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Vol. 76

Monday,

No. 99

May 23, 2011

Part III

Federal Reserve System

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12 CFR Part 205
Electronic Fund Transfers; Proposed Rule

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
FOR FURTHER INFORMATION CONTACT:

FEDERAL RESERVE SYSTEM

Dana Miller, Mandie Aubrey or
Samantha Pelosi, Senior Attorneys, or
Vivian Wong, Counsel, Division of
Consumer and Community Affairs,
Board of Governors of the Federal
Reserve System, Washington, DC 20551,
at (202) 452–2412 or (202) 452–3667.
For users of Telecommunications
Device for the Deaf (TDD) only, contact
(202) 263–4869.
SUPPLEMENTARY INFORMATION:

12 CFR Part 205
[Regulation E; Docket No. R–1419]
RIN 7100–AD76

Electronic Fund Transfers
Board of Governors of the
Federal Reserve System.
ACTION: Proposed rule; request for
public comment.
AGENCY:

The Board is proposing to
amend Regulation E, which implements
the Electronic Fund Transfer Act, and
the official staff commentary to the
regulation, which interprets the
requirements of Regulation E. The
proposal contains new protections for
consumers who send remittance
transfers to consumers or entities in a
foreign country, by providing
consumers with disclosures and error
resolution rights. The proposed
amendments implement statutory
requirements set forth in the DoddFrank Wall Street Reform and Consumer
Protection Act.
DATES: Comments must be received on
or before July 22, 2011. All comment
letters will be transferred to the
Consumer Financial Protection Bureau.
ADDRESSES: You may submit comments,
identified by Docket No. R–1419 and
RIN 7100–AD76, by any of the following
methods:
• Agency Web site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include the docket number in the
subject line of the message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper form in Room MP–500 of the
Board’s Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m.
on weekdays.

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SUMMARY:

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I. Statutory Background
The Electronic Fund Transfer Act
(15 U.S.C. 1693 et seq.) (EFTA or Act),
enacted in 1978, provides a basic
framework establishing the rights,
liabilities, and responsibilities of
participants in electronic fund transfer
(EFT) systems. The EFTA is
implemented by the Board’s Regulation
E (12 CFR part 205). Examples of the
types of transactions covered by the
EFTA and Regulation E include
transfers initiated through an automated
teller machine (ATM), point-of-sale
terminal, automated clearinghouse
(ACH), telephone bill-payment plan, or
remote banking service. The Act and
regulation provide for the disclosure of
terms and conditions of an EFT service;
documentation of EFTs by means of
terminal receipts and periodic
statements; limitations on consumer
liability for unauthorized transfers;
procedures for error resolution; and
certain rights related to preauthorized
EFTs. Further, the Act and regulation
restrict the unsolicited issuance of ATM
cards and other access devices.
The official staff commentary (12 CFR
part 205 (Supp. I)) interprets the
requirements of Regulation E to
facilitate compliance and provides
protection from liability under Sections
916 and 917 of the EFTA for financial
institutions and other persons subject to
the Act who act in conformity with the
Board’s commentary interpretations. 15
U.S.C. 1693m(d)(1). The commentary is
updated periodically to address
significant questions that arise.
On July 21, 2010, the Dodd-Frank
Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) was
signed into law.1 Section 1073 of the
Dodd-Frank Act adds a new Section 919
to the EFTA to create new protections
for consumers who send remittance
transfers to designated recipients
located in a foreign country. The DoddFrank Act requires that remittance
transfer providers give senders of
remittance transfers certain disclosures,
including information about fees, the
applicable exchange rate, and the
1 Public

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amount of currency to be received by
the recipient. In addition, the DoddFrank Act provides error resolution
rights for senders of remittance transfers
and directs the Board to promulgate
standards for resolving errors and
recordkeeping rules. Finally, the DoddFrank Act requires the Board to issue
rules regarding appropriate cancellation
and refund policies. Final rules must be
prescribed not later than 18 months
after enactment, which is January 21,
2012.2
II. Background
A. General
The term ‘‘remittance transfer’’
typically describes a transaction where
a consumer sends funds to a relative or
other individual located in another
country, often the consumer’s country of
origin. Traditional remittance transfers
often consist of consumer-to-consumer
payments of low monetary value.
Information on the volume of
remittance transfers varies widely, in
part because of the difficulty in
obtaining reliable data regarding the
subject population, and in part because
of differences in the scope of
transactions included in estimates. The
World Bank estimates that the total
volume of remittance transfers
worldwide to developing countries
reached $325 billion in 2010.3 The
World Bank further estimates that the
United States has the highest volume of
remittances, totaling $48.3 billion in
2009.4 The U.S. Bureau of Economic
Analysis estimates that cash and in-kind
‘‘personal transfers’’ made by foreignborn residents in the United States to
households abroad totaled $37.6 billion
in 2009,5 while the U.S. Census Bureau
estimates that cash ‘‘monetary transfers’’
from U.S. residents to nonresident
households totaled approximately $12
billion in 2008.6 The majority of
2 As discussed below, due to the timing of the
statute and this proposal, the Board anticipates that
final rules on remittance transfers will be issued by
the Consumer Financial Protection Bureau
(‘‘Bureau’’).
3 World Bank, Migration and Remittances
Factbook 2011 17 (2011). The World Bank includes
cash and in-kind transfers, earnings of temporary
workers, and other transfers in its calculations.
4 Id. at 15.
5 U.S. Bureau of Economic Analysis [BEA],
Personal Transfers, 1992:I –2010:I (Dec. 16, 2010).
For more on the BEA’s methodology, see
Christopher L. Bach, BEA, ‘‘Annual Revision of the
U.S. International Accounts, 1991–2004,’’ Surv. Of
Current Bus. No. 7 (July 2005) at 64–66.
6 Elizabeth M. Grieco, Patricia de la Cruz et al,
Who in the United States Sends and Receives
Remittances? An Initial Analysis of the Monetary
Transfer Data from the August 2008 CPS Migration
Supplement, U.S. Census Bureau Working Paper
No. 87 (Nov. 2010), available at: http://
www.census.gov/population/www/documentation/

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
remittances from the United States are
sent to the Caribbean and Latin
America, and primarily to Mexico.7
Significant sums are also sent to Asia,
and to the Philippines in particular.
B. Methods for Sending Remittance
Transfers
Remittance transfers can be sent in a
variety of ways. The primary methods
for sending remittances transfers are
discussed below.

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Remittance Transfers Through Money
Transmitters
Traditionally, consumers send
remittance transfers through a money
transmitter 8 operating through its own
store or through an agent, such as a
grocery store or neighborhood
convenience store. The remittance
transfer provider may have an exclusive
arrangement with the agent, or may be
one of several providers available to
consumers through that agent.
Typically, the consumer provides basic
identifying information about himself
and the recipient, and pays cash
sufficient to cover the transfer amount
and any transfer fees charged by the
money transmitter. The consumer is
provided a confirmation code, which
the consumer relays to the recipient.
The money transmitter sends an
instruction to a specified payout
location or locations in the recipient’s
country where the recipient may pick
up the transferred funds, often in local
currency, on or after a specified date,
upon presentation of the confirmation
code and other identification. These
transfers are generally referred to as
cash-to-cash remittances. In some cases,
the consumer can also use other
methods of payment for the transfer,
such as a credit or debit card, or can
provide a checking or savings account
number from which funds can be
debited for the transfer.
Although most money transmitters
focus on cash-to-cash remittance
transfers, many have also broadened
their product offerings, with respect to
both the method for sending and the
method for receiving remittance
transfers. A recent survey of remittance
twps0087/twps0087.html. The report recognizes the
substantial difference between its estimate and that
of the BEA and offers several possible explanations,
but does not come to a conclusion.
7 U.S. Gov’t Accountability Office, GAO–06–204,
International Remittances: Information on
Products, Costs, and Consumer Disclosures 7
(November 2005) (‘‘GAO Report’’); see also Cong.
Budget Office, Migrants’ Remittances and Related
Economic Flows 7 (Feb. 2011).
8 Federal law requires money transmitters to
register with the Financial Crimes Enforcement
Network of the U.S. Department of the Treasury. 31
U.S.C. 5330; 31 CFR 103.41. Most states also require
money transmitters to be licensed by the state.

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transfer providers operating in Latin
America showed that approximately
75% also permit consumers to send
transfers of funds that can be deposited
directly into a recipient’s bank account,
and about 15% offer Internet-based
transfers.9 Several money transmitters
permit consumers to send remittances
only via the Internet. Money
transmitters may also permit transfers to
be sent through a dedicated telephone at
an agent, at a stand-alone kiosk, or by
telephone.
In most cases where funds are made
available to the recipient in the local
currency, the exchange rate is set when
the sender tenders payment, although
some money transmitters offer floating
rate products where the exchange rate is
not determined until the recipient picks
up the funds. Funds sent through a
money transmitter are generally
available in one to three business days,
although faster delivery may be
available for a higher fee.
International Wire Transfers
Consumers may also send remittances
through banks and credit unions.
Traditionally, consumers have sent
remittances through financial
institutions by international wire
transfer. Consumers may choose to send
funds by wire transfer when traditional
money transmitters do not send funds
where a recipient is located, or when
consumers feel that depositing funds
directly to a recipient’s account
provides a more secure method of
transmitting funds, particularly when
sending larger amounts. A wire transfer
is generally an account-to-account
transaction. Funds are transferred from
the consumer’s account into a
recipient’s account at a foreign financial
institution. The two account-holding
financial institutions will not
communicate directly if they do not
have a correspondent relationship.
Rather, the sending institution will send
funds or a payment instruction to a
correspondent institution, which will
then be transmitted to the recipient
institution directly or indirectly through
a series of intermediary institutions.
Each wire transfer sent from the
sender’s financial institution to the
recipient’s institution may travel
through a different transmittal route of
financial institutions.
Fees for international wire transfers
are typically higher than fees for cashto-cash transfers. Intermediary
institutions along the transmittal route
9 Manuel Orozco, Elizabeth Burgess et al, InterAmerican Dialogue, A Scorecard in the Market for
Money Transfers: Trends in Competition in Latin
American and the Caribbean 6 (June 18, 2010)
(‘‘Scorecard’’).

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for international wire transfers may
deduct fees from the amount
transferred, which are often referred to
as ‘‘lifting fees.’’ The recipient
institution may also deduct a fee from
the recipient’s account for converting
the funds into local currency and
depositing them into the recipient’s
account. Further, depending on the
number of institutions involved in the
transmittal route, it may take longer for
funds to be deposited into the
recipient’s account via international
wire transfer than is typically the case
for transfers conducted through money
transmitters. If the sending institution
does not have a direct relationship with
the intermediary or receiving
institutions, it likely does not have
knowledge of all fees that might be
imposed on the recipient, or when the
funds ultimately will be deposited into
the recipient’s account.
Financial institutions also do not
always know the exchange rate that will
apply to wire transfers. In some
instances, financial institutions
purchase foreign currency at wholesale
prices on the commodities market.
Before sending a wire transfer, the
institution will convert U.S. dollars into
local currency using an exchange rate it
sets (usually based on the wholesale rate
plus a margin), and it thus can
determine the exchange rate applicable
to the wire transfer. Other financial
institutions, however, do not purchase
foreign currency on the market, or
certain currencies may not be readily
available for purchase on the market. In
these circumstances, the sending
financial institution will send a wire
transfer in U.S. dollars, and will not set
the exchange rate. In those cases, either
the first cross-border intermediary
institution in the recipient’s country, or
the recipient’s institution, will set the
rate. If the sending financial institution
does not have a correspondent
relationship with these parties, it
generally will not be able to determine
the applicable rate.
International ACH
More recently, financial institutions
have begun to offer other methods for
sending remittances, such as through
international automated clearing house
(ACH) transactions. In 2001, the Federal
Reserve Banks began offering crossborder ACH services to Canada. In 2003,
the United States and Mexico launched
the ‘‘Partnership for Prosperity’’
initiative aimed at fostering economic
development. One of the efforts under
this initiative was to lower the cost of
remittance transfers from the United
States to Mexico. Under this initiative,
the Federal Reserve Banks worked with

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the central bank of Mexico to create an
interbank mechanism, later branded
‘‘Directo a México,’’ to carry out crossborder ACH transactions between the
United States and Mexico. The Directo
a México service was introduced in
2004, and the Federal Reserve Banks
now offer international ACH services to
over 35 countries in Europe, Canada,
and Latin America through agreements
with private-sector or government
entities.
In each case, the Federal Reserve and
the entity or entities with which the
Federal Reserve has an agreement
receive, process, and distribute ACH
payments to financial institutions or
recipients within the respective
domestic payment systems.10 The
Federal Reserve provides U.S. financial
institutions access to its FedGlobal ACH
Payments Service for a small charge.
Financial institutions, in turn, offer the
product to their customers for a
competitive fee.11 Institutions may offer
customers account-to-account transfers,
or allow customers to send transfers that
may be picked up at a participating
institution or other payout location
abroad.12 In some instances, the
financial institution will know the
exchange rate when the transfer is
requested. In other cases, however, the
exchange rate is determined by the
foreign ACH counterpart and applied
the next business day when funds are
deposited into the recipient’s account or
made available to be picked up.

Additional Methods
In addition to the primary remittance
transfer methods described above, there
are various other methods and products
for delivering funds to a person located
abroad. For example, consumers may
send funds to recipients abroad using
prepaid cards. In one model, a
consumer purchases a prepaid card
from a remittance transfer provider,
which loads funds onto the card and
sends it to a specified recipient in
another country. The recipient may then
use the prepaid card at an ATM or at a
point of sale. The consumer can reload
the recipient’s prepaid card through the
provider’s Web site. In this model, the
exchange rate is set when the recipient
uses the card. Other card-based
products permit the cardholder to send
funds using his or her debit or credit
card to the debit or credit card account
of a recipient.
A consumer may also add a recipient
in another country as an authorized user
on his or her checking or savings
account. A debit card linked to the
consumer’s account is provided to the
recipient, who can use it to withdraw
funds at an ATM or at a point of sale.
Remittance transfer providers are also
exploring the use of mobile applications
to send remittances.14
C. Consumer Choice, Pricing, and
Disclosure

Other Account-Based Methods
Over the last decade, some financial
institutions have independently
developed lower-cost remittance
transfer products, or have directly
partnered with or joined a larger
distribution network of financial
institutions or other payout locations.
These products generally are account-toaccount or account-to-cash products
that resemble those offered by
traditional money transmitters.
Transferred funds are generally
available in one to three days, similar to
the traditional money transmitter
model, for a competitive fee.13

Consumers choose a particular
remittance transfer provider or product
over another for a number of reasons.
Significant factors include trust in the
provider, security, reliability (i.e.,
having funds available at the specified
time), and convenience to the recipient,
particularly in markets where the
recipient may have limited options
where funds can be picked up.15 Fees
and exchange rates are also key factors
in choosing a provider. Some studies
have shown consumers may agree to
pay more to ensure that recipients
receive the entire amount promised at
the promised delivery time, and that
consumers also tend to continue using

10 Fed. Reserve Bank Services, FedGlobal® ACH
Payments Service Origination Manual, available at:
http://www.frbservices.org/files/serviceofferings/
pdf/fedach_global_service_orig_manual.pdf.
11 See, e.g., Lenora Suki, Competition and
Remittances in Latin America: Lower Prices and
More Efficient Markets, Working Paper at 27 (Feb.
2007), available at: http://www.oecd.org/dataoecd/
31/52/38821426.pdf (‘‘Competition and
Remittances’’).
12 Fed. Reserve Bank Services, FedGlobal ACH
Payments, available at: http://www.frbservices.org/
serviceofferings/fedach/fedach_international_ach
_payments.html.
13 See, e.g., Competition and Remittances at 27;
Scorecard at 7.

14 Consumers may also use informal methods to
send money abroad, such as sending funds through
the mail or with a friend, relative, or courier
traveling to the destination country. See, e.g.,
Bendixen & Amandi, Survey of Latin American
Immigrants in the United States (2008), available at:
http://www.bendixenandassociates.com/
studies2008.html (estimating about 12% of
remittances to Latin America are through informal
means) (‘‘Bendixen Survey’’).
15 Marianne A. Hilgert, Jeanne M. Hogarth, et al.
‘‘Banking on Remittances: Extending Financial
Services to Immigrants.’’ 15 Partners No. 2 at 18
(2005); Competition and Remittances at 25. See also
the discussion below regarding the Board’s
consumer testing.

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a service provider once it proves
reliable.16
Studies also suggest that increasing
diversification and competition in the
remittance transfer market have
contributed to downward market
pressure on prices.17 One study shows
that transfer costs to Latin America, the
largest recipient of remittances from the
United States, have decreased from
about 15% of the value transferred
before 2000 to approximately 5% of the
value transferred, although the rate of
decline has slowed in the last few
years.18 Similarly, the World Bank
estimates that worldwide, transfer costs
declined to an estimated 8.7% of the
value of the transfer in first quarter of
2010.19
Although the remittance transfer
market has seen an overall price
decline, concerns remain regarding the
adequacy of disclosures. Even though
consumers often can obtain exchange
rate and fee information orally upon
request, many consumers currently do
not receive written information about
their remittance transaction until after
payment is tendered. Consumer
advocates have argued that providing
written disclosures prior to payment is
essential to help the consumer
understand the transaction before
committing to pay.20 However, one
survey indicated that a majority of
consumers are satisfied with the
transparency of the exchange rate and
fees.21 Concerns have also been raised
that state money transmitter laws
address licensing and money laundering
issues, but largely do not require
disclosures.
Further, there is inconsistency in the
type of information disclosed by
different providers. In some instances,
the provider may disclose the total cost
of the transaction to the sender, but not
the amount the recipient will receive. In
other instances, the consumer may
believe that the recipient will receive a
specified amount, but lifting fees,
recipient agent fees, or foreign taxes
reduce the amount the recipient
16 GAO Report at 8. See also Appleseed, The Fair
Exchange: Improving the Market for International
Remittances 7 (Apr. 2007).
17 Scorecard at 7. Technology is also a driving
factor.
18 Inter-American Development Bank,
Multilateral Investment Fund. Ten Years of
Innovation in Remittances: Lessons Learned and
Models for the Future 8 (2005). The market has
recently seen remittance transfer provider
consolidation.
19 World Bank Migration and Development Brief
No. 13 at 10 (Nov. 2010).
20 See, e.g., Testimony of Annette LoVoi,
Appleseed, in Hearing Before House Subcomm. on
Fin. Insts. And Cons. Credit, No. 111–39 (June 3,
2009).
21 Scorecard at 10.

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ultimately receives. Thus, consumers
could benefit from consistent, accessible
disclosures regarding remittance
transfers. Concerns have also been
raised about a consumer’s ability to
pursue the resolution of errors with
providers, particularly given variations
in state law regulation of money
transmitters.22
Outreach and Consumer Testing
In the fall of 2010, Board staff
conducted outreach with various parties
regarding remittances and
implementation of the statute. Board
staff met with representatives from a
variety of money transmitters, financial
institutions, industry trade associations,
consumer advocates, and other
interested parties to discuss current
remittance transfer business models,
consumer disclosure and error
resolution practices, operational issues,
and specific provisions of the statute.23
The Board also engaged a testing
consultant, ICF Macro (Macro), to
conduct focus groups and one-on-one
interviews regarding remittance
transfers. Participants represented a
range of ages, education levels, amount
of time lived in the United States, and
country or region to which remittances
were sent.
In December 2010, Macro conducted
a series of six focus groups with eight
to ten participants each, to explore
current remittance provider practices
and attitudes about remittance
disclosures. Three focus groups were
held in Bethesda, Maryland, and three
were held in Los Angeles, California. At
each location, two of the three focus
groups were conducted in English, and
the third in Spanish. Among other
things, participants were asked about
the factors they consider when choosing
a remittance provider, and information
they receive from providers before and
after their transaction. Consistent with
the research described above, focus
group participants identified cost,
convenience, and security among the
most important factors when choosing a
provider, and tended to use the same
provider over time. Most participants
said they did not receive any written
information before completing an inperson remittance transfer, but said they
could get information about fees and
exchange rates orally if they asked an
agent. Only a few participants regularly
22 Nat. Council of La Raza, Wiring Change: New
Protections for Remittances Can Help Families, at:
http://www.nclr.org/images/uploads/pages/
Remittances_and_Banking_Reform_5_5_2010_
Final.pdf (May 2010).
23 Summaries of these meetings are available on
the Board’s Web site at: http://www.federalreserve.
gov/newsevents/reform_consumer.htm.

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compared provider prices. Those who
did compare would generally call or
look on-line for approximate fees and
exchange rates. When asked about the
usefulness of a storefront sign showing
how much a recipient would receive in
local currency if $100 were sent, most
participants responded by highlighting
the limitations and obstacles of such a
sign.
In early 2011, Macro conducted a
series of one-on-one interviews in New
York City, Atlanta, Georgia, and
Bethesda, Maryland, with nine to ten
participants in each city. During the
interview, participants were given
scenarios in which they completed a
hypothetical remittance transfer and
received one or more disclosure forms.
For each scenario, participants were
asked specific questions to test their
understanding of the information
presented in the disclosure form. Nearly
all participants understood the
information presented in the disclosure
forms. Most participants said that
getting information prior to completing
the transaction could be useful in that
it would give consumers the
opportunity to review or confirm
information before sending money.
Participants also generally responded
positively to disclosures about their
error resolution rights.
III. Summary of Proposal
The Board is proposing to implement
the Dodd-Frank Act remittance transfer
provisions in a new Subpart B of
Regulation E, § 205.30 et seq.24 The
proposed rule contains new protections
for consumers who send remittance
transfers to designated recipients in a
foreign country by providing consumers
with disclosures and error resolution
rights.
Under the proposed rule, a remittance
transfer provider must generally provide
a written pre-payment disclosure to a
sender 25 containing information about
the specific transfer, such as the
exchange rate, applicable fees and taxes,
and the amount to be received by the
designated recipient. Oral pre-payment
disclosures would be permitted if the
transaction is conducted entirely by
telephone.
The remittance transfer provider must
also generally provide a written receipt
when payment is made for the
remittance transfer that includes the
information provided on the prepayment disclosure, as well as
additional information such as the date
24 Existing provisions of Regulation E would be
incorporated into a new Subpart A.
25 As discussed in more detail below, the
proposed rule is applicable to senders who are
consumers.

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of availability, the recipient’s contact
information, and information regarding
the sender’s error resolution and
cancellation rights. Alternatively, the
proposed rule permits remittance
transfer providers to provide senders a
single written pre-payment disclosure
containing all of the information
required on the receipt.
The proposal also implements two
statutory exceptions that permit a
remittance transfer provider to disclose
an estimate of the amount of currency
to be received, rather than the actual
amount. The first exception applies for
five years from the date of enactment of
the Dodd-Frank Act. This temporary
exception applies to insured depository
institutions and insured credit unions
that cannot determine certain disclosed
amounts for reasons beyond their
control, which primarily occurs with
international wire transfers. The second
exception is a permanent exception and
applies where the provider cannot
determine certain amounts to be
disclosed because of (a) the laws of a
recipient country or (b) the method by
which transactions are made in the
recipient country. Under the proposed
rule, the permanent exception applies
when the government of a foreign
country sets the exchange rate after a
transfer has been sent, or where the
exchange rate, by law, is not set until
the recipient picks up the funds. The
permanent exception also applies to
certain international ACH transactions,
where the central bank of the foreign
country sets the exchange rate after the
transfer has been sent.
The proposed rule also implements
the statutory requirement that
disclosures must generally be provided
in English and in each of the foreign
languages principally used by the
remittance transfer provider to
advertise, solicit, or market remittance
transfer services at a particular office,
with several modifications. The
proposed rule provides guidance on
how and when foreign language
disclosures must be provided, and
proposes several foreign language
disclosure alternatives.
Additionally, the proposed rule
prescribes error resolution standards,
including recordkeeping standards,
consistent with the statute. The
proposed rule requires a sender to
provide notice of an error to the
remittance transfer provider within 180
days of the stated date of availability of
a remittance transfer. The notice triggers
a provider’s duty to investigate the
claim and correct any error within 90
days of receiving the notice of error. The
proposed rule would establish error
resolution procedures similar to those

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that apply to a financial institution
under Regulation E with respect to
errors involving electronic fund
transfers. The proposal also provides
senders specified cancellation and
refund rights.
Finally, the proposed rule sets forth
two alternative approaches for
implementing the standards of liability
for remittance transfer providers,
including those that act through an
agent. Under the first alternative, a
remittance transfer provider would be
liable for violations by an agent, when
such agent acts for the provider. Under
the second alternative, a remittance
transfer provider would be liable for
violations by an agent acting for the
provider unless the provider establishes
and maintains policies and procedures
for agent compliance, including
appropriate oversight measures, and the
provider corrects any violation, to the
extent appropriate.
Request for Comment
The Board requests comment on all
aspects of this remittances proposal,
including on the various alternatives set
forth in the proposal, as well as
projected implementation and
compliance costs. The Board also
solicits comment on whether an
effective date of one year from the date
the final rule is published, or an
alternative effective date, would be
appropriate. Specifically, the Board
requests comment on the length of time
remittance transfer providers may need
to implement the rule.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Transition Issues
The Dodd-Frank Act requires the
Board to issue rules implementing the
remittance transfer provisions within 18
months from the date of enactment, or
by January 21, 2012. However, the Act
transfers rulemaking authority for most
consumer protection statutes, including
the EFTA, from the Board to the Bureau
as of the designated transfer date, which
has been designated as July 21, 2011.26
As a result, the Board anticipates that
final rules on remittance transfers will
be issued by the Bureau.
IV. Legal Authority
Section 1073 of the Dodd-Frank Act
creates a new Section 919 of the EFTA
and requires remittance transfer
providers to make disclosures to senders
of remittance transfers, pursuant to rules
prescribed by the Board. In particular,
providers must give senders a written
pre-payment disclosure containing
specified information applicable to the
sender’s remittance transfer. The
26 75

FR 57252 (Sept. 20, 2010).

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remittance transfer provider must also
provide a written receipt that includes
the information provided on the prepayment disclosure, as well as
additional specified information. EFTA
Section 919(a); 15 U.S.C. 1693o–1(a).
In addition, EFTA Section 919
provides for specific error resolution
procedures. The Act directs the Board to
promulgate error resolution standards
and rules regarding appropriate
cancellation and refund policies. EFTA
Section 919(d); 15 U.S.C. 1693o–1(d).
Finally, EFTA Section 919 requires the
Board to establish standards of liability
for remittance transfer providers,
including those that act through agents.
EFTA Section 919(f); 15 U.S.C. 1693o–
1(f). Except as described below, the
remittance transfer rule is proposed
under the authority provided to the
Board in EFTA Section 919, and as more
specifically described in this
SUPPLEMENTARY INFORMATION.
In addition to the statutory mandates
set forth in the Dodd-Frank Act, EFTA
Section 904(a) authorizes the Board to
prescribe regulations necessary to carry
out the purposes of the title. The
express purposes of the EFTA, as
amended by the Dodd-Frank Act, are to
establish ‘‘the rights, liabilities, and
responsibilities of participants in
electronic fund and remittance transfer
systems’’ and to provide ‘‘individual
consumer rights.’’ EFTA Section 902(b);
15 U.S.C. 1693. As described in more
detail in the SUPPLEMENTARY
INFORMATION, the following provisions
are proposed in part or in whole
pursuant to the Board’s authority in
EFTA Section 904(a): §§ 205.31(b)(1)(i),
(b)(1)(iii), (b)(1)(v), (b)(1)(vi), (g)(2), and
205.33(c)(1). The proposed Model
Forms in Appendix A are also proposed
pursuant to EFTA Section 904(a). The
Section-by-Section analysis, Initial
Regulatory Flexibility Analysis, and
Paperwork Reduction Act analysis serve
as the economic impact analysis
pursuant to EFTA Section 904(a)(2).
EFTA Section 904(c) further provides
that regulations prescribed by the Board
may contain any classifications,
differentiations, or other provisions, and
may provide for such adjustments or
exceptions for any class of electronic
fund transfers or remittance transfers
that the Board deems necessary or
proper to effectuate the purposes of the
title, to prevent circumvention or
evasion, or to facilitate compliance. As
described in more detail in the
SUPPLEMENTARY INFORMATION, proposed
§§ 205.31(g)(1)(ii), (g)(2), (g)(3),
205.32(a), and 205.31(e)(2) are proposed
in part or in whole pursuant to the
Board’s authority in EFTA Section
904(c).

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V. Section-by-Section Analysis
Section 205.3

Coverage

Section 205.3(a), which describes
Regulation E’s coverage, is proposed to
be revised to provide that the
requirements of Subpart B apply to
remittance transfer providers. The
revision reflects that the scope of the
Dodd-Frank Act’s remittance transfer
provisions is not limited to financial
institutions. Specifically, EFTA Section
919(g)(3) defines a remittance transfer
provider as ‘‘any person that provides
remittance transfers for a consumer in
the normal course of its business,
whether or not the consumer holds an
account with such person’’ (emphasis
added). Thus, Subpart B would also
apply to non-financial institutions, such
as money transmitters, that send
remittance transfers.
Section 205.30
Definitions

Remittance Transfer

EFTA Section 919(g) sets forth several
definitions applicable to the remittance
transfer provisions in Subpart B.
Proposed § 205.30 incorporates these
definitions, with modifications, and
other terms used in the rule, with
proposed commentary for further
clarification.
30(a) Agent
Proposed § 205.30(a) states that an
‘‘agent’’ means an agent, authorized
delegate, or person affiliated with a
remittance transfer provider under state
or other applicable law, when such
agent, authorized delegate, or affiliate
acts for that remittance transfer
provider. EFTA Section 919 does not
use consistent terminology concerning
agents of remittance transfer providers.
For example, EFTA Section 919(f)(1)
uses the phrase ‘‘agent, authorized
delegate, or person affiliated with a
remittance transfer provider,’’ when that
person ‘‘acts for that remittance transfer
provider,’’ while other provisions use
the phrase ‘‘agent or authorized
delegate’’ (EFTA Section 919(f)(2)) or
simply ‘‘agent’’ (EFTA Section 919(b)).
The Board does not believe that these
statutory wording differences are
intended to establish different standards
across the rule. Therefore, the proposed
rule generally refers to ‘‘agents,’’ as
defined in proposed § 205.30(a), to
provide consistency across the proposed
rule. Because the concept of agency is
historically tied to state law, the
proposed definition references these
parties under state or other applicable
law.

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30(b) Business Day
Several provisions in the proposed
rule use the term ‘‘business day.’’ See,
e.g., §§ 205.31(e)(2) and 205.33(c)(1).
The existing definition of ‘‘business day’’
in Regulation E applies only to financial
institutions and includes inapt
commentary. See 12 CFR 205.2(d).
Because remittance transfer providers
include non-financial institutions,
proposed § 205.30(b) contains a new
definition of ‘‘business day’’ applicable
to Subpart B. The proposed rule states
that ‘‘business day’’ means any day on
which a remittance transfer provider
accepts funds for sending remittance
transfers.
Proposed comment 30(b)–1 explains
that a business day includes the entire
24-hour period ending at midnight, and
that a notice required by any section in
Subpart B is effective even if given
outside of normal business hours.
However, the comment clarifies that no
section of Subpart B requires that a
remittance transfer provider make
telephone lines available on a 24-hour
basis.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

30(c) Designated Recipient
EFTA Section 919(g)(1) provides that
a ‘‘designated recipient’’ is ‘‘any person
located in a foreign country and
identified by the sender as the
authorized recipient of a remittance
transfer to be made by a remittance
transfer provider, except that a
designated recipient shall not be
deemed to be a consumer for purposes
of [the EFTA].’’ The statute uses the term
‘‘person,’’ indicating that the statute
applies to remittance transfers sent to
businesses, as well as to consumers. See
proposed comment 30(c)–1.
Proposed § 205.30(c) implements
EFTA Section 919(g)(1), with edits for
clarity. A remittance transfer provider
will generally only know the location
where funds are to be sent, rather than
where a designated recipient is
physically located. For instance,
although the sender may indicate that
funds are to be sent to the recipient in
Mexico City, the recipient could
actually be in the United States at the
time of the transfer. The Board believes
that the statutory reference to a ‘‘person
located in a foreign country’’ should be
read with a view to the location where
funds are to be sent. Additionally, the
statute references a remittance transfer
‘‘to be made by a remittance transfer
provider.’’ As discussed below, the
definition of remittance transfer requires
that it be sent by a remittance transfer
provider. Thus, this language is
unnecessary. Accordingly, proposed
§ 205.30(c) states that a designated

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recipient is any person specified by the
sender as an authorized recipient of a
remittance transfer to be received at a
location in a foreign country.
Proposed comment 30(c)–2 explains
that a remittance transfer is received at
a location in a foreign country if funds
are to be received at a location
physically outside of any state, as
defined in § 205.2(l). The Board
understands that a provider will
generally know the location where
funds can be picked up or will be
deposited as part of its normal operating
procedures. However, the Board solicits
comment on whether there are instances
where a remittance provider may only
receive a recipient’s email address and
therefore be unable to determine the
location where funds are to be received.
30(d) Remittance Transfer
30(d)(1) General Definition
EFTA Section 919(g)(2)(A) defines a
remittance transfer as an electronic (as
defined in Section 106(2) of the
Electronic Signatures in Global and
National Commerce Act, 15 U.S.C. 7007
et seq. (‘‘E–Sign Act’’)) transfer of funds
requested by a sender located in any
state to a designated recipient that is
sent by a remittance transfer provider.
Under the statute, such a transaction is
a remittance transfer whether or not the
sender holds an account with the
remittance transfer provider and
whether or not the remittance transfer is
also an electronic fund transfer, as
defined in EFTA Section 903. The
statute thus brings within the scope of
the EFTA certain transactions that have
traditionally been outside the scope of
the EFTA, if those transactions meet
elements of the definition of ‘‘remittance
transfer.’’ Such transactions include
cash-based remittance transfers sent
through a money transmitter as well as
consumer wire transfers. Proposed
§ 205.30(d) implements the definition of
‘‘remittance transfer’’ in EFTA Section
919(g)(2), with revisions for clarity. The
Board is also proposing commentary to
provide further guidance on the
definition, as well as examples of
transactions that are and are not
remittance transfers under the rule.
Proposed § 205.30(d)(1) implements
the general definition set forth in EFTA
Section 919(g)(2)(A). Proposed
§ 205.30(d)(1) states that a remittance
transfer means the electronic transfer of
funds requested by a sender to a
designated recipient that is sent by a
remittance transfer provider. Proposed
§ 205.30(d)(1) further states that the
term applies regardless of whether the
sender holds an account with the
remittance transfer provider and

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regardless of whether the transfer is also
an electronic fund transfer, as defined in
§ 205.3(b).
Proposed comments 30(d)–1 through
–4 provide further guidance on each of
the elements of the proposed definition
of ‘‘remittance transfer.’’ Proposed
comment 30(d)–1 provides that there
must be an electronic transfer of funds.
The term electronic has the meaning
given in Section 106(2) of the E-Sign
Act. There may be an electronic transfer
of funds if a provider makes an
electronic book entry between different
settlement accounts to effectuate the
transfer. However, the proposed
comment explains that where a sender
mails funds directly to a recipient, or
provides funds to a courier for delivery
to a foreign country, there has not been
an electronic transfer of funds.
Therefore, non-electronic remittance
methods are not remittance transfers.
Proposed comment 30(d)–2 provides
that the definition of remittance transfer
requires a specific sender request that a
remittance transfer provider send a
remittance transfer. The proposed
comment explains that a deposit by a
consumer into a checking or savings
account does not itself constitute such
a request, even if a person in a foreign
country is an authorized user on that
account, where the consumer retains the
ability to withdraw funds in the
account.
Proposed comment 30(d)–3 provides
that the definition of remittance transfer
also requires that the transfer be sent to
a designated recipient. As noted above,
the definition of ‘‘designated recipient’’
requires a person to be identified by the
sender as the authorized recipient of a
remittance transfer to be sent by a
remittance transfer provider. Proposed
comment 30(d)–3 explains that there is
no designated recipient unless the
sender specifically identifies the
recipient of a transfer. Thus, there is a
designated recipient if, for example, the
sender instructs a remittance transfer
provider to send a prepaid card to a
specified recipient in a foreign country,
and the sender does not retain the
ability to draw down funds on the
prepaid card. In contrast, there is no
designated recipient where the sender
retains the ability to withdraw funds,
such as when a person in a foreign
country is made an authorized user on
the sender’s checking account, because
the remittance transfer provider cannot
identify the ultimate recipient of the
funds. For instance, a consumer may
add his daughter, who is studying
abroad, as an authorized user to his
account so that the daughter has access
to funds while abroad. When the
consumer deposits funds to the account,

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the consumer’s financial institution
cannot know whether the purpose of
that deposit is to provide funds to the
daughter, or is merely a deposit that the
consumer will later withdraw himself.
Finally, proposed comment 30(d)–4
provides that the definition of
remittance transfer requires that the
remittance transfer must be sent by a
remittance transfer provider. The
proposed comment explains that this
means that there must be an
intermediary actively involved in
sending the transfer of funds. Examples
include a person (other than the sender)
sending an instruction to a receiving
agent in a foreign country to make funds
available to a recipient; executing a
payment order pursuant to a consumer’s
instructions; executing a consumer’s
online bill payment request; or
otherwise engaging in the business of
accepting or debiting funds for
transmission to a recipient and
transmitting those funds.
However, the proposed comment
explains that a payment card network or
other third party payment service that is
functionally similar to a payment card
network does not send a remittance
transfer when a consumer designates a
debit or credit card as the payment
method to purchase goods or services
from a foreign merchant. In such a case,
the payment card network or third party
payment service is not directly engaged
with the sender to send a transfer of
funds to a person in a foreign country;
rather, the network or third party
payment service is merely providing
contemporaneous third-party payment
processing and settlement services on
behalf of the merchant or the remittance
transfer provider, rather than on behalf
of the sender.27
Similarly, where a consumer provides
a checking or other account number
directly to a merchant as payment for
goods or services, the merchant is not
acting as a remittance transfer provider
when it submits the payment
information for processing. Proposed
comment 30(d)–5 provides a nonexclusive list of examples of
transactions that are, and are not,
remittance transfers.
Under proposed § 205.30(d), some
transactions that have not traditionally
been considered remittance transfers,
such as a consumer’s online bill
payment through his or her financial
institution to a recipient abroad, will
27 However, when a consumer uses his or her
debit or credit card to send funds to a recipient’s
debit or credit card, the debit or credit card issuer
offering the service could be considered a
remittance transfer provider, and the transfer of
funds a remittance transfer, under the proposed
rule. See, e.g., proposed comment 30(d)–5.

