Financial institutions that regularly process remittances for accountholders are facing new Consumer Financial Protection Bureau rules, which are presenting some genuine barriers in their ability to continue to deliver these services.
Even with a new safe-harbor cap of 100 annual transactions, the impact of complying with these rules will probably mean a lot of smaller institutions will find outsourced solutions and drive up costs overall. Higher costs mean higher fees, so once again, consumers end up paying more for, hopefully, better services.
From the Credit Union Times:
The Consumer Financial Protection Bureau on Tuesday released the final part of its new remittance rule, increasing the maximum number of annual transactions that qualify for safe harbor exemption to 100.
Generally speaking, that increase from the originally proposed 25 annual transactions does help ease regulatory burden, said Carrie Hunt, NAFCU general counsel and vice president of regulatory affairs.
However, it won’t provide relief for most credit unions, she said, because most credit unions exceed 100 transactions per year, and those unable to comply with the new rule will be faced with either denying the 101st transaction, or eliminating remittance services altogether.
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