Electronic Fund Transfer Act: Supplemental OCC Examination Procedures on Remittance Transfer Amendments; Summary of Amendments; and Rescissions (2024)

Summary

This bulletin provides the Office of the Comptroller of the Currency's (OCC) supplemental examination procedures on remittance transfers. The examination procedures are prepared for use by OCC examiners as a supplement to the Federal Financial Institutions Examination Council's1 interagency Electronic Fund Transfer Act (EFTA) procedures that the OCC adopted in 2019. In addition, this bulletin summarizes the Consumer Financial Protection Bureau's (CFPB) Regulation E amendments regarding remittance transfers that became effective in July 2020. The CFPB has exclusive Regulation E rulemaking authority and supervisory jurisdiction for banks2 with assets over $10 billion. The OCC has Regulation E supervisory jurisdiction for banks with assets of $10 billion or less.3

Rescissions

With the issuance of this bulletin, the following have been rescinded:

• The "Electronic Fund Transfer Act" booklet of the Comptroller's Handbook, which is replaced by the 2019 interagency EFTA examination procedures. The procedures are listed on the Comptroller's Handbook page on OCC.gov as "Electronic Fund Transfer Act (Interagency)."
• OCC Bulletin 2019-16, "Consumer Compliance: Revised Interagency Examination Procedures," which conveyed the 2019 interagency examination procedures for the EFTA and for the Truth in Lending Act.4
• OCC Bulletin 2014-43, "Electronic Fund Transfer Act: Comptroller's Handbook Booklet Revision and Rescission."

Highlights

The supplemental examination procedures address the following provisions for implementation of the Regulation E requirement to disclose the exact cost of remittance transfers

• increases in the safe harbor threshold that excludes certain banks from the requirements for a bank that provides remittance transfers for consumers in the normal course of the bank's business.
• exceptions regarding exchange rates and third-party fees. Banks continue to be allowed to disclose the following estimates to consumers:
  • Exchange rate: Banks may estimate the exchange rate for a remittance transfer to a particular country if certain conditions are met, including
    • the bank cannot determine the exact exchange rate for the remittance transfer at the time it is required to provide applicable disclosures.
    • in the prior calendar year, the bank made 1,000 or fewer remittance transfers to the particular country for which the designated recipients received funds in the country's local currency.
    • the remittance transfer is initiated from the sender's account to a recipient's account within the same bank.
  • Third-party fees: Banks may estimate covered third-party fees for a remittance transfer if certain conditions are met, including
    • the bank cannot determine the exact covered third-party fees for the remittance transfer at the time it is required to provide applicable disclosures.
    • either (1) the bank made 500 or fewer remittance transfers to the designated recipient's institution in the prior calendar year, or (2) a statute or regulation prohibits the bank from being able to determine the exact covered third-party fees.
    • the remittance transfer is initiated from the sender's account to a recipient's account within the same bank.

Background

The EFTA and its implementing regulation, Regulation E, establish certain protections for consumers sending international money transfers, or remittance transfers. Regulation E specifies the information that must be disclosed to consumers who send remittance transfers. This includes information related to the exact cost of a remittance transfer. A statutory exception previously allowed banks to disclose estimates to consumers rather than exact amounts. This exception expired on July 21, 2020. In response to the statutory exception's expiration, the CFPB amended Regulation E and the official interpretations of Regulation E. The amendments address an increased safe harbor threshold and permanently adopt exceptions for continued disclosure of exchange rate and third-party fee estimates. The amendments became effective on July 21, 2020.5

Summary of Amendments

A "normal course of business safe harbor" amendment increased the safe harbor threshold under Regulation E. The regulation defines "remittance transfer provider" in part to mean any person who initiates remittance transfers for a consumer in the normal course of business.6 As originally adopted, the normal course of business safe harbor threshold stated that a person is deemed not to be providing remittance transfers for a consumer in the normal course of business if the person made 100 or fewer remittance transfers in the previous calendar year and makes 100 or fewer remittance transfers in the current calendar year.7 This amendment increased the normal course of business safe harbor threshold from 100 or fewer transfers to 500 or fewer transfers annually. These changes to the threshold appear in the definition of remittance transfer provider in 12 CFR 1005.30(f) and related commentary.

The "exchange rate and third-party fee estimate" exceptions were permanently adopted to address compliance challenges that banks may face in certain circ*mstances upon the July 21, 2020, expiration of a temporary statutory exception from providing the exact costs of remittance transfers.

Regarding the exchange rate and third-party fee estimate exceptions, the CFPB adopted a transition period for banks that exceed, as applicable, the 1,000- or 500-transfer thresholds in a certain year. This transition period allows these banks to continue to deliver estimates for a reasonable period of time, while they came into compliance with the requirement to provide exact amounts. Specifically, comment 32(b)(4)-3 discusses the transition period if a bank in the prior calendar year did not exceed the 1,000-transfer threshold to a particular country pursuant to 12 CFR 1005.32(b)(4)(i)(C), but does exceed the 1,000-transfer threshold in the current calendar year. In that case, the bank has a reasonable amount of time after exceeding the 1,000-transfer threshold to begin providing exact exchange rates in disclosures (assuming the bank cannot rely on another exception in 12 CFR 1005.32 to estimate the exchange rate). The reasonable amount of time must not exceed the later of six months after exceeding the 1,000- or 500-transfer threshold in the current calendar year or January 1 of the next year.8 Comment 32(b)(5)-5 applies the same reasonable amount of time to the transition period for third-party fees.

Further Information

Please contact Paul R. Reymann, Director for Consumer Compliance Policy, at (202) 649-5470.

Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy

Related Links

• "Supplemental OCC Examination Procedures on Remittance Transfer Amendments" (PDF)
• Electronic Fund Transfer Act (Interagency)