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fall within the scope of the rule. In
contrast, other transfer methods
specifically marketed for use by a
consumer to send remittances, but that
do not meet all elements of the
definition of remittance transfer, may
fall outside the scope of the rule (e.g.,
a prepaid card where the sender retains
the ability to draw down funds). The
Board believes that proposed § 205.30(d)
implements the statutory definition of
‘‘remittance transfer.’’ However, the
Board solicits comment on whether it
should exempt online bill payments
made through the sender’s institution,
and specifically preauthorized bill
payments, from the rule, as it could be
challenging for institutions to provide
timely disclosures.
30(d)(2) Exception for Small-Value
Transfers
EFTA Section 919(g)(2)(B) states that
a remittance transfer does not include a
transfer described in EFTA Section
919(g)(2)(A) ‘‘in an amount that is equal
to or lesser than the amount of a smallvalue transaction determined, by rule, to
be excluded from the requirements
under section 906(a)’’ of the EFTA.
EFTA Section 906(a) addresses the
requirements for electronic terminal
receipts. The Board has previously
determined, by rule, that financial
institutions are not subject to the
requirement to provide electronic
terminal receipts for small-value
transfers of $15 or less. 12 CFR
§ 205.9(e). Proposed § 205.30(d)(3)
incorporates this exception for smallvalue transfers by providing that
remittance transfers do not include
transfer amounts of $15 or less.
Application of the EFTA; Relationship
to Uniform Commercial Code
As described above, the statute
applies to remittance transfers whether
or not they are electronic fund transfers.
This raises certain issues with respect to
traditional cash-based remittance
transfers sent through money
transmitters, which have not generally
been regulated under the EFTA, as well
as international wire transfers, which
are not EFTs.
During the Board’s outreach, some
money transmitters asked how and to
what extent the EFTA would apply to
providers that would ordinarily be
outside its scope. The statute outlines
the application of the EFTA to
remittance transfers that are not
electronic fund transfers. Specifically,
EFTA Section 919(e)(1) states that a
remittance transfer that is not an
electronic fund transfer is not subject to
any of the provisions of EFTA Sections
905 through 913. For example, a money

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transmitter sending a remittance transfer
would not be subject to the requirement
in EFTA Section 906(b), as implemented
in 12 CFR 205.9(b), to provide periodic
statements to consumers. The
transmitter would, however, generally
be subject to other provisions of the
EFTA, including provisions on liability
under EFTA Sections 916 through 918.
EFTA Section 919(e)(2)(A) also clarifies
that a transaction that would not
otherwise be an electronic fund transfer
under the EFTA, such as a wire transfer,
does not become an electronic fund
transfer because it is a remittance
transfer under EFTA Section 919.
Prior to the enactment of the DoddFrank Act, wire transfers were entirely
exempt from the EFTA and instead were
governed by state law through state
enactment of Article 4A of the Uniform
Commercial Code. Among other things,
Article 4A primarily governs the rights
and responsibilities among the
commercial parties to a wire transfer,
including payment obligations among
the parties and allocation of risk of loss
for unauthorized or improperly
executed payment orders.
UCC Article 4A–108 provides that
Article 4A does not apply ‘‘to a funds
transfer, any part of which is governed
by the [EFTA]’’ (emphasis added). Under
EFTA Section 919, wire transfers sent
on a consumer’s behalf that are
remittance transfers will now be
governed in part by the EFTA. As a
result, it appears that, by operation of
Article 4A–108, Article 4A will no
longer apply to such consumer wire
transfers.28
Some institutions have urged the
Board to clarify that remittance transfers
are not governed by the EFTA for
purposes of state law, so that UCC
Article 4A will continue to apply to
such transfers. However, as noted above,
EFTA Section 919(e)(1) explicitly
applies the EFTA to remittance transfers
that are not electronic fund transfers,
except for certain enumerated
provisions. Further, the remittance
disclosure and error resolution
requirements are set forth under the
EFTA.
In the alternative, institutions have
urged the Board to preempt any
provision of state law that prevents a
remittance transfer from being treated as
a funds transfer under UCC Article 4A
based solely upon the inclusion of the
remittance transfer provisions in EFTA
Section 919. Under this suggested
approach, the error resolution
provisions of EFTA Section 919(b)(1)
would govern remittance transfers as
28 Commercial wire transfers are not affected
because a ‘‘sender’’ must be a consumer.

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
between a sender and a remittance
transfer provider, but the remaining
provisions in UCC Article 4A would
continue to govern the allocation of risk
of loss as between the remittance
transfer provider and another financial
institution that carries out part of the
transfer.
Under EFTA Section 921 and
§ 205.12, the Board may determine
whether a state law relating to, among
other things, electronic fund transfers is
preempted by a provision of the EFTA
or Regulation E. However, a provision
can only preempt a state law that is
inconsistent with the provision and
only to the extent of its inconsistency.
Moreover, the statute and regulation
provide that a state law is not
inconsistent with any provision if it is
more protective of consumers.
EFTA Section 902(b) states that the
primary purpose of the EFTA is the
provision of individual consumer rights.
In contrast, as discussed above, Article
4A is primarily intended to govern the
rights and responsibilities among the
commercial parties to a funds transfer,
that is, the financial institution that
accepts a payment order for a funds
transfer and any other financial
institutions that may be involved in
carrying out the transfer. Thus, because
the two statutes focus on different
relationships, it is not clear that EFTA
Section 919 is inconsistent with UCC
Article 4A.
In addition, the Board notes that
Congress amended the EFTA’s
preemption provision to specifically
include a reference to state gift card
laws when it enacted new EFTA
protections for gift cards as part of the
Credit Card Accountability
Responsibility and Disclosure Act of
2009 (Credit Card Act).29 By contrast,
Congress did not amend the EFTA’s
preemption provision with respect to
state laws relating to remittance
transfers, including those that are not
electronic fund transfers, when it
enacted the Dodd-Frank Act.
The Board recognizes that one
consequence of covering remittance
transfers under the EFTA could be legal
uncertainty for certain remittance
transfer providers. Specifically,
providers of international wire transfers
may no longer be able to rely on UCC
Article 4A’s rules governing the rights
and responsibilities among the parties to
a wire transfer. However, because this
issue arises from a provision of state
law, not federal law, the Board believes
that the authority for resolving this
uncertainty rests with the states or
29 See Credit Card Act § 402, Public Law 111–24,
123 Stat. 1734 (2009).

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through the rules applicable to the
relevant wire transfer system. The final
rule must be issued in final form no
later than January 21, 2012, and will be
effective at a subsequent date. Thus,
before the rule is finalized and becomes
effective, states have the opportunity to
amend UCC Article 4A to restore its
application to consumer international
wire transfers, or wire transfer systems
could amend their operating rules to
incorporate UCC Article 4A.
30(e) Remittance Transfer Provider
Proposed § 205.30(e) implements the
definition of ‘‘remittance transfer
provider’’ in EFTA Section 919(g)(3).
Proposed § 205.30(e) states that a
remittance transfer provider (or
provider) means any person that
provides remittance transfers for a
consumer in the normal course of its
business, regardless of whether the
consumer holds an account with such
person. To eliminate redundancy,
statutory references to ‘‘any person or
financial institution’’ have been revised
to state ‘‘any person’’ in the proposed
rule, because the term ‘‘person’’ under
Regulation E already includes financial
institutions. Proposed comment 30(e)–1
clarifies that an agent is not deemed to
be a remittance transfer provider by
merely providing remittance transfer
services on behalf of the remittance
transfer provider. The Board solicits
comment on whether it should adopt
guidance interpreting the phrase
‘‘normal course of business’’ as sending
a minimum number of remittance
transfers in a given year. If so, the Board
solicits comment on what that number
should be.
30(f) Sender
Proposed § 205.30(f) implements the
definition of ‘‘sender’’ in EFTA Section
919(g)(4) with minor edits for clarity.
Under the proposed rule, a sender is a
consumer in a state who requests a
remittance transfer provider to send a
remittance transfer to a designated
recipient. Accordingly, the proposed
rule does not apply to business-toconsumer or business-to-business
transactions.
Section 205.31 Disclosures
The Dodd-Frank Act contains several
disclosure requirements relating to
remittance transfers. Among these,
EFTA Sections 919(a)(2)(A) and (B)
require a remittance transfer provider to
provide two disclosures to a sender in
connection with a remittance transfer.
First, a remittance transfer provider
must provide a written pre-payment
disclosure to a sender with information
about the sender’s remittance transfer,

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such as the exchange rate, fees, and the
amount to be received by the designated
recipient. A remittance transfer provider
must also provide a written receipt that
includes the information provided on
the pre-payment disclosure, as well as
additional information, such as the
promised date of delivery, contact
information for the designated recipient,
and information regarding the sender’s
error resolution rights. EFTA Section
919(a)(5) provides the Board with
certain exemption authority, including
the authority to permit a remittance
transfer provider to provide, in lieu of
a pre-payment disclosure and receipt, a
single written disclosure to a sender
prior to payment for the remittance
transfer that accurately discloses all of
the information required on both the
pre-payment disclosure and the receipt.
See EFTA Section 919(a)(5)(C). EFTA
Section 919(b) also provides that
disclosures under Section 919 must be
made in English and in each foreign
language principally used by the
remittance transfer provider, or any of
its agents, to advertise, solicit, or
market, either orally or in writing, at
that office.
Proposed § 205.31(a) sets forth the
requirements for the general form of
disclosures required under Subpart B.
Proposed §§ 205.31(b)(1) and (2)
implement the EFTA Section
919(a)(2)(A) and (B) pre-payment
disclosure and receipt requirements.
Proposed § 205.31(b)(3) sets forth the
requirements for providing a combined
disclosure, as permitted by EFTA
Section 919(a)(5)(C). Proposed
§ 205.31(b)(4) sets forth disclosure
requirements with respect to a sender’s
error resolution and cancellation rights.
Proposed § 205.31(c) sets forth specific
format requirements required under
Subpart B, including grouping,
proximity, prominence and size, and
segregation requirements. Proposed
§ 205.31(d) sets forth the disclosure
requirements for providing estimates, to
the extent they are permitted by
§ 205.32. Proposed § 205.31(e)
implements the timing requirements of
EFTA Sections 919(a)(2) and
919(a)(5)(C). Proposed § 205.31(f)
clarifies that the disclosures required by
§ 205.31(b) must be accurate when
payment is made. Finally, proposed
§ 205.31(g) implements the foreign
language requirement in EFTA Section
919(b).
31(a) General Form of Disclosures
31(a)(1) Clear and Conspicuous
Proposed § 205.31(a) sets forth the
requirements for the general form of
disclosures required under proposed

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Subpart B. Pursuant to EFTA Sections
919(a)(3)(A) and (a)(5)(C),30 proposed
§ 205.31(a)(1) provides that disclosures
required by Subpart B must be clear and
conspicuous. These include the
disclosures required by proposed
§ 205.31, as well as disclosures
providing a description of the sender’s
error resolution and cancellation rights
under proposed §§ 205.33 and .34,
discussed below. Proposed comment
31(a)(1)–1 clarifies that disclosures are
clear and conspicuous for purposes of
Subpart B if they are readily
understandable and, in the case of
written and electronic disclosures, the
location and type size are readily
noticeable to senders. Oral disclosures,
to the extent permitted by proposed
§ 205.31(a)(3) and (4), are clear and
conspicuous when they are given at a
volume and speed sufficient for a sender
to hear and comprehend them.
Proposed § 205.31(a)(1) also provides
that disclosures required by Subpart B
may contain commonly accepted or
readily understandable abbreviations or
symbols. Proposed comment 31(a)(1)–2
clarifies that using abbreviations or
symbols such as ‘‘USD’’ to indicate
currency in U.S. dollars or ‘‘MXN’’ to
indicate currency in Mexican pesos is
permissible.

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31(a)(2) Written and Electronic
Disclosures
Proposed § 205.31(a)(2) sets forth the
requirements for written and electronic
disclosures under Subpart B.
Disclosures required by Subpart B
generally must be provided to the
sender in writing. See EFTA Sections
919(a)(2), (a)(5)(C), and (d)(1)(B)(iv).
However, EFTA Section 919(a)(5)(D)
permits a remittance transfer provider to
disclose a pre-payment disclosure
electronically if a sender initiates a
transaction electronically. The Board
believes the intent of this exemption
was to permit a remittance transfer
provider to give electronic disclosures
when a sender electronically requests
the provider to send the remittance
transfer. See also comment 31(e)–1.
Therefore, pursuant to the Board’s
authority in EFTA Section 919(a)(5)(D),
proposed § 205.31(a)(2) permits a prepayment disclosure under § 205.31(b)(1)
to be provided to the sender in
electronic form, if the sender
electronically requests the remittance
transfer provider to send a remittance
transfer. In such a case, proposed
comment 31(a)(2)–1 explains that
30 EFTA Section 919(a)(5)(C) incorporates the
requirements of EFTA Section 919(a)(3)(A) by
reference, including the clear and conspicuous
requirement.

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electronic disclosures required by
§ 205.31(b)(1) may be provided without
regard to the consumer consent and
other applicable provisions of the ESign Act. Proposed comment 31(a)(2)–1
also clarifies that if a sender
electronically requests the remittance
transfer provider to send a remittance
transfer, receipts required by
§ 205.31(b)(2) also may be provided to
the consumer in electronic form.
However, electronic receipts must
comply with the consumer consent and
other applicable provisions of the
E-Sign Act.
Proposed comment 31(a)(2)–2 clarifies
that written disclosures may be
provided on any size paper, as long as
the disclosures are clear and
conspicuous. For example, disclosures
may be provided on a register receipt or
on an 8.5 inch by 11 inch sheet of paper,
consistent with current practices in the
industry. The Board believes that the
required disclosures are sufficiently
simple and limited in scope that they
may be provided clearly and
conspicuously on various paper sizes, as
long as a remittance transfer provider
complies with the formatting
requirements of proposed § 205.31(a)
and (c).
In addition, proposed § 205.31(a)(2)
provides that the written and electronic
disclosures required by Subpart B must
be made in a retainable form, pursuant
to EFTA Section 919(a)(2) and
consistent with the authority provided
to the Board in EFTA Section
919(a)(5)(C). Proposed comment
31(a)(2)–3 clarifies that a remittance
transfer provider may satisfy the
requirement to provide electronic
disclosures in a retainable form if it
provides an on-line disclosure in a
format that is capable of being printed.
Electronic disclosures cannot be
provided through a hyperlink or in
another manner by which the sender
can bypass the disclosure. A provider is
not required to confirm that the sender
has read the electronic disclosures.
The Board requests comment on how
the requirement to provide electronic
disclosures in a retainable form in
proposed § 205.31(a)(2) could be
applied to transactions conducted via
text messaging or mobile phone
application.
31(a)(3) Oral Disclosures for Telephone
Transactions
Relying upon the exemption authority
in EFTA § 919(a)(5)(B), proposed
§ 205.31(a)(3) permits pre-payment
disclosures required by § 205.31(b)(1) to
be disclosed orally if the transaction is
conducted entirely by telephone and if
the remittance transfer provider

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complies with the foreign language
disclosure requirements of
§ 205.31(g)(2), discussed below.
Proposed comment 31(a)(3)–1 clarifies
that, for transactions conducted
partially by telephone, disclosures may
not be provided orally. For example, a
sender may begin a remittance transfer
at a remittance transfer provider’s
dedicated phone in a retail store, and
then provide payment in person to a
store clerk to complete the transaction.
In such cases, the proposed comment
clarifies that all disclosures must be
provided in writing. The Board believes
that by limiting oral disclosures to
transactions performed entirely by
telephone, Congress did not intend to
permit providers to satisfy the
disclosure requirements orally for
transactions conducted partially by
telephone. See EFTA Section
919(a)(5)(B). Proposed comment
31(a)(3)–1 clarifies that for such a
transaction, a provider complies with
the disclosure requirements, for
example, by providing the written prepayment disclosure in person prior to
the sender’s payment for the
transaction, and the written receipt
when payment is made for the
remittance transfer.
31(a)(4) Oral Disclosures for Certain
Error Resolution Notices
Proposed § 205.31(a)(4) permits the
report of the results of an investigation
of a notice of error required by proposed
§ 205.33(c)(1) to be provided orally, if
the remittance transfer provider
determines that an error occurred as
described by the sender, and if the
remittance transfer provider complies
with the foreign language disclosure
requirements of § 205.31(g)(2),
discussed below. As discussed in
§ 205.33, below, the Board believes that
it is appropriate to permit a remittance
transfer provider to orally report its
findings that the specified error did
occur, alert the sender of the results of
the investigation, and facilitate a
sender’s ability to remedy errors
promptly.
In outreach conducted by the Board,
some remittance transfer providers
suggested that the Board should permit
a disclosure made prior to payment to
be provided at the point-of-sale either
orally or electronically by showing a
consumer a computer screen displaying
the required disclosures. Alternatively,
some remittance transfer providers
suggested permitting a disclosure made
prior to payment to be provided only
upon request of the sender. The
providers argued that requiring written
disclosures prior to payment would be
less convenient and more confusing for

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consumers, and would create an
unnecessary compliance burden.
For point-of-sale transactions, the
proposed rule does not permit the prepayment disclosure required by
§ 205.31(b)(1) or the combined
disclosure required by § 205.31(b)(3),
discussed below, to be provided orally
or to be shown to a consumer on a
computer screen at the point-of-sale
prior to payment. As discussed above,
EFTA Section 919 requires disclosures
to be written and retainable, and only
permits oral disclosures in limited
circumstances. Therefore, the Board
believes that the statute does not permit
a remittance transfer provider to provide
an oral pre-payment disclosure at the
point-of-sale.
Moreover, the statute requires
disclosures under EFTA Section 919 to
be provided to senders, and not simply
made available. Showing a sender the
required disclosures on a computer
screen at the point-of-sale or providing
a written disclosure only upon request
of the sender would not comply with
the requirement to provide the
disclosures to the sender. Therefore, the
Board believes that permitting these
disclosures to be made available, rather
than be provided to a sender, would be
inconsistent with the statute.
31(b) Disclosures
Section 205.31(b) sets forth
substantive disclosure requirements for
remittance transfers. EFTA Sections
919(a)(2)(A) and (B) require a remittance
transfer provider to provide to a sender:
(1) A written pre-payment disclosure
with information applicable to the
sender’s remittance transfer—
specifically, the exchange rate, the
amount of transfer and other fees, and
the amount that would be received by
the designated recipient; and (2) a
written receipt that includes the
information provided on the prepayment disclosure, plus the promised
date of delivery, contact information for
the designated recipient, information
regarding the sender’s error resolution
rights, and contact information for the
remittance transfer provider and
applicable regulatory agencies. EFTA
Section 919(a)(5)(C) also authorizes the
Board to permit a remittance transfer
provider to provide a single written
disclosure to a sender, instead of a prepayment disclosure and receipt, that
accurately discloses all of the
information required on both the prepayment disclosure and the receipt (a
‘‘combined disclosure’’).
Pursuant to EFTA Section 919(a)(2),
information on a pre-payment
disclosure and a receipt need only be
provided to the extent applicable to the

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transaction. Similarly, the information
required on a combined disclosure need
only be provided as applicable because
the combined disclosure is simply a
consolidation of disclosures on the prepayment disclosure and the receipt. See
EFTA Section 919(a)(2)(A) and (B).
Proposed comment 31(b)-1 clarifies that
a remittance transfer provider could
choose to omit an inapplicable item
provided in § 205.31(b). Alternatively, a
remittance transfer provider could
disclose a term and state that an amount
or item is ‘‘not applicable,’’ ‘‘N/A,’’ or
‘‘None.’’
For example, if fees or taxes are not
imposed in connection with a particular
transaction, the provider need not
provide the disclosures required by
§ 205.31(b)(1)(ii) or (b)(1)(vi). Similarly,
a Web site need not be disclosed under
§ 205.31(b)(2)(v) if the provider does not
maintain a Web site.
In some instances, a sender may
choose to send funds to a designated
recipient to be picked up in U.S. dollars
or deposited into a dollar-denominated
account. For example, El Salvador is a
dollarized economy,31 so remittance
transfers to El Salvador may be sent as
dollar-to-dollar transactions. Proposed
comment 31(b)-1 clarifies that a
provider need not provide the exchange
rate disclosure required by
§ 205.31(b)(1)(iv) if a recipient receives
currency in U.S. dollars or currency is
delivered into an account in U.S.
dollars, rather than in another currency.
Section 205.31(b) requires that
disclosures be described using the terms
set forth in § 205.31(b) or substantially
similar terms. The Board developed and
tested the terms in consumer testing to
ensure that consumers could
understand the information disclosed to
them. However, the proposed rule
provides remittance transfer providers
with some flexibility in developing their
disclosures. Proposed comment 31(b)-2
clarifies that terms may be more specific
than the terms provided in the proposed
rule. For example, a remittance transfer
provider sending funds to Colombia
may describe a tax disclosed under
§ 205.31(b)(1)(vi) as a ‘‘Colombian Tax’’
in lieu of describing it as ‘‘Other Taxes.’’
As discussed in § 205.31(g) below,
disclosures generally must be provided
in English and in each of the foreign
languages principally used by the
remittance transfer provider to
advertise, solicit, or market remittance
transfers, either orally or in writing, at
that office. The Board recognizes that
not all words or phrases lend
31 See U.S. Department of State Consular
Information Sheet for El Salvador at http://
travel.state.gov/travel/cis_pa_tw/cis/cis_1109.html.

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29911

themselves to exact word-for-word
translations in a foreign language.
Therefore, proposed comment 31(b)–2
also clarifies that foreign language
disclosures required under § 205.31(g)
must contain accurate translations of the
terms, language, and notices required by
§ 205.31(b).
31(b)(1) Pre-Payment Disclosures
Pursuant to EFTA Section
919(a)(2)(A), proposed § 205.31(b)(1)
requires a remittance transfer provider
to make specified pre-payment
disclosures to a sender, as applicable.
Proposed § 205.31(b)(1)(i) requires that
the remittance transfer provider disclose
the amount that will be transferred to
the designated recipient using the term
‘‘Transfer Amount’’ or a substantially
similar term. The transfer amount must
be provided in the currency in which
the funds will be transferred. For
example, if the funds will be transferred
from U.S. dollars to Mexican pesos, the
transfer amount required by
§ 205.31(b)(1) must be disclosed in U.S.
dollars. The Board is proposing the
disclosure of the transfer amount
pursuant to the Board’s authority under
EFTA Section 904(a). The Board
believes the disclosure of the transfer
amount helps demonstrate to a sender
how a provider calculates the total
amount of the transaction, discussed
below.
Proposed § 205.31(b)(1)(ii) requires
that a remittance transfer provider
disclose any fees and taxes that are
imposed on the remittance transfer by
the remittance transfer provider, in the
currency in which the funds will be
transferred. The proposed disclosure
must be described using the term
‘‘Transfer Fees,’’ ‘‘Transfer Taxes,’’ or
‘‘Transfer Fees and Taxes,’’ or a
substantially similar term. These
disclosures are proposed pursuant to
EFTA Section 919(a)(2)(A)(ii), which
requires a remittance transfer provider
to disclose the amount of transfer fees
and any other fees charged by the
remittance transfer provider for the
remittance transfer. The Board believes
the statute requires the disclosure of all
charges that would affect the cost of a
remittance transfer to the sender,
including any applicable taxes that are
passed on to the sender. See proposed
comment 31(b)(1)–1.
Proposed comment 31(b)(1)–1
clarifies that taxes imposed by the
remittance transfer provider include
taxes imposed on the remittance transfer
by a state or other governmental body.
The proposed comment further clarifies
that a remittance transfer provider need
only disclose fees or taxes required by
§§ 205.31(b)(1)(ii) and (b)(1)(vi), as

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applicable. For example, if no transfer
taxes are imposed on a remittance
transfer, a provider only needs to
disclose applicable transfer fees. If both
fees and taxes are imposed, the fees and
taxes may be disclosed as one disclosure
or as separate, itemized disclosures.
Proposed comment 31(b)(1)–1
distinguishes between the fees and taxes
required to be disclosed in proposed
§ 205.31(b)(1)(ii) and those in proposed
§ 205.31(b)(1)(vi). The fees and taxes
required to be disclosed by
§ 205.31(b)(1)(ii) include all fees and
taxes imposed on the remittance transfer
by the provider. For example, a provider
must disclose a service fee and any state
taxes imposed on the remittance
transfer. By contrast, as discussed
below, the fees and taxes required to be
disclosed by § 205.31(b)(1)(vi) include
fees and taxes imposed on the
remittance transfer by a person other
than the provider.
Proposed comment 31(b)(1)–1 also
clarifies that the terms used to describe
the fees and taxes in proposed
§§ 205.31(b)(1)(ii) and (b)(1)(vi) must
differentiate between such fees and
taxes. For example, the terms used to
describe the fees for proposed
§§ 205.31(b)(1)(ii) and (b)(1)(vi) may not
both be described as ‘‘Fees.’’ The Board
requests comment on whether a
provider should be permitted to
describe the disclosures in proposed
§ 205.31(b)(1)(ii) or (b)(1)(vi) using the
term ‘‘Fees and Taxes’’ or a substantially
similar term if either only fees or only
taxes are being charged, or if a provider
should be required to describe the
amounts being disclosed more
specifically using the term ‘‘Fees’’ or
‘‘Taxes’’ or a substantially similar term.
Proposed § 205.31(b)(1)(iii) requires
disclosure of the total amount of the
transaction, which is the sum of
§§ 205.31(b)(1)(i) and (b)(1)(ii) in the
currency in which the funds will be
transferred. The total amount of the
transaction would be required to be
described using the term ‘‘Total’’ or a
substantially similar term. Although this
total is not required by the statute, the
Board believes that it is appropriate to
include it in the proposed pre-payment
disclosure, so that a sender can
understand the total amount to be paid
out-of-pocket for the transaction. Some
consumer testing participants stated that
they would use such a disclosure to
ensure that they had the funds
necessary to complete the transaction on
hand. Therefore, the Board proposes to
require the disclosure of the total
amount of the transaction pursuant to
its authority under EFTA Section 904(a).
Proposed § 205.31(b)(1)(iv) requires
the disclosure of any exchange rate used

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by the provider for the remittance
transfer, rounded to the nearest 1/100th
of a decimal point, consistent with
EFTA Section 919(a)(2)(A)(iii). The
exchange rate would be required to be
described using the term ‘‘Exchange
Rate’’ or a substantially similar term.
The proposed rule does not require the
disclosure of either the wholesale rate or
the spread between the wholesale rate
and the exchange rate offered by the
provider.
Several outreach participants urged
the Board to propose a rule that would
permit remittance transfer providers to
continue offering ‘‘floating rate’’
remittance transfers. A floating rate
remittance transfer is a transfer
requested by a sender for which the
exchange rate is set when the designated
recipient claims the funds. When
making a floating rate transfer, the
remittance transfer provider does not set
or disclose a foreign exchange rate to the
sender. It was suggested that the Board
permit a remittance transfer provider
making a floating rate transfer to
disclose terms such as ‘‘unknown,’’
‘‘floating,’’ ‘‘variable,’’ or ‘‘to be
determined,’’ instead of a specified
exchange rate.
However, the statute requires a
remittance transfer provider to disclose
to the sender the exchange rate to be
used for the remittance transfer to the
sender both before and at the time the
sender pays for the transaction. This
disclosure provides senders with
certainty regarding the exchange rate
and the amount of currency their
designated recipients would receive.
Proposed comment 31(b)(1)(iv)–1
clarifies that if the designated recipient
will receive funds in a currency other
than the currency in which it will be
transferred, a remittance transfer
provider must disclose an exchange
rate. An exchange rate that is estimated
must be disclosed pursuant to the
requirements of § 205.32. A remittance
transfer provider may not disclose, for
example, that an estimated exchange
rate is ‘‘unknown,’’ ‘‘floating,’’ or ‘‘to be
determined.’’ The Board recognizes that
the result of proposed § 205.31(b)(1)(iv)
would likely be that providers will no
longer offer floating rate products.
Proposed comment 31(b)(1)(iv)–2
clarifies that the exchange rate used by
the provider for the remittance transfer
must be rounded to the nearest 1/100th
of a decimal point. However, an
exchange rate need not be expressed to
the nearest 1/100th of a decimal point
if the amount need not be rounded. For
example, if one U.S. dollar exchanges
for 11.9483 Mexican pesos, a provider
must disclose that the U.S. dollar
exchanges for 11.95 Mexican pesos.

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However, if one U.S. dollar exchanges
for 11.9 Mexican pesos, the provider
may disclose that ‘‘US$1 = 11.9 MXN,’’
instead of ‘‘11.90MXN.’’
Proposed § 205.31(b)(1)(v) requires
the disclosure of the transfer amount in
§ 205.31(b)(1)(i), in the currency in
which the funds will be received by the
designated recipient, but only if fees or
taxes are imposed under proposed
§ 205.31(b)(1)(vi). The disclosure must
be described using the term ‘‘Transfer
Amount’’ or a substantially similar term.
As discussed above, a remittance
transfer provider is always required to
disclose the transfer amount, pursuant
to proposed § 205.31(b)(1)(i). The
proposal would require a remittance
transfer provider to repeat the
disclosure of the amount transferred,
expressed in the currency in which the
funds will be received by the designated
recipient, if other fees and taxes are
charged under proposed
§ 205.31(b)(1)(vi). As is the case with the
transfer amount required to be disclosed
by proposed § 205.31(b)(1)(i), the
transfer amount required to be disclosed
by proposed § 205.31(b)(1)(v) is
proposed pursuant to the Board’s
authority under EFTA Section 904(a).
This disclosure is only required to the
extent fees and taxes are imposed by
parties other than the remittance
transfer provider. When disclosed with
such fees and taxes, the Board believes
the disclosure of the transfer amount
will help demonstrate to the sender how
a provider calculates the amount that
will ultimately be received by a
designated recipient. For example, a
sender could request to send $100 to
Nigeria. Assuming an exchange rate of
1 U.S. dollar = 150.00 Nigerian naira,
and assuming the recipient is charged
an additional fee of 100 naira, the
amount to be received would be 14,900
naira. By disclosing the transfer amount
as 15,000 naira, and the fee as 100 naira,
a sender will better understand why the
recipient will receive only 14,900 naira
in spite of the exchange rate. However,
when the amount to be received is not
reduced by any third party fees or taxes,
the transfer amount under
§ 205.31(b)(1)(v) and the amount to be
received will be the same number, so
the disclosure under § 205.31(b)(1)(v) is
unnecessary.
The proposed commentary provides
more guidance on this requirement.
Proposed comment 31(b)(1)–2 clarifies
that two transfer amounts are required
to be disclosed by §§ 205.31(b)(1)(i) and
(b)(1)(v). First, a provider must disclose
the transfer amount in the currency in
which the funds will be transferred to
show the calculation of the total amount
of the transaction. Typically, funds will

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
be transferred in U.S. dollars, so the
transfer amount would be expressed in
U.S. dollars. However, if funds will be
transferred, for example, from a Eurodenominated account, the transfer
amount would be expressed in Euros.
Second, a provider must disclose the
transfer amount in the currency in
which the funds will be made available
to the designated recipient. For
example, if the funds will be picked up
by the designated recipient in Japanese
yen, the transfer amount would be
expressed in Japanese yen. However, as
discussed above, the proposed comment
also clarifies that this second transfer
amount need not be disclosed if fees
and taxes are not imposed for the
remittance transfer under proposed
§ 205.31(b)(1)(vi). In such cases, there is
no consumer benefit to the additional
information if the transferred amount is
not reduced by other fees and taxes.
Finally, proposed § 205.31(b)(1)(v)
also requires a remittance transfer
provider to use the term ‘‘Transfer
Amount’’ or a substantially similar term
to describe the disclosure required
under this paragraph. Proposed
comment 31(b)(1)–2 clarifies that the
terms used to describe each transfer
amount should be the same.
Proposed § 205.31(b)(1)(vi) requires a
remittance transfer provider to disclose
any fees and taxes imposed on the
remittance transfer by a person other
than the provider, in the currency in
which the funds will be received by the
designated recipient. Such fees and
taxes could include lifting fees charged
in connection with an international wire
transfer, a fee charged by a recipient
institution or agent, or a tax imposed by
a government in the designated
recipient’s country. In contrast to fees
and taxes paid by the sender to the
remittance transfer provider, which are
added to the total amount paid by the
sender, these fees and taxes typically
reduce the amount received by the
designated recipient. In many cases, the
sender may not be aware of the impact
of these fees and taxes. The Board
believes that it is critical for senders to
be aware of all fees and taxes charged
in connection with the transfer, even if
not imposed by the remittance transfer
provider, because such fees and taxes
affect the amount ultimately received by
the designated recipient. Therefore, the
Board is proposing the disclosure of
other fees and taxes pursuant to its
authority under EFTA Section 904(a).
The remittance transfer provider
would be required to describe the
disclosures using the term ‘‘Other
Transfer Fees,’’ ‘‘Other Transfer Taxes,’’
or ‘‘Other Transfer Fees and Taxes,’’ or
a substantially similar term. As

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discussed above, proposed comment
31(b)(1)–1 clarifies that the fees and
taxes required to be disclosed by
proposed § 205.31(b)(1)(vi) must include
all fees and taxes that are charged for
the remittance transfer by a person other
than the remittance transfer provider.
For example, a provider would disclose
fees imposed by the receiving
institution or agency at pick-up, fees
imposed by intermediary institutions in
connection with an international wire
transfer, and taxes imposed by a foreign
government.
Proposed comment 31(b)(1)(vi)–1
clarifies that § 205.31(b)(1)(vi) requires
the disclosure of fees and taxes in the
currency in which the funds will be
received by the designated recipient. A
fee or tax required by § 205.31(b)(1)(vi)
may be imposed in one currency, but
the funds may be received by the
designated recipient in another
currency. In such cases, the remittance
transfer provider should calculate the
fee or tax to be disclosed using the
exchange rate required by
§ 205.31(b)(1)(iv). For example, an
intermediary institution in an
international wire transfer may impose
a fee in U.S. dollars, but funds are
ultimately deposited in the recipient’s
account in Euros. Here, the provider
would disclose the fee to the sender
expressed in Euros, calculated using the
exchange rate used by the provider for
the remittance transfer. This is intended
to facilitate the sender’s understanding
of the calculation of the amount to be
received.
Proposed § 205.31(b)(1)(vii) requires a
remittance transfer provider to disclose
to the sender the amount that will be
received by the designated recipient, in
the currency in which the funds will be
received. See EFTA Section
919(a)(2)(A)(i). The disclosures should
be described using the term ‘‘Total to
Recipient’’ or a substantially similar
term. EFTA Section 919(a)(2)(A)(i)
requires a remittance transfer provider
to disclose the amount received by the
designated recipient using the values of
the currency into which the funds will
be exchanged. As discussed above, the
Board believes that the amount to be
received by the designated recipient is
intended to be the amount net of all fees
and taxes that would affect the amount
received by the designated recipient. An
exchange rate, if one is applied, is just
one of the factors that could affect the
actual amount received by the
designated recipient. Providing a total
amount to be received that does not take
into account all cost elements would not
be consistent with the statute’s goal of
providing disclosures of the costs of a
remittance transfer.

