Delay CFPB's Remittance Rule

ABA and four other bank and credit-union trade groups this week urged all House members to sign Reps. Blaine Luetkemeyer (R-Mo.) and Yvette Clarke’s (D-N.Y.) letter urging Consumer Financial Protection Bureau (CFPB) Director Richard Cordray to delay until February 2015 the bureau’s final rule on remittance transfers.

The rule was “intended to provide greater transparency and certainty, smoother error resolution procedures, and increased access to low-cost transfer services for consumers who utilize remittances and international wire transfer services,” the trade groups said in a letter to House members.

Instead, it would “add dramatically to the costs of providing these services, and create mandates that are simply not possible for community-based institutions to implement,” they said. “The end result is likely to be fewer and more costly choices for consumers as credit unions and community banks stop offering these services. This is clearly not what Congress intended.”

The trade groups emphasized that it’s vital for community banks and credit unions, which often operate in rural and underserved areas, to be able to offer such services to the millions of consumers that send billions of dollars to their families in other countries.

“While we strongly support … appropriate consumer disclosures of fees and product terms, the rule … will make it exceedingly difficult and costly for our member financial institutions to continue offering these services,” they said. “If not delayed, and hopefully modified, the CFPB’s remittance rule will result in fewer choices and more costs for consumers.”

Read the trade groups’ and Luetkemeyer-Clarke letters.