.
For the temporary exception to apply, the provider must meet the following criteria.

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Insured institution. The provider must be an insured depository institution or credit union,
or an uninsured U.S. branch or agency of a foreign depository institution.

•

Account-based transfers. The remittance transfer must be sent from the sender’s account
with the provider.

•

Unable to determine exact amounts. The provider must be unable to determine exact
amounts for reasons outside of its control. For example, the provider may not be able to
determine the exchange rate if it is set by the designated recipient’s institution, and the
provider has no correspondent relationship with that institution.

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The Securities and Exchange Commission (SEC) staff has written a no action letter that concludes that SEC staff will
not recommend enforcement action to the SEC under Regulation E if a broker-dealer provides disclosures as though
the broker-dealer were an insured institution for purposes of the temporary exception. See
http://www.sec.gov/divisions/marketreg/mr-noaction/2012/financial-information-forum-121412-rege.pdf (accessed on
October 16, 2013).
consumerfinance.gov

The focus of the temporary exception is on estimates of the applicable exchange rate, and fees
imposed on the remittance transfer by a person other than the provider (such as fees imposed by
an intermediary bank that assists in the transfer).
If the provider may disclose estimated amounts, and chooses to do so, the provider must calculate
the estimates according to one of the specified methods that is listed in Regulation E at section
1005.32(c). If the provider does not use a listed method and chooses to use another method for
estimating the transfers, the provider is in compliance so long as the recipient receives the same,
or greater, amount of funds than the provider disclosed.
Section 1005.32(a) and section 1005.32(c) and the official interpretation to both are attached to
this interview guide.
In the interview questions below, when we refer to “remittance transfers” we are referring to
transfers that are covered by the Remittance Transfer Rule (or would have been, if the rule had
been in effect at the relevant time).

INTERVIEW QUESTIONS
To set the context for our discussion, we would like to understand the services you offer. We may
cover these questions in our initial phone call, when we set up time to speak with you.
COMPANY BACKGROUND
1. Do you provide remittance transfers in the normal course of your business?
2. What type of remittance transfer services do you provide? For example, do you provide the
following:
a. Wire transfers, through the correspondent banking network?
b. International ACH transfers?
c. Other proprietary services for which you are the provider? (For example: if you operate
a cash-to-cash network, or an international bill pay service). (Please describe)
d. Other proprietary services for which another company is the provider? (For example:
When you are the agent for a money transmitter). (Please describe)
3. How many remittance transfers do you estimate that you provided in 2013, for each type of
service? If more convenient to determine, please estimate the number of remittance transfers
you provided for a shorter period in 2013 (such as a calendar quarter, or since the rule took
effect on October 28, 2013).
4. What other consumer financial products and services do you provide?
CURRENT DISCLOSURE METHODS:
5. We assume that you are not applying the temporary exception to estimate fees imposed by
entities other than the provider. Please also describe the methods that you use to disclose the
required fee information.
6. Please discuss whether and how you needed to change your business to comply with the
requirement to disclose certain fees imposed by entities other than the provider. What types of
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changes did you need to make? How long did those changes take you to make? How much did
the various changes cost you? Please describe in detail.
7. We assume that you are not using the temporary exception to estimate exchange rates. Please
describe the methods that you use to disclose the required exchange rate information.
8. Please discuss whether and how you needed to change your business to comply with the
requirement to disclose exchange rates. What types of changes did you need to make? How
long did those changes take you to make? How much did the various changes cost you? Please
describe in detail.
9. The Remittance Transfer Rule provides several methods to estimate fees imposed by entities
other than the provider. Could you discuss how feasible these methods are? The methods are:
a. For certain remittance transfers sent via international ACH, the most recent exchange
rate set by the recipient country's central bank or other governmental authority and
reported by a Federal Reserve Bank.
b. The most recent publicly available wholesale exchange rate and, if applicable, any
spread that the remittance transfer provider or its correspondent typically applies to
such a wholesale rate for remittance transfers for that currency.
c. The most recent exchange rate offered or used by the person making funds available
directly to the designated recipient or by the person setting the exchange rate.
d. Any other method, so long as the designated recipient receives the same, or greater,
amount of funds than the remittance transfer provider disclosed to the consumer.
(Please describe method).
The temporary exception is currently set to expire on July 21, 2015. We have not yet decided
whether or not to extend the exception for additional time. For the questions below, please
assume that the temporary exception will expire on July 21, 2015 and focus on how you believe
the expiration will affect you, other industry participants, and consumers.
IMPACT OF THE EXPIRATION OF THE TEMPORARY EXCEPTION
10. Would the expiration of the temporary exception have any effect on the number of customers
you serve? If so, please explain what changes you expect and why.
11. What do you anticipate will be the net impact of the expiration of the temporary exception on
your profit from remittance transfers? Will it increase, decrease, or stay the same? Please
explain why.
12. Do you expect to make any changes in your products, services, business partners or processes
in response to the expiration of the temporary exception? Why or why not? Please describe
any change that you expect.
13. Please describe how you believe the continuation of the temporary exception affects your
competitive position. Please indicate what type of entities you believe are your competitors.
14. Please describe how you believe the expiration of the temporary exception would affect your
competitive position. Please indicate what type of entities you believe are your competitors.
15. Do you expect any providers to gain or lose market share in response to the expiration of the
temporary exception? Why or why not? Please describe the change that you expect.
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16. Please describe any other impacts, benefits, or costs that you believe the expiration or
continuation of the temporary exception would have on the industry.
17. Please describe any other impacts, benefits, or costs that you believe the expiration or
continuation of the temporary exception would have on consumers who send remittances.
OTHER TOPICS OF DISCUSSION
18. Please describe any other concerns or comments you have regarding the Remittance Transfer
Rule, and its disclosures requirements, cancelation requirements, and error resolution
requirements.
19. Please relate any experience that you wish to share regarding your implementation of the
Remittance Transfer Rule.
20. Please share any other information about factors driving changes in supply, demand, prices,
practice regarding transparency, cancelation, or error resolution, or other characteristics of the
remittance transfer market.

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