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Proposed comment 31(b)(1)(vii)–1
clarifies that the disclosed amount to be
received by the designated recipient
must reflect all charges that affect the
amount received, including the
exchange rate and all fees and taxes
imposed by the remittance transfer
provider, the receiving institution, and
any other party in the transmittal route
of a remittance transfer. The disclosed
amount received must be reduced by the
amount of any fee or tax that is imposed
by a person other than the provider,
even if that amount is imposed or
itemized separately from the transaction
amount.
31(b)(2) Receipt
Proposed § 205.31(b)(2) requires a
remittance transfer provider to disclose
a written receipt to a sender when
payment is made for the remittance
transfer. As with the proposed prepayment disclosure, the disclosures
required to be provided on the receipt
may be provided as applicable.
Proposed § 205.31(b)(2)(i) requires the
same disclosures required in the prepayment disclosure to be disclosed on
the receipt, pursuant to EFTA Section
919(a)(2)(B)(i)(I). Proposed
§ 205.31(b)(2) also requires disclosure of
additional elements on the receipt.
Proposed § 205.31(b)(2)(ii) requires a
remittance transfer provider to disclose
the date of availability of funds to the
designated recipient, using the term
‘‘Date Available’’ or a substantially
similar term. EFTA Section
919(a)(2)(B)(i)(II) requires the disclosure
of the promised date of delivery to the
designated recipient on a receipt. While
a transfer may be made available to a
designated recipient within a specified
time frame at a specified pick-up
location, the recipient may not pick up
the funds for some period of time. The
Board interprets the statute to require
disclosure of the date the currency will
be available to the designated recipient,
not on the date the funds are physically
picked up by the designated recipient.
Time zone differences may result in a
date in the United States being different
from the date in the country of the
designated recipient. Thus, proposed
comment 31(b)(2)–1 clarifies that the
date of availability that must be
disclosed is the date in the foreign
country on which the funds will be
available to the designated recipient.
In some instances, it may be difficult
to determine the exact date on which a
remittance transfer will be available to
a designated recipient. For example, an
international wire transfer may pass
through several intermediary
institutions prior to becoming available
at the institution of a designated

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recipient, and the time it takes to pass
through these intermediaries may be
difficult to determine. Nonetheless,
EFTA Section 919(a)(2)(B)(i)(II) requires
disclosure of a single, promised date of
delivery of the funds. EFTA Section 919
does not permit a remittance transfer
provider to provide an estimate of this
promised date. Therefore, proposed
comment 31(b)(2)–1 clarifies that a
remittance transfer provider may not
provide a range of dates that the
remittance transfer may be available,
nor an estimate of the date on which
funds will be available.
As a result, remittance transfer
providers will likely disclose the latest
date that the funds will be available,
even if funds are available sooner most
of the time. The Board believes it is
appropriate for a remittance transfer
provider to indicate that funds may be
available sooner than the disclosed date.
Thus, proposed § 205.31(b)(2)(ii)
permits a provider to include a
statement that funds may be available to
the designated recipient earlier than the
date disclosed, using the term ‘‘may be
available sooner’’ or a substantially
similar term. For example, if funds may
be available on January 3, but are not
certain to be available until January 10,
then January 10 should be disclosed as
the date of availability. However, the
provider may disclose ‘‘January 10 (may
be available sooner).’’ See proposed
comment 31(b)(2)–1.
The Board tested various terms in
consumer testing for communicating the
fact that funds may be available earlier
than the date disclosed. Participants
generally understood the meaning of the
statement that funds ‘‘may be available
sooner’’ better than other terms.
Proposed § 205.31(b)(2)(iii)
implements EFTA Section
919(a)(2)(B)(i)(III) by requiring a
remittance transfer provider to disclose
the name and, if provided by the sender,
the telephone number and/or address of
the designated recipient. The proposed
rule would require the remittance
transfer provider to describe the
disclosure using the term ‘‘Recipient’’ or
a substantially similar term.
As discussed in more detail below,
EFTA Section 919(d) provides the
sender with substantive error resolution
and cancellation rights. EFTA Section
919(a)(2)(B)(ii)(I) requires a remittance
transfer provider to provide a statement
containing information about the rights
of the sender regarding the resolution of
errors on the receipt or combined
disclosure. However, the Board
recognizes that a long disclosure
routinely provided to the sender may be
ineffective at conveying the most
important information that a sender

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would need to resolve an error or cancel
a transaction. At the same time, the
Board believes a sender must have
access to a complete description of the
sender’s error resolution and
cancellation rights in order to effectively
exercise those rights. Together,
proposed §§ 205.31(b)(2)(iv) and
§ 205.31(b)(4), discussed below, attempt
to balance the interest in providing a
sender a concise disclosure with the
sender’s ability to obtain a full
explanation of those rights.
Specifically, proposed
§ 205.31(b)(2)(iv) would require a
remittance transfer provider to include
an abbreviated statement about the
sender’s error resolution and
cancellation rights on the receipt and on
the combined disclosures using
language set forth in Model Form A–37
of Appendix A or substantially similar
language. The statement requires a brief
disclosure of the sender’s error
resolution and cancellation rights, and
includes a notification that a sender
may contact the remittance transfer
provider for a written explanation of
these rights. Consumer testing
participants understood and responded
positively to the concise, abbreviated
disclosure.
EFTA Section 919(a)(2)(B)(ii)(II)
generally requires that the remittance
transfer provider disclose appropriate
contact information for the remittance
transfer provider, its state regulator, and
the Board. The Board believes that
appropriate contact information
includes the name, telephone number,
and Web site of these entities, so that
senders have multiple options for
addressing any issues that may arise
with respect to a remittance transfer
provider.
Therefore, proposed § 205.31(b)(2)(v)
requires the disclosure of the name,
telephone number, and Web site of the
remittance transfer provider. Proposed
§ 205.31(b)(2)(vi) requires a statement
that the sender can contact the state
agency that regulates the remittance
transfer provider and the Bureau for
questions or complaints about the
remittance transfer provider, using
language set forth in Model Form A–37
of Appendix A or substantially similar
language. The statement must include
contact information for these agencies,
including the toll-free telephone
number of the Bureau established under
section 1013 of the Consumer Financial
Protection Act of 2010. The proposed
paragraph requires the disclosure of the
Bureau, rather than the Board, because
the Bureau will be the appropriate
contact when the rules are issued in
final form after the designated transfer
date. Consumer testing participants

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understood the brief disclosure of the
contact information, and many stated
that they would call one or more of the
entities to resolve any problems that the
provider did not resolve.
The Board requests comment on
whether and how a remittance transfer
provider should be required to disclose
information regarding a state agency
that regulates the remittance transfer
provider for remittance transfers
conducted through a toll-free telephone
number or on-line and, if so, what is the
appropriate state agency to disclose to a
sender. For example, it may be
appropriate to require disclosure of the
state agency that regulates the
remittance transfer provider in the state
in which the sender is located.
The Board also requests comment on
whether it is appropriate to disclose the
contact information for the Bureau,
including the toll-free telephone
number, in cases where the Bureau is
not the primary Federal regulator for
consumer complaints against the
remittance transfer provider. For
example, under the proposed rule, the
contact information of the Bureau
would be disclosed to a sender who
uses a financial institution to send an
international wire transfer. The sender
may encounter an error and, based on
the disclosure, contact the Bureau for
assistance with error resolution.
However, the Bureau may not have the
authority to investigate such complaints
against the financial institution.
Therefore, the Board requests comment
on whether it is appropriate to require
the disclosure of the contact information
of the Bureau in all circumstances. The
Board further requests comment on
whether it is appropriate to instead
require the contact information of the
appropriate Federal regulator of the
remittance transfer provider for
consumer complaints.
Finally, the Board requests comment
on whether financial institutions that
are primarily regulated by federal
banking agencies, such as national
banks, should be required to disclose
state regulatory agency information. The
Board requests comment regarding the
circumstances in which it might be
appropriate to disclose such a state
regulatory agency.
31(b)(3) Combined Disclosure
As discussed above, EFTA Section
919(A)(5)(C) grants the Board authority
to permit a remittance transfer provider
to provide to a sender a single written
disclosure instead of the pre-payment
disclosure and receipt, if the
information disclosed is accurate at the
time at which payment is made in
connection with the remittance transfer.

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The disclosure must include the content
provided in the disclosures under EFTA
Sections 919(a)(2)(A) and (B).
The Board believes it is appropriate to
provide the combined disclosure as a
compliance option to give flexibility to
remittance transfer providers. The Board
determined through consumer testing
that participants understood the
disclosures provided on the combined
disclosure. Moreover, approximately
half of the consumers stated that they
would prefer to receive the single,
combined disclosure rather than the
pre-payment disclosure and receipt.
Therefore, proposed § 205.31(b)(3)
generally permits a remittance transfer
provider to provide the disclosures
described in proposed §§ 205.31(b)(1)
and (b)(2) in a single disclosure prior to
payment, as applicable, as an alternative
to providing the two disclosures
described in proposed §§ 205.31(b)(1)
and (b)(2).
Some participants who stated they
would prefer to receive a pre-payment
disclosure and a receipt expressed
concern about receiving the combined
disclosure without also receiving proof
of payment for the remittance transfer.
Particularly if an issue arose with the
transaction, these participants felt that
they would not have sufficient official
documentation to assert an error with
the provider. Some participants also
expressed concerns about different
methods for providing proof of payment
with the combined disclosure. For
example, some participants believed
that stamping the combined disclosure
as ‘‘paid’’ constituted sufficient proof of
payment, while others believed that it
was insufficient because a disclosure
could easily be fraudulently stamped as
‘‘paid.’’ The Board solicits comment on
whether proof of payment should also
be required for remittance transfer
providers using the combined
disclosure and, if so, solicits comment
on appropriate methods of
demonstrating proof of payment for the
combined disclosure.
31(b)(4) Long Form Error Resolution and
Cancellation Notice
As discussed above, the Board
believes a sender must have access to a
complete description of the sender’s
error resolution and cancellation rights,
in addition to an abbreviated statement
about the sender’s error resolution and
cancellation rights on the receipt and
combined disclosures required by
proposed § 205.31(b)(2)(iv). The Board
believes that a sender should have
access to a full description of his or her
rights in order to effectively exercise
those rights. Therefore, proposed
§ 205.31(b)(4) provides that, upon the

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sender’s request, a remittance transfer
provider must provide to the sender a
notice providing a description of the
sender’s error resolution and
cancellation rights under §§ 205.33 and
.34 using Model Form A–36 of
Appendix A or a substantially similar
notice.
31(c) Specific Format Requirements
Proposed § 205.31(c) sets forth
specific format requirements for the
written and electronic disclosures
required by this section. The Board’s
consumer testing indicated that
grouping certain disclosures together or
in close proximity to one another
helped consumers with calculations and
facilitated their comprehension of the
disclosures, including fees and costs.
Therefore, proposed §§ 205.31(c)(1) and
(2) set forth grouping and proximity
requirements for certain disclosures
required under § 205.31. Proposed
§ 205.31(c)(3) sets forth prominence and
size requirements for disclosures
required by Subpart B, and proposed
§ 205.31(c)(4) imposes segregation
requirements for disclosures provided
under Subpart B, with certain specified
exceptions.
31(c)(1) Grouping
Proposed § 205.31(c)(1) provides that
the disclosures required by proposed
§§ 205.31(b)(1)(i), (ii), and (iii) (transfer
amount, transfer fees and taxes, and
total amount of transaction) must be
grouped together. Grouping these
disclosures together would make clear
to the sender that the total amount
charged is comprised of the transfer
amount plus any transfer fees and taxes.
Proposed § 205.31(c)(1) also provides
that the disclosures required by
proposed §§ 205.31(b)(1)(v), (vi), and
(vii) (transfer amount in the currency to
be made available to the designated
recipient, other transfer fees and taxes,
and amount received by the designated
recipient) must be grouped together.
Grouping these disclosures together
would make clear to the sender how the
total amount to be transferred to the
designated recipient, in the currency to
be made available to the designated
recipient, will be reduced by fees or
taxes charged by a person other than the
remittance transfer provider.
Proposed comment 31(c)(1)–1 clarifies
that information is grouped together for
purposes of Subpart B if multiple
disclosures are in close proximity to one
another and a sender can reasonably
determine how to calculate the total
amount of the transaction, and the
amount that will be received by the
designated recipient. Proposed Model
Forms A–30 through A–35 in Appendix

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A, discussed in more detail below,
illustrate how information may be
grouped to comply with the rule. The
proposed comment also clarifies that a
remittance transfer provider may group
the information in another manner. For
example, a provider could provide the
grouped information as a horizontal,
rather than a vertical, calculation.
31(c)(2) Proximity
Proposed § 205.31(c)(2) provides that
the exchange rate required by
§ 205.31(b)(1)(iv) must be disclosed in
close proximity to the other disclosures
on the pre-payment disclosure. The
Board believes that disclosing the
exchange rate in close proximity to both
the calculations that demonstrate the
total transaction amount, as well as the
total amount the recipient will receive,
will help a sender understand the effect
of the exchange rate on the transaction.
Proposed § 205.31(c)(2) also provides
that the error resolution and
cancellation disclosures required by
§ 205.31(b)(2)(iv) must be disclosed in
close proximity to the other disclosures
on the receipt. The Board determined in
consumer testing that providing a brief
statement regarding error resolution and
cancellation rights in a location that is
near the other disclosures effectively
communicated these rights to a
consumer. Most participants in
consumer testing noticed the error
resolution statement and liked its
brevity and proximity to the other
disclosure elements. Therefore, the
Board believes that the error resolution
and cancellation disclosures should be
closely proximate to the other
disclosures required under
§ 205.31(b)(2) to prevent such
disclosures from being overlooked by a
sender.
The Board believes that many
remittance transfer providers currently
could comply with the proposed
grouping and proximity requirements
for written and electronic disclosures.
However, as remittance transfer
products continue to evolve, providing
key disclosures about the terms of a
remittance transfer may present new
challenges. For example, remittance
transfers may, in the future, increasingly
be sent from the U.S. via text messaging
or mobile phone applications.
Therefore, the Board requests comment
on how the grouping and proximity
requirements in proposed
§§ 205.31(c)(1) and (2) could be applied
to transactions conducted via text
messaging or mobile phone application.
31(c)(3) Prominence and Size
Proposed § 205.31(c)(3) sets forth the
requirements regarding the prominence

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and size of the disclosures required
under Subpart B. The proposed rule
provides that written and electronic
disclosures required by Subpart B must
be made in a minimum eight-point font.
The disclosures that the Board
developed for consumer testing used
eight-point font, consistent with the font
size used in a register receipt, and were
provided on the front of the page shown
to consumer testing participants.
Participants in consumer testing
generally found that the disclosures
were readable, and they were able to
locate the different disclosure elements
during testing. The Board believes that
disclosures provided in a smaller font
could diminish the readability and
noticeability of the disclosures. The
Board solicits comment on whether a
minimum font size should be required
and, if so, whether an eight-point font
size is appropriate.
Proposed § 205.31(c)(3) further
provides that written disclosures
required by Subpart B must be on the
front of the page on which the
disclosure is printed. In testing,
participants reacted positively to frontof-page disclosures. Proposed
§ 205.31(c)(3) also provides that each of
the written and electronic disclosures
required under § 205.31(b) must be in
equal prominence to each other.
Participants in consumer testing
generally responded positively to the
model forms, and particularly to the
statement regarding error resolution and
cancellation, which was displayed in
the same font and type size as the other
disclosures. For example, some
participants specifically contrasted the
disclosures to error resolution or
cancellation disclosures currently
provided by remittance transfer
providers that they stated were typically
provided in ‘‘fine print’’ or on the back
of this disclosure. Given the importance
of each of the new disclosures in
Subpart B, and particularly the new
error resolution and cancellation rights,
the Board believes that each of the
disclosures should be provided in equal
prominence to each other.
The Board requests comment on how
the prominence and size requirements
in proposed § 205.31(c)(3) could be
applied to transactions performed via
text messaging or mobile phone
application.
31(c)(4) Segregation
Proposed § 205.31(c)(4) provides that
written and electronic disclosures
required by Subpart B must be
segregated from everything else and
must contain only information that is
directly related to the disclosures
required under Subpart B. Proposed

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comment 31(c)(4)–1 clarifies that
disclosures may be segregated from
other information in a variety of ways.
For example, the disclosures may
appear on a separate sheet of paper or
may be set off from other information on
a notice by outlining them in a box or
series of boxes, bold print dividing
lines, or a different color background.
Proposed comment 31(c)(4)–2 clarifies
that, for purposes of segregation, the
following information is directly related
information: (i) The date and/or time of
the transaction; (ii) the sender’s name
and contact information; (iii) the
location at which the designated
recipient may pick up the funds; (iv) the
confirmation or other identification
code; (v) a company name or logo; (vi)
an indication that a disclosure is or is
not a receipt or other indicia of proof of
payment; (vii) a designated area for
signatures or initials; and (viii) a
statement that funds may be available
sooner, as permitted by
§ 205.31(b)(2)(ii).
In general, the Board believes that
permitting additional information to be
included on the disclosure could
adversely affect the comprehensibility
of the disclosures. Nonetheless, the
Board recognizes that certain
information not required by the statute
or regulation is integral to the
transaction, such as the confirmation
code that a designated recipient must
tender in order to receive the funds, and
a remittance transfer provider should be
able to communicate this information to
a consumer. The Board tested the
required disclosures in a segregated
format that complies with the
requirements of proposed § 205.31(c)(4)
and that included most of the additional
information discussed above. The
Board’s testing indicated that the
additional information permitted by
paragraph (c)(4) was useful to the
consumer and did not lead to
information overload. Thus, the
proposed rule would permit, but would
not require, such additional information
to be included with the required,
segregated disclosures. The Board
requests comment on the proposed
segregation requirement and whether
additional information should be
permitted to be included with the
required segregated disclosures.
The Board recognizes that the specific
formatting requirements set forth in
proposed § 205.31(c) are more
prescriptive than other disclosures
under Regulation E. The Board believes
that certain formatting requirements are
necessary in order to ensure that
consumers notice and understand the
disclosures provided under Subpart B.
Many of the disclosures required by

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Subpart B have a mathematical
relationship to each other, and
presenting this information to
consumers in a logical sequence is
important for consumer understanding.
The Board requests comment, however,
on whether certain requirements set
forth in proposed § 205.31(c) could be
less prescriptive, while still ensuring
that consumers are provided with clear
and conspicuous disclosures.
31(d) Estimates
Proposed § 205.31(d) provides that
estimated disclosures may be provided
to the extent permitted by § 205.32. See
§ 205.32, below. The proposed rule
would require that such disclosures be
described as estimates, using the term
‘‘Estimated’’ or a substantially similar
term and in close proximity to the
estimated term or terms described.
Consumer testing participants generally
understood that where the term
‘‘estimated’’ was used in close proximity
to the estimated term or terms, the
actual amount could vary (for example,
the amount of currency to be received
could be higher or lower than the
amount disclosed). Proposed comment
31(d)–1 provides examples of terms that
may be used to indicate that a disclosed
amount is estimated. For instance, a
remittance transfer provider could
describe an estimated disclosure as
‘‘Estimated Transfer Amount,’’ ‘‘Other
Estimated Fees and Taxes,’’ or ‘‘Total to
Recipient (Est.).’’
31(e) Timing
Proposed § 205.31(e) sets forth the
timing requirements for the disclosures
required by § 205.31 in accordance with
the statute. Proposed § 205.31(e)(1)
provides that the disclosures required
by § 205.31(b)(1) or a combined
disclosure provided under § 205.31(b)(3)
must be provided to the sender when
the sender requests the remittance
transfer, but prior to payment for the
remittance transfer.
Although current practice generally is
to provide written disclosures after
payment is made, the Board believes
that the statute precludes such an
approach with respect to the combined
disclosures. Specifically, EFTA Section
919(a)(5)(C) affirmatively requires that
the combined disclosure be accurate at
the time at which payment is made
(emphasis added). Such a requirement
would be superfluous if the combined
disclosure could be provided after
payment, because a disclosure provided
after payment should accurately reflect
the terms of the completed transaction.
Therefore, the Board believes the statute
requires that the combined disclosure be
given prior to payment.

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
Proposed comment 31(e)–1 clarifies
that whether a sender has requested a
remittance transfer depends on the facts
and circumstances. Under the proposed
comment, a sender that asks a provider
to send a remittance transfer, and that
provides transaction-specific
information to the provider in order to
send funds to a designated recipient,
has requested a remittance transfer. For
example, a sender who asks the
provider to send money to a recipient in
Mexico and provides the sender and
recipient information to the provider
has requested the remittance transfer
provider to send a remittance transfer.
In contrast, a sender who solely inquires
about that day’s rates and fees has not
requested the remittance transfer
provider to send a remittance transfer.
EFTA Section 919(a)(2)(B) requires
that a receipt be provided to a sender at
the time at which the sender makes
payment in connection with the
remittance transfer. The Board believes
the statute intends to permit a sender to
provide a receipt after the sender pays
for a transaction. However, the Board
also believes that the statute generally
intends the receipt to be provided
within a short time period of when the
sender pays for the transaction.
Therefore, proposed § 205.31(e)(2)
provides that a receipt provided under
§ 205.31(b)(2) must be provided to the
sender when payment is made for the
transaction. Proposed comment 31(e)–2
provides examples of when a remittance
transfer provider may provide the
sender a receipt. For example, a
provider could give the sender a receipt
after the consumer pays for the
remittance transfer, but before the
sender leaves the counter. A provider
could also give the sender a receipt
immediately before the sender pays for
the transaction.
Proposed § 205.31(e)(2) further states
that if a transaction is conducted
entirely by telephone, a written receipt
may be mailed or delivered to the
sender no later than one business day
after the date on which payment is
made for the remittance transfer. If a
transaction is conducted entirely by
telephone and involves the transfer of
funds from the sender’s account held by
the provider, the written receipt may be
provided on or with the next regularly
scheduled periodic statement. See EFTA
Section 919(a)(5)(B). In some
circumstances, a provider conducting
such a transfer from the sender’s
account held by the provider is not
required to provide a periodic
statement. The Board believes that in
such circumstances, it is appropriate to
permit the provider to provide a written
receipt within a similar period of time

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as a periodic statement. Therefore, the
Board is also proposing in § 205.31(e)(2)
that the written receipt may be provided
within 30 days after payment is made
for the remittance transfer if a periodic
statement is not required, pursuant to its
authority under EFTA Section 904(c). In
order for the written receipt to be
mailed or delivered to a sender
conducting a transaction entirely by
telephone at these later times, however,
the remittance transfer provider must
comply with the foreign language
requirements of § 205.31(g)(3),
discussed below.
Proposed comment 31(e)–3 clarifies
that a sender may transfer funds from
his or her account, as defined by
§ 205.2(b), that is held by the remittance
transfer provider. For example, a
financial institution may send an
international wire transfer for a sender
using funds from the sender’s account
with the institution. If the sender
conducts such a transfer entirely by
telephone, the institution may provide a
written receipt on or with the sender’s
next regularly scheduled periodic
statement or within 30 days after
payment is made for the remittance
transfer if a periodic statement is not
required.
The Board requests comment on the
timing requirements for the disclosures
required by § 205.31.
31(f) Accurate When Payment Is Made
Proposed § 205.31(f) provides that
disclosures required by § 205.31(b) must
be accurate when a sender pays for the
remittance transfer, except as permitted
by proposed § 205.32. As discussed
above in proposed § 205.31(e)(1), a
combined disclosure provided under
§ 205.31(b)(3) must be provided to the
sender when the sender requests the
remittance transfer, but prior to
payment for the remittance transfer.
EFTA Section 919 does not require that
the information provided in the
required disclosures be guaranteed for
any period of time. However, EFTA
Section 919(a)(5)(C) requires that the
combined disclosure must be accurate
when payment is made. The Board
believes the statute intends to ensure
that the information disclosed to
senders in the required disclosures
reflects the terms of the transaction.
Proposed comment 31(f)–1 clarifies
that a remittance transfer provider is not
required to guarantee the terms of the
remittance transfer in the disclosures
required by § 205.31(b) for any specific
period of time. However, if any of the
disclosures required by § 205.31(b) are
not accurate when a sender pays for the
remittance transfer, a provider must give
new disclosures before receiving

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payment for the remittance transfer. For
example, a sender at a retail store may
be provided a pre-payment disclosure
under § 205.31(b)(1) at a customer
service desk, but the sender may decide
to leave the desk to go shopping. Upon
the sender’s return to the customer
service desk an hour later, the sender
must be provided a new pre-payment
disclosure if any of the information has
changed. However, the sender need not
be provided a new disclosure if the
information has not changed.
31(g) Foreign Language Disclosures
EFTA Section 919(b) provides that
disclosures required under EFTA
Section 919 must be made in English
and in each of the foreign languages
principally used by the remittance
transfer provider, or any of its agents, to
advertise, solicit, or market, either orally
or in writing, at that office. Proposed
§ 205.31(g)(1) implements EFTA Section
919(b) for written or electronic
disclosures generally, with the
modifications discussed below. In
addition, the Board proposes to exempt
oral disclosures and written receipts for
telephone transactions from the general
foreign language disclosure
requirements of EFTA Section 919(b)
and proposed § 205.31(g)(1). Instead, the
Board is proposing different foreign
language requirements for those
disclosures under proposed
§§ 205.31(g)(2) and (g)(3), respectively.
31(g)(1) General
Proposed § 205.31(g)(1) contains the
general requirements for foreign
language disclosures. Specifically,
proposed § 205.31(g)(1) provides that
disclosures required under Subpart B,
other than oral disclosures and written
receipts for telephone transactions, must
be made in English and either: (i) In
each of the foreign languages principally
used by the remittance transfer provider
to advertise, solicit, or market
remittance transfer services, either
orally, in writing, or electronically, at
that office; or (ii) if applicable, in the
foreign language primarily used by the
sender with the remittance transfer
provider to conduct the transaction (or
for written or electronic disclosures
made pursuant to § 205.33, in the
foreign language primarily used by the
sender with the remittance transfer
provider to assert the error), provided
that such foreign language is principally
used by the remittance transfer provider
to advertise, solicit, or market
remittance transfer services, either
orally, in writing, or electronically, at
that office.
Proposed § 205.31(g)(1) generally
implements EFTA Section 919(b) with

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the following modifications. First,
proposed § 205.31(g)(1) only applies to
written or electronic disclosures. Oral
disclosures are addressed separately in
proposed § 205.31(g)(2), discussed
below. Second, to simplify the statutory
language in EFTA Section 919(b),
proposed § 205.31(g)(1) does not
incorporate the term ‘‘or any of its
agents.’’ This is consistent with other
sections of Subpart B that reference the
remittance transfer provider, where the
reference also applies to any of the
remittance transfer provider’s agents to
the extent such agents act for the
provider. Third, while EFTA Section
919(b) does not explicitly reference
electronic advertising, soliciting, or
marketing, proposed § 205.31(g)(1)
provides that foreign languages
principally used by the remittance
transfer provider to advertise, solicit, or
market electronically are also triggered.
Fourth, proposed § 205.31(g)(1) is
triggered only by foreign language
advertisements, solicitations, or
marketing of remittance transfer
services, and not by foreign language
advertisements, solicitations, or
marketing of other products or services.
Many remittance transfer provider agent
offices are located in retail
establishments where other financial
and non-financial products or services
are advertised, solicited, or marketed.
For example, an agent of a remittance
transfer provider may be located at a
grocery store or convenience store. A
remittance transfer provider should be
able to institute controls on an agent’s
advertising of the provider’s remittance
transfer services, but a provider would
have little or no control over an agent’s
advertising practices for any other
product or service. Therefore, proposed
§ 205.31(g)(1) clarifies that only
advertisements, solicitations, or
marketing of the provider’s remittance
transfer services trigger foreign language
disclosures under the rule.
Finally, proposed § 205.31(g)(1)
would allow a remittance transfer
provider to fulfill its obligations by
providing the consumer with
disclosures in English and, if applicable,
the one triggered foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction or assert an error in lieu
of each of the triggered foreign
languages. Permitting this flexibility
facilitates compliance with the
provision, particularly for a remittance
transfer provider who advertises,
solicits, and markets in several foreign
languages. In such cases, the remittance
transfer provider may find it
cumbersome to provide disclosures in
English and in multiple foreign

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languages. Such flexibility may also
benefit consumers because disclosures
containing several foreign languages
may also be confusing for consumers to
read and understand.
As a result, the Board proposes to use
its authority under EFTA Section 904(c)
to give remittance transfer providers the
flexibility to provide senders with
written or electronic disclosures in
English and either: (i) In each foreign
language that the remittance transfer
provider principally uses to advertise,
solicit, or market remittance transfer
services at that office; or (ii) if
applicable, in the foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction (or for written
disclosures provided pursuant to
proposed § 205.33, the foreign language
primarily used by the sender with the
remittance transfer provider to assert the
error), provided that such foreign
language is principally used to
advertise, solicit, or market remittance
transfer services at that office. Proposed
§§ 205.31(g)(1)(i) and (ii).
In order to clarify proposed
§ 205.31(g)(1), the Board also proposes
several comments to provide guidance
on the terms ‘‘principally used,’’
‘‘advertise, solicit, and market,’’ and ‘‘at
that office.’’
Principally Used
Proposed comment 31(g)(1)–1 clarifies
when a foreign language is principally
used. The term ‘‘principally used’’ could
be interpreted to mean the foreign
language that is used most frequently or
most prominently. The Board, however,
does not believe this meaning is
consistent with the statutory language,
which provides that disclosures must be
provided ‘‘in each of the foreign
languages’’ principally used. Thus, the
statute indicates that more than one
foreign language may be principally
used. Consequently, the term
‘‘principally used’’ does not appear to be
limited to the one foreign language that
is used most by the remittance transfer
provider.
The Board also does not believe that
any use of a foreign language by a
remittance transfer provider to
advertise, solicit, or market should
automatically trigger the foreign
language disclosure requirement. Such a
reading would essentially read out the
term ‘‘principally’’ from the statute.
Therefore, the Board believes that
proper interpretation of the statute
requires a reading that is between these
two extremes.
The term ‘‘principally used’’ could
signify the use of a foreign language in
a manner that is not minor or incidental.

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The Board believes this interpretation
may be more consistent with the statute.
The Board also believes that whether a
foreign language is principally used
must be determined based on the facts
and circumstances. In the Board’s view,
factors that contribute to whether a
foreign language is principally used
include: (i) The frequency with which
the remittance transfer provider
advertises, solicits, or markets
remittance transfers in a foreign
language at a particular office; (ii) the
prominence of such advertising,
soliciting, or marketing in that language
at that office; and (iii) the specific
foreign language terms used to
advertise, solicit, or market remittance
transfer services at that office. The
Board believes that when a foreign
language is used frequently and is
featured prominently to advertise,
solicit, or market remittance transfer
services at a particular office, and when
the specific foreign language terms used
in such advertisements, solicitations,
and marketing convey the availability of
remittance transfer services, it may lead
a reasonable consumer to expect to
receive information on remittance
transfer services in that language at that
office. In such a case, the Board believes
the foreign language has been
principally used by the remittance
transfer provider to advertise, solicit, or
market remittance transfer services at
that office.
Proposed comment 31(g)(1)–1
provides guidance on when a foreign
language may be principally used to
advertise, solicit, or market remittance
transfer services and includes examples
to illustrate when a foreign language is
principally used and when there is
incidental use of the language.
Specifically, proposed comment
31(g)(1)–1 provides that an
advertisement for remittance transfer
services, including rate and fee
information, that is featured
prominently at an office and is entirely
in English, except for a sentence
advising consumers to ‘‘Ask us about
our foreign remittance services’’ in a
foreign language, may create an
expectation that a consumer could
receive information on remittance
transfer services in that foreign
language. Thus, based on the
prominence of the advertisement using
the foreign language and the specific
terms of the foreign language used in the
advertisement inviting a consumer to
inquire about remittance transfer
services, the foreign language would be
considered to be principally used to
advertise, solicit, or market remittance
transfer services. In contrast, the

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proposed comment provides that an
advertisement for remittance transfer
services, including rate and fee
information, that is featured
prominently at an office and is entirely
in English, except for the incidental use
of one word of greeting in a foreign
language, may not create an expectation
that a consumer could receive
information on remittance transfer
services in that foreign language, and
would, therefore, not trigger the foreign
language disclosure requirement, based
on the specific foreign language term
used.
The Board also considered an
objective standard based on whether a
foreign language meets a certain
percentage threshold of a remittance
transfer provider’s advertisements at a
particular office as an appropriate way
to measure if such a language is
principally used. However, such a
standard would be arbitrary, may be
difficult to administer, and may
inappropriately exclude instances
where a foreign language is principally
used to advertise, solicit or market
remittance transfers, even if the number
of advertisements in the foreign
language is nominally low. For these
reasons, the Board believes that a factsand-circumstances approach that
considers not only the frequency with
which the foreign language is used, but
also the prominence with which the
foreign language is featured and the
specific foreign language terms used in
any advertisement, soliciting, or
marketing, would best effectuate the
statute and protect consumers.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Advertise, Solicit, or Market
Neither the EFTA nor Regulation E
defines advertising, soliciting, or
marketing.32 The general concept of
advertising, soliciting, or marketing is
explained in other Board regulations.
See, e.g., Regulation Z, 12 CFR
226.2(a)(2) and associated commentary;
Regulation DD, 12 CFR 230.2(b) and
11(b) and associated commentary.
Proposed comment 31(g)(1)–2
provides both positive and negative
examples of advertising, soliciting, or
marketing in a foreign language. The
proposed comment borrows applicable
examples from the commentary to
§§ 226.2(a)(2) and 230.2(b) regarding the
definition of ‘‘advertisement,’’ as well as
32 Regulation E contains some guidance on
whether a card, code, or other device is ‘‘marketed
or labeled as a gift card or gift certificate’’ or
‘‘marketed to the general public’’ for purposes of the
Board’s gift card rule. See comments 20(b)(2)–2,
20(b)(2)–3, and 20(b)(4)–1. However, that guidance
focuses on a narrow set of circumstances and does
not address more broadly what actions generally
constitute advertising, soliciting, or marketing.

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examples related to the promotion of
overdrafts under § 230.11(b). The
proposed comment includes examples
that could apply to a remittance transfer
provider’s interactions with a consumer.
At That Office
Under EFTA Section 919(b) and
proposed § 205.31(g)(1), the requirement
that a remittance transfer provider
provide foreign language disclosures is
based on whether the foreign language
is principally used to advertise, solicit,
or market ‘‘at that office.’’ Proposed
comment 31(g)(1)–3 clarifies the
meaning of ‘‘office’’ as used in
§ 205.31(g)(1). The Board believes that
an office of a remittance transfer
provider includes both physical and
non-physical locations where
remittance transfer services are offered
to consumers. Because transactions may
be conducted, and errors may be
asserted, by telephone and through the
Internet, the proposal states that an
office includes any telephone number or
Web site through which a consumer can
complete a transaction or assert an error.
Therefore, a telephone number or Web
site that provides general information
about the remittance transfer provider,
but through which a consumer does not
have the ability to complete a
transaction or assert an error, is not an
office.
Proposed comment 31(g)(1)–3 also
clarifies that a location need not
exclusively offer remittance transfer
services in order to be considered an
office for purposes of § 205.31(g)(1).
Many agents of remittance transfer
providers are located in retail
establishments where other financial
and non-financial products or services
may be sold. The proposed comment
includes an example stating that if an
agent of a remittance transfer provider is
located in a grocery store, the grocery
store is considered an office for
purposes of § 205.31(g)(1).
Proposed comment 31(g)(1)–4
provides guidance on the term ‘‘at that
office.’’ Specifically, the proposed
comment states that any advertisement,
solicitation, or marketing that is posted,
provided, or made at a physical office is
considered to be advertising, soliciting,
or marketing at that office. Moreover,
proposed comment 31(g)(1)–4 also
provides that advertisements,
solicitations, or marketing posted,
provided, or made on a Web site of a
remittance transfer provider, or during a
telephone call with the remittance
transfer provider also constitute
advertising, soliciting, or marketing at
an office of a remittance transfer
provider.

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29919

The proposed comment also states
that for error resolution disclosures
provided pursuant to § 205.33, the
relevant office is the office in which the
sender first asserts the error and not the
office where the remittance transfer was
conducted. The Board believes the
office in which the sender first asserts
the error is the appropriate office to
determine whether the foreign language
advertising disclosure requirement has
been triggered because the remittance
transfer provider may not know where
the disputed remittance transfer was
conducted or may not be able to
determine whether the foreign language
advertising disclosure requirement was
triggered at that office.
31(g)(2) Oral Disclosures
As noted above, the Board proposes to
exempt oral disclosures from the general
foreign language disclosure rule.
Instead, proposed § 205.31(g)(2) would
require that disclosures permitted to be
provided orally under § 205.31(a)(3) for
transactions conducted entirely by
telephone must be made in the language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction. Proposed § 205.31(g)(2)
would also provide that disclosures
permitted to be provided orally under
proposed § 205.31(a)(4) for error
resolution purposes must be made in
the language primarily used by the
sender with the remittance transfer
provider to assert the error.
The Board believes that application of
the foreign language disclosure
requirement in EFTA Section 919(b) to
oral disclosures may not be effective or
optimal. First, under EFTA Section
919(b), a foreign language must be
principally used by the remittance
transfer provider to advertise, solicit, or
market remittance transfers at an office
in order to be required for disclosures.
If this trigger applied to oral disclosures,
a sender conducting a transaction or
asserting an error in a foreign language
that did not meet the foreign language
advertising trigger may only receive
required oral disclosures in English.
Such a result could undermine a
sender’s ability to comprehend
important information related to the
transaction. This is especially
problematic if the remittance transfer
provider conducted the actual
transaction or communicated with the
sender regarding the error asserted by
the sender in a foreign language, then
switched to English to disclose the
required information under Subpart B.
Instead, the Board believes senders
would benefit from having the required
disclosures provided in the same
language primarily used by the sender

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with the remittance transfer provider to
conduct the transaction or assert the
error, regardless of whether the language
meets the foreign language advertising
trigger. As a result, the Board believes
foreign language disclosures are
especially important in this context.
Second, the Board believes
disclosures that are permitted to be
provided orally under §§ 205.31(a)(3)
and (4) should be provided only in the
language primarily used to conduct the
transaction or assert the error. EFTA
Section 919(b) requires that disclosures
be given in English and in each of the
triggered foreign languages. Thus, if
EFTA Section 919(b) applied to oral
transactions, a sender conducting a
telephone transaction or receiving the
results of an error investigation orally
could be given disclosures in English
and in every foreign language triggered
by the regulation. It is unlikely that
providing oral disclosures in two or
more languages would be helpful to
senders.
For these reasons, the Board proposes
to use its authority under EFTA Section
904(c) to exempt oral disclosures from
the foreign language requirement under
EFTA Section 919(b). At the same time,
the Board proposes to use its authority
under EFTA Section 919(a)(5)(A) to
condition the availability of oral
disclosures for transactions conducted
entirely by telephone on the remittance
transfer provider making such
disclosures in the language primarily
used by the sender with the remittance
transfer provider to conduct the
transaction. Furthermore, the Board
proposes to use its EFTA Section 904(a)
authority to permit oral disclosure of
certain error resolution investigation
results, as discussed below in the
supplementary information to
§ 205.33(c)(1), provided that the oral
disclosure of such error resolution
investigation results must be made in
the language primarily used by the
sender with the remittance transfer
provider to assert the error.

of EFTA Section 919(b). At the same
time, the proposal imposes a new
requirement that the remittance transfer
provider make such disclosures in
English, and if applicable, in the
language primarily used by the sender
with the remittance transfer provider to
conduct the transaction, regardless of
whether such foreign language is
primarily used by the remittance
transfer provider to advertise, solicit, or
market remittance transfers. See EFTA
Section 919(a)(5)(B).
The Board believes that because the
pre-payment disclosures will be
provided orally in the language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction entirely by telephone
under proposed § 205.31(g)(2), the same
language should be used in the written
receipt provided to the sender under
proposed § 205.31(g)(3) for consistency,
regardless of whether the language
meets the foreign disclosure advertising
trigger.
Alternatively, the Board could apply
the general rule proposed in
§ 205.31(g)(1) to the written receipt
provided for transactions conducted
entirely by telephone. This would mean
that a remittance transfer provider
would not be obligated to provide the
written receipt in a foreign language,
even if such foreign language was used
to conduct the telephone transaction,
unless the foreign language was
principally used to advertise, solicit, or
market remittance transfers during the
telephone call.
In the Board’s outreach with industry,
remittance transfer providers generally
stated that providing written disclosures
in a foreign language can be more costly
and burdensome than providing oral
disclosures in a foreign language.
Therefore, the Board requests comment
on whether proposed § 205.31(g)(3)
might have the unintended consequence
of reducing the number of foreign
languages remittance transfer providers
may offer for telephone transactions.

