Pub. 2 2012-2013 Issue 3

14 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S The Remittance Transfer Rule What Is My Bank Supposed To Do? O n January 20, 2012, the CFPB published a final rule, effective February 7, 2013, amending Regulation E to establish new rules governing remittance transfer pro- viders as required by Dodd-Frank (the “Rule”). On August 7, the CFPB issued another final rule amending the original Rule to provide a safe harbor for determining when a bank will not be subject to the Rule (the “Amendment”). Every bank needs to promptly determine (1) if it provides remittance transfers; (2) whether it may be considered a “remittance transfer provider” ( an “RTP”) under the Rule; (3) if so, whether it intends to continue providing this service after the effective date of the Rule; (4) if it does intend to continue providing remittance transfer services, how to comply; and (5) if it does not wish to be an RTP, how to fall within the safe harbor. What is a remittance transfer? A remittance transfer is an electronic transfer of more than $15 requested by a sender to a designated recipient located in a foreign country and sent by an RTP. A “sender” is a consumer who requests the transfer for personal, family or household purposes, and is in a state at the time of the request. If the transfer is made from a consumer’s account, “The Rule is very complex, and the risks are potentially significant, especially for smaller entities. The CFPB promises that a small business compliance guide is in the works.” FEATURE ARTICLE KAREN GARRETT Partner Stinson Morrison Hecker LLP