31(g)(3) Written Receipt for Telephone
Transactions
Proposed § 205.31(g)(3) would require
that written receipts required to be
provided to the sender after payment
under proposed § 205.31(e)(2) for
transactions conducted entirely by
telephone must be made in English and,
if applicable, in the foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction. The Board proposes to
implement this provision by using its
authority under EFTA Section 904(c) to
exempt such written receipts from the
foreign language disclosure requirement

General Clarifications
The Board also proposes additional
commentary to provide general
guidance on issues that affect each of
the subsections of § 205.31(g) discussed
above. Proposed comment 31(g)–1
addresses the number of languages
contained in a written or electronic
disclosure. EFTA Section 919(b) does
not limit the number of languages that
may be used on a single disclosure.
However, the Board is concerned that
too many languages on a single written
document may diminish a consumer’s
ability to read and understand the
disclosures. The Board’s proposed rule

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in § 205.31(g)(2) and (g)(3) regarding
oral disclosures and written receipts for
telephone transactions, as discussed
above, limit the number of languages
used in the disclosures. For written or
electronic disclosures under
§ 205.31(g)(1), however, there is no
stated limit to the number of languages
appearing on a disclosure.
Proposed comment 31(g)–1 suggests
that a single written or electronic
document containing more than three
languages is not likely to be helpful to
a consumer. The proposed commentary
is not a strict limit and leaves open the
possibility that a single written or
electronic document may contain more
than three languages yet still be helpful
to a consumer, depending on how the
information is presented. The Board
seeks comment on whether three
languages is an appropriate suggested
limit to the number of languages in a
single written or electronic document
and whether the regulation should
strictly limit the number of languages
that may be contained in a single
written or electronic disclosure.
As discussed above, proposed
§ 205.31(g)(1) provides flexibility to
remittance transfer providers to provide
senders with written or electronic
disclosures in English and either: (i) In
each foreign language that the
remittance transfer provider principally
uses to advertise, solicit, or market at
that office; or (ii) if applicable, in the
foreign language primarily used by the
sender with the remittance transfer
provider to conduct the transaction (or
for written or electronic disclosures
pursuant to § 205.33, the foreign
language primarily used by the sender
with the remittance transfer provider to
assert the error), provided that the
foreign language is principally used to
advertise, solicit, or market at that
office. Proposed comment 31(g)–1
clarifies that the remittance transfer
provider may provide disclosures in a
single document with both languages or
in two separate documents with one
document in English and the other
document in the applicable foreign
language.
To illustrate this concept, the Board
proposes several examples in comment
31(g)–1. If a remittance transfer provider
principally uses only Spanish and
Vietnamese to advertise, solicit, or
market remittance transfer services at a
particular office, the proposed comment
provides that the remittance transfer
provider may provide all of its
consumers with disclosures in English,
Spanish, and Vietnamese, regardless of
the language the consumer uses with the
remittance transfer to conduct the
transaction or assert the error.

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
Alternatively, if a sender primarily uses
Spanish to conduct the transaction or
assert an error, the proposed comment
states that the remittance transfer
provider may provide the written
disclosure in English and Spanish,
whether in a single document or two
separate documents. If the sender
primarily uses English with the
remittance transfer provider to conduct
the transaction or assert an error, the
remittance transfer provider may
provide the written or electronic
disclosure solely in English. If the
sender primarily uses a language with
the remittance transfer provider to
conduct the transaction or assert an
error that the remittance transfer
provider does not use to advertise,
solicit, or market either orally, in
writing, or electronically, at that office,
the proposed comment provides that the
remittance transfer provider may
provide the written or electronic
disclosure solely in English.
Proposed comment 31(g)–2 clarifies
when a language is primarily used by
the sender with the remittance transfer
provider to conduct a transaction and
assert an error. As discussed above,
under proposed § 205.31(g)(1)(ii),
remittance transfer providers have the
flexibility to provide written or
electronic disclosures in English, and if
applicable, in the foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction. Proposed
§ 205.31(g)(1)(ii) also provides that for
written or electronic disclosures
provided pursuant to § 205.33,
remittance transfer providers have the
flexibility to provide such disclosures in
English, and if applicable, in the foreign
language primarily used by the sender
with the remittance transfer provider to
assert the error. Also, as discussed
above, proposed §§ 205.31(g)(2) and
(g)(3) require disclosures in the language
that is primarily used by the sender
with the remittance transfer provider to
conduct the transaction or assert an
error.
Proposed comment 31(g)–2 provides
guidance on determining the language
that is primarily used by the sender
with the remittance transfer provider to
conduct a transaction or assert an error.
The proposed comment clarifies that the
language primarily used by the sender
with the remittance transfer provider to
conduct the transaction is the primary
language used to convey the information
necessary to complete the transaction.
Proposed comment 31(g)–2 also states
that the language primarily used by the
sender with the remittance transfer
provider to assert an error is the primary
language used by the sender with the

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remittance transfer provider to provide
the information required by § 205.33(b)
to assert an error.
The proposed comment also provides
examples to clarify this concept. Under
one proposed example, a sender
initiates a conversation with a
remittance transfer provider in English
and expresses interest in sending a
remittance transfer to Mexico. If, based
on that knowledge, the remittance
transfer provider offers to communicate
in Spanish with the sender, and the
sender conveys the other information
necessary to complete the transaction in
Spanish, including the designated
recipient’s information and the amount
and funding source of the transfer, then
Spanish is the language primarily used
by the sender with the remittance
transfer provider to conduct the
transaction. Under a second example, a
sender initiates a conversation with the
remittance transfer provider and tells
the remittance transfer provider that
there was a problem with a prior
remittance transfer to Vietnam. If, based
on that knowledge, the remittance
transfer provider offers to communicate
in Vietnamese with the sender, and the
sender conveys the information required
by § 205.33(b) to assert an error in
Vietnamese, then Vietnamese is the
language primarily used by the sender
with the remittance transfer provider to
assert the error.
Section 205.32 Estimates
In some instances, a remittance
transfer provider will not know the
amount of currency that a designated
recipient will receive. This may happen
because the provider does not know the
applicable exchange rate or the
applicable fees or taxes that may be
deducted from the amount transferred.
To address these circumstances, the
statute provides two exceptions to the
requirement to disclose the amount of
currency that will be received by the
designated recipient.
The first exception (the ‘‘temporary
exception’’) is in EFTA Section 919(a)(4)
and states that, subject to rules
prescribed by the Board, disclosures
regarding the amount of currency that
will be received by the designated
recipient will be deemed to be accurate
so long as the disclosure provides a
reasonably accurate estimate of the
amount of foreign currency to be
received. A remittance transfer provider
may use this exception only if: (1) It is
an insured depository institution or
insured credit union (collectively, an
‘‘insured institution’’ as described in
more detail below) conducting a transfer
through an account that the sender
holds with it; and (2) it is unable to

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29921

know, for reasons beyond its control,
the amount of currency that will be
made available to the designated
recipient. See EFTA Section 919(a)(4).
This exception expires five years after
the enactment of the Dodd-Frank Act, or
July 20, 2015. If the Board determines
that expiration of the exception would
negatively affect the ability of insured
institutions to send remittances to
foreign countries, the Board may extend
the exception to not longer than ten
years after enactment. See EFTA Section
919(a)(4)(B).
The second exception (the
‘‘permanent exception’’) is in EFTA
Section 919(c). It states that if the Board
determines that a recipient country does
not legally allow, or the method by
which transactions are made in the
recipient country do not allow, a
remittance transfer provider to know the
amount of currency that will be received
by the designated recipient, the Board
may prescribe rules addressing the
issue. EFTA Section 919(c) further states
that the Board’s rules shall include
standards for the remittance transfer
provider to provide: (1) A receipt that is
consistent with EFTA Sections 919(a)
and (b); and (2) a reasonably accurate
estimate of the foreign currency to be
received. The second exception does not
have a sunset date.
The Board proposes § 205.32 to
implement the exceptions set forth in
EFTA Sections 919(a)(4) and (c).
Proposed § 205.32 would permit a
remittance transfer provider to disclose
estimates if it cannot determine exact
amounts for the reasons specified in the
statute.
32(a) Temporary Exception for Insured
Institutions
Proposed § 205.32(a)(1) implements
the temporary exception set forth in
EFTA Section 919(a)(4)(A) by permitting
estimates to be provided in accordance
with proposed § 205.32(c) for the
disclosures required by proposed
§§ 205.31(b)(1)(iv)–(vii), if: (1) A
remittance transfer provider cannot
determine exact amounts for reasons
beyond its control; (2) a remittance
transfer provider is an insured
institution; and (3) the remittance
transfer is sent from the sender’s
account with the insured institution.
For purposes of proposed § 205.32, the
term ‘‘insured institution’’ includes
insured depository institutions as
defined in Section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813)
and insured credit unions as defined in
Section 101 of the Federal Credit Union
Act (12 U.S.C. 1752). See proposed
§ 205.32(a)(3).

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EFTA Section 919(a)(4) only
addresses estimates for the amount of
currency that will be received by a
designated recipient. Nonetheless,
proposed § 205.32(a) also would permit
disclosure of an estimate for the
exchange rate, the transfer amount in
the currency made available to the
designated recipient, the fees imposed
by intermediaries in the transmittal
route, and taxes imposed in the
recipient country that are a percentage
of the amount transferred to the
designated recipient. These items must
be disclosed under proposed
§ 205.31(b)(1)(iv), (v), and (vi),
respectively. The inability to determine
the exact amount of one or more of these
additional items is the reason why the
amount of currency that will be received
by the designated recipient must be
estimated. The Board believes that, by
permitting an estimate of the amount of
currency that will be received, Congress
intended to permit estimates of the
components that determine that
amount. Furthermore, the Board
believes that permitting estimates of
these additional items will help
consumers to understand why the
amount of currency that will be received
is displayed as an estimate.
EFTA Section 919(a)(4) permits the
use of an estimate of the amount of
foreign currency that will be received by
a designated recipient. However,
proposed § 205.32(a) permits an insured
institution to provide an estimate of the
currency that will be received, whether
it is in U.S. dollars or foreign currency.
Many consumers send remittance
transfers which are to be paid to the
designated recipient in U.S. dollars.
When an insured institution sends a
remittance via international wire
transfer, fees are sometimes deducted by
intermediary institutions in the
transmittal route with which the
sending institution has no
correspondent relationship.33 Although
the insured institution may not know
the total amount of these fees in
advance, it must disclose them to the
sender under proposed
§ 205.31(b)(1)(vi). The amount of
currency that will be received by the
designated recipient, whether that
currency is U.S. dollars or foreign
currency, will be an estimate if fees
imposed by intermediaries are
estimates. Therefore, the Board is
33 A correspondent relationship is where one
financial institution has a contractual arrangement
to hold deposits and provide services to another
financial institution, which has limited access to
certain financial markets. Such agreements permit
the financial institution to provide services to
account holders without incurring the expense of
setting up a branch in another city or country.

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exercising its authority under EFTA
Section 904(c) to allow an estimate of
the amount of currency that will be
received, even if that currency is in U.S.
dollars.
The proposed commentary to
proposed § 205.32(a)(1) provides further
guidance on the temporary exception.
Proposed comment 32(a)(1)–1 explains
that an insured institution cannot
determine exact amounts ‘‘for reasons
beyond its control’’ when: (1) The
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) is set by a
person with which the insured
institution has no correspondent
relationship after the insured institution
sends the remittance transfer; or (2) fees
required to be disclosed under
§ 205.31(b)(1)(vi) are imposed by
intermediary institutions along the
transmittal route and the insured
institution has no correspondent
relationship with those institutions.
Proposed comment 32(a)(1)–2
provides examples of scenarios that
qualify for the temporary exception. For
instance, an insured institution cannot
determine the exact exchange rate
required to be disclosed under
§ 205.31(b)(1)(iv) for an international
wire transfer if the insured institution
does not set the exchange rate, and the
rate is instead later set by the designated
recipient’s institution with which the
insured institution does not have a
correspondent relationship. The insured
institution will not know the date on
which funds will be deposited into the
recipient’s account, and will not know
the exchange rate that will be applied
on that date. Proposed comment
32(a)(1)–2.i. Further, an insured
institution cannot determine the exact
fees required to be disclosed under
§ 205.31(b)(1)(vi) if an intermediary
institution or the designated recipient’s
institution, with which the insured
institution does not have a
correspondent relationship, imposes a
transfer or conversion fee. Proposed
comment 32(a)(1)–2.ii. Finally, an
insured institution cannot determine the
exact taxes required to be disclosed
under § 205.31(b)(1)(vi) if the insured
institution cannot determine the
applicable exchange rate or other fees,
as described in proposed comments
32(a)(1)–2.i and –2.ii, and the recipient
country imposes a tax that is a
percentage of the amount transferred to
the designated recipient, less any other
fees. Proposed comment 32(a)(1)–2.iii.
Proposed comment 32(a)(1)–3
provides several examples of when an
insured institution will not qualify for
the exception in § 205.32(a). In each
case, the insured institution can
determine the exact amount for the

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relevant disclosure. First, the proposed
comment explains that an insured
institution can determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) if it converts the
funds into the local currency to be
received by the designated recipient
using an exchange rate that it sets.
Proposed comment 32(a)(1)–3.i. Second,
the proposed comment states that an
insured institution can determine the
exact fees required to be disclosed
under § 205.31(b)(1)(vi) if it has
negotiated specific fees with a
correspondent institution, and the
correspondent institution is the only
institution in the transmittal route to the
designated recipient’s institution.
Proposed comment 32(a)(1)–3.ii.
Finally, the proposed comment notes
that an insured institution can
determine the exact taxes required to be
disclosed under § 205.31(b)(1)(vi) if the
recipient country imposes a tax that is
a percentage of the amount transferred
to the designated recipient, less any
other fees, and the insured institution
can determine the exact amount of the
applicable exchange rate and other fees.
Similarly, the insured institution can
determine these taxes if the recipient
country imposes a flat tax that is not
tied to the amount transferred. Proposed
comment 32(a)(1)–3.iii.
If an insured institution can
determine the exact exchange rate, fees,
and taxes required to be disclosed under
proposed § 205.31(b)(1)(iv) and (vi), it
can determine the exact amounts to be
derived from calculations involving
them. For instance, the insured
institution could determine both the
transfer amount expressed as local
currency and the amount in local
currency that will be received by the
designated recipient required to be
disclosed under proposed
§ 205.31(b)(1)(v) and (vii), respectively.
Proposed § 205.32(a)(2) provides that
proposed § 205.32(a)(1) expires on July
20, 2015, consistent with the five-year
term set forth in EFTA Section
919(a)(4)(B). EFTA Section 919(a)(4)(B)
gives the Board authority to extend the
application of proposed § 205.32(a)(2) to
July 20, 2020, if it determines that
termination of the exception would
negatively affect the ability of insured
institutions to send remittances to
foreign countries. The Board
understands that this exception was
intended to avoid immediate disruption
of remittance transfer services by
insured institutions using international
wire transfers. The exception gives these
financial institutions time to reach
agreements and modify systems to
provide accurate disclosures.

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
32(b) Permanent Exception for Transfers
to Certain Countries
Proposed § 205.32(b) implements the
permanent exception set forth in EFTA
Section 919(c) by allowing estimates to
be provided in accordance with
proposed § 205.32(c) for amounts
required to be disclosed under proposed
§ 205.31(b)(1)(iv)–(vii) for transfers to
certain countries. Like the temporary
exception in EFTA Section 919(a)(4),
the permanent exception in EFTA
Section 919(c) only addresses estimates
for the amount of currency that will be
received by a designated recipient. For
the reasons described above, proposed
§ 205.32(b) also permits disclosure of
estimates for the exchange rate, the
transfer amount in the currency made
available to the designated recipient,
and taxes imposed in the recipient
country that are a percentage of the
amount transferred to the designated
recipient. These items are required to be
disclosed under proposed
§ 205.31(b)(1)(iv), (v), and (vi),
respectively.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

32(b)(1) Laws of Recipient Country
Proposed § 205.32(b)(1) allows
estimates to be provided in accordance
with proposed § 205.32(c) for the
disclosures required by proposed
§ 205.31(b)(1)(iv)–(vii), if a remittance
transfer provider cannot determine
exact amounts because the laws of the
recipient country do not permit such a
determination.
The proposed commentary provides
guidance on this standard. Specifically,
proposed comment 32(b)(1)–1 clarifies
that the ‘‘laws of the recipient country’’
do not permit a remittance transfer
provider to determine exact amounts
when a law or regulation of the
recipient country requires the person
making funds directly available to the
designated recipient to apply an
exchange rate that is: (1) Set by the
government of the recipient country
after the remittance transfer provider
sends the remittance transfer; or (2) set
when the designated recipient chooses
to claim the funds.
Proposed comments 32(b)(1)–2.i and
–2.ii provide examples illustrating the
application of the exception. Proposed
comment 32(b)(1)–2.i explains that the
laws of the recipient country do not
permit a remittance transfer provider to
determine the exact exchange rate
required to be disclosed under
§ 205.31(b)(1)(iv) when, for example, the
government of the recipient country sets
the exchange rate daily and the funds
are made available to the designated
recipient in the local currency the day
after the remittance transfer provider

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sends the remittance transfer. Under
such circumstances, an estimate for the
exchange rate is permitted because the
remittance transfer provider cannot
determine a rate that a foreign
government has yet to set.
In contrast, proposed comment
32(b)(1)–2.ii explains that the laws of
the recipient country permit a
remittance transfer provider to
determine the exact exchange rate
required to be disclosed under
§ 205.31(b)(1)(iv) if, for example, the
government of the recipient country
pegs the value of its currency to the U.S.
dollar.
32(b)(2) Method by Which Transactions
Are Made in the Recipient Country
Proposed § 205.32(b)(2) allows
estimates to be provided in accordance
with proposed § 205.32(c) for the
disclosures required by proposed
§ 205.31(b)(1)(iv)–(vii), if a remittance
transfer provider cannot determine
exact amounts because the method by
which transactions are made in the
recipient country does not permit such
a determination.
Based on the Board’s outreach and
interpretation of the statute, the Board
believes that the exception for methods
by which transactions are made in the
recipient country was intended to
permit estimates for certain
international ACH transactions.
Specifically, the Board interprets the
exception to apply to remittances sent
via international ACH on terms
negotiated by the government of the
United States and the government of a
recipient country where the exchange
rate is set after the transfer is sent.
Accordingly, proposed comment
32(b)(2)–1 states that the ‘‘method by
which transactions are made in the
recipient country’’ does not permit a
remittance transfer provider to
determine exact amounts when
transactions are sent via international
ACH on terms negotiated between the
United States government and recipient
country’s government, under which the
exchange rate is set by the recipient
country’s central bank after the provider
sends the remittance transfer.
Proposed comment 32(b)(2)–2
provides examples illustrating the
application of the exception provided
under proposed § 205.32(b)(2). Proposed
comment 32(b)(2)–2.i provides an
example of when a remittance transfer
would qualify for the exception. It
explains that a transfer would qualify
for the exception when sent via
international ACH on terms negotiated
between the United States government
and the recipient country’s government,
under which the exchange rate is set by

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29923

the recipient country’s central bank on
the business day after the provider has
sent the remittance transfer. Under such
circumstances, the provider cannot
determine the exact exchange rate
required to be disclosed under
§ 205.31(b)(1)(iv). Remittance transfers
sent via Directo a México currently
would qualify for the proposed
§ 205.32(b)(2) exception.
Proposed comments 32(b)(2)–2.ii and
–2.iii provide examples of when a
remittance transfer would not qualify
for the § 205.32(b)(2) exception.
Proposed comment 32(b)(2)–2.ii
explains that a remittance transfer
provider would not be permitted to
provide estimates under the proposed
§ 205.32(b)(2) exception if it sends a
remittance transfer via international
ACH on terms negotiated between the
United States government and a privatesector entity in the recipient country,
under which the exchange rate is set by
the institution acting as the entry point
to the recipient country’s payments
system on the next business day. In this
case, transactions are made using a
method negotiated between the United
States and a private entity. Nonetheless,
remittance transfers sent using such a
method may qualify for the § 205.32(a)
temporary exception. In addition,
proposed comment 32(b)(2)–2.iii
explains that a remittance transfer
provider would not qualify for the
§ 205.32(b)(2) exception if, for example,
it sends transfers via international ACH
on terms negotiated between the United
States government and the recipient
country’s government, under which the
exchange rate is set by the recipient
country’s central bank before the sender
requests a transfer. In such a case, the
remittance transfer provider can
determine the exchange rate required to
be disclosed.
During outreach, several industry
members expressed the view that
international wire transfers are a
method by which transactions are made
in a recipient country that does not
allow the remittance transfer provider to
know the amount of currency that will
be received by a designated recipient
and should qualify for the permanent
exception in EFTA Section 919(c). The
Board does not believe that the
permanent exception in EFTA Section
919(c) applies to international wire
transfers because wire transfers are not
a method by which transactions are
made that are particular to a specific
country or group of countries.
Additionally, the application of the
permanent exception to international
wire transfers would make the
temporary exception superfluous.
Accordingly, the proposed exception in

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§ 205.32(b)(2) does not apply to
international wire transfers.

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32(c) Bases for Estimates
If a remittance transfer qualifies for
either the temporary exception in EFTA
Section 919(a)(4) or the permanent
exception in EFTA Section 919(c), the
statute permits the provider to disclose
a reasonably accurate estimate to the
sender. The Board believes that
providing an exhaustive list of
approaches that will result in a
reasonably accurate estimate may be
more helpful to remittance transfer
providers than a less specific standard
for calculating estimates. Thus,
proposed § 205.32(c) states that
estimates provided pursuant to the
exceptions in proposed § 205.32(a) and
(b) must be based on an approach listed
in the regulation for the required
disclosure.
Proposed § 205.32(c) further states
that if a remittance transfer provider
bases an estimate on an approach that
is not listed, the provider complies with
§ 205.32(c) so long as the designated
recipient receives the same, or a greater
amount, of currency that it would have
received had the estimate been based on
a listed approach. Thus, use of an
approach other than one listed in the
proposed rule will not result in a
violation, to the extent that the sender
is not harmed by such use.
32(c)(1) Exchange Rate
Proposed § 205.32(c)(1) sets forth the
approaches that a remittance transfer
provider may use as the basis of an
estimate of the exchange rate required to
be disclosed under proposed
§ 205.31(b)(1)(iv). Proposed
§ 205.32(c)(1)(i) states that for
remittance transfers qualifying for the
§ 205.32(b)(2) exception, the estimate
must be based on the most recent
exchange rate set by the recipient
country’s central bank and reported by
a Federal Reserve Bank. Proposed
comment 32(c)(1)(i)–1 clarifies that if
the exchange rate for a remittance
transfer sent via international ACH that
qualifies for the § 205.32(b)(2) exception
is set the following business day, the
most recent exchange rate available for
a transfer will be the exchange rate set
for the day that the disclosure is
provided, i.e., the current business day’s
exchange rate.
Proposed § 205.32(c)(1)(ii) provides
that, for other transfers, the estimate
must be based on the most recent
publicly available wholesale exchange
rate. Proposed comment 32(c)(1)(ii)–1
provides that publicly available sources
of information containing the most
recent wholesale exchange rate for a

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currency include, for example, U.S.
news services, such as Bloomberg, the
Wall Street Journal, and the New York
Times, a recipient country’s national
news service, and a recipient country’s
central bank or other government
agency.
However, the Board recognizes that
U.S. news services do not list the
exchange rate for every currency and
that some remittance transfer providers
may not have access to the national
news services or the information
provided by the central bank of a
recipient country. Therefore, proposed
§ 205.32(c)(1)(iii) permits use of the
most recent exchange rate offered by the
person making funds available directly
to the designated recipient as the basis
for providing an estimate. This may
require a provider to contact the
designated recipient’s institution or
payout location to obtain such a rate.
The Board solicits comment on other
approaches a remittance transfer
provider might use as the basis for an
estimate of the exchange when the
currency that will be paid to the
designated recipient is infrequently
traded or when the remittance transfer
provider sends transfers to a recipient
country infrequently.
32(c)(2) Transfer Amount in the
Currency Made Available to the
Designated Recipient
Proposed § 205.32(c)(2) states that in
disclosing the transfer amount in the
currency made available to the
designated recipient, as required under
proposed § 205.31(b)(1)(v), an estimate
must be based upon the estimated
exchange rate provided in accordance
with § 205.31(c)(1).
32(c)(3) Other Fees Imposed by
Intermediaries
Proposed § 205.32(c)(3) provides that
one of two approaches must be used to
estimate the fees imposed by
intermediary institutions in connection
with an international wire transfer
required to be disclosed under proposed
§ 205.31(b)(1)(vi). Under the first
approach, an estimate must be based on
the remittance transfer provider’s most
recent transfer to an account at the
designated recipient’s institution. Under
the second approach, an estimate must
based on the representations of the
intermediary institutions along a
representative route identified by the
remittance transfer provider that the
requested transfer could travel.
Proposed comment 32(c)(3)(ii)–1
clarifies that a remittance transfer from
a sender’s account at an insured
institution to the designated recipient’s
institution may take several routes,

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depending on the correspondent
relationships each institution in the
transmittal route has with other
institutions. Proposed comment
32(c)(3)(ii)–1 further clarifies that, in
providing an estimate of the fees
required to be disclosed under proposed
§ 205.31(b)(1)(vi) pursuant to the
proposed § 205.32(a) temporary
exception, an insured institution may
rely upon the representations of the
institutions that act as intermediaries in
any one of the potential transmittal
routes that it reasonably believes a
requested remittance transfer may
travel.
The Board solicits comment on other
approaches that a remittance transfer
provider might use as the basis for
calculating an estimate of the fees
imposed by intermediaries for an
international wire transfer when the
remittance transfer provider rarely
sends transfers to a requested location.
32(c)(4) Other Taxes Imposed in the
Recipient Country
Proposed § 205.32(c)(4) states that, in
disclosing taxes imposed in the
recipient country as required under
proposed § 205.31(b)(1)(vi) that are a
percentage of the amount transferred to
the designated recipient, an estimate
must be based on the estimated
exchange rate provided in accordance
with § 205.32(c)(1) and the estimated
fees imposed by institutions that act as
intermediaries in connection with an
international wire transfer provided in
accordance with § 205.32(c)(3).
Proposed comment 32(c)(4)–1 clarifies
that proposed § 205.32(c)(4) permits a
provider to give an estimate only when
the taxes imposed in a recipient country
are a percentage of the amount
transferred to the designated recipient.
In other contexts where taxes may be
imposed, a remittance transfer provider
can determine the exact amount, such as
in the case of a flat tax.
32(c)(5) Amount of Currency That Will
Be Received by the Designated
Recipient
Proposed § 205.32(c)(5) states that, in
disclosing the amount of currency that
will be received by the designated
recipient as required under proposed
§ 205.31(b)(1)(vii), an estimate must be
based on the estimates provided in
accordance with §§ 205.32(c)(1), (3), and
(4), as applicable.
Storefront and Internet Disclosures
Statutory Requirements
EFTA Section 919(a)(6)(A) states that
the Board may prescribe rules to require
a remittance transfer provider to
prominently post, and timely update, a

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules

srobinson on DSK4SPTVN1PROD with PROPOSALS3

notice describing a model remittance
transfer for one or more amounts, as the
Board may determine, which notice
shall show the amount of currency that
will be received by the designated
recipient, using the values of the
currency into which the funds will be
exchanged. EFTA Section 919(a)(6)(A)
also states that the Board may require
the notice prescribed to be displayed in
every physical storefront location
owned or controlled by the remittance
transfer provider. Further, EFTA Section
919(a)(6)(A) states that the Board shall
prescribe rules to require a remittance
transfer provider that provides
remittance transfers via the Internet to
provide a notice, comparable to the
storefront notice described in the
statute, located on the home page or
landing page (with respect to such
remittance transfer services) owned or
controlled by the remittance transfer
provider.
EFTA Section 919(a)(6)(B) states that,
prior to proposing rules under EFTA
Section 919(a)(6)(A), the Board shall
undertake appropriate studies and
analyses, which shall be consistent with
EFTA Section 904(a)(2), to determine
whether a storefront notice or Internet
notice facilitates the ability of a
consumer (1) to compare prices for
remittance transfers, and (2) to
understand the types and amounts of
any fees or costs imposed on remittance
transfers. EFTA Section 904(a)(2)
requires an economic impact analysis
that considers the costs and benefits of
a regulation to financial institutions,
consumers, and other users, including
the extent to which additional
paperwork would be required, the
effects upon competition in the
provision of services among large and
small financial institutions, and the
availability of services to different
classes of consumers, particularly low
income consumers.
Summary of the Board’s Study and
Findings
Consistent with EFTA Section
919(a)(6)(B), the Board has reviewed
and analyzed the statute and a variety
of independent articles, studies, and
Congressional testimony; conducted
outreach with industry and consumer
advocates; and held focus groups with
consumers who send remittance
transfers. Based on its findings,
discussed in more detail below, the
Board is not proposing a rule that would
require the posting of model remittance
transfer notices at a storefront or on the
Internet.
The notice described by the statute
would illustrate only one of several
costs of a remittance transfer. Thus, the

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Board believes that the statutory notice
would not facilitate a consumer’s ability
to compare prices or to understand the
fees and costs imposed on remittance
transfers. In addition, most consumers
would be unable to apply the
information provided by the statutory
notice to their own transfers.
The Board considered alternatives to
the type of notice described in the
statute. The Board considered requiring
the posting of transfer fee information
for model send amounts, but believes
that this alternative notice would have
many of the same limitations as the
statutory notice. The Board also
considered requiring a notice that
would reflect all the costs of a transfer
as well as the different variables that
affect the total cost of the transaction. A
notice with this alternative content
could help consumers to obtain a better
understanding of the costs and fees
imposed on remittance transfers.
Nonetheless, the Board believes that the
length and complexity of such notices
could limit their utility. In addition, the
frequent manual updates that would be
required for any of these storefront
notices raise concerns about accuracy.
As described in more detail below, these
factors led to the Board to decide against
proposing a rule requiring remittance
transfer providers to post storefront
model remittance transfer notices.
Because the Board is not proposing a
rule mandating the posting of storefront
notices, it is not proposing a rule
mandating the posting of Internet
notices. As noted above, EFTA Section
919(a)(6)(A) states that the Board shall
prescribe rules to require a remittance
transfer provider that provides
remittance transfers via the Internet to
provide a notice comparable to a
storefront notice. The Board
understands that the word ‘‘shall’’ could
be read as mandating the Board to
require model Internet notices
regardless of whether it proposes model
storefront notices. However, the Board
believes that the provision is better read
as not requiring Internet notices in the
absence of any model storefront notices.
The Board believes such a reading is
more consistent with the statute as a
whole. For instance, because the Board
is not requiring a storefront notice, there
would be no ‘‘comparable’’ Internet
notice. Moreover, the Board’s study of
model Internet notices indicated that
consumers using Internet remittance
transfer providers to request remittance
transfers would be even less likely to
use a model transfer notice than those
using providers at a physical location.
Most Internet providers currently
disclose transaction-specific
information prior to the consumer’s

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payment for a transfer. Proposed
§ 205.31(b)(1) would make this common
practice a regulatory requirement.
Discussion
Statutory Notice
First, the Board’s study showed that
the storefront notice as described by
EFTA Section 919(a)(6)(A) would not
facilitate a consumer’s ability to
compare prices or to understand the fees
and costs imposed on remittance
transfers. The statutory storefront notice
would illustrate only one of several
costs of a remittance transfer—that is,
the exchange rate offered by that
remittance transfer provider for the
particular model transfer amount. In
addition to the exchange rate, the total
cost of a remittance transfer includes
fees charged by the remittance transfer
provider, any intermediary in the
transfer, and the receiving entity, and
any taxes that may be charged in the
sending and receiving jurisdictions (all
of which must be disclosed pursuant to
proposed § 205.31(b)(1)). Because the
statutory storefront notice would not
address these fees and taxes, it would
not present a complete picture to the
consumer of all potential fees and costs
for a remittance transfer, even for the
‘‘model’’ send amount.34
The participants in the focus groups
for the Board’s consumer testing
generally recognized the limitations of
the storefront notice described in the
statute. Participants noted that the
information provided by the storefront
notice would permit a customer to
calculate the exchange rate being used
by the remittance transfer provider, but
that the information did not disclose the
remittance transfer provider’s transfer
fee or specify whether there would be a
deduction from the amount to be
received by the recipient entity or
jurisdiction.
Second, the Board believes that most
consumers would be unable to apply the
information provided by a statutory
storefront notice to their own transfers.
The fees, exchange rate, and taxes for a
remittance transfer can vary based upon
the amount sent, transfer corridor (i.e.,
the sending location to the receiving
location), speed of transfer (e.g., the next
day, the same day, or in one hour),
method of delivery (e.g., an electronic
deposit into a bank account or a cash
disbursement), and type of receiving
entity (e.g., a bank or a money
34 A significant number of focus group
participants request that their transfers be paid to
their designated recipient in U.S. dollars. These
participants would not use the exchange rate and
local currency amount information provided by a
statutory storefront notice.

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transmitter’s payout partner). Because of
these variations, it is unlikely that a
storefront notice as described by the
statute would contain a model transfer
pertinent to the consumer’s intended
transfer. For example, some remittance
transfer providers offer a discount on
their exchange rate margin for large
send amounts. Therefore, even if the
consumer’s transfer were identical to
the model transfer posted in the
storefront notice except for the send
amount, the consumer still may be
unable to determine the exchange rate
that would apply to the consumer’s
transfer based on the storefront notice.
Focus group participants also
recognized these shortcomings of the
statutory storefront notices. Participants
commented that if they were sending
more than the posted send amount, they
would need to ask the provider how
much local currency would be received
because the notice would not
necessarily provide the information
needed to independently calculate that
amount. Some participants indicated
that the statutory storefront notice
would not help them because it would
not show how much money in U.S.
dollars they would need to send so that
the recipient would receive a specific
amount in local currency.
Third, the Board believes consumers
may proceed with their transfer requests
as planned even with the posting of the
statutory storefront notices. A few focus
group participants said that they would
use the information in the statutory
storefront notice to calculate the
exchange rate offered by that provider
and compare it to the wholesale bank
exchange rate published in a national
newspaper or the exchange rate offered
by other providers when contemplating
future transactions. However, most
participants stated that if they went to
a particular store intending to send
money and learned that the exchange
rate would result in the delivery of less
local currency to the recipient than
expected, they would still complete the
transaction. Because these participants
generally transferred smaller amounts, a
slightly lower exchange rate would have
little impact on the total amount of local
currency received.
Alternative Notices
In light of the concerns raised by the
statutory storefront notices, the Board
considered proposing two alternative
storefront notices. The first alternative
notice would have required remittance
transfer providers to show the transfer
fees imposed by the provider for one or
more model send amounts. The second
alternative notice would have required
remittance transfer providers to show all

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the cost variables for one or more model
send amounts. The cost variables would
include: Location of the receiving entity;
speed of delivery; fees charged by the
remittance transfer provider, any
intermediaries, and the recipient entity;
taxes imposed by sending and receiving
jurisdictions; exchange rate; and amount
of currency to be received by the
designated recipient.
The Board considered requiring
remittance transfer providers to display
storefront notices showing the transfer
fee charged for one or more model send
amounts based on comments made
during the focus groups that posted fee
information could be useful. A few
focus group participants noted that a
remittance transfer provider’s fee, rather
than its exchange rate, accounts for the
largest percentage of the total cost for a
transfer. One focus group participant
said that he currently uses fee
information posted by two providers to
help him to decide which provider he
should use for an upcoming transfer.
Another participant said that he would
use a storefront notice with fee
information to shop among providers.
However, a storefront notice
containing information regarding the
remittance transfer provider’s fees still
would not present a complete picture of
all potential costs for a transfer. A
storefront notice with a provider’s fee
information would not necessarily
disclose the exchange rate, fees imposed
by any intermediary in the transfer or
the receiving entity, and taxes imposed
by the receiving jurisdiction.
Participants in the Board’s one-on-one
consumer interviews universally
expressed their wish to know if a
recipient would be charged a fee by the
receiving entity or would be taxed by
the receiving jurisdiction.
The Board believes that many
consumers would not be able to apply
the fee information provided by an
alternative notice to their own transfers.
As mentioned above with respect to the
statutory storefront notices, the fee
charged by the remittance transfer
provider also varies based on the
transfer corridor, speed of transfer,
method of delivery, and type of
receiving entity. For example, some
providers charge different fees for
sending funds to an urban versus a rural
area in a particular country. Again,
because of these variations, a notice
would not necessarily contain a model
transfer identical to the consumer’s
intended transfer. Further, some
remittance transfer providers use a
tiered pricing structure for their fees
that would prevent the consumer from
accurately extrapolating the fee for his
or her transfer from the information

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provided, even if the consumer’s
transfer were identical to the model
transfer except for the send amount.
Customers who are members of a
remittance transfer provider’s loyalty
program might be eligible for fee
discounts that would not be reflected in
a storefront notice.
A remittance transfer provider’s fee
generally changes less frequently than
the exchange rate offered for a given
transfer, and accordingly would become
outdated less frequently. Some
remittance transfer providers operate in
just one or two corridors and charge a
flat fee for transfers under a certain
amount within those corridors. Thus,
for these providers, a storefront notice
with fee information arguably would be
less burdensome and costly than the
statutory storefront notice to produce,
and could ameliorate concerns about the
accuracy of posted information. But, a
storefront notice with fee information
posted by global remittance transfer
providers would be long and complex
and could be burdensome and costly to
produce.
Many focus group participants raised
similar concerns when presented with
the idea of a storefront notice showing
fee information as they did regarding a
storefront notice showing the amount of
local currency to be received. Thus, the
Board believes that, in practice,
alternative storefront notices containing
fee information would have many of the
same limitations as the statutory
storefront notices containing
information about the amount of
currency to be received.
The Board also considered requiring
remittance transfer providers to post a
notice that would reflect all the costs of
a transfer as well as the different
variables that affect the total cost of the
transaction. However, as described
below, the Board believes that the
length and complexity of such notices
could discourage consumers’ use of the
notice and prove overly burdensome for
industry.
Remittance transfer providers that
operate in just one or two corridors with
little price variability could produce a
storefront notice reflecting all cost
variables that is inexpensive and
relatively simple in nature although, as
discussed below, accuracy would
continue to be a concern because
currency values frequently fluctuate. A
notice with this content could help
consumers to obtain a better
understanding of the costs and fees
imposed on remittance transfers.
However, for other providers, a
storefront notice for sending a specified
amount to just a single country could
contain multiple rows of information to

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
account for differences in pricing based
on the transfer method, timing option,
receipt location, and cost permutations
described above. Many providers offer
remittance transfers to multiple
countries, and several locations within
each country, which would multiply the
number of data points on the notice.
The Board believes that a consumer
could be overwhelmed by the amount of
data appearing in a long, complex
storefront notice posted by these
providers and, therefore, might not use
it. One pilot study on storefront notices
containing comprehensive cost
information showed that only 37% of
bank and money transmitter customers
sending remittances checked the
posting.35 Thus, taken as a whole, the
Board does not believe this alternative
would benefit consumers.
Both the statutory and the more
comprehensive alternate storefront
notice would become inaccurate
whenever the exchange rate for a model
transfers changed. As a result, the Board
believes a storefront notice could be
unhelpful and even misleading to
consumers, while creating unnecessary
legal risks for remittance transfer
providers. In Congressional hearings 36
and during the Board’s outreach,
industry representatives and others
expressed concern that, because
currency exchange rates frequently
fluctuate, remittance transfer providers
would have to update the storefront
notice for each send location several
times a week, or as frequently as several
times a day. These rates could also be
different at a single provider’s different
send locations. Remittance transfer
providers would need to distribute the
updated notices to each send location
and each send location would need to
replace the outdated notice just as
frequently. Non-exclusive send
locations that offer the services of two
or more money transmitters would have
to post and update the storefront notices
for each remittance transfer provider.
Compliance concerns are magnified for
providers that have a large network of
agents where the providers would have
to rely on store clerks to update
disclosures on a timely basis. Echoing
the concerns of industry representatives,
focus group participants also questioned
the ability of remittance transfer
providers to keep the notices up to date.
Finally, the Board is concerned about
the effect the storefront notice
35 Appleseed, Remittance Transparency:
Strengthening Business, Building Community 8
(2009).
36 See, e.g., Testimony of Mark Thompson, The
Western Union Company, in Hearing Before House
Subcomm. on Fin. Insts. And Cons. Credit, No.
111–39 (June 3, 2009).

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requirement would have on competition
and costs to the consumer. Remittance
transfer providers that sell their
products through agents have expressed
concern that the work involved in
posting and updating storefront notices
could cause some agents to stop offering
remittance transfers. Further, credit
unions and small banks that
infrequently conduct transfers may find
the burden and cost of producing
storefront notices prohibitive and
discontinue the service. Given the costs
and risks associated with posting and
updating the storefront notices
contemplated by the statute, some
providers may exit the market, which
could reduce competition among
providers and increase costs for
consumers. For these reasons, the Board
is not proposing to require providers to
post model storefront or Internet
notices.
Section 205.33 Procedures for
Resolving Errors
EFTA Section 919(d) addresses error
resolution procedures for errors in
connection with remittance transfers,
and requires a sender to provide notice
of an error within 180 days of the
promised date of delivery of a
remittance transfer. The notice triggers a
remittance transfer provider’s duty to
investigate the claim and correct any
error within 90 days of receiving the
notice. Proposed § 205.33 implements
the new error resolution requirements
for remittance transfers and establishes,
where appropriate, error resolution
procedures similar to those that apply to
a financial institution under § 205.11
with respect to errors involving
electronic fund transfers.
33(a) Definition of Error
Proposed § 205.33(a)(1) defines the
term ‘‘error’’ for purposes of the error
resolution provisions applying to
remittance transfers. The proposed
definition lists the types of transfers or
inquiries that constitute errors.
Proposed § 205.33(a)(2) lists types of
transfers or inquiries that do not
constitute errors. The proposed
commentary provides additional
guidance illustrating errors under the
rule.
Under proposed § 205.33(a)(1)(i), the
term ‘‘error’’ includes an incorrect
amount paid by a sender in connection
with a remittance transfer. The
proposed provision is similar to
§ 205.11(a)(1)(ii), which defines as an
error an incorrect EFT to or from a
consumer’s account. Proposed comment
33(a)–1 clarifies that this provision is
intended to cover circumstances in
which the amount paid by the sender

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differs from the total transaction amount
stated in the receipt provided under
§ 205.31(b)(2) or the combined
disclosure provided under
§ 205.31(b)(3). See also
§ 205.31(b)(1)(iii).
Proposed comment 33(a)–1 also states
that an error under § 205.33(a)(1)(i)
covers incorrect amounts paid by a
sender regardless of the form or method
of payment tendered by the sender for
the transfer, including when a debit,
credit, or prepaid card is used to pay an
amount in excess of the amount of the
transfer requested by the consumer plus
applicable fees. For example, if a
remittance transfer provider incorrectly
charged a sender’s credit card account
for $150 to send $120 to the sender’s
relative in a foreign country, plus a
transfer fee of $10, and the provider sent
only $120, the sender could assert an
error with the remittance transfer
provider for the incorrect charge. In
addition, however, as discussed below
under proposed § 205.33(f), the right to
assert an error with a remittance transfer
provider for incorrect amounts paid in
connection with a transfer is
independent of any other existing rights
that the sender may also have under
other applicable law with respect to an
incorrect payment amount.
Proposed § 205.33(a)(1)(ii) defines as
an error ‘‘a computational or
bookkeeping error made by a remittance
transfer provider relating to a remittance
transfer.’’ Similar to an existing error
provision for EFTs in § 205.11(a)(iv), an
error is intended to include
‘‘arithmetical errors, posting errors,
errors in printing figures, and figures
that were jumbled due to mechanical or
electronic malfunction.’’ See 44 FR
59480 (Oct. 15, 1979). The proposed
error would cover, for example,
circumstances in which a remittance
transfer provider fails to reflect all fees
that will be imposed in connection with
the transfer or misapplies the applicable
exchange rate in calculating the amount
of currency that will be received by the
designated recipient. Thus,
notwithstanding that the designated
recipient may receive the amount of
currency stated on the receipt or
combined disclosure, an error could be
asserted because the provider
incorrectly calculated the amount that
should have been received.
Proposed § 205.33(a)(1)(iii) provides
that an error also generally includes the
failure by a remittance transfer provider
to make available to a designated
recipient the amount of currency
identified in the receipt (or combined
notice) given to the sender. Proposed
comment 33(a)-2 contains guidance
regarding the scope of the error under

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§ 205.33(a)(1)(iii). For example, as
discussed above under proposed
§ 205.31, the amount of currency to be
received by the designated recipient
stated on the transfer receipt must
accurately reflect any third party fees or
taxes that may be imposed in the course
of the remittance transfer (for example,
fees imposed by the recipient agent or
bank in the foreign country or by an
intermediary institution). Accordingly,
if the remittance transfer provider fails
to account for such third party fees or
taxes, resulting in the designated
recipient’s receipt of less than the
amount disclosed on the transaction
receipt, the sender may assert an error
(except in the case of an estimate). The
proposed definition would also cover
circumstances in which the remittance
transfer provider initially transmits or
sends an amount that differs from the
amount requested by the sender.
The proposed definition in
§ 205.33(a)(1)(iii) does not, however,
apply to circumstances in which the
amount received by a designated
recipient differs from the stated amount
of currency where the remittance
transfer provider provides an estimate
as permitted in proposed § 205.32,
discussed above. For example, where
the law in the foreign country prohibits
the remittance transfer provider from
offering a fixed currency exchange rate
and the provider gives an estimate of the
currency to be received in compliance
with § 205.32(c), the fact that the
designated recipient received less than
the estimated currency amount would
not constitute an error under proposed
§ 205.33(a)(1)(iii).
Proposed comment 33(a)–3 provides
examples illustrating circumstances in
which an incorrect amount of currency
may be received by a designated
recipient.
Proposed § 205.33(a)(1)(iv) generally
treats as an error a remittance transfer
provider’s failure to make funds in
connection with a remittance transfer
available to the designated recipient by
the date of availability stated on the
receipt (or combined disclosure). See
proposed § 205.31(b)(2)(ii). Proposed
comment 33(a)-4 provides examples of
the circumstances that would be errors.
These circumstances include the late
delivery of a remittance transfer after
the stated date of availability or nondelivery of the transfer, and the deposit
of a remittance transfer to the wrong
account. See, however, proposed
§ 205.33(a)(1)(iv)(B), discussed below.
An error could also be asserted if a
recipient agent or institution retains the
transferred funds after the stated date of
availability, rather than making the

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funds available to the designated
recipient.
In addition, an error under
§ 205.33(a)(1)(iv) includes a
circumstance in which a person other
than the person identified by the sender
as the designated recipient of the
transfer fraudulently picks up a
remittance transfer in the foreign
country. An error would not, however,
include circumstances in which a
designated recipient picks up a
remittance transfer from the provider’s
agent as authorized, but subsequently
has the funds stolen from the recipient’s
possession.
The proposed approach with respect
to the fraudulent pick-up of a remittance
transfer is consistent with the scope of
unauthorized EFTs under § 205.2(m),
which include unauthorized EFTs
initiated through fraudulent means. See
comment 2(m)-3. Moreover, the Board
believes it is appropriate to treat these
circumstances as errors under the
proposed rule because the remittance
transfer provider, rather than the sender,
is in the best position to ensure that a
remittance transfer is picked up only by
the person designated by the sender. For
example, the provider could establish
appropriate policies and procedures for
its agents to verify the identity of the
recipient of the transfer.
The proposed rule provides two
exceptions to the definition of error in
§ 205.33(a)(1)(iv). First, under proposed
§ 205.33(a)(1)(iv)(A), the failure to make
funds from a remittance transfer
available by the stated date of
availability does not constitute an error
where the failure resulted from
circumstances outside the remittance
transfer provider’s control. As clarified
in proposed comment 33(a)–5, the
exception is limited to circumstances
that are generally referred to under
contract law as force majeure, or
uncontrollable or extraordinary
circumstances that cannot be reasonably
anticipated by the remittance transfer
provider and that prevent the provider
from delivering a remittance transfer,
such as war, civil unrest, or a natural
disaster. The exception for
circumstances beyond a provider’s
control also covers government actions
or restrictions that occur after the
transfer has been sent but that could not
have been reasonably anticipated by the
remittance transfer provider, such as the
imposition of foreign currency controls
or the garnishment or attachment of
funds by a foreign government.
Comment is requested regarding
whether additional examples or
guidance is necessary to illustrate the
exception for circumstances outside the
remittance transfer provider’s control.

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Under proposed § 205.33(a)(1)(iv)(B),
the failure to make funds from a
remittance transfer available on the
stated date of availability does not
constitute an error if it was caused by
the sender providing incorrect
information in connection with the
remittance transfer to the provider. For
example, a transfer may not be delivered
by the stated date of delivery as a result
of the sender’s provision of incorrect
information in connection with the
transfer if the sender misspells the
recipient’s name or otherwise
incorrectly identifies the designated
recipient or account to which the
transferred funds are to be deposited.
Under these circumstances, however,
the provider must give the sender the
opportunity to correct the information
and resend the transfer at no additional
cost in order to avoid triggering the error
resolution requirements.
The exception in § 205.33(a)(1)(iv)(B)
applies only where funds from a transfer
were not made available by the stated
date of availability as a result of
incorrect information provided by the
sender. Accordingly, proposed comment
33(a)–6 clarifies that if the failure to
make funds from a transfer available by
the stated date of availability occurred
due to the provider’s
miscommunication of information
necessary for the designated recipient to
pick up the transfer, such as providing
the incorrect location where the transfer
may be picked up or providing the
wrong confirmation number or code for
the transfer, such failure would be
treated as an error under
§ 205.33(a)(1)(iv).
Finally, proposed § 205.33(a)(1)(v)
includes as an error a sender’s request
for documentation provided in
connection with a remittance transfer or
additional information or clarification
concerning a remittance transfer. An
error under proposed § 205.33(a)(1)(v)
would also cover a sender’s request to
determine whether an error exists under
the proposed errors discussed above
under proposed §§ 205.33(a)(1)(i)
through (a)(1)(iv). The proposal is
similar to an existing provision in
§ 205.11(a)(1)(vii).
Proposed § 205.33(a)(2) lists
circumstances that do not constitute
errors. Under proposed § 205.33(a)(2)(i),
an inquiry about a transfer of $15 or less
does not constitute an error, since these
small-value transfers do not fall within
the scope of the definition of remittance
transfer. See § 205.30(d)(2), discussed
above. Proposed § 205.33(a)(2)(ii) states
that an inquiry about the status of a
remittance transfer—for example, if the
sender calls to ask whether the funds
have been made available in the foreign

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country—is not an error (unless the
funds have not been made available by
the stated date of availability). Finally,
proposed § 205.33(a)(3)(iii) provides
that the term ‘‘error’’ does not include a
sender’s request for information for tax
or other recordkeeping purposes.
The Board solicits comment on all
aspects of the proposed definition of
error in § 205.33(a), including whether
additional circumstances should be
treated as errors under the proposed
rule and whether additional examples of
non-errors are necessary to provide
clarity.
33(b) Notice of Error From Sender
Proposed § 205.33(b) sets forth the
timing and content requirements for a
notice of error provided by a sender in
connection with a remittance transfer.
Under proposed § 205.33(b)(1)(i), a
sender must generally provide a notice
of error orally or in writing to the
remittance transfer provider no later
than 180 days after the date of
availability of the remittance transfer
stated in the receipt (or combined
disclosure). See EFTA Section
919(d)(1)(A). Such notice of error must
be sufficient to enable the remittance
transfer provider to identify the sender’s
name and telephone number or address;
the recipient’s name, and if known, the
telephone number or address of the
recipient; and the remittance transfer to
which the notice of error applies. See
proposed § 205.33(b)(1)(ii). Except for
requests for documentation, additional
information, or clarification under
proposed § 205.33(a)(1)(v), the notice
must also indicate why the sender
believes the error exists and include to
the extent possible the type, date, and
amount of the error. See proposed
§ 205.33(b)(1)(iii).
Proposed § 205.33(b)(2) provides that
when a notice of error is based on
documentation, additional information,
or clarification that the sender had
previously requested under
§ 205.33(a)(1)(v), the sender’s notice of
error is timely if received by the
provider no later than 60 days after the
provider sends the requested
documentation, information, or
clarification. The proposed 60-day time
frame for the sender to provide a new
notice of error following the sender’s
receipt of documentation, information,
or clarification from the remittance
transfer provider is consistent with the
60-day time frame established for
similar circumstances under the general
error resolution provisions in
Regulation E, § 205.11(b)(3). The Board
believes that under these circumstances,
60 days, rather than the 180-day error
resolution time frame generally

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applicable to remittance transfers,
provides sufficient time for a sender to
review the additional information
provided by the remittance transfer
provider and determine whether an
error occurred in connection with a
transfer.
Proposed comment 33(b)–1 clarifies
that the error resolution procedures for
remittance transfers apply only when a
notice of error is received from the
sender of the transfer. Thus, under the
proposed rule, a notice of error provided
by the designated recipient does not
trigger the remittance transfer provider’s
error resolution obligations. This
interpretation is consistent with EFTA
Section 919(d)(1)(A), which establishes
error resolution obligations for a
remittance transfer provider only when
a notice is received from the ‘‘sender.’’ 37
The proposed comment also clarifies
that the error resolution provisions do
not apply when the remittance transfer
provider itself discovers and corrects an
error.
Proposed comment 33(b)–2 provides
that a notice of error is effective so long
as the remittance transfer provider is
able to identify the remittance transfer
in question. For example, many
remittance transfer providers may use
the confirmation number or code given
to the sender for the pick-up of a
remittance transfer to identify the
particular transfer in their tracking
systems and records. In those
circumstances, if a sender provides the
confirmation number or code in the
notice of error, or any other
identification number or code supplied
by the provider in connection with the
remittance transfer, such number or
code should be sufficient to enable the
provider to identify the transfer.
Proposed comment 33(b)–3 provides
that a remittance transfer provider may
request, or the sender may provide, an
e-mail address of the sender or the
designated recipient, as applicable,
instead of a physical address if the email address would be sufficient to
enable the provider to identify the
remittance transfer to which the notice
applies.
Proposed comment 33(b)–4 clarifies
that if the sender fails to provide a
timely notice of error within 180 days
from the stated date of delivery, the
remittance transfer provider is not
required to comply with the error
resolution requirements set forth in the
rule. See, e.g., comment 11(b)(1)–7
(providing that a financial institution
need not comply with the error
37 See also EFTA Section 919(g)(1) (providing that
a designated recipient ‘‘shall not be deemed to be
a consumer for purposes of this Act’’).

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resolution provisions of § 205.11 for
untimely notices of error).
In many cases, a sender that has a
problem or issue with a particular
remittance transfer may contact the
agent location that the sender used to
send the transfer to resolve the problem
or issue, rather than notifying the
provider directly. Proposed comment
33(b)–5 states that a notice of error from
a sender received by a remittance
transfer provider’s agent is deemed to be
received by the provider for purposes of
the 180-day time frame for reporting
errors under proposed § 205.33(b)(1)(i).
The Board believes that it is appropriate
to treat notices of error given to the
agent as notice to the provider because
in most cases, it will be the agent with
which the sender has the direct
relationship, and not the provider. In
addition, treating a notice of error given
to the agent as notice to the provider
ensures that a sender does not lose his
or her error resolution rights merely
because the sender was unaware of a
need to directly notify the provider.
Proposed comment 33(b)–6 crossreferences the disclosure requirements
in proposed § 205.31, discussed above,
to reiterate that a remittance transfer
provider must include an abbreviated
notice of the consumer’s error resolution
rights on the receipt under
§ 205.31(b)(2) or combined disclosure
under § 205.31(b)(3), as applicable. In
addition, the remittance transfer
provider must make available to a
sender upon request, a notice providing
a full description of error resolution
rights that is substantially similar to the
proposed model error resolution and
cancellation notice set forth in
Appendix A of this regulation (Model
Form A–36).
33(c) Time Limits and Extent of
Investigation
EFTA Section 919(d)(1)(B) generally
provides that a remittance transfer
provider must investigate and resolve an
error not later than 90 days after receipt
of a sender’s timely notice of error.
EFTA Section 919(d)(1)(B) also specifies
certain remedies for errors in
connection with a remittance transfer;
however, the statute also authorizes the
Board to provide ‘‘such other remedy’’ as
the Board determines appropriate ‘‘for
the protection of senders.’’
Proposed § 205.33(c) implements the
statutory time frame for investigating
errors and sets forth the procedures for
resolving an error, including the
applicable remedies. Consistent with
the statute, proposed § 205.33(c)(1)
requires a remittance transfer provider
to promptly investigate a notice of error
to determine whether an error occurred

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within 90 days of receiving the sender’s
notice.
Pursuant to the Board’s authority
under EFTA Section 904(a), the
proposed rule further requires the
remittance transfer provider to report
the results to the sender within three
business days after completing its
investigation, which is consistent with
the time frame for reporting the results
of an error investigation under
Regulation E, § 205.11(c)(2)(iv). The
report or notice of results must also alert
the sender of any remedies available for
correcting any error that the provider
determines has occurred.
Although EFTA Section 919(d)(1)
does not expressly require a notice to be
provided to the sender when the
provider determines that an error has
occurred, the Board believes that a
notice is appropriate under these
circumstances to alert the sender of the
results of the investigation as well as to
inform the sender of available remedies.
The proposed rule does not require a
written notice to a sender that an error
occurred because such a requirement
could unnecessarily delay a sender’s
ability to receive an appropriate remedy.
Accordingly, proposed comment 33(c)–
1 clarifies that if the error occurred as
described by the sender, the provider
may inform the sender of its findings
either orally or in writing. However, if
the error did not occur as described, the
remittance transfer provider must
provide a written notice of its findings
under § 205.33(d), discussed below.
Proposed § 205.33(c)(2) establishes
the procedures and remedies for
correcting an error. The proposed rule
implements the two remedies that are
specified in the statute and adds a third
remedy that would apply if the transfer
was not made available to the
designated recipient by the stated date
of availability under proposed
§ 205.33(a)(1)(iv). As in the statute, the
proposed rule allows the sender to
designate the preferred remedy in the
event of an error. See EFTA Section
919(d)(1)(B). Under proposed
§ 205.33(c)(2), the sender could choose
to obtain a full refund of the amount
tendered where the remittance transfer
was not properly transmitted, or an
amount appropriate to resolve the error.
Alternatively, the sender could choose
to have the remittance transfer provider
send to the designated recipient the
amount appropriate to resolve the error,
at no additional cost to the sender or the
designated recipient. See proposed
§§ 205.33(c)(2)(i) and (ii).
In addition, if the remittance transfer
was not sent or delivered to the
designated recipient by the stated date
of availability, the remittance transfer

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provider would be required to refund all
fees charged or imposed in connection
with the transfer, even if the consumer
asks the provider to send the remittance
transfer to the designated recipient as
the preferred remedy. See proposed
§ 205.33(c)(2)(iii). The Board believes
that requiring the provider to refund all
fees imposed in connection with the
remittance transfer, including the
transfer fee, is appropriate under such
circumstances because the sender did
not receive the contracted service,
specifically the availability of funds in
connection with the transfer by the
stated date. Moreover, in some cases,
the sender may have paid an additional
fee for expedited delivery of funds. See
proposed comment 33(c)–4. Of course,
in the event that the funds have already
been delivered to the recipient, even if
on an untimely basis, the sole remedy
in such case would be the refund of
fees.
Under proposed § 205.33(c)(2), the
remittance transfer provider must
correct the error within one business
day of, or as soon as reasonably
practicable after, receiving the sender’s
instructions regarding the appropriate
remedy. The Board expects that in most
cases, a remittance transfer provider
will correct an error in accordance with
the sender’s instructions within one
business day of receiving the
instructions. However, the proposed
rule provides additional flexibility to
address the limited circumstances
where the particular method of sending
a remittance transfer may present
practical impediments to a provider’s
ability to correct an error within one
business day. For example, as discussed
above, a wire transfer sent
internationally may go through several
intermediary institutions before getting
to the designated recipient. In such
cases, it may not be practicable to make
the amount in error available to the
recipient within one business day in
accordance with a sender’s request. The
Board solicits comment on whether the
proposed time frame for correcting an
error under § 205.33(c)(2) is appropriate.
Proposed comment 33(c)–2 clarifies
that the remittance transfer provider
may request that the sender designate
the preferred remedy at the time the
sender provides notice of error.
Permitting such requests may enable
providers to process error claims more
expeditiously without waiting for the
sender’s subsequent instructions after
notifying the sender of the results of the
investigation. Nonetheless, if the sender
does not indicate the desired remedy at
the time of providing a notice of error,
the provider would still be required to
notify the sender of any available

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remedies in the report provided under
§ 205.33(c)(1) if the provider determines
an error occurred. See proposed
comment 33(c)–2.
The Board notes that under the statute
and proposed rule, a provider may be
unable to promptly correct an error if
the consumer fails to designate an
appropriate remedy either at the time of
providing the notice of error or in
response to the provider’s notice
informing the consumer of its error
determination and available remedies.
Comment is requested on whether the
Board should alternatively permit
remittance transfer providers to select a
default method of correcting errors,
provided that the sender retains the
option of selecting a different remedy if
appropriate. For example, a sender
could choose to automatically refund to
senders any amounts necessary to
correct the error, but each sender could
decide in an individual case to decline
the refund and instead request that the
provider deliver the appropriate amount
to the designated recipient.
Proposed comment 33(c)–3 provides
additional guidance regarding the
appropriate remedies where the sender
has paid an excess amount to send a
remittance transfer. Under that
circumstance, the sender may request a
refund of the amount paid in excess or
may request that the remittance transfer
provider make that excess amount
available to the designated recipient at
no additional cost. Proposed comment
33(c)–4 states that fees that must be
refunded to a sender for a failure to
make funds from a remittance transfer
available by the stated date of
availability under § 205.33(a)(1)(iv)
include all fees imposed for the transfer,
regardless of the party that imposed the
fee, and are not limited to fees imposed
by the provider.
Proposed comment 33(c)–5 clarifies
that if an error occurred, whether as
alleged or in a different amount or
manner, a remittance transfer provider
may not impose any charges related to
any aspect of the error resolution
process, including any charges for
documentation or investigation. The
Board is concerned that such fees or
charges might have a chilling effect on
a sender’s good faith assertion of errors.
See, e.g., comment 11(c)–3. Nothing in
this proposed rule, however, would
prohibit a remittance transfer provider
from imposing a fee for making copies
of documentation for non-errorresolution related purposes, such as for
tax documentation purposes. See, e.g.,
proposed § 205.33(a)(2)(iii).
Under proposed comment 33(c)–6, a
remittance transfer provider may correct
an error, without further investigation,

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in the amount or manner alleged by the
sender to be in error. However, the
provider must otherwise comply with
all other applicable requirements of
§ 205.33, including providing notice of
the resolution of the error under
§ 205.33(c). See, e.g., comment 11(c)–4.

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33(d) Procedures if Remittance Transfer
Provider Determines No Error or
Different Error Occurred
Proposed § 205.33(d) establishes
procedures in the event that a
remittance transfer provider determines
that no error or a different error
occurred from that described by the
sender. Consistent with EFTA Section
919(d)(1)(B)(iv), proposed § 205.33(d)(1)
would require the remittance transfer
provider to provide a written
explanation of the provider’s finding
that there was no error or that a different
error occurred. Such explanation must
respond to the sender’s specific
complaint and note the sender’s right to
request the documents that the provider
relied on in making its determination.
Proposed § 205.33(d)(2) further states
that upon the sender’s request, the
remittance transfer provider must
promptly provide copies of such
documentation.
Proposed comment 33(d)–1 states that
where a remittance transfer provider
determines that an error occurred in a
manner or amount different from that
described by the sender, the provider
must comply with applicable provisions
of both § 205.33(c) and (d). The
proposed commentary also clarifies that
in such case, the provider may choose
to give the notice of correction of error
under § 205.33(c)(1) and the explanation
that a different error occurred under
§ 205.33(d) separately or in a combined
form. See, e.g., comment 11(d)–1
(establishing a similar provision for
error investigations involving EFTs).
33(e) Reassertion of Error
Under proposed § 205.33(e), a
remittance transfer provider that has
fully complied with the error resolution
requirements with respect to a
particular notice of error has no further
responsibilities in the event the sender
later reasserts the same error, except in
the case of an error asserted following
the sender’s receipt of information
provided under § 205.33(a)(1)(v).
Proposed comment 33(e)–1 clarifies that
the remittance transfer provider has no
further error-resolution responsibilities
if the sender voluntarily withdraws the
notice alleging an error. In such case,
however, the sender retains the right to
reassert the allegation within the
original 180-day period from the stated
date of availability unless the remittance

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transfer provider had already complied
with all of the error resolution
requirements before the allegation was
withdrawn. The proposed provision and
comment are modeled on similar
provisions under § 205.11(e). Comment
is requested on whether additional
guidance is necessary regarding the
circumstances in which a sender has
‘‘voluntarily withdrawn’’ a notice of
error.
33(f) Relation to Other Laws
As noted above under
§ 205.33(a)(1)(i), the error resolution
rights for remittance transfers exist
independently from other rights that a
consumer may have under other
existing federal law. For example, when
a sender uses a credit card to pay for a
remittance transfer, the sender may have
billing error rights under Regulation Z,
12 CFR 226.13, with respect to the
extension of credit if there is an
incorrect amount charged to the
consumer’s account for the transfer, in
addition to the error resolution rights
the sender may assert against the
remittance transfer provider. Similarly,
a sender may use a debit card to pay for
a remittance transfer and thus may have
error resolution rights with respect to
both the remittance transfer provider
and the account-holding institution.
Proposed § 205.33(f) contains guidance
regarding the interplay between the
error resolution provisions for
remittance transfers and error resolution
rights that may exist under other
applicable consumer financial
protection laws.
In most cases when a consumer pays
for a remittance transfer by means of an
electronic fund transfer from his or her
checking or savings account (for
example, by providing a debit card as
payment or authorizing an ACH transfer
from the account), the institution
providing the remittance transfer service
will not be the same institution that
holds the debited account. If, however,
the sender uses his or her bank or credit
union to send a remittance transfer via
an international ACH service, the
account-holding bank or credit union
would also be the remittance transfer
provider. In such case, a potential
conflict arises between the error
resolution time frames and procedures
that would apply under EFTA Section
908, implemented in § 205.11, and the
error resolution provisions under this
proposed rule. For example, under
§ 205.11(c), a financial institution
generally has 10 business days to
investigate a consumer’s notice of error
(and up to 45 calendar days if
provisional credit is provided).
However, under EFTA Section

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29931

919(d)(1)(B) and proposed § 205.33(c),
discussed above, a remittance transfer
provider has up to 90 calendar days to
investigate a sender’s notice of error.
EFTA Section 919(e)(1) provides that
under these circumstances—that is,
where a remittance transfer is also an
electronic fund transfer—the error
resolution provisions for remittance
transfers apply to the institution/
provider, rather than the error
resolution provisions generally
applicable to EFTs.
Proposed § 205.33(f)(1) implements
EFTA Section 919(e)(1)’s conflict of law
provision. The proposed rule provides
that if an alleged error in connection
with a remittance transfer involves an
incorrect EFT to a sender’s account and
the account is also held by the
remittance transfer provider, then the
requirements of § 205.33, and its
applicable time frames and procedures,
govern the error resolution process.
However, proposed § 205.33(f)(1) further
provides that if the notice of error is
asserted with an account-holding
institution that is not the same entity as
the remittance transfer provider, the
error resolution procedures under
§ 205.11, and not those under § 205.33,
apply to the account-holding
institution’s investigation of the alleged
error. In both cases, the electronic fund
transfer from a consumer’s account may
also be a remittance transfer.
Nonetheless, the Board believes that as
a practical matter, an account-holding
institution would be unable to identify
a particular EFT as a remittance transfer
unless it was also the remittance
transfer provider. In the absence of
direct knowledge that a particular EFT
was used to fund a remittance transfer,
the account-holding institution would
face significant compliance risk if the
error resolution requirements under
proposed § 205.33 were deemed to
apply to the error. The Board does not
believe such an outcome is desirable.
Accordingly, proposed § 205.33(f)(1)
permits an account-holding institution
to comply with the error resolution
requirements of § 205.11 when the
institution is not also the remittance
transfer provider for the transaction in
question. Of course, the consumer still
has independent error resolution rights
against the remittance transfer provider
itself under proposed § 205.33.
Proposed comment 33(f)–1 clarifies
that the guidance in § 205.33(f)(1)
applies only when an error could be
asserted under both §§ 205.11 and
205.33 with a financial institution that
is also the remittance transfer provider.
For example, the proposed comment
provides that if the sender asserted an
error under § 205.11 with a remittance

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transfer provider that holds the sender’s
account, and the error was not also an
error under § 205.33 (such as in the case
of an omission of an EFT on a periodic
statement), then the error-resolution
provisions of § 205.11 would
exclusively apply to the error.
Proposed § 205.33(f)(2) addresses
circumstances where an alleged error
involves an incorrect extension of credit
in connection with a remittance
transfer, such as when a consumer
provides a credit card to pay for a
remittance transfer. If the consumer
provides a notice of error to the creditor
that issued the credit card, the
provisions of Regulation Z, 12 CFR
226.13, governing error resolution apply
to the creditor, rather than the
requirements under § 205.33. However,
if the sender instead provides a notice
of error asserting an incorrect payment
amount involving the use of a credit
card to the remittance transfer provider,
then the error-resolution provisions of
§ 205.33 apply to the remittance transfer
provider.
In certain circumstances, the creditor
issuing a credit card may also act as a
remittance transfer provider, for
example, when the cardholder sends
funds from his or her credit card
through a service offered by the creditor
to a recipient in a foreign country. In the
case of an incorrect extension of credit
in connection with the transfer, an error
could potentially be asserted under
either Regulation Z or the error
resolution provisions applicable to
remittance transfers in proposed
§ 205.33. The proposed rule provides
that under these circumstances, the
error resolution provisions under
Regulation Z § 226.13 would apply to
the alleged error. Under these
circumstances, the Board believes it is
reasonable to apply the Regulation Z
error resolution provisions because 12
CFR 226.13(d)(1) permits a consumer to
withhold disputed amounts while an
error is being investigated. Nonetheless,
the Board notes that if the error
resolution provisions under proposed
§ 205.33 were instead deemed to apply
to the error, then a sender would have
180 days from the stated date of
availability for the transfer to assert a
notice of error, rather than 60 days from
the periodic statement reflecting the
error. Accordingly, because the error
resolution provisions under 12 CFR
226.13 and proposed § 205.33 each
provide greater protection to consumers
in different respects, the Board solicits
comment on the appropriate standard to
apply when an error for an incorrect
amount paid arises in connection with
a remittance transfer sent by a creditor.
Proposed § 205.33(f)(3) provides

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guidance where a person makes an
unauthorized EFT or unauthorized use
of a credit card to send a remittance
transfer, such as when a stolen debit or
credit card is used to send funds to a
foreign country. Under such
circumstances, the consumer holding
the asset account or the credit card
account is not the sender of the
remittance transfer, and thus the error
resolution provisions under § 205.33 do
not apply. See proposed comment
33(b)–1. However, proposed
§ 205.33(f)(3) clarifies that the consumer
retains existing rights under Regulation
E §§ 205.6 and 205.11 in the case of an
unauthorized EFT and Regulation Z
§§ 226.12(b) and 226.13 in the case of an
unauthorized use of a credit card.
As discussed above, in certain cases a
consumer may be able to assert error
resolution rights in connection with a
remittance transfer with both the
remittance transfer provider as well as
his or her account-holding institution or
credit card issuer or creditor.
Nonetheless, the Board does not believe
that a consumer should be able to
receive a windfall that could otherwise
arise if the consumer were to
successfully assert an error with both
the provider and the account-holding
institution and/or credit card issuer or
creditor. Accordingly, proposed
comment 33(f)–2 clarifies that if a
sender receives credit to correct an error
of an incorrect amount paid in
connection with a remittance transfer
from either the remittance transfer
provider or the sender’s accountholding institution (or creditor), and
then subsequently asserts the same error
with the other party, the other party has
no further responsibilities to investigate
the error. In such case, the sender has
already received sufficient credit to
correct the error, thereby extinguishing
the second party’s error resolution
obligations. The proposed comment also
clarifies that nothing in this section
prevents an account-holding institution
or creditor from reversing amounts it
has previously credited to correct an
error if the consumer receives more than
one credit to correct the same error. For
example, assume that a sender
concurrently files notices of error with
his or her account-holding institution
and remittance transfer provider for the
same error, and the sender receives
credit from the account-holding
institution for the error. If the
remittance transfer provider
subsequently provides a credit to the
sender for the same error, the accountholding institution may reverse the
amounts it had previously credited to
the consumer’s account even after the

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45-day error resolution period set forth
in § 205.11.
33(g) Error Resolution Standards and
Recordkeeping Requirements
EFTA Section 919(d)(2) directs the
Board to establish clear and appropriate
standards for remittance transfer
providers with respect to error
resolution relating to remittance
transfers, to protect senders from such
errors. The statute specifically provides
that such standards must include
appropriate standards regarding
recordkeeping, including retention of
certain error-resolution related
documentation. Proposed § 205.33(g)
implements the new requirements
regarding error resolution standards and
recordkeeping requirements.
Proposed § 205.33(g)(1) provides that
a remittance transfer provider must
develop and maintain written policies
and procedures that are designed to
ensure compliance with respect to the
error resolution requirements applicable
to remittance transfers under § 205.33.
The proposed rule would also require
remittance transfer providers to take
steps to ensure that whenever a provider
uses an agent to perform any of the
provider’s error resolution obligations,
the agent conducts such activity in
accordance with the provider’s policies
and procedures. This approach is
similar to one taken by the federal
banking agencies in other contexts. See,
e.g., 12 CFR 222.90(e) (requiring that an
identity theft red flags program exercise
appropriate and effective oversight of
service-provider arrangements).
Proposed § 205.33(g)(2) provides that
the remittance transfer provider’s
policies and procedures concerning
error resolution must include provisions
regarding the retention of
documentation related to an error
investigation. Consistent with the
statute, such provisions must ensure, at
a minimum, the retention of any notices
of error submitted by a sender,
documentation provided by the sender
to the provider with respect to the
alleged error, and the findings of the
remittance transfer provider regarding
the investigation of the alleged error.
See EFTA Section 919(d)(2).
Proposed comment 33(g)–1 states that
remittance transfer providers are subject
to the record retention requirements
under § 205.13, which apply to ‘‘any
person subject to the [EFTA].’’
Accordingly, remittance transfer
providers must retain documentation,
including documentation related to
error investigations, for a period of not
less than two years from the date a
notice of error was submitted to the
provider or action was required to be

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taken by the provider. However, the
proposed comment further clarifies that
the record retention requirements do not
require a remittance transfer provider to
maintain records of individual
disclosures of remittance transfers that
it has provided to each sender. Instead,
a provider need only retain records to
ensure that it can comply with a
sender’s request for documentation or
other information relating to a particular
remittance transfer under
§ 205.33(a)(1)(v), including a request for
supporting documentation to enable the
sender to determine whether an error
exists with respect to that transfer.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Section 205.34 Procedures for
Cancellation and Refund of Remittance
Transfers
EFTA Section 919(d)(3) directs the
Board to issue final rules regarding
appropriate remittance transfer
cancellation and refund policies for
consumers within 18 months of the date
of enactment of the Dodd-Frank Act.
Proposed § 205.34 establishes new
cancellation and refund rights for
senders of remittance transfers as
required by the Dodd-Frank Act.
34(a) Sender Right of Cancellation and
Refund
Under proposed § 205.34(a), a
remittance transfer provider must
comply with a sender’s oral or written
request to cancel a remittance transfer
received no later than one business day
from when the sender makes payment
in connection with the remittance
transfer provider. In determining the
appropriate minimum time period for
cancelling a remittance transfer, the
Board considered a number of factors.
Through its outreach, the Board
understands that some remittance
transfer providers permit a sender to
cancel a remittance transfer and obtain
a full refund of all funds tendered at any
time so long as the transfer has not been
picked up in the foreign country by the
recipient or deposited into the
recipient’s account.
In contrast, however, remittance
transfers sent by ACH or wire transfer
generally cannot be cancelled once the
payment order has been accepted by the
sending institution. See, e.g., UCC
Article 4A–211 (providing that a
payment order cannot be cancelled or
amended once it has been accepted
unless the receiving bank agrees or a
funds-transfer system rule allows
cancellation or amendment without
agreement of the bank). Thus, a
prolonged cancellation period would
present significant practical difficulties
for remittance transfers sent by ACH
and wire transfer. Under such

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circumstances, the bank or credit union
would likely wait to execute the
payment order until the cancellation
period has passed, which could further
delay the receipt of the funds in the
foreign country.
The Board also considered time
frames for cancellation established
under state laws applicable to
remittance transfers, or money transfers
more generally. See, e.g., TX Admin.
Code § 278.052 (providing that a
consumer may cancel a transfer for any
reason within 30 minutes of initiating
the transfer provided the customer has
not left the premises). Finally, during
the Board’s consumer testing, a few of
the participants that believed that they
had a right to cancel a remittance
transfer expected that they would have
to exercise their right to cancel the same
day they requested the transfer be sent.
For these reasons, the Board believes
that one business day provides a
reasonable time frame for a sender to
evaluate whether to cancel a remittance
transfer after providing payment for the
transfer. Nothing in the proposed rule,
however, prohibits remittance transfer
providers from offering longer
cancellation time frames to senders.
Comment is requested regarding
whether the proposed minimum time
period should be longer or shorter than
proposed.
The proposed rule contains two
conditions on the right to cancel. First,
under proposed § 205.34(a)(1), a valid
request to cancel a remittance transfer
must enable the provider to identify the
sender’s name and address or telephone
number and the particular transfer to be
cancelled. Proposed comment 34(a)–1
clarifies that the request to cancel a
remittance transfer is valid so long as
the remittance transfer provider is able
to identify the remittance transfer in
question. For example, the sender could
provide the confirmation number or
code that would be used by the
designated recipient to pick up the
transfer, or other identification number
or code supplied by the provider in
connection with the transfer. The
proposed comment also permits the
provider to request, or the sender to
provide, the sender’s e-mail address
instead of a physical address, so long as
the provider can identify the transfer to
which the cancellation request applies.
Second, proposed § 205.34(a)(2)
provides that a sender’s timely request
to cancel a remittance transfer is
effective so long as the transferred funds
have not been picked up by the

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29933

designated recipient or deposited into
an account held by the recipient.38
Proposed comment 34(a)–2 crossreferences the disclosure requirements
in proposed § 205.31 to reiterate that a
remittance transfer provider must
include an abbreviated notice of the
sender’s right to cancel a remittance
transfer in the receipt or combined prepayment notice, as applicable. In
addition, the remittance transfer
provider must make available to a
sender upon request, a notice providing
a full description of the right to cancel
a remittance transfer that is
substantially similar to the proposed
model error resolution and cancellation
notice set forth in Appendix A of this
regulation (Model Form A–36).
34(b) Time Limits and Refund
Requirements
Proposed § 205.34(b) establishes the
time frames and refund requirements
applicable to remittance transfer
cancellation requests. The proposed rule
requires a remittance transfer provider
to refund, at no additional cost to the
sender, the total amount of funds
tendered by the sender in connection
with the remittance transfer, including
any fees imposed in connection with the
requested transfer, within three business
days of receiving the sender’s valid
cancellation request. The Board believes
that three business days provides
sufficient time for a remittance transfer
provider to determine whether a
remittance transfer has been picked up
in the foreign country or deposited into
the recipient’s account. Comment is
requested regarding the appropriate
time period for providing a refund
following a sender’s request for
cancellation.
Proposed comment 34(b)–1 clarifies
that a remittance transfer provider may,
at the provider’s discretion, issue a
refund in cash or in the same form of
payment that was initially tendered by
the sender for the remittance transfer.
For example, if the sender originally
provided a credit card as payment for
the transfer, the remittance transfer
provider may issue a credit to the
sender’s credit card account in the
amount of the payment.
Proposed comment 34(b)–2 addresses
fees that must be refunded upon a
sender’s timely request to cancel a
38 Such accounts need not be accounts held by a
financial institution so long as the recipient may
access the transferred funds without any
restrictions regarding the use of such funds. For
example, some Internet-based providers may track
consumer funds in a virtual account or wallet and
permit the holder of the account or wallet to make
purchases or withdraw funds once funds are
credited to the account or wallet.

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remittance transfer. Under the proposed
comment, the remittance transfer
provider must refund all funds tendered
by the sender in connection with the
remittance transfer, including any fees
that have been imposed for the transfer,
regardless of whether the provider or a
third party, such as an intermediary
institution, imposed the fee.
The Board solicits comment on any
and all aspects of the proposed right to
cancel a remittance transfer.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Section 205.35 Acts of Agents
In most cases, remittance transfers are
sent through an agent of the remittance
transfer provider, such as a convenience
store that has contracted with the
provider to offer remittance transfer
services at that location. EFTA Section
919(f)(1) generally makes remittance
transfer providers liable for any
violation of EFTA Section 919 by an
agent, authorized delegate, or person
affiliated with such provider, when
such agent, authorized delegate, or
affiliate acts for that remittance transfer
provider. EFTA Section 919(f)(2)
requires the Board to prescribe rules to
implement appropriate standards or
conditions of liability of a remittance
transfer provider, including one that
acts through its agent or authorized
delegate.39
The Board is proposing two
alternatives to implement EFTA Section
919(f) with respect to acts of agents.
Under the first alternative, a remittance
transfer provider would be strictly liable
for violations by an agent when such
agent acts for the provider. Under the
second alternative, a remittance transfer
provider would not be liable under the
EFTA for violations by an agent acting
for the provider where the provider
establishes and maintains policies and
procedures for agent compliance,
including appropriate oversight
measures, and the provider corrects any
violation, to the extent appropriate. The
Board solicits comment on both
alternatives.
Alternative A
EFTA Section 919(f)(1) states that
remittance transfer providers are liable
for any violation of EFTA Section 919
by an agent, authorized delegate, or
person affiliated with such provider,
when such agent, authorized delegate,
or affiliate acts for that remittance
transfer provider. Under Alternative A,
proposed § 205.35 provides that a
remittance transfer provider is liable for
any violation of Subpart B by an agent
when such agent acts for the provider.
39 See proposed § 205.30(a), which defines the
term agent for purposes of the proposed rule.

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Some agents have a non-exclusive
arrangement with several remittance
transfer providers, so that a sender may
choose from among the remittance
transfer providers at that location. If a
sender chooses to use Provider A to
send funds at the agent location, then
Provider B would not be liable for the
agent’s actions in that instance because
the agent would be acting for
Provider A.
Proposed comment 35–1 explains that
remittance transfer providers remain
fully responsible for complying with the
requirements of this subpart, including,
but not limited to, providing the
disclosures set forth in proposed
§ 205.31 and remedying any errors as set
forth in proposed § 205.33. This is the
case even if a remittance transfer
provider performs its functions through
an agent, and regardless of whether the
provider has an agreement with a third
party that transfers or otherwise makes
funds available to a designated
recipient.
The approach set forth in Alternative
A is consistent with EFTA Section
919(f)(1), as well as the approach
generally taken in other Board
regulations, including Regulation E. For
example, under Regulation E’s payroll
card rules, a financial institution is
required to provide initial payroll card
disclosures to a payroll account holder.
If, by contractual agreement with the
institution, a third-party service
provider or the employer agrees to
deliver these disclosures on the
institution’s behalf and fails to do so,
the issuing financial institution is
nonetheless liable for the violation.40
Similarly, if an agent at a retail
establishment fails to provide the
disclosures required by proposed
§ 205.31, under the proposed rule, the
remittance transfer provider would be
liable.
Even where there is no contractual
relationship between a provider and an
agent, the proposed rule by its terms
requires the remittance transfer provider
to make accurate, timely disclosures and
to provide error resolution rights to the
sender. See, e.g., proposed § 205.31(b).
A remittance transfer provider may not
always have a contractual relationship
with the location that is making funds
available or depositing funds into the
40 12 CFR 205.18. See 71 FR 51437, 51441–42
(August 30, 2006) (‘‘In many cases, the depository
institution may use a third-party service provider to
perform some or a substantial proportion of the
compliance duties (e.g., in a turnkey arrangement),
including mailing account terms and conditions
and providing error resolution services’’; ‘‘[P]ayroll
card account holders will, at a minimum, be able
to assert their Regulation E rights against the
depository institution holding their account in all
cases * * *’’).

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recipient’s account. For example, a
financial institution that sends a wire
transfer may not have a correspondent
relationship or other contractual privity
with an institution abroad where the
wire transfer is deposited. Nonetheless,
if the amount of currency paid to the
designated recipient is reduced by an
intermediary institution’s fee, such that
the amount disclosed by the remittance
transfer provider (or its agent) is no
longer accurate, the remittance transfer
is responsible for providing the
appropriate remedy under proposed
§ 205.33. See proposed
§ 205.33(a)(1)(iii).
Alternative B
Remittance transfer providers have
expressed concern that, under a strict
liability approach, they may be held
responsible for their agents’ failure to
comply with the statute despite the
provider’s best efforts to monitor and
train their agents. As noted previously,
the majority of senders send remittances
through money transmitters at agent
locations. Some providers have a
network of thousands, or in some cases,
hundreds of thousands of agent
locations worldwide to oversee, making
frequent on-site inspection of each
location impracticable. Providers have
expressed particular concern about
administrative and civil liability under
the EFTA for a single agent’s noncompliance.
Alternative B recognizes the unique
position of agents in the remittance
transfer model, while still making an
individual consumer whole for any
problems experienced with the
remittance transfer. Under Alternative
B, proposed § 205.35 provides that a
remittance transfer provider is liable for
any violation of Subpart B by an agent
when such agent acts for that provider,
unless it meets two conditions. The first
condition is that the remittance transfer
provider must establish and maintain
written policies and procedures
designed to assure compliance with
Subpart B by an agent, including
policies, procedures and other
appropriate oversight measures. See
proposed § 205.35(a). The second
condition is that the remittance transfer
provider must correct the violation to
the extent appropriate, including
complying with the error resolution
procedures set forth in proposed
§ 205.33 and providing the sender the
remedies set forth in proposed
§ 205.33(c)(2). See proposed § 205.35(b).
A remittance transfer provider that
meets these two conditions would not
be liable for the acts of its agents.
Alternative B is proposed consistent
with the Board’s authority under EFTA

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srobinson on DSK4SPTVN1PROD with PROPOSALS3

Section 919(f)(2) to prescribe rules to
implement appropriate standards or
conditions of liability of a remittance
transfer provider, including one that
acts through its agent or authorized
delegate.
Proposed comment 35–1 states that
remittance transfer providers generally
remain fully responsible for complying
with the requirements of Subpart B,
including but not limited to providing
the disclosures set forth in proposed
§ 205.31 and remedying any errors as set
forth in proposed § 205.33. As in
Alternative A, this is the case even if a
remittance transfer provider performs its
functions through an agent or other
person, and regardless of whether the
provider has an agreement with a third
party that transfers or otherwise makes
funds available to a designated
recipient.
Proposed comment 35–2 provides
further guidance on proposed
§ 205.35(a)(1). The proposed comment
states that a remittance transfer provider
must establish and maintain written
policies and procedures for compliance
with Subpart B applicable to its agents.
Maintenance of policies and procedures
includes periodic updates to and
administration of such policies and
procedures, including appropriate
oversight over agents. Further,
appropriate oversight measures include
regular audits, training, and other
measures designed to ensure an agent’s
compliance with Subpart B. Under these
circumstances, a provider will not be
liable if an agent fails to follow the
policies and procedures in an
individual case, and so long as the
remittance transfer provider makes the
consumer whole for any error resulting
from an agent’s acts, including as set
forth under the error resolution
provisions in proposed § 205.33.
Appendix A—Model Disclosure Clauses
and Forms
The proposal would add to Appendix
A twelve model forms that a remittance
transfer provider may use in connection
with remittance transfers. Proposed
Model Forms A–30 through A–41 are
intended to demonstrate several formats
a remittance transfer provider may use
to comply with the disclosure
requirements of proposed § 205.31. The
Board is proposing model forms
pursuant to its authority under EFTA
section 904(a), rather than model
clauses pursuant to its authority under
EFTA section 904(b), in order to clearly
demonstrate the general form and
specific format requirements of
§ 205.31(a) and (c). Proposed Model
Forms A–30 through A–32 were
developed in consumer testing and

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reflect a format in which the flow and
organization of information effectively
communicates the remittance
disclosures to most consumers.
The proposed rule amends instruction
2 to Appendix A regarding the use of
model forms, which currently only
references financial institutions and
electronic fund transfers. The
instruction is proposed to be revised to
include references to remittance transfer
providers and remittance transfers. The
proposed instruction also updates the
numbering of the liability provisions of
the EFTA as sections 916 and 917. Thus,
the proposed instruction clarifies that
the use of the proposed model forms in
making disclosures would protect a
remittance transfer provider from
liability under sections 916 and 917 of
the EFTA if they accurately reflect the
provider’s remittance transfer services.
The proposal also adds instruction 4
to Appendix A to describe how a
remittance transfer provider may
properly use and alter the model forms.
Proposed instruction 4 to Appendix A
explains that Model Forms A–30
through A–32 demonstrate how a
provider could provide the required
disclosures for a remittance transfer
exchanged into local currency. Proposed
Model Forms A–33 through A–35
demonstrate how a provider could
provide the required disclosures for U.S.
dollar-to-U.S. dollar remittance
transfers. Proposed instruction 4 states
that these forms also demonstrate
disclosure of the required content, in
accordance with the grouping and
proximity requirements of § 205.31(c)(1)
and (2), in both a register receipt format
(as developed in consumer testing) and
an 8.5 inch by 11 inch format. Proposed
Model Form A–36 provides long-form
model error resolution and cancellation
disclosures in connection with
§ 205.31(d), and Model Form A–37
provides short-form model error
resolution and cancellation disclosures
in connection with § 205.31(b)(2)(iv).
Proposed instruction 4 to Appendix A
also explains that a remittance transfer
provider could use the language and
formatting provided in proposed Forms
A–37 through A–41 for disclosures that
are required to be provided in Spanish,
pursuant to the requirements of
proposed § 205.31(g). The Board
understands that the majority of
remittance transfers from the United
States are sent to Mexico and the
Caribbean, Central America, and South
America.41 Spanish is the primary
language in many of the countries in
these regions, so many senders of
remittance transfers that remit funds to
41 See

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the countries in these regions speak
Spanish. Therefore, the Board believes
that it is appropriate to provide model
disclosures in Spanish to facilitate
compliance. The Board requests
comment on the provision of Spanish
language disclosures, including whether
the language used in the Spanish
translation would effectively
communicate the remittance transfer
disclosures to Spanish-speaking
consumers.
The Board recognizes that disclosures
may be required to be provided in
languages other than English and
Spanish. Nonetheless, the Board
believes it would be impracticable to
provide model forms in every possible
language in which remittance transfer
disclosures may be provided.
Proposed instruction 4 to Appendix A
clarifies that the model forms may
contain information that is not required
by Subpart B, such as a confirmation
code and the sender’s name and contact
information. The additional information
not required by Subpart B is included
on the model form to demonstrate one
way of displaying this information in
compliance with § 205.31(c)(4). The
proposed instruction clarifies that any
additional information must be
presented consistent with a remittance
transfer provider’s obligation to provide
required disclosures in a clear and
conspicuous manner.
Proposed instruction 4 to Appendix A
further clarifies that use of the model
forms is optional. A remittance transfer
provider may change the forms by
rearranging the format or by making
modifications to the language of the
forms, without modifying the substance
of the disclosures. Proposed instruction
4 to Appendix A clarifies that
rearrangement or modification of the
format of the model forms is
permissible, as long as it is consistent
with the form, grouping, proximity, and
other requirements of § 205.31(a) and
(c). The proposed instruction states that
providers making revisions that do not
comply with this section will lose the
benefit of the safe harbor for appropriate
use of proposed model forms A–30 to
A–41. The Board recognizes that many
remittance transfer providers currently
provide disclosures in a variety of
forms. The Board intends to provide
flexibility to remittance transfer
providers in developing disclosure
forms that comply with the proposed
rule.
Proposed instruction 4 to Appendix A
also provides examples of permissible
changes a remittance transfer provider
may make to the language and format of
the model forms without losing the
benefit of the safe harbor. The proposed

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instruction clarifies that a remittance
transfer provider could substitute the
information entered into the model
forms that is intended to demonstrate
how to complete the information in the
model forms—such as names, addresses,
and Web sites; dates; numbers; and
state-specific contact information—with
information applicable to the remittance
transfer. A remittance transfer provider
could also eliminate disclosures that are
not applicable to the transfer, as
permitted under proposed § 205.31(b),
or provide the required disclosures on a
paper size that is different from a
register receipt and 8.5 inch by 11 inch
formats. The proposed instruction also
clarifies that a remittance transfer
provider could correct or update
telephone numbers, mailing addresses,
or Web site addresses that may change
over time. This instruction applies to all
telephone numbers and addresses on a
model form, including the contact
information of the provider, the state
agency, and the Consumer Financial
Protection Bureau. The proposed
instruction also clarifies that a provider
could provide the required disclosures
in a foreign language, or multiple
foreign languages, subject to the
requirements of proposed § 205.31(g),
without losing the benefit of the safe
harbor.
The proposed comment also clarifies
that an impermissible change would be
adding language to a form that is not
segregated from the required
disclosures, other than as permitted by
§ 205.31(c)(4).
Proposed instruction 4 to Appendix A
further clarifies that adding the term
‘‘Estimated’’ or a substantially similar
term and in close proximity to the
estimated term or terms, as permitted
under proposed § 205.31(d), is a
permissible change to the model forms.
The Board is not proposing separate
forms that demonstrate how estimated
content would be presented on the
forms, because the disclosures will be
the same as the proposed model forms,
except for the disclosures that certain
information is estimated. The general
form and specific formatting will be the
same on forms that include estimates as
they are in the model forms that are
provided.
VI. Initial Regulatory Flexibility
Analysis
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (‘‘RFA’’) generally
requires an agency to publish an initial
regulatory flexibility analysis with a
proposed rule whenever the agency is
required to publish a general notice of
proposed rulemaking for a proposed
rule. The Board requests public

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comment on the following areas in
connection with its initial regulatory
flexibility analysis. The Board will
conduct a final regulatory flexibility
analysis after considering the comments
received during the public comment
period.
1. Statement of the need for, and
objectives of, the proposed rule. The
EFTA, as amended by the Dodd-Frank
Act, was enacted to provide a basic
framework establishing the rights,
liabilities, and responsibilities of
participants in electronic fund and
remittance transfer systems. The
primary objective of the EFTA is the
provision of individual consumer rights.
15 U.S.C. 1693. The EFTA authorizes
the Board to prescribe regulations to
carry out the purpose and provisions of
the statute. 15 U.S.C. 1693b(a). The
EFTA expressly states that the Board’s
regulations may contain ‘‘such
classifications, differentiations, or other
provisions . . . as, in the judgment of the
Board, are necessary or proper to
effectuate the purposes of [the EFTA], to
prevent circumvention or evasion [of
the EFTA], or to facilitate compliance
[with the EFTA].’’ 15 U.S.C. 1693b(c).
The Board is proposing revisions to
Regulation E to implement Section 1073
of the Dodd-Frank Act. The proposal
creates new protections for consumers
who send remittance transfers from the
United States to a designated recipient
in a foreign country. The proposal
generally requires remittance transfer
providers to provide the sender a
written pre-payment disclosure
containing information about the
specific remittance transfer, such as the
exchange rate, applicable fees and taxes,
and the amount to be received by the
designated recipient. The remittance
transfer provider generally must also
provide a written receipt for the
remittance transfer that includes the
above information, as well as additional
information such as the date of
availability and the recipient’s contact
information. Alternatively, the proposal
permits remittance transfer providers to
provide the sender a single written prepayment disclosure containing all of the
information required on the receipt.
The proposal also requires remittance
transfer providers to furnish the sender
with a brief statement of the sender’s
error resolution and cancellation rights,
and requires providers to comply with
related recordkeeping, cancellation, and
refund policies. The proposed revisions
also implement standards of liability for
remittance transfer providers, including
those that act through an agent.
The Board believes that the revisions
to Regulation E discussed above are
consistent with the EFTA, as amended

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by Section 1073 of the Dodd-Frank Act,
and within Congress’s broad grant of
authority to the Board to adopt
provisions that carry out the purposes of
the EFTA.
2. Small entities affected by the
proposed rule. The number of small
entities affected by this proposal is
unknown. Under regulations issued by
the Small Business Administration
(‘‘SBA’’), an entity is considered ‘‘small’’
if it has $175 million or less in assets
for banks and other depository
institutions, or for other financial
businesses, as one whose average
annual receipts do not exceed $7
million.42 Based on estimates compiled
by the Board, the Federal Deposit
Insurance Corporation, and the Office of
Thrift Supervision, there are
approximately 9,458 depository
institutions that could be considered
small entities.43 In addition, the
Financial Crimes Enforcement Network
(FinCEN) previously estimated that
there are approximately 19,000
registered money transmitters, an
estimated 95% of which have less than
$7 million in gross receipts annually.44
Remittance transfer providers will be
required to review and potentially
revise their disclosures and procedures
to ensure that disclosures meet the
content, format, timing, and foreign
language requirements of the proposed
rule, as described above. Remittance
transfer providers will also be required
to review and potentially update their
error resolution and cancellation
procedures to ensure compliance with
the proposed rule, also as described
above. Accordingly, remittance transfer
providers that are small entities will
incur implementation costs to comply
with the rule.
The Board believes that the rule as
proposed offers flexibility that will
mitigate the impact of the proposed rule
on remittance transfer providers that are
small entities. Although the proposed
disclosure rules do contain certain
formatting requirements in order to
ensure that senders notice and
comprehend the disclosures, the
proposed rule also gives remittance
42 13 CFR 121.201; SBA, Table of Small Business
Size Standards (available at: http://www.sba.gov/
sites/default/files/Size_Standards_Table.pdf).
43 The estimate includes 1,459 institutions
regulated by the Board, 659 national banks, and
4,099 federally-chartered credit unions, as
determined by the Board. The estimate also
includes 2,872 institutions regulated by the FDIC
and 369 thrifts regulated by the OTS. See 75 FR
36016, 36020 (Jun. 24, 2010).
44 Notice of Proposed Rulemaking, Cross-Border
Electronic Transmittal of Funds, 75 FR 60377,
60392 (Sept. 30, 2010) (estimates based on
FinCEN’s February 2010 Money Service Business
Registration List).

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transfer providers some flexibility in
drafting their disclosures. For example,
disclosures may be provided on a
register receipt or 8.5 inches by 11
inches piece of paper, consistent with
current practices in the industry. The
Board also believes that currently, some
remittance transfer providers give the
disclosures’ required content.
Additionally, EFTA Section 919(a)(5)
provides the Board with exemption
authority with respect to several
statutory requirements. The Board is
exercising its exemption authority in the
proposed rule in order to reduce
providers’ compliance burden. For
instance, the Board is exercising its
authority under EFTA Section
919(a)(5)(C) to permit remittance
transfer providers to provide the sender
a single written pre-payment disclosure
under the conditions described above,
instead of both pre-payment and receipt
disclosures. Similarly, consistent with
EFTA Section 919(a)(5)(A), the
proposed rule permits remittance
transfer providers to provide prepayment disclosures orally when the
transaction is conducted entirely by
telephone.
Other measures intended to provide
flexibility to remittance transfer
providers are discussed above in this
SUPPLEMENTARY INFORMATION.
The proposed rule could have a
significant economic impact on small
financial institutions that are remittance
transfer providers for consumer
international wire transfers.
Specifically, as discussed above, one
consequence of covering remittance
transfers under the EFTA could be legal
uncertainty for financial institutions, as
providers of consumer international
wire transfers may no longer be able to
rely on UCC Article 4A’s rules
governing the rights and responsibilities
among the parties to a wire transfer. As
a result, some financial institutions may
decide to stop offering international
wire transfers to consumer customers.
However, unless these international
wire transfers constitute a high volume
of a financial institution’s remittance
transfer business, or business in general,
such a decision is unlikely to have a
significant economic impact on the
institution. Based on the Board’s
understanding that consumers are less
likely to send remittance transfers by
wire transfer compared to other
methods, the Board does not believe
that small financial institutions are
likely to be significantly impacted by
the rule.
Nonetheless, the Board solicits
comment on whether the proposed rule
will have a significant economic impact
on small remittance transfer providers.

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The Board also solicits comment on any
significant alternatives that would
reduce the regulatory burden associated
with this proposed rule on small
entities.
3. Other federal rules. The Board has
not identified any likely duplication,
overlap and/or potential conflict
between the proposed rule and any
federal rule.
4. Significant alternatives to the
proposed revisions. The Board solicits
comment on any significant alternatives
that would reduce the regulatory burden
associated with this proposed rule on
small entities.
VII. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act (PRA) of 1995 (44 U.S.C.
3506; 5 CFR part 1320 Appendix A.1),
the Board reviewed the rule under the
authority delegated to the Board by the
Office of Management and Budget
(OMB). The collection of information
that is subject to the PRA by this
proposed rule is found in 12 CFR part
205. In addition, as permitted by the
PRA, the Board also proposes to extend
for three years the current
recordkeeping and disclosure
requirements in connection with
Regulation E. The Federal Reserve may
not conduct or sponsor, and an
organization is not required to respond
to, this information collection unless the
information collection displays a
currently valid OMB control number.
The OMB control number is 7100–0200.
This information collection is
required to provide benefits for
consumers and is mandatory. See 15
U.S.C. 1693 et seq. Since the Board does
not collect any information, no issue of
confidentiality arises. The respondents/
recordkeepers are for-profit financial
institutions and entities involved in the
remittance transfer business, including
small businesses. Respondents are
required to retain records for 24 months,
but this regulation does not specify
types of records that must be retained.
Any entities involved in the
remittance transfer business potentially
are affected by this collection of
information because these entities will
be required to provide disclosures
containing information about
consumers’ specific remittance
transfers. Disclosures must be provided
prior to and at the time of payment for
a remittance transfer, or alternatively, in
a single pre-transaction disclosure
containing all required information.
Remittance transfer providers also make
available a written explanation of a
consumer’s error resolution,
cancellation and refund rights upon
request. Disclosures must be provided

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in English and in each foreign language
principally used to advertise, solicit or
market remittance transfers at an office.
Entities subject to the rule will have
to review and revise disclosures that are
currently provided to ensure that they
accurately reflect the disclosure
requirements in this proposed rule.
Entities subject to the rule may need to
develop new disclosures to meet the
proposed rule’s timing requirements.
The total estimated burden increase,
as well as the estimates of the burden
increase associated with each major
section of the proposed rule as set forth
below, represents averages for all
respondents regulated by the Federal
Reserve. The Federal Reserve expects
that the amount of time required to
implement each of the proposed
changes for a given institution may vary
based on the size and complexity of the
respondent.
The current annual burden to comply
with the provisions of Regulation E is
estimated to be 738,600 hours for the
1,133 institutions 45 supervised by the
Federal Reserve that are deemed to be
respondents for the purposes of the
PRA.
The Board estimates that 1,133
respondents regulated by the Federal
Reserve would take, on average, 120
hours (three business weeks) to update
their systems to comply with the
disclosure requirements addressed in
§ 205.31. This one-time revision would
increase the burden by 135,960 hours.
On a continuing basis the Board
estimates that 1,133 respondents would
take, on average, 8 hours (one business
day) monthly to comply with the
requirements under § 205.31and would
increase the ongoing burden by 108,768
hours. In an effort to minimize the
compliance cost and burden,
particularly for small entities, the
proposed rule contains model
disclosures in appendix A (Model
Forms A–10 through A–20) that may be
used to satisfy the statutory
requirements.
The Board estimates that on average
825,600 consumers would spend
approximately 5 minutes in order to
provide a notice of error as required
under section 205.33(b). This would
increase the total annual burden for this
information collection by 68,798 hours.
The Board estimates that 1,133
respondents regulated by the Federal
Reserve would take, on average, 1.5
hours (monthly) to address a sender’s
45 The number of Board-supervised respondents
was obtained from queries of entities that filed
December 2010 Call Reports: 828 State member
banks, 243 branches & agencies of foreign banks,
three commercial lending companies, and 59 Edge
Act or agreement corporations.

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notice of error as required by
§ 205.33(c)(1) and would increase the
ongoing burden by 20,349 hours.
The Board estimates that 1,133
respondents regulated by the Federal
Reserve would take, on average, 40
hours (one business week) to develop
written policies and procedures
designed to ensure compliance with
respect to the error resolution
requirements applicable to remittance
transfers under § 205.33. This one-time
revision would increase the burden by
45,320 hours. On a continuing basis the
Board estimates that 1,133 respondents
would take, on average, 8 hours (one
business day) annually to maintain the
requirements under § 205.33 and would
increase the ongoing burden by 9,064
hours.
The Board estimates that 1,133
respondents regulated by the Federal
Reserve would take, on average, 40
hours (one business week) to establish
policies and procedures for agent
compliance as addressed under
§ 205.35, This one-time revision would
increase the burden by 45,320 hours. On
a continuing basis the Board estimates
that 1,133 respondents would take, on
average, 8 hours (one business day)
annually to maintain the requirements
under § 205.35 and would increase the
ongoing burden by 9,064 hours.
The proposed rule would impose a
one-time increase in the estimated
annual burden 226,600 hours. On a
continuing basis the proposed rule
would increase in the estimated annual
burden by 216,043 hours. Overall the
total annual burden is estimated to
increase by 442,643 hours, from 738,600
to 1,181,243 hours.
In a September 2010 rulemaking the
Department of Treasury estimated that
as of February 2010, the number of
registered U.S. entities engaged in
money transmission was approximately
19,000.46 Using the Federal Reserve’s
method the proposed rule would
impose a one-time estimated annual
burden for such entities of 3,800,000
hours. On a continuing basis the
proposed rule would impose an annual
burden for such entities of 798,000
hours. Overall the proposed total annual
burden for such entities is estimated to
be 4,598,000 hours.
The other federal financial agencies 47
are responsible for estimating and
46 75

FR 60377, 60392 (Sept. 30, 2010).
47 Appendix B—Federal Enforcement Agencies—
of Regulation E lists those federal agencies that
enforce the regulation for particular classes of
business. The federal financial agencies include: the
Office of the Comptroller of the Currency, Federal
Deposit Insurance Corporation, Office of Thrift
Supervision, and National Credit Union
Administration. The federal non-financial agencies

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reporting to OMB the total paperwork
burden for the institutions for which
they have administrative enforcement
authority. They may, but are not
required to, use the Federal Reserve’s
burden estimation methodology. Using
the Federal Reserve’s method, the
current total estimated annual burden
for all persons subject to Regulation E,
including Federal Reserve-supervised
institutions would be approximately
5,166,413 hours. The above estimates
represent an average across all
respondents and reflect variations
between persons based on their size,
complexity, and practices. All covered
persons, including depository
institutions (of which there are
approximately 19,000), potentially are
affected by this collection of
information, and thus are respondents
for purposes of the PRA. The proposed
rule would impose a one-time increase
in the estimated annual burden for such
institutions by 3,800,000 hours. On a
continuing basis the proposed rule
would increase in the estimated annual
burden for such institutions by 798,000
hours. The proposed total annual
burden for the respondents regulated by
the federal financial agencies is
estimated to be 9,764,413 hours.
Comments are invited on: (1) Whether
the proposed collection of information
is necessary for the proper performance
of the Board’s functions; including
whether the information has practical
utility; (2) the accuracy of the Board’s
estimate of the burden of the proposed
information collection, including the
cost of compliance; (3) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (4)
ways to minimize the burden of
information collection on respondents,
including through the use of automated
collection techniques or other forms of
information technology. Comments on
the collection of information should be
sent to Cynthia Ayouch, Acting Federal
Reserve Clearance Officer, Division of
Research and Statistics, Mail Stop 95–A,
Board of Governors of the Federal
Reserve System, Washington, DC 20551,
with copies of such comments sent to
the Office of Management and Budget,
Paperwork Reduction Project (7100–
0200), Washington, DC 20503.
Text of Proposed Revisions
Certain conventions have been used
to highlight the proposed changes to the
text of the regulation and staff
commentary. New language is shown
inside flbold-faced arrowsfi, while
include: Department of Transportation, Securities
and Exchange Commission, and Federal Trade
Commission.

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language that would be deleted is set off
with øbold-faced brackets¿.
List of Subjects in 12 CFR Part 205
Consumer protection, Electronic fund
transfers, Federal Reserve System,
Reporting and recordkeeping
requirements.
Authority and Issuance
For the reasons set forth in the
preamble, the Board proposes to amend
12 CFR part 205 and the Official Staff
Commentary, as follows:
PART 205—ELECTRONIC FUND
TRANSFERS (REGULATION E)
1. The authority citation for part 205
continues to read as follows:
Authority: 15 U.S.C. 1693b.

Subpart A—General
2. Add a new Subpart A heading as
set forth above, and designate §§ 205.1
through 205.20 under Subpart A.
3. In § 205.3, revise paragraph (a) to
read as follows:
§ 205.3

Coverage.

(a) General. This part applies to any
electronic fund transfer that authorizes
a financial institution to debit or credit
a consumer’s account. Generally, this
part applies to financial institutions. For
purposes of §§ 205.3(b)(2) and (b)(3),
205.10(b), (d), and (e), and 205.13, this
part applies to any person. flThe
requirements of Subpart B apply to
remittance transfer providers.fi
*
*
*
*
*
4. Add Subpart B to part 205 to read
as follows:
Subpart B—Requirements for
Remittance Transfers
Sec.
205.30 Remittance transfer definitions.
205.31 Disclosures.
205.32 Estimates.
205.33 Procedures for resolving errors.
205.34 Procedures for cancellation and
refund of remittance transfers.
205.35 Acts of agents.

Subpart B—Requirements for
Remittance Transfers
Authority: 12 U.S.C. 5601; Pub. L. 111–
203, 124 Stat. 1376 (2010).
ߤ 205.30

Remittance transfer definitions.

For purposes of this subpart, the
following definitions apply.
(a) Agent means an agent, authorized
delegate, or person affiliated with a
remittance transfer provider, as defined
under state or other applicable law,
when such agent, authorized delegate,

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or affiliate acts for that remittance
transfer provider.
(b) Business day means any day on
which a remittance transfer provider
accepts funds for sending remittance
transfers.
(c) Designated recipient means any
person specified by the sender as the
authorized recipient of a remittance
transfer to be received at a location in
a foreign country.
(d) Remittance transfer—(1) General
definition. A remittance transfer means
the electronic transfer of funds
requested by a sender to a designated
recipient that is sent by a remittance
transfer provider. The term applies
regardless of whether the sender holds
an account with the remittance transfer
provider, and regardless of whether the
transaction is also an electronic fund
transfer, as defined in § 205.3(b).
(2) Exception for small value
transactions. Remittance transfers do
not include transfer amounts of $15 or
less.
(e) Remittance transfer provider or
provider means any person that
provides remittance transfers for a
consumer in the normal course of its
business, regardless of whether the
consumer holds an account with such
person.
(f) Sender means a consumer in a state
who requests a remittance transfer
provider to send a remittance transfer to
a designated recipient.

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§ 205.31

Disclosures.

(a) General form of disclosures—
(1) Clear and conspicuous. Disclosures
required by this subpart must be clear
and conspicuous. Disclosures required
by this subpart may contain commonly
accepted or readily understandable
abbreviations or symbols.
(2) Written and electronic disclosures.
Disclosures required by this subpart
generally must be provided to the
sender in writing. Disclosures required
by paragraph (b)(1) of this section may
be provided electronically, if the sender
electronically requests the remittance
transfer provider to send the remittance
transfer. Written and electronic
disclosures required by this subpart
must be made in a retainable form.
(3) Oral disclosures for telephone
transactions. The information required
by paragraph (b)(1) of this section may
be disclosed orally if:
(i) The transaction is conducted
entirely by telephone; and
(ii) The remittance transfer provider
complies with the requirements of
paragraph (g)(2) of this section.
(4) Oral disclosures for certain error
resolution notices. The information

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required by § 205.33(c)(1) may be
disclosed orally if:
(i) The remittance transfer provider
determines that an error occurred as
described by the sender; and
(ii) The remittance transfer provider
complies with the requirements of
paragraph (g)(2) of this section.
(b) Disclosure requirements—(1) Prepayment disclosure. A remittance
transfer provider must disclose to a
sender, as applicable:
(i) The amount that will be transferred
to the designated recipient, in the
currency in which the funds will be
transferred, using the term ‘‘Transfer
Amount’’ or a substantially similar term;
(ii) Any fees and taxes imposed on the
remittance transfer by the provider, in
the currency in which the funds will be
transferred, using the term ‘‘Transfer
Fees,’’ ‘‘Transfer Taxes,’’ or ‘‘Transfer
Fees and Taxes,’’ or a substantially
similar term;
(iii) The total amount of the
transaction, which is the sum of
paragraphs (b)(1)(i) and (b)(1)(ii) of this
section, in the currency in which the
funds will be transferred, using the term
‘‘Total’’ or a substantially similar term;
(iv) The exchange rate used by the
provider for the remittance transfer,
rounded to the nearest 1/100th of a
decimal point, using the term ‘‘Exchange
Rate’’ or a substantially similar term;
(v) The amount in paragraph (b)(1)(i)
of this section in the currency in which
the funds will be received by the
designated recipient, but only if fees or
taxes are imposed under paragraph
(b)(1)(vi) of this section, using the term
‘‘Transfer Amount’’ or a substantially
similar term;
(vi) Any fees and taxes imposed on
the remittance transfer by a person other
than the provider, in the currency in
which the funds will be received by the
designated recipient, using the term
‘‘Other Transfer Fees,’’ ‘‘Other Transfer
Taxes,’’ or ‘‘Other Transfer Fees and
Taxes,’’ or a substantially similar term.
(vii) The amount that will be received
by the designated recipient, in the
currency in which the funds will be
received, using the term ‘‘Total to
Recipient’’ or a substantially similar
term.
(2) Receipt. A remittance transfer
provider must disclose to a sender, as
applicable:
(i) The disclosures described in
paragraphs (b)(1)(i) through (b)(1)(vii) of
this section;
(ii) The date of availability of funds to
the designated recipient, using the term
‘‘Date Available’’ or a substantially
similar term. A provider may provide a
statement that funds may be available to
the designated recipient earlier than the

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date disclosed, using the term ‘‘may be
available sooner’’ or a substantially
similar term.
(iii) The name and, if provided by the
sender, the telephone number and/or
address of the designated recipient,
using the term ‘‘Recipient’’ or a
substantially similar term;
(iv) A statement about the rights of the
sender regarding the resolution of errors
and cancellation, using language set
forth in Model Form A–37 of Appendix
A to this part or substantially similar
language;
(v) The name, telephone number, and
Web site of the remittance transfer
provider; and
(vi) A statement that the sender can
contact the state agency that regulates
the remittance transfer provider and the
Consumer Financial Protection Bureau
for questions or complaints about the
remittance transfer provider, using
language set forth in Model Form A–37
of Appendix A to this part or
substantially similar language, and the
telephone number and Web site of the
state agency that regulates the
remittance transfer provider and the
telephone number and Web site of the
Consumer Financial Protection Bureau,
including the toll-free telephone
number established under Section 1013
of the Consumer Financial Protection
Act of 2010.
(3) Combined disclosure. As an
alternative to providing the disclosures
described in paragraphs (b)(1) and (b)(2)
of this section, a remittance transfer
provider may provide the disclosures
described in paragraph (b)(2) of this
section, as applicable, in a single
disclosure.
(4) Long form error resolution and
cancellation notice. Upon the sender’s
request, a remittance transfer provider
must provide to the sender a notice
providing a description of the sender’s
error resolution and cancellation rights
under §§ 205.33 and 205.34 using Model
Form A–36 of Appendix A to this part
or a substantially similar notice.
(c) Specific format requirements—
(1) Grouping. The information required
by paragraphs (b)(1)(i), (ii), and (iii) of
this section must be grouped together in
written and electronic disclosures. The
information required by paragraphs
(b)(1)(v), (vi), and (vii) of this section
must be grouped together in written and
electronic disclosures.
(2) Proximity. The information
required by paragraph (b)(1)(iv) of this
section must be disclosed in close
proximity to the other information
required by paragraph (b)(1) of this
section in written and electronic
disclosures. The information required
by paragraph (b)(2)(iv) of this section

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must be disclosed in close proximity to
the other information required by
paragraph (b)(2) of this section in
written and electronic disclosures.
(3) Prominence and size. Written
disclosures required by this subpart
must be provided on the front of the
page on which the disclosure is printed.
Written and electronic disclosures
required by this subpart must be in a
minimum eight-point font. Written and
electronic disclosures required by
paragraph (b) of this section must be in
equal prominence to each other.
(4) Segregation. Written and
electronic disclosures required by this
subpart must be segregated from
everything else and must contain only
information that is directly related to
the disclosures required under this
subpart.
(d) Estimates. Estimated disclosures
may be provided to the extent permitted
by § 205.32. Estimated disclosures must
be described using the term ‘‘Estimated’’
or a substantially similar term and in
close proximity to the estimated term or
terms.
(e) Timing. (1) Disclosures required by
paragraph (b)(1) or (b)(3) of this section
must be provided to the sender when
the sender requests the remittance
transfer, but prior to payment for the
remittance transfer.
(2) A receipt required by paragraph
(b)(2) of this section must be provided
to the sender when payment is made for
the remittance transfer. If a transaction
is conducted entirely by telephone, a
written receipt may be mailed or
delivered to the sender no later than one
business day after the date on which
payment is made for the remittance
transfer. If a transaction is conducted
entirely by telephone and involves the
transfer of funds from the sender’s
account held by the provider, the
written receipt may be provided on or
with the next regularly scheduled
periodic statement or within 30 days
after payment is made for the remittance
transfer if a periodic statement is not
required and must comply with
paragraph (g)(3) of this section.
(f) Accurate when payment is made.
Disclosures required by this section
must be accurate when a sender pays for
the remittance transfer, except to the
extent permitted by § 205.32
(g) Foreign language disclosures—
(1) General. Except as provided in
paragraphs (g)(2) and (g)(3) of this
section, disclosures required by this
subpart must be made in English and
either:
(i) In each of the foreign languages
principally used by the remittance
transfer provider to advertise, solicit, or
market remittance transfer services,

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either orally, in writing, or
electronically, at that office; or
(ii) If applicable, in the foreign
language primarily used by the sender
with the remittance transfer provider to
conduct the transaction (or for written
or electronic disclosures made pursuant
to § 205.33, in the foreign language
primarily used by the sender with the
remittance transfer provider to assert the
error), provided that such foreign
language is principally used by the
remittance transfer provider to
advertise, solicit, or market remittance
transfer services, either orally, in
writing, or electronically, at that office.
(2) Oral disclosures. Disclosures
permitted to be provided orally under
paragraph (a)(3) of this section for
transactions conducted entirely by
telephone shall be made in the language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction. Disclosures permitted to
be provided orally under paragraph
(a)(4) of this section for error resolution
purposes shall be made in the language
primarily used by the sender with the
remittance transfer provider to assert the
error.
(3) Written receipts for telephone
transactions. Receipts required to be
provided to the sender after payment
under paragraph (e)(2) of this section for
transactions conducted entirely by
telephone shall be made in English and,
if applicable, in the foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction.
§ 205.32

Estimates.

(a) Temporary exception for insured
institutions—(1) General. Estimates may
be provided in accordance with
paragraph (c) of this section for the
amounts required to be disclosed under
§§ 205.31(b)(1)(iv) through (vii), if:
(i) A remittance transfer provider
cannot determine the exact amounts for
reasons beyond its control;
(ii) A remittance transfer provider is
an insured institution; and
(iii) The remittance transfer is sent
from the sender’s account with the
institution.
(2) Sunset date. Paragraph (a)(1) of
this section expires on July 20, 2015.
(3) Insured institution. For purposes
of this section, the term ‘‘insured
institution’’ includes insured depository
institutions as defined in Section 3 of
the Federal Deposit Insurance Act (12
U.S.C. 1813) and insured credit unions
as defined in Section 101 of the Federal
Credit Union Act (12 U.S.C. 1752).
(b) Permanent exception for transfers
to certain countries. Estimates may be
provided in accordance with paragraph

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(c) of this section for the amounts
required to be disclosed under
§§ 205.31(b)(1)(iv) through (vii), if a
remittance transfer provider cannot
determine the exact amounts because
(1) The laws of the recipient country
do not permit, or
(2) The method by which transactions
are made in the recipient country does
not permit, such determination.
(c) Bases for estimates. Estimates
provided pursuant to the exceptions in
paragraph (a) or (b) of this section must
be based on the below-listed approach
or approaches applicable to the required
disclosure. If a remittance transfer
provider bases an estimate on an
approach that is not listed in this
paragraph (c), the provider complies
with this paragraph (c) so long as the
designated recipient receives the same,
or a greater amount, of currency that it
would have received had the estimate
been based on a listed approach.
(1) Exchange rate. In disclosing the
exchange rate as required under
§ 205.31(b)(1)(iv), an estimate must be
based on one of the following:
(i) For remittance transfers sent via
international ACH that qualify for the
exception in paragraph (b)(2) of this
section, the most recent exchange rate
set by the recipient country’s central
bank and reported by a Federal Reserve
Bank;
(ii) The most recent publicly available
wholesale exchange rate; or
(iii) The most recent exchange rate
offered by the person making funds
available directly to the designated
recipient.
(2) Transfer amount in the currency
made available to the designated
recipient. In disclosing the transfer
amount in the currency made available
to the designated recipient, as required
under § 205.31(b)(1)(v), an estimate
must be based on the estimated
exchange rate provided in accordance
with paragraph (c)(1) of this section.
(3) Other fees imposed by
intermediaries. In disclosing fees
imposed by institutions that act as
intermediaries in connection with an
international wire transfer as required
under § 205.31(b)(1)(vi), an estimate
must be based on one of the following:
(i) The remittance transfer provider’s
most recent remittance transfer to the
designated recipient’s institution, or
(ii) The representations of the
intermediary institutions along a
representative route identified by the
remittance transfer provider that the
requested transfer could travel.
(4) Other taxes imposed in the
recipient country. In disclosing taxes
imposed in the recipient country as
required under § 205.31(b)(1)(vi) that are

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a percentage of the amount transferred
to the designated recipient, an estimate
must be based on the estimated
exchange rate provided in accordance
with paragraph (c)(1) of this section and
the estimated fees imposed by
institutions that act as intermediaries in
connection with an international wire
transfer provided in accordance with
paragraph (c)(3) of this section.
(5) Amount of currency that will be
received by the designated recipient. In
disclosing the amount of currency that
will be received by the designated
recipient as required under
§ 205.31(b)(1)(vii), an estimate must be
based on the estimates provided in
accordance with paragraphs (c)(1), (3),
and (4) of this section, as applicable.

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§ 205.33

Procedures for resolving errors.

(a) Definition of error—(1) Types of
transfers or inquiries covered. For
purposes of this section, the term error
means:
(i) An incorrect amount paid by a
sender in connection with a remittance
transfer;
(ii) A computational or bookkeeping
error made by the remittance transfer
provider relating to a remittance
transfer;
(iii) The failure to make available to
a designated recipient the amount of
currency stated in the disclosure
provided to the sender under
§ 205.31(b)(2) or (b)(3), unless the
disclosure stated an estimate of the
amount to be received in accordance
with § 205.32;
(iv) The failure to make funds in
connection with a remittance transfer
available to a designated recipient by
the date of availability stated in the
disclosure provided to the sender under
§ 205.31(b)(2) or (b)(3), unless the failure
to make the funds available resulted
from:
(A) Circumstances outside the
remittance transfer provider’s control; or
(B) The sender providing incorrect
information in connection with a
remittance transfer to the remittance
transfer provider, so long as the
provider gives the sender the
opportunity to correct the information
and send the transfer at no additional
cost; or
(v) The sender’s request for
documentation required by § 205.31 or
for additional information or
clarification concerning a remittance
transfer, including a request a sender
makes to determine whether an error
exists under paragraph (a)(1)(i) through
(iv) of this section.
(2) Types of transfers or inquiries not
covered. The term error does not
include:

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(i) An inquiry involving a transfer of
$15 or less;
(ii) An inquiry about the status of a
remittance transfer, except where the
funds from the transfer were not made
available to a designated recipient by
the stated date of availability as
described in paragraph (a)(1)(iv) of this
section; or
(iii) A request for information for tax
or other recordkeeping purposes.
(b) Notice of error from sender—
(1) Timing; contents. A remittance
transfer provider shall comply with the
requirements of this section with
respect to any oral or written notice of
error from a sender that:
(i) Is received by the remittance
transfer provider no later than 180 days
after the stated date of availability of the
remittance transfer;
(ii) Enables the provider to identify:
(A) The sender’s name and telephone
number or address;
(B) The recipient’s name, and if
known, the telephone number or
address of the recipient; and
(C) The remittance transfer to which
the notice of error applies; and
(iii) Indicates why the sender believes
an error exists and includes to the
extent possible the type, date, and
amount of the error, except for requests
for documentation, additional
information, or clarification described
in paragraph (a)(1)(v) of this section.
(2) Request for documentation or
clarification. When a notice of error is
based on documentation, additional
information, or clarification that the
sender requested under paragraph
(a)(1)(v) of this section, the sender’s
notice of error is timely if received by
the remittance transfer provider no later
than 60 days after the provider sent the
documentation, information, or
clarification requested.
(c) Time limits and extent of
investigation—
(1) Time limits for investigation and
report to consumer of error. A
remittance transfer provider shall
investigate promptly and determine
whether an error occurred within 90
days of receiving a notice of error. The
remittance transfer provider shall report
the results to the sender, including
notice of any remedies available for
correcting any error that the provider
determines has occurred, within three
business days after completing its
investigation.
(2) Remedies. If the remittance
transfer provider determines an error
occurred, the provider shall, within one
business day of, or as soon as reasonably
practicable after, receiving the sender’s
instructions regarding the appropriate

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remedy, correct the error as designated
by the sender by:
(i) Refunding to the sender the
amount of funds tendered by the sender
in connection with a remittance transfer
which was not properly transmitted, or
the amount appropriate to resolve the
error; or
(ii) Making available to the designated
recipient, without additional cost to the
sender or to the designated recipient,
the amount appropriate to resolve the
error; and
(iii) In the case of an error asserted
under paragraph (a)(1)(iv) of this
section, refunding to the sender any fees
imposed for the remittance transfer.
(d) Procedures if remittance transfer
provider determines no error or different
error occurred. In addition to following
the procedures specified in paragraph
(c) of this section, the remittance
transfer provider shall follow the
procedures set forth in this paragraph
(d) if it determines that no error
occurred or that an error occurred in a
manner or amount different from that
described by the sender.
(1) Explanation of results of
investigation. The remittance transfer
provider’s report of the results of the
investigation shall include a written
explanation of the provider’s findings
and shall note the sender’s right to
request the documents on which the
provider relied in making its
determination. The explanation shall
also respond to the specific complaint of
the sender.
(2) Copies of documentation. Upon
the sender’s request, the remittance
transfer provider shall promptly provide
copies of the documents on which the
provider relied in making its error
determination.
(e) Reassertion of error. A remittance
transfer provider that has fully complied
with the error resolution requirements
of this section has no further
responsibilities under this section
should the sender later reassert the same
error, except in the case of an error
asserted by the sender following receipt
of information provided under
paragraph (a)(1)(v) of this section.
(f) Relation to other laws—(1) Relation
to Regulation E § 205.11 for incorrect
EFTs from a sender’s account. If an
alleged error involves an incorrect
electronic fund transfer from a sender’s
account in connection with a remittance
transfer, and the sender provides a
notice of error to the account-holding
institution, the account-holding
institution shall comply with the
requirements of § 205.11 governing error
resolution rather than the requirements
of this section, provided that the
account-holding institution is not also

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the remittance transfer provider. If the
remittance transfer provider is also the
financial institution that holds the
consumer’s account, then the errorresolution provisions of this section
apply when the sender provides such
notice of error.
(2) Relation to Truth in Lending Act
and Regulation Z. If an alleged error
involves an incorrect extension of credit
in connection with a remittance
transfer, and the sender provides a
notice of error to the creditor holding
the credit card account, the provisions
of Regulation Z, 12 CFR 226.13,
governing error resolution apply to the
creditor, rather than the requirements of
this section, even if the creditor is the
remittance transfer provider. If the
sender instead provides a notice of error
to the remittance transfer provider, then
the error-resolution provisions of this
section apply to the remittance transfer
provider.
(3) Unauthorized remittance transfers.
If an alleged error involves an
unauthorized electronic fund transfer
for payment in connection with a
remittance transfer, §§ 205.6 and 205.11
apply with respect to the accountholding institution. If an alleged error
involves an unauthorized use of a credit
card for payment in connection with a
remittance transfer, the provisions of
Regulation Z, 12 CFR 226.12(b) and
226.13, apply with respect to the
creditor.
(g) Error resolution standards and
recordkeeping requirements—(1)
Compliance program. A remittance
transfer provider shall develop and
maintain written policies and
procedures that are designed to ensure
compliance with respect to the error
resolution requirements applicable to
remittance transfers under this section.
The provider must also take steps
designed to ensure that an agent of the
provider that performs any error
resolution obligations on behalf of the
provider, conducts such activity in
accordance with the remittance transfer
provider’s policies and procedures.
(2) Retention of error-related
documentation. The remittance transfer
provider’s policies and procedures
required under paragraph (g)(1) of this
section shall include policies and
procedures regarding the retention of
documentation related to error
investigations. Such policies and
procedures must ensure, at a minimum,
the retention of any notices of error
submitted by a sender, documentation
provided by the sender to the provider

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with respect to the alleged error, and the
findings of the remittance transfer
provider regarding the investigation of
the alleged error.
§ 205.34 Procedures for cancellation and
refund of remittance transfers.

(a) Sender right of cancellation and
refund. A remittance transfer provider
shall comply with the requirements of
this section with respect to any oral or
written request to cancel a remittance
transfer from the sender that is received
by the provider no later than one
business day from when the sender
makes payment in connection with the
remittance transfer if:
(1) The request to cancel enables the
provider to identify the sender’s name
and address or telephone number and
the particular transfer to be cancelled;
and
(2) The transferred funds have not
been picked up by the designated
recipient or deposited into an account of
the designated recipient.
(b) Time limits and refund
requirements. A remittance transfer
provider shall refund, at no additional
cost to the sender, the total amount of
funds tendered by the sender in
connection with a remittance transfer,
including any fees imposed in
connection with the remittance transfer,
within three business days of receiving
a sender’s request to cancel the
remittance transfer.
§ 205.35

Acts of agents.

Alternative A
A remittance transfer provider is
liable for any violation of this subpart
by an agent when such agent acts for the
provider.
Alternative B
A remittance transfer provider is
liable for any violation of this subpart
by an agent when such agent acts for the
provider, unless:
(a) The remittance transfer provider
establishes and maintains written
policies and procedures designed to
assure compliance with this subpart by
its agents, including appropriate
oversight practices; and
(b) The remittance transfer provider
corrects the violation to the extent
appropriate, including complying with
the error resolution procedures set forth
in § 205.33 and providing the sender the
remedies set forth in § 205.33(c)(2). fi
5. Amend Appendix A to Part 205 as
follows:

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a. Add Titles A–6 through A–8, and
A–30 through A–41, and reserve A–10
through A–29 to the Table of Contents
b. Add Model Forms A–30 through
A–41
The additions and revisions read as
follows:
Appendix A to Part 205—Model
Disclosure Clauses and Forms
Table of Contents
*
*
*
*
*
fl A–6—Model Clauses for Authorizing
One-Time Electronic Fund
Transfers Using Information From a
Check (§ 205.3(b)(2))
A–7—Model Clauses for Financial
Institutions Offering Payroll Card
Accounts (§ 205.18(c))
A–8—MODEL CLAUSE FOR
ELECTRONIC COLLECTION OF
RETURNED ITEM FEES
(§ 205.3(b)(3))
*
*
*
*
*
A–10 through A–29—(Reserved)
A–30—Model form for pre-payment
disclosures for remittance transfers
exchanged into local currency
(§ 205.31(b)(1))
A–31—Model form for receipts for
remittance transfers exchanged into
local currency (§ 205.31(b)(2))
A–32—Model form for combined
disclosures for remittance transfers
exchanged into local currency
(§ 205.31(b)(3))
A–33—Model form for pre-payment
disclosures for dollar-to-dollar
remittance transfers (§ 205.31(b)(1))
A–34—Model form for receipts for
dollar-to-dollar remittance transfers
(§ 205.31(b)(2))
A–35—Model form for combined
disclosures for dollar-to-dollar
remittance transfers (§ 205.31(b)(3))
A–36—Model form for error resolution
and cancellation disclosures (long)
(§ 205.31(b)(4))
A–37—Model form for error resolution
and cancellation disclosures (short)
(§ 205.31(b)(2)(vi))
A–38—Model form for pre-payment
disclosures—Spanish
(§ 205.31(b)(1))
A–39—Model form for receipts—
Spanish (§ 205.31(b)(2))
A–40—Model form for combined
disclosures—Spanish
(§ 205.31(b)(3))
A–41—Model form for error resolution
and cancellation disclosures
(long)—Spanish (§ 205.31(b)(4)) fi
*
*
*
*
*
BILLING CODE 6210–01–P

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6. In Supplement I to part 205:
a. Add new Commentary for Sections
205.30, 205.31, 205.32, 205.33, 205.34,
and 205.35.
b. Under subheading Appendix A,
paragraph (2) Use of forms is revised
and paragraph (4) is added.
The revision and additions read as
follows:

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Supplement I to Part 205—Official Staff
Interpretations
*

*

*

*

*

fl Section 205.30—Remittance
Definitions
30(b) Business Day

hour period ending at midnight, and a
notice required by any section of
Subpart B is effective even if given
outside of normal business hours. No
section of Subpart B requires that a
remittance transfer provider make
telephone lines available on a 24-hour
basis.

1. General. With respect to Subpart B,
a business day includes the entire 24-

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30(c) Designated Recipient
1. Person. A designated recipient can
be either a natural person or a business.
See § 205.2(j) (definition of person).
2. Located in a foreign country. A
remittance transfer is received at a
location in a foreign country if funds are
to be received at a location physically
outside of any state, as defined in
§ 205.2(l).

srobinson on DSK4SPTVN1PROD with PROPOSALS3

30(d) Remittance Transfer
1. Electronic transfer of funds. The
definition of remittance transfer requires
an electronic transfer of funds. The term
electronic has the meaning given in
Section 106(2) of the Electronic
Signatures in Global and National
Commerce Act. There may be an
electronic transfer of funds if a provider
makes an electronic book entry between
different settlement accounts to
effectuate the transfer. However, where
a sender mails funds directly to a
recipient, or provides funds to a courier
for delivery to a foreign country, there
has not been an electronic transfer of
funds. Therefore, non-electronic
remittance methods are not remittance
transfers.
2. Request by a sender. The definition
of remittance transfer requires a specific
sender request that a remittance transfer
provider send a remittance transfer. A
deposit by a consumer into a checking
or savings account does not itself
constitute such a request, even if a
person in a foreign country is an
authorized user on that account, where
the consumer retains the ability to
withdraw funds in the account.
3. To a designated recipient. The
definition of remittance transfer requires
that the transfer be sent to a designated
recipient. See comment 30(c)–1. There
is no designated recipient unless the
sender specifically identifies the
recipient of a transfer. A transfer is sent
to a designated recipient if, for example,
the sender instructs a remittance
transfer provider to send a prepaid card
to a specified recipient in a foreign
country, and the sender does not retain
the ability to draw down funds on the
prepaid card. In contrast, there is no
designated recipient where the sender
retains the ability to withdraw funds,
such as when a person in a foreign
country is made an authorized user on
the sender’s checking account, because
the remittance transfer provider cannot
identify the ultimate recipient of the
funds.
4. Sent by a remittance transfer
provider. i. The definition of remittance
transfer requires that a transfer must be
‘‘sent by a remittance transfer provider.’’
This means that there must be an

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intermediary actively involved in
sending the transfer of funds. Examples
include:
A. A person (other than the sender)
sending an instruction to a receiving
agent in a foreign country to make funds
available to a recipient;
B. Executing a payment order
pursuant to a consumer’s instructions;
C. Executing a consumer’s online bill
payment request; or
D. Otherwise engaging in the business
of accepting or debiting funds for
transmission to a recipient and
transmitting those funds.
ii. However, a payment card network
or other third party payment service that
is functionally similar to a payment card
network does not send a remittance
transfer when a consumer designates a
debit or credit card as the payment
method to purchase goods or services
from a foreign merchant. In such a case,
the payment card network or third party
payment service is not directly engaged
with the sender to send a transfer of
funds to a person in a foreign country;
rather, the network or third party
payment service is merely providing
contemporaneous third-party payment
processing and settlement services on
behalf of the merchant or the remittance
transfer provider, rather than on behalf
of the sender. Similarly, where a
consumer provides a checking or other
account number directly to a merchant
as payment for goods or services, the
merchant is not acting as a remittance
transfer provider when it submits the
payment information for processing.
5. Examples of remittance transfers.
i. Examples of remittance transfers
include:
A. Transfers where the sender
provides cash or another method of
payment to a money transmitter or
financial institution that directs funds to
be sent to a specified payout location or
account in a foreign country.
B. Consumer wire transfers, where a
financial institution executes a payment
order upon a sender’s request to wire
money from the sender’s account to a
designated recipient.
C. A sender’s addition of funds to a
prepaid card, which the prepaid card
issuer sends or has previously sent to a
designated recipient, if the sender does
not retain the ability to withdraw such
funds.
D. International ACH transactions
sent by the sender’s financial institution
at the sender’s request.
E. Online bill payments to foreign
merchants made by the sender’s
financial institution at the sender’s
request.
ii. The term remittance transfer does
not include:

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A. A consumer’s purchase of goods or
services from a merchant in a foreign
country with a credit or debit card.
B. A consumer’s deposit of funds to
his or her checking or savings account
that can be withdrawn by an authorized
user located in a foreign country, but
where the consumer retains the ability
to withdraw funds in the account.
C. Online bill payments made through
the Web site of a merchant located in a
foreign country.
30(e) Remittance Transfer Provider
1. Agents. An agent is not deemed to
be a remittance transfer provider by
merely providing remittance transfer
services on behalf of the remittance
transfer provider.
Section 205.31—Disclosures
31(a) General Form of Disclosures
Paragraph 31(a)(1)—Clear and
Conspicuous
1. Clear and conspicuous standard.
Disclosures are clear and conspicuous
for purposes of Subpart B if they are
readily understandable and, in the case
of written and electronic disclosures,
the location and type size are readily
noticeable to senders. To the extent
permitted by §§ 205.31(a)(3) and (4),
oral disclosures are clear and
conspicuous when they are given at a
volume and speed sufficient for a sender
to hear and comprehend them.
2. Abbreviations and symbols.
Disclosures may contain commonly
accepted or readily understandable
abbreviations or symbols, such as ‘‘USD’’
to indicate currency in U.S. dollars or
‘‘MXN’’ to indicate currency in Mexican
pesos.
Paragraph 31(a)(2)—Written and
Electronic Disclosures
1. E-Sign Act requirements. If a sender
electronically requests the remittance
transfer provider to send a remittance
transfer, pre-payment disclosures
required by § 205.31(b)(1) may be
provided to the sender in electronic
form without regard to the consumer
consent and other applicable provisions
of the Electronic Signatures in Global
and National Commerce Act (E-Sign
Act) (15 U.S.C. 7001 et seq.). If a sender
electronically requests the provider to
send a remittance transfer, receipts
required by § 205.31(b)(2) may be
provided to the consumer in electronic
form, subject to compliance with the
consumer consent and other applicable
provisions of the E-Sign Act. See
§ 205.4(a)(1).
2. Paper size. Written disclosures may
be provided on any size paper, as long
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conspicuous. For example, disclosures
may be provided on a register receipt or
on an 8.5 inch by 11 inch sheet of paper.
3. Retainable electronic disclosures. A
remittance transfer provider may satisfy
the requirement to provide electronic
disclosures in a retainable form if it
provides an on-line disclosure in a
format that is capable of being printed.
Electronic disclosures may not be
provided through a hyperlink or in
another manner by which the sender
can bypass the disclosure. A provider is
not required to confirm that the sender
has read the electronic disclosures.

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Paragraph 31(a)(3)—Oral Disclosures for
Telephone Transactions
1. Transactions conducted partially
by telephone. For transactions
conducted partially by telephone,
disclosures may not be provided orally.
For example, a sender may begin a
remittance transfer at a remittance
transfer provider’s dedicated telephone
in a retail store, and then provide
payment in person to a store clerk to
complete the transaction. In such cases,
all disclosures must be provided in
writing. A provider complies with this
requirement, for example, by providing
the written pre-payment disclosure in
person prior to the sender’s payment for
the transaction, and the written receipt
when the sender pays for the
transaction.
31(b) Disclosure Requirements
1. Disclosures provided as applicable.
Disclosures required by § 205.31(b) need
only be provided to the extent
applicable. A remittance transfer
provider may choose to omit an item of
information required by § 205.31(b) if it
is inapplicable to a particular
transaction. Alternatively, a provider
may disclose a term and state that an
amount or item is ‘‘not applicable,’’
‘‘N/A,’’ or ‘‘None.’’ For example, if fees or
taxes are not imposed in connection
with a particular transaction, the
provider need not provide the
disclosures required by § 205.31(b)(1)(ii)
or (b)(1)(vi). Similarly, a Web site need
not be disclosed under § 205.31(b)(2)(v)
if the provider does not maintain a Web
site. A provider need not provide the
exchange rate disclosure required by
§ 205.31(b)(1)(iv) if a recipient receives
currency in U.S. dollars or currency is
delivered into an account in U.S.
dollars, rather than in another currency.
2. Substantially similar terms,
language, and notices. Some disclosures
required by § 205.31(b) must be
described using the terms set forth in
§ 205.31(b) or substantially similar
terms. Terms may be more specific than
those provided. For example, a

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remittance transfer provider sending
funds to Colombia may describe a tax
under § 205.31(b)(1)(vi) as a ‘‘Colombian
Tax’’ in lieu of describing it as ‘‘Other
Taxes.’’ Foreign language disclosures
required under § 205.31(g) must contain
accurate translations of the terms,
language, and notices required by
§ 205.31(b).
Paragraph 31(b)(1)—Pre-Payment
Disclosures
1. Fees and taxes. i. Taxes imposed by
the remittance transfer provider include
taxes imposed on the remittance transfer
by a state or other governmental body.
A provider need only disclose fees or
taxes required by § 205.31(b)(1)(ii) and
(vi), as applicable. For example, if no
transfer taxes are imposed on a
remittance transfer, a provider would
only disclose applicable transfer fees.
See comment 31(b)–1. If both fees and
taxes are imposed, the fees and taxes
may be disclosed as one disclosure or as
separate, itemized disclosures.
ii. The fees and taxes required to be
disclosed by § 205.31(b)(1)(ii) include
all fees and taxes imposed on the
remittance transfer by the provider. For
example, a provider must disclose a
service fee and any state taxes imposed
on the remittance transfer. In contrast,
the fees and taxes required to be
disclosed by § 205.31(b)(1)(vi) include
fees and taxes imposed on the
remittance transfer by a person other
than the provider. For example, a
provider must disclose fees imposed by
the receiving institution or agent at
pick-up, fees imposed by intermediary
institutions in connection with an
international wire transfer, and taxes
imposed by a foreign government. The
terms used to describe the fees and taxes
in § 205.31(b)(1)(ii) and (b)(1)(vi) must
differentiate between such fees and
taxes. For example, the terms used to
describe fees disclosed under
§ 205.31(b)(1)(ii) and (b)(1)(vi) may not
both be described as ‘‘Fees.’’
2. Transfer amount. Sections
205.31(b)(1)(i) and (b)(1)(v) require two
transfer amount disclosures. First, under
§ 205.31(b)(1)(i), a provider must
disclose the transfer amount in the
currency in which the funds will be
transferred to show the calculation of
the total amount of the transaction.
Typically, funds will be transferred in
U.S. dollars, so the transfer amount
would be expressed in U.S. dollars.
However, if funds will be transferred,
for example, from a Euro-denominated
account, the transfer amount would be
expressed in Euros. Second, under
§ 205.31(b)(1)(v), a provider must
disclose the transfer amount in the
currency in which the funds will be

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made available to the designated
recipient. For example, if the funds will
be picked up by the designated recipient
in Japanese yen, the transfer amount
would be expressed in Japanese yen.
However, this second transfer amount
need not be disclosed if fees and taxes
are not imposed on the remittance
transfer under § 205.31(b)(1)(vi). The
terms used to describe each transfer
amount should be the same.
Paragraph 31(b)(1)(iv)—Exchange Rate
1. Applicable exchange rate for
estimates. If the designated recipient
will receive funds in a currency other
than the currency in which it will be
transferred, a remittance transfer
provider must disclose an exchange
rate. An exchange rate that is estimated
must be disclosed pursuant to the
requirements of § 205.32. A remittance
transfer provider may not disclose, for
example, that an estimated exchange
rate is ‘‘unknown,’’ ‘‘floating,’’ or ‘‘to be
determined.’’
2. Rounding. The exchange rate used
by the provider for the remittance
transfer is required to be rounded to the
nearest 1/100th of a decimal point.
However, an exchange rate need not be
expressed to the nearest 1/100th of a
decimal point if the amount need not be
rounded. For example, if one U.S. dollar
exchanges for 11.9483 Mexican pesos, a
provider must disclose that the U.S.
dollar exchanges for 11.95 Mexican
pesos. However, if one U.S. dollar
exchanges for 11.9 Mexican pesos, the
provider may disclose that ‘‘US$1 = 11.9
MXN’’ in lieu of ‘‘US$1 = 11.90 MXN.’’
Paragraph 31(b)(1)(vi)—Fees and Taxes
Imposed by a Person Other than the
Provider
1. Fees and taxes disclosed in the
currency in which the funds will be
received. Section 205.31(b)(1)(vi)
requires the disclosure of fees and taxes
in the currency in which the funds will
be received by the designated recipient.
A fee or tax required by
§ 205.31(b)(1)(vi) may be imposed in
one currency, but the funds may be
received by the designated recipient in
another currency. In such cases, the
remittance transfer provider should
calculate the fee or tax to be disclosed
using the exchange rate required by
§ 205.31(b)(1)(iv). For example, an
intermediary institution in an
international wire transfer may impose
a fee in U.S. dollars, but funds are
ultimately deposited in the recipient’s
account in Euros. Here, the provider
would disclose the fee to the sender
expressed in Euros, calculated using the
exchange rate used by the provider for
the remittance transfer.

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Paragraph 31(b)(1)(vii)—Amount
Received
1. Amount received. The remittance
transfer provider is required to disclose
the amount that will be received by the
designated recipient in the currency in
which the funds will be received. The
amount received must reflect all charges
that affect the amount received,
including the exchange rate and all fees
and taxes imposed by the remittance
transfer provider, the receiving
institution, and any other party in the
transmittal route of a remittance
transfer. The disclosed amount received
must be reduced by the amount of any
fee or tax that is imposed by a person
other than the provider, even if that
amount is imposed or itemized
separately from the transaction amount.
Paragraph 31(b)(2)—Receipt
1. Date of availability. The date of
availability of funds to the designated
recipient is the date in the foreign
country on which the funds will be
available to the designated recipient. A
remittance transfer provider does not
comply with the requirements of
§ 205.31(b)(2)(ii) if it provides a range of
dates that the remittance transfer may be
available or an estimate of the date on
which funds will be available. If a
provider does not know the exact date
on which funds will be available, the
provider may disclose the latest date on
which the funds will be available. For
example, if funds may be available on
January 3, but are not certain to be
available until January 10, then January
10 should be disclosed as the date of
availability. However, a remittance
transfer provider may also disclose that
funds ‘‘may be available sooner’’ or use
a substantially similar term to inform
senders that funds may be available to
the designated recipient on a date
earlier than the date disclosed. For
example, a provider may disclose
‘‘January 10 (may be available sooner).’’

srobinson on DSK4SPTVN1PROD with PROPOSALS3

31(c)

Specific Format Requirements

Paragraph 31(c)(1)—Grouping
1. Grouping. Information is grouped
together for purposes of Subpart B if
multiple disclosures are in close
proximity to one another and a sender
can reasonably determine how to
calculate the total amount of the
transaction, and the amount that will be
received by the designated recipient.
Model Forms A–30 through A–35 in
Appendix A illustrate how information
may be grouped to comply with the
rule, but a remittance transfer provider
may group the information in another
manner. For example, a provider could
provide the grouped information as a

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horizontal, rather than a vertical,
calculation.
Paragraph 31(c)(4)—Segregation
1. Segregation. Disclosures may be
segregated from other information in a
variety of ways. For example, the
disclosures may appear on a separate
sheet of paper or may be set off from
other information on a notice by
outlining them in a box or series of
boxes, bold print dividing lines, or a
different color background.
2. Directly related. For purposes of
§ 205.31(c)(4), the following is directly
related information:
i. The date and/or time of the
transaction;
ii. The sender’s name and contact
information;
iii. The location at which the
designated recipient may pick up the
funds;
iv. The confirmation or other
identification code;
v. A company name or logo;
vi. An indication that a disclosure is
or is not a receipt or other indicia of
proof of payment;
vii. A designated area for signatures or
initials; and
viii. A statement that funds may be
available sooner, as permitted by
§ 205.31(b)(2)(ii).
31(d) Estimates
1. Terms. A remittance transfer
provider may provide estimates of the
amounts required by § 205.31(b), to the
extent permitted by § 205.32. An
estimate must be described using the
term ‘‘Estimated’’ or a substantially
similar term and in close proximity to
the term or terms described. For
example, a remittance transfer provider
could describe an estimated disclosure
as ‘‘Estimated Transfer Amount,’’ ‘‘Other
Estimated Fees and Taxes,’’ or ‘‘Total to
Recipient (Est.).’’
31(e) Timing
1. Request to send a remittance
transfer. Pre-payment and combined
disclosures are required to be provided
to the sender when the sender requests
the remittance transfer, but prior to
payment for the remittance transfer.
Whether a sender has requested a
remittance transfer depends on the facts
and circumstances. A sender that asks a
provider to send a remittance transfer,
and provides transaction-specific
information to the provider in order to
send funds to a designated recipient,
has requested a remittance transfer. For
example, a sender who asks the
provider to send money to a recipient in
Mexico and provides the sender and
recipient information to the provider

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has requested a remittance transfer. A
sender who solely inquires about that
day’s rates and fees, however, has not
requested the provider to send a
remittance transfer.
2. When payment is made. A receipt
required by § 205.31(b)(2) is required to
be provided to the sender when
payment is made for the remittance
transfer. For example, a remittance
transfer provider could give the sender
a receipt after the consumer pays for the
remittance transfer, but before the
sender leaves the counter. A provider
could also give the sender a receipt
immediately before the sender pays for
the transaction.
3. Telephone transfer from an
account. A sender may transfer funds
from his or her account, as defined by
§ 205.2(b), that is held by the remittance
transfer provider. For example, a
financial institution may send an
international wire transfer for a sender
using funds from the sender’s account
with the institution. If the sender
conducts such a transfer entirely by
telephone, the institution may provide a
written receipt on or with the sender’s
next regularly scheduled periodic
statement or within 30 days after
payment is made for the remittance
transfer if a periodic statement is not
required.
31(f) Accurate When Payment Is Made
1. No guarantee of disclosures
provided before payment. Disclosures
required by § 205.31(b) are required to
be accurate when a sender pays for the
remittance transfer. A remittance
transfer provider is not required to
guarantee the terms of the remittance
transfer in the disclosures required by
§ 205.31(b) for any specific period of
time. However, if any of the disclosures
required by § 205.31(b) are not accurate
when a sender pays for the remittance
transfer, a provider must give new
disclosures before receiving payment for
the remittance transfer.
31(g) Foreign Language Disclosures
1. Number of foreign languages used
in written disclosure. Section
205.31(g)(1) does not limit the number
of languages that may be used on a
single document, but a single written
document containing more than three
languages is not likely to be helpful to
a consumer. Section 205.31(g)(3),
however, does limit the languages that
may be used on the written receipts
provided to the sender to English and,
if applicable, the foreign language
primarily used by the sender with the
remittance transfer provider to conduct
the transaction. See comment 31(g)–2
for guidance on the language a sender

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Federal Register / Vol. 76, No. 99 / Monday, May 23, 2011 / Proposed Rules
primarily uses with the remittance
transfer provider to conduct the
transaction. Under § 205.31(g)(1), a
remittance transfer provider may, but
need not, provide the consumer with a
written or electronic disclosure that is
in English and in each foreign language
that the remittance transfer provider
principally uses to advertise, solicit, or
market either orally, in writing, or
electronically, at that office.
Alternatively, the remittance transfer
provider may provide the disclosure
solely in English and, if applicable, the
foreign language primarily used by the
sender with the remittance transfer
provider to conduct the transaction or
assert an error, provided such language
is principally used by the remittance
transfer provider to advertise, solicit, or
market either orally, in writing, or
electronically, at that office. If the
remittance transfer provider chooses the
alternative method, it may provide
disclosures in a single document with
both languages or in two separate
documents with one document in
English and the other document in the
applicable foreign language. The
following examples illustrate this
concept.
i. A remittance transfer provider
principally uses only Spanish and
Vietnamese to advertise, solicit, or
market remittance transfer services at a
particular office. The remittance transfer
provider may provide all of its
consumers with disclosures in English,
Spanish, and Vietnamese, regardless of
the language the sender uses with the
remittance transfer provider to conduct
the transaction or assert an error.
ii. Same facts as i. If a sender
primarily uses Spanish with the
remittance transfer provider to conduct
a transaction or assert an error, the
remittance transfer provider may
provide a written or electronic
disclosure in English and Spanish,
whether in a single document or two
separate documents. If the sender
primarily uses English with the
remittance transfer provider to conduct
the transaction or assert an error, the
remittance transfer provider may
provide a written or electronic
disclosure solely in English. If the
sender primarily uses a foreign language
with the remittance transfer provider to
conduct the transaction or assert an
error that the remittance transfer
provider does not use to advertise,
solicit, or market either orally, in
writing, or electronically, at that office,
the remittance transfer provider may
provide a written or electronic
disclosure solely in English.
2. Primarily used. The language
primarily used by the sender with the

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remittance transfer provider to conduct
the transaction is the primary language
used by the sender with the remittance
transfer provider to convey the
information necessary to complete the
transaction. Similarly, the language
primarily used by the sender with the
remittance transfer provider to assert the
error is the primary language used by
the sender with the remittance transfer
provider to provide the information
required by § 205.33(b) to assert an
error. For example:
i. A sender initiates a conversation
with a remittance transfer provider with
a word of greeting in English and
expresses interest in sending a
remittance transfer to Mexico in
English. If, based on that knowledge, the
remittance transfer provider offers to
communicate with the sender in
Spanish and the sender conveys the
other information needed to complete
the transaction, including the
designated recipient’s information and
the amount and funding source of the
transfer, in Spanish, then Spanish is the
language primarily used by the sender
with the remittance transfer provider to
conduct the transaction.
ii. A sender initiates a conversation
with the remittance transfer provider
with a word of greeting in English and
states in English that there was a
problem with a prior remittance transfer
to Vietnam. If, based on that knowledge,
the remittance transfer provider offers to
communicate with the sender in
Vietnamese and the sender uses
Vietnamese to convey the information
required by § 205.33(b) to assert an
error, then Vietnamese is the language
primarily used by the sender with the
remittance transfer provider to assert the
error.
Paragraph 31(g)(1)—General
1. Principally used. i. All relevant
facts and circumstances determine
whether a foreign language is
principally used by the remittance
transfer provider to advertise, solicit, or
market under § 205.31(g)(1). Generally,
whether a foreign language is
considered to be principally used by the
remittance transfer provider to
advertise, solicit, or market is based on:
A. The frequency with which the
foreign language is used in advertising,
soliciting, or marketing of remittance
transfer services at that office;
B. The prominence of the advertising,
soliciting, or marketing of remittance
transfer services in that foreign language
at that office; and
C. The specific foreign language terms
used in the advertising soliciting, or
marketing of remittance transfer service
at that office.

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ii. For example, an advertisement for
remittance transfer services, including
rate and fee information, that is featured
prominently at an office and is entirely
in English, except for a sentence
advising consumers to ‘‘Ask us about
our foreign remittance services’’ in a
foreign language, may create an
expectation that a consumer could
receive information on remittance
transfer services in the foreign language
used in the advertisement. The foreign
language used in such an advertisement
would be considered to be principally
used at that office based on the
prominence of the advertising and the
specific foreign language terms inviting
consumers to inquire about remittance
transfer services. In contrast, an
advertisement for remittance transfer
services, including rate and fee
information, that is featured
prominently at an office and is entirely
in English, except for one word of
greeting in a foreign language, may not
create an expectation that a consumer
could receive information on remittance
transfer services in the foreign language
used for such greeting. The foreign
language used in such an advertisement
is not considered to be principally used
at that office based on the incidental
specific foreign language term used.
2. Advertise, solicit, or market. i. Any
commercial message in a foreign
language, appearing in any medium,
that promotes directly or indirectly the
availability of remittance transfer
services constitutes advertising,
soliciting, or marketing in such foreign
language for purposes of § 205.31(g)(1).
Examples illustrating when a foreign
language is used to advertise, solicit, or
market include:
A. Messages in a foreign language in
a leaflet or promotional flyer at an
office.
B. Announcements in a foreign
language on a public address system at
an office.
C. On-line messages in a foreign
language, such as on the Internet.
D. Printed material in a foreign
language on any exterior or interior sign
at an office.
E. Point-of-sale displays in a foreign
language at an office.
F. Telephone solicitations in a foreign
language.
ii. Examples illustrating when a
foreign language is not principally used
to advertise, solicit, or market include:
A. Communicating in a foreign
language (whether by telephone,
electronically, or otherwise) about
remittance transfer services in response
to a consumer-initiated inquiry.

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B. Making disclosures in a foreign
language that are required by Federal or
other applicable law.
3. Office. An office includes any
physical location, telephone number, or
Web site of a remittance transfer
provider where remittance transfer
services are offered to consumers. The
location need not exclusively offer
remittance transfer services. For
example, if an agent of a remittance
transfer provider is located in a grocery
store, the grocery store is considered an
office for purposes of § 205.31(g)(1).
4. At that office. Any advertisement,
solicitation, or marketing is considered
to be made at that office if such
advertisement, solicitation, or marketing
is posted, provided, or made: at a
physical office of a remittance transfer
provider; on a Web site of a remittance
transfer provider; or during a telephone
call with the remittance transfer
provider. For disclosures provided
pursuant to § 205.33 for error resolution
purposes, the relevant office is the office
in which the sender first asserts the
error, not the office where the
transaction was conducted.
Section 205.32—Estimates

srobinson on DSK4SPTVN1PROD with PROPOSALS3

32(a) Temporary Exception for Insured
Institutions
Paragraph 32(a)(1)—General
1. For reasons beyond its control. An
insured institution cannot determine
exact amounts ‘‘for reasons beyond its
control’’ when:
i. The exchange rate required to be
disclosed under § 205.31(b)(1)(iv) is set
by a person with which the insured
institution has no correspondent
relationship after the insured institution
sends the remittance transfer; or
ii. Fees required to be disclosed under
§ 205.31(b)(1)(vi) are imposed by
intermediary institutions along the
transmittal route and the insured
institution has no correspondent
relationship with those institutions.
2. Examples of scenarios that qualify
for the temporary exception. The
following examples illustrate when an
insured institution cannot determine an
exact amount ‘‘for reasons beyond its
control’’ and, thus, would qualify for the
temporary exception.
i. Exchange rate. An insured
institution cannot determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) for an
international wire transfer if the insured
institution does not set the exchange
rate, and the rate is instead later set by
the designated recipient’s institution
with which the insured institution does
not have a correspondent relationship.
The insured institution will not know

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the date on which funds will be
deposited into the recipient’s account,
and will not know the exchange rate
that will be applied on that date.
ii. Other fees. An insured institution
cannot determine the exact fees required
to be disclosed under § 205.31(b)(1)(vi)
if an intermediary institution or the
designated recipient’s institution, with
which the insured institution does not
have a correspondent relationship,
imposes a transfer or conversion fee.
iii. Other taxes. An insured institution
cannot determine the exact taxes
required to be disclosed under
§ 205.31(b)(1)(vi) if the insured
institution cannot determine the
applicable exchange rate or fees as
described in i. and ii. above, and the
recipient country imposes a tax that is
a percentage of the amount transferred
to the designated recipient, less any
other fees.
3. Examples of scenarios that do not
qualify for the temporary exception. The
following examples illustrate when an
insured institution can determine exact
amounts and, thus, would not qualify
for the temporary exception.
i. Exchange rate. An insured
institution can determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) if it converts the
funds into the local currency to be
received by the designated recipient
using an exchange rate that it sets.
ii. Other fees. An insured institution
can determine the exact fees required to
be disclosed under § 205.31(b)(1)(vi) if it
has negotiated specific fees with a
correspondent institution, and this
correspondent institution is the only
institution in the transmittal route to the
designated recipient’s institution.
iii. Other taxes. An insured institution
can determine the exact taxes required
to be disclosed under § 205.31(b)(1)(vi)
if:
A. The recipient country imposes a
tax that is a percentage of the amount
transferred to the designated recipient,
less any other fees, and the insured
institution can determine the exact
amount of the applicable exchange rate
and other fees; or
B. The recipient country imposes a
tax that is a flat amount that is not tied
to the amount transferred.
32(b) Permanent Exception for Transfers
to Certain Countries
Paragraph 32(b)(1)
1. Laws of the recipient country. The
‘‘laws of the recipient country’’ do not
permit a remittance transfer provider to
determine exact amounts required to be
disclosed when a law or regulation of
the recipient country requires the

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person making funds directly available
to the designated recipient to apply an
exchange rate that is:
i. Set by the government of the
recipient country after the remittance
transfer provider sends the remittance
transfer, or
ii. Set when the designated recipient
claims the funds.
2. Examples illustrating application of
the ‘‘laws of the recipient country’’
exception.
i. The ‘‘laws of the recipient country’’
do not permit a remittance transfer
provider to determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) when, for
example, the government of the
recipient country sets the exchange rate
daily and the funds are made available
to the designated recipient in the local
currency the day after the remittance
transfer provider sends the remittance
transfer.
ii. In contrast, the ‘‘laws of the
recipient country’’ permit a remittance
transfer provider to determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) when, for
example, the government of the
recipient country pegs the value of its
currency to the U.S. dollar.
Paragraph 32(b)(2)
1. Method by which transactions are
made in the recipient country. The
‘‘method by which transactions are
made in the recipient country’’ does not
permit a remittance transfer provider to
determine exact amounts required to be
disclosed when transactions are sent via
international ACH on terms negotiated
between the United States government
and the recipient country’s government,
under which the exchange rate is set by
the recipient country’s central bank after
the provider sends the remittance
transfer.
2. Examples of illustrating application
of the ‘‘methods’’ exception.
i. The ‘‘method by which transactions
are made in the recipient country’’ does
not permit a remittance transfer
provider to determine the exact
exchange rate required to be disclosed
under § 205.31(b)(1)(iv) when the
provider sends a remittance transfer via
international ACH on terms negotiated
between the United States government
and the recipient country’s government,
under which the exchange rate is set by
the recipient country’s central bank on
the business day after the provider has
sent the remittance transfer.
ii. In contrast, a remittance transfer
provider would not qualify for the
§ 205.32(b)(2) ‘‘methods’’ exception if it
sends a remittance transfer via
international ACH on terms negotiated

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between the United States government
and a private-sector entity or entities in
the recipient country, under which the
exchange rate is set by the institution
acting as the entry point to the recipient
country’s payments system on the next
business day. However, a remittance
transfer provider sending a remittance
transfer using such a method may
qualify for the § 205.32(a) temporary
exception.
iii. A remittance transfer provider
would not qualify for the § 205.32(b)(2)
‘‘methods’’ exception if, for example, it
sends a remittance transfer via
international ACH on terms negotiated
between the United States government
and the recipient country’s government,
under which the exchange rate is set by
the recipient country’s central bank
before the sender requests a transfer.
32(c) Bases for Estimates
Paragraph 32(c)(1)(i)
1. Most recent exchange rate for
qualifying international ACH transfers.
If the exchange rate for a remittance
transfer sent via international ACH that
qualifies for the § 205.32(b)(2) exception
is set the following business day, the
most recent exchange rate available for
a transfer will be the exchange rate set
for the day that the disclosure is
provided, i.e. the current business day’s
exchange rate.
Paragraph 32(c)(1)(ii)
1. Publicly available. Examples of
publicly available sources of
information containing the most recent
wholesale exchange rate for a currency
include U.S. news services, such as
Bloomberg, the Wall Street Journal, and
the New York Times, a recipient
country’s national news services, and a
recipient country’s central bank or other
government agency.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Paragraph 32(c)(3)(ii)
1. Potential transmittal routes. A
remittance transfer from the sender’s
account at an insured institution to the
designated recipient’s institution may
take several routes, depending on the
correspondent relationships each
institution in the transmittal route has
with other institutions. In providing an
estimate of the fees required to be
disclosed under § 205.31(b)(1)(vi)
pursuant to the § 205.32(a) temporary
exception, an insured institution may
rely upon the representations of the
institutions that act as intermediaries in
any one of the potential transmittal
routes that it reasonably believes a
requested remittance transfer may
travel.

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Paragraph 32(c)(4)
1. Other taxes imposed in a recipient
country that are a percentage. Section
205.32(c)(4) sets forth the basis for
providing an estimate of only those
taxes imposed in a recipient country
that are a percentage of the amount
transferred to the designated recipient
because a remittance transfer provider
can determine the exact amount of other
taxes, such as a flat tax.
Section 205.33—Procedures for
Resolving Errors
33(a) Definition of Error
1. Incorrect amount of currency sent.
Section 205.33(a)(1)(i) covers
circumstances in which a sender pays
an amount that differs from the total
transaction amount, including fees
imposed in connection with the
transfer, stated in the receipt or
combined disclosure provided under
§ 205.31(b)(2) or (b)(3). Such error may
be asserted by a sender regardless of the
form or method of payment tendered,
including when a debit, credit, or
prepaid card is used to fund the transfer
and an excess amount is paid. For
example, if a remittance transfer
provider incorrectly charged a sender’s
credit card account for $150 to send
$120 to the sender’s relative in a foreign
country, plus a transfer fee of $10, and
the provider sent only $120, the sender
could assert an error with the remittance
transfer provider for the incorrect charge
under § 205.33(a)(1)(i).
2. Incorrect amount of currency
received—coverage. Section
205.33(a)(1)(iii) covers circumstances in
which the designated recipient receives
an amount of currency that differs from
the amount of currency identified on the
disclosures provided to the sender,
except where the disclosure stated an
estimate of the amount of currency to be
received in accordance with § 205.32. A
designated recipient may receive an
amount of currency that differs from the
amount of currency disclosed, for
example, if an exchange rate other than
the disclosed rate is applied to the
remittance transfer or if the provider
fails to account for fees or taxes that
may be imposed by the provider or a
third party before the transfer is picked
up by the designated recipient or
deposited into the recipient’s account in
the foreign country. Section
205.33(a)(1)(iii) also covers
circumstances in which the remittance
transfer provider transmits an amount
that differs from the amount requested
by the sender.
3. Incorrect amount of currency
received—examples. For purposes of the
following examples illustrating the error

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for an incorrect amount of currency
received under § 205.33(a)(1)(iii),
assume that none of the circumstances
permitting an estimate under § 205.32
apply (unless otherwise stated).
i. A consumer requests to send funds
to a relative in Mexico to be received in
local currency. Upon receiving the
sender’s payment, the remittance
transfer provider provides a receipt
indicating that the amount of currency
that will be received by the designated
recipient will be 1180 Mexican pesos,
after fees and taxes are applied.
However, when the relative picks up the
transfer in Mexico a day later, he only
receives 1150 Mexican pesos because
the exchange rate applied by the
recipient agent in Mexico was lower
than the exchange rate disclosed on the
receipt. Because the designated
recipient has received less than the
amount of currency disclosed on the
receipt, an error has occurred.
ii. A consumer requests to send funds
to a relative in Colombia to be received
in local currency. The remittance
transfer provider provides the sender a
receipt stating an amount of currency
that will be received by the designated
recipient, which does not reflect
additional foreign taxes that will be
imposed in Colombia on the transfer.
Because the designated recipient will
receive less than the amount of currency
disclosed on the receipt, an error has
occurred.
iii. Same facts as in ii., except that the
receipt provided by the remittance
transfer provider does not reflect
additional fees that are imposed by the
receiving agent in Colombia on the
transfer. Because the designated
recipient will receive less than the
amount of currency disclosed on the
receipt, an error has occurred.
iv. A consumer requests to send
US$250 to a relative in India to an U.S.
dollar-denominated account held by the
relative at an Indian bank. Instead of the
US$250 disclosed on the receipt as the
amount to be sent, the remittance
transfer provider sends US$200,
resulting in a smaller deposit to the
designated recipient’s account than was
disclosed as the amount to be received
after fees and taxes. Because the
designated recipient received less than
the amount of currency that was
disclosed, an error has occurred.
v. A consumer requests to send
US$100 to a relative in Brazil to be
received in local currency. The
remittance transfer provider provides
the sender a receipt that discloses an
estimated exchange rate, other taxes,
and amount of currency that will be
received due to Brazilian law requiring
that the exchange rate be set by the

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Brazilian central bank. When the
relative picks up the remittance transfer,
the relative receives less currency than
the estimated amount disclosed to the
sender on the receipt. Because
§ 205.32(b) permits the remittance
transfer provider to disclose an estimate
of the amount of currency to be
received, no error has occurred unless
the estimate was not based on an
approach set forth under § 205.32(c).
4. Failure to make funds available by
stated date of availability—coverage.
Section 205.33(a)(1)(iv) generally covers
disputes about the failure to make funds
available in connection with a
remittance transfer to a designated
recipient by the stated date of
availability. The following are examples
of errors for failure to make funds
available by the stated date of
availability (assuming that neither of the
exceptions in § 205.33(a)(1)(iv)(A) or (B)
apply).
i. Late or non-delivery of a remittance
transfer;
ii. Delivery of funds to the wrong
account;
iii. The fraudulent pick-up of a
remittance transfer in a foreign country
by a person other than the designated
recipient;
iv. The recipient agent or institution’s
retention of funds in connection with a
remittance transfer, instead of making
the funds available to the designated
recipient.
5. Extenuating circumstances. Under
§ 205.33(a)(1)(iv)(A), a remittance
transfer provider’s failure to deliver or
transmit a remittance transfer by the
stated date of availability is not an error
if such failure was caused by
circumstances beyond the provider’s
control. Examples of circumstances
beyond a remittance transfer provider’s
control under § 205.33(a)(1)(iv)(A)
include circumstances such as war or
civil unrest, natural disaster, and
government actions or restrictions that
could not have been reasonably
anticipated by the remittance transfer
provider, such as the imposition of
foreign currency controls or
garnishment or attachment of funds
after the transfer is sent.
6. Incorrect information provided for
transfer. Under § 205.33(a)(1)(iv)(B), a
remittance transfer provider’s failure to
make funds in connection with a
remittance transfer available to a
designated recipient by the stated date
of availability is not an error if such
failure occurred because the sender
provided incorrect information in
connection with the transfer, such as by
erroneously identifying the designated
recipient or the recipient’s account
number, provided that the remittance

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transfer provider also gives the sender
the opportunity to correct the
information and send the transfer at no
additional cost. However, an error may
be asserted under § 205.33(a)(1)(iv) if
the failure to make funds available was
caused by the provider’s
miscommunication of information
necessary for the designated recipient to
pick up the transfer. For example, an
error under § 205.33(a)(1)(iv) could
occur if the provider discloses the
incorrect location where the transfer
may be picked up or gives the wrong
confirmation number/code for the
transfer.
33(b) Notice of Error From Sender
1. Person asserting or discovering
error. The error resolution procedures of
this section apply only when a notice of
error is received from the sender, and
not when a notice of error is received
from the designated recipient or when
the remittance transfer provider itself
discovers and corrects an error.
2. Content of error notice. The notice
of error is effective so long as the
remittance transfer provider is able to
identify the remittance transfer in
question. For example, the sender could
provide the confirmation number or
code that would be used by the
designated recipient to pick up the
transfer, or other identification number
or code supplied by the remittance
transfer provider in connection with the
transfer, if such number or code is
sufficient for the remittance transfer
provider to identify the transfer.
3. Address on notice of error. A
remittance transfer provider may
request, or a sender may provide, the
sender’s or designated recipient’s e-mail
address, as applicable, instead of a
physical address, on a notice of error if
such e-mail address would be sufficient
to enable the provider to identify the
remittance transfer to which the notice
applies.
4. Effect of late notice. A remittance
transfer provider is not required to
comply with the requirements of this
section for any notice of error from a
sender that is received by the provider
more than 180 days from the stated date
of availability of the remittance transfer
to which the notice of error applies.
5. Notice of error provided to agent. A
notice of error provided by a sender to
an agent of the remittance transfer
provider is deemed to be received by the
provider under § 205.33(b)(1)(i) when
received by the agent.
6. Consumer notice of error resolution
rights. Section 205.31 requires a
remittance transfer provider to include
an abbreviated notice of the consumer’s
error resolution rights on the receipt or

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combined notice given under
§ 205.31(b)(2) or (b)(3). In addition, the
remittance transfer provider must make
available to a sender upon request, a
notice providing a full description of the
sender’s error resolution rights that is
substantially similar to the model error
resolution and cancellation notice set
forth in Appendix A of this part (Model
Form A–36).
33(c) Time Limits and Extent of
Investigation
1. Notice to sender of finding of error.
If the remittance transfer provider
determines during its investigation that
an error occurred as described by the
sender, the remittance provider may
inform the sender of its findings either
orally or in writing. However, if the
provider determines that no error or a
different error occurred, the provider
must provide a written explanation of
its findings under § 205.33(d)(1).
2. Designation of requested remedy.
Under § 205.33(c)(2), the sender may
choose to obtain a refund of the amount
of funds that was not properly
transmitted or delivered to the
designated recipient or request
redelivery of the amount appropriate to
correct the error at no additional cost.
Upon receiving the sender’s request, the
remittance transfer provider shall
correct the error within one business
day or as soon as reasonably practicable,
applying the same currency rate and
fees stated in the disclosure provided
under § 205.31(b)(2) or (b)(3), if the
sender requests delivery of the amount
appropriate to correct the error. The
remittance transfer provider may also
request that the sender indicate the
preferred remedy at the time the sender
provides notice of the error. However, if
the sender does not indicate the desired
remedy at the time of providing notice
of error, the remittance transfer provider
must notify the sender of any available
remedies in the report provided under
§ 205.33(c)(1) if the provider determines
an error occurred.
3. Remedies for incorrect amount
paid. If an error asserted under
§ 205.33(a)(1)(i) occurred as alleged by
the sender, the sender may request a
refund of the amount necessary to
resolve the error from the remittance
provider under § 205.33(c)(2)(i) or that
the remittance transfer provider make
that amount available to the designated
recipient at no additional cost under
§ 205.33(c)(2)(ii).
4. Correction of an error if funds not
available by stated date. If the
remittance transfer provider determines
an error occurred as asserted under
§ 205.33(a)(1)(iv), it must correct the
error including refunding any fees

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imposed for the transfer, whether the fee
was imposed by the provider or a third
party involved in sending the transfer,
such as an intermediary bank involved
in sending a wire transfer or the
institution from which the funds are
picked up.
5. Charges for error resolution. If an
error occurred, whether as alleged or in
a different amount or manner, the
remittance transfer provider may not
impose a charge related to any aspect of
the error resolution process (including
charges for documentation or
investigation).
6. Correction without investigation. A
remittance transfer provider may correct
an error, without investigation, in the
amount or manner alleged by the
sender, or otherwise determined, to be
in error, but must comply with all other
applicable requirements of § 205.33.
33(d) Procedures if Remittance Transfer
Provider Determines no Error or
Different Error Occurred
1. Error different from that alleged.
When a remittance transfer provider
determines that an error occurred in a
manner or amount different from that
described by the sender, it must comply
with the requirements of both
§§ 205.33(c) and (d), as applicable. The
provider may give the notice of
correction and the explanation
separately or in a combined form.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

33(e) Reassertion of Error
1. Withdrawal of error; right to
reassert. The remittance transfer
provider has no further error-resolution
responsibilities if the sender voluntarily
withdraws the notice alleging an error.
A sender who has withdrawn an
allegation of error has the right to
reassert the allegation unless the
remittance transfer provider had already
complied with all of the error resolution
requirements before the allegation was
withdrawn. The sender must do so,
however, within the original 180-day
period from the stated date of
availability.
33(f) Relation to Other Laws
1. Concurrent error obligations.
Section 205.33(f)(1) applies only when
an error may be asserted under both
§§ 205.11 and 205.33 with a financial
institution that is also the remittance
transfer provider. For example, if a
sender asserts an error under § 205.11
with a remittance transfer provider that
holds the sender’s account, and the
error is not also an error under § 205.33
(such as in the case of the omission of
an EFT on a periodic statement), then
the error-resolution provisions of
§ 205.11 exclusively apply to the error.

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2. Assertion of same error with
multiple parties. If a sender receives
credit to correct an error of an incorrect
amount paid in connection with a
remittance transfer from either the
remittance transfer provider or accountholding institution (or creditor), and
subsequently asserts the same error with
another party, that party has no further
responsibilities to investigate the error
because the sender has received
sufficient credit to correct the error. For
example, assume that a sender initially
asserts an error with a remittance
transfer provider with respect to a
remittance transfer alleging that $130
was debited from his checking account,
but the sender only requested a
remittance transfer for $100, plus a $10
transfer fee. If the remittance transfer
provider refunds $20 to the sender to
correct the error, and the sender
subsequently asserts the same error with
his account-holding institution, the
account-holding institution has no error
resolution responsibilities under
Regulation E because the consumer
sender has already received sufficient
credit to correct the error. In addition,
nothing in this section prevents an
account-holding institution or creditor
from reversing amounts it has
previously credited to correct an error if
a consumer receives more than one
credit to correct the same error. For
example, assume that a sender
concurrently files notice of error with
his or her account-holding institution
and remittance transfer provider for the
same error, and the sender receives
credit from the account-holding
institution for the error within 45 days
of the notice of error. If the remittance
transfer provider subsequently provides
a credit to the sender for the same error,
the account-holding institution may
reverse the amounts it had previously
credited to the consumer’s account even
after the 45-day error resolution period
under § 205.11.
33(g) Error Resolution Standards and
Recordkeeping Requirements
1. Record retention requirements.
Remittance transfer providers are
subject to the record retention
requirements under § 205.13, and must
retain documentation, including
documentation related to error
investigations, for a period of not less
than two years from the date a notice of
error was submitted to the provider or
action was required to be taken by the
provider. A remittance transfer provider
need not maintain records of individual
disclosures that it has provided to each
sender; it need only retain records that
ensure that it can comply with a
sender’s request for documentation or

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other information relating to a particular
remittance transfer, including a request
for supporting documentation to enable
the sender to determine whether an
error exists with respect to that transfer.
Section 205.34—Procedures for
Cancellation and Refund of Remittance
Transfers 34(a) Sender Right of
Cancellation and Refund
1. Content of cancellation request. A
request to cancel a remittance transfer is
valid so long as the remittance transfer
provider is able to identify the
remittance transfer in question. For
example, the sender could provide the
confirmation number or code that
would be used by the designated
recipient to pick up the transfer or other
identification number or code supplied
by the remittance transfer provider in
connection with the transfer, if such
number or code is sufficient for the
remittance transfer provider to identify
the transfer. A remittance transfer
provider may also request, or the sender
may provide, the sender’s e-mail
address instead of a physical address, so
long as the remittance transfer provider
is able to identify the transfer to which
the request to cancel applies.
2. Consumer notice of cancellation
right. Section 205.31 requires a
remittance transfer provider to include
an abbreviated notice of the consumer’s
right to cancel a remittance transfer on
the receipt or combined disclosure
given under § 205.31(b)(2) or (b)(3). In
addition, the remittance transfer
provider must make available to a
sender upon request, a notice providing
a full description of the right to cancel
a remittance transfer that is
substantially similar to the model error
resolution and cancellation notice set
forth in Appendix A of this part (Model
Form A–36).
34(b) Time Limits and Refund
Requirements
1. Form of refund. At its discretion, a
remittance transfer provider may issue a
refund in cash or in the same form of
payment that was initially tendered by
the sender for the remittance transfer.
For example, if the sender originally
provided a credit card as payment for
the transfer, the remittance transfer
provider may issue a credit to the
sender’s credit card account in the
amount of the payment.
2. Fees refunded. If a sender provides
a timely request to cancel a remittance
transfer, a remittance transfer provider
must refund all funds tendered by the
sender in connection with the
remittance transfer, including any fees
that have been imposed for the transfer,
whether the fee was assessed by the

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provider or a third party, such as an
intermediary institution or the receiving
agent or bank.
Section 205.35—Acts of Agents
Alternative A
1. General. Remittance transfer
providers must comply with the
requirements of this subpart, including,
but not limited to, providing the
disclosures set forth in § 205.31 and
providing any remedies as set forth in
§ 205.33, even if a remittance transfer
provider performs its functions through
an agent, and regardless of whether the
provider has an agreement with a third
party that transfers or otherwise makes
funds available to a designated
recipient.

srobinson on DSK4SPTVN1PROD with PROPOSALS3

Alternative B
1. General. Remittance transfer
providers generally must comply with
the requirements of this subpart,
including, but not limited to, providing
the disclosures set forth in § 205.31 and
remedying any errors as set forth in
§ 205.33, even if a remittance transfer
provider performs its functions through
an agent, and regardless of whether the
provider has an agreement with a third
party that transfers or otherwise makes
funds available to a designated
recipient.
2. Policies and procedures. Under
§ 205.35(a), a remittance transfer
provider that performs its functions
through an agent must establish and
maintain written policies and
procedures for compliance with this
subpart applicable to its agents.
Maintenance of policies and procedures
includes periodic review of and, as
needed, updates to such policies and
procedures. Appropriate oversight
practices include, for example, regular
audits, training, and other measures
designed to ensure an agent’s
compliance with this subpart. Under
these circumstances, a provider has not
violated its obligations under Subpart B
if its agent fails to follow the policies
and procedures in an individual case, so
long as the remittance transfer provider
makes the consumer whole for any error
resulting from an agent’s acts, including
as set forth under the error resolution
provisions in § 205.33.fi
Appendix A—Model Disclosure Clauses
and Forms
*

*

*

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*

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2. Use of forms. The appendix
contains model disclosure clauses for
optional use by financial institutions
fland remittance transfer providersfi
to facilitate compliance with the
disclosure requirements of sections
205.5(b)(2) and (b)(3), 205.6(a), 205.7,
205.8(b), 205.14(b)(1)(ii), 205.15(d)(1)
and (d)(2), [and] 205.18(c)(1) and
(c)(2)fl, and § 205.31(b)fi. The use of
appropriate clauses in making
disclosures will protect a financial
institution fland a remittance transfer
providerfi from liability under sections
[915 and] 916 fland 917fi of the act
provided the clauses accurately reflect
the institution’s EFT services fland the
provider’s remittance transfer services,
respectivelyfi.
*
*
*
*
*
fl4. Altering the model forms for
remittance transfers. This appendix
contains twelve model forms for use in
connection with remittance transfers.
These model forms are intended to
demonstrate several formats a
remittance transfer provider may use to
comply with the requirements of
§ 205.31(b). Model Forms A–30 through
A–32 demonstrate how a provider could
provide the required disclosures for a
remittance transfer exchanged into local
currency. Model Forms A–33 through
A–35 demonstrate how a provider could
provide the required disclosures for
dollar-to-dollar remittance transfers.
These forms also demonstrate disclosure
of the required content, in accordance
with the grouping and proximity
requirements of §§ 205.31(c)(1) and (2),
in both a register receipt format and an
8.5 inch by 11 inch format. Model Form
A–36 provides long-form model error
resolution and cancellation disclosures
required by § 205.31(d), and Model
Form A–37 provides short-form model
error resolution and cancellation
disclosures required by
§ 205.31(b)(2)(iv). Model Forms A–38
through A–41 provide language for
Spanish language disclosures.
i. The model forms contain
information that is not required by
Subpart B, such as a confirmation code
and the sender’s name and contact
information. Additional information not
required by Subpart B may be presented
on the model forms as permitted by
§ 205.31(c)(4). Any additional
information must be presented
consistent with a remittance transfer

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provider’s obligation to provide
required disclosures in a clear and
conspicuous manner.
ii. Use of the model forms is optional.
A remittance transfer provider may
change the forms by rearranging the
format or by making modifications to
the language of the forms, in each case
without modifying the substance of the
disclosures. Any rearrangement or
modification of the format of the model
forms must be consistent with the form,
grouping, proximity, and other
requirements of §§ 205.31(a) and (c).
Providers making revisions that do not
comply with this section will lose the
benefit of the safe harbor for appropriate
use of Model Forms A–30 to A–41.
iii. Permissible changes to the
language and format of the model forms
include, for example:
A. Substituting the information
entered into the model forms intended
to demonstrate how to complete the
information in the model forms—such
as names, addresses, and Web sites;
dates; numbers; and state-specific
contact information—with information
applicable to the remittance transfer.
B. Eliminating disclosures that are not
applicable to the transfer, as permitted
under § 205.31(b).
C. Correcting or updating telephone
numbers, mailing addresses, or Web site
addresses that may change over time.
D. Providing the disclosures on a
paper size that is different from a
register receipt and 8.5 inch by 11 inch
formats.
E. Adding a term substantially similar
to ‘‘estimated’’ in close proximity to the
specified terms in §§ 205.31(b)(1) and
(b)(2), as permitted under § 205.31(d).
F. Providing the disclosures in a
foreign language, or multiple foreign
languages, subject to the requirements of
§ 205.31(g).
iv. Changes to the model forms that
are not permissible include, for
example, adding information that is not
segregated from the required
disclosures, other than as permitted by
§ 205.31(c)(4).fi
By order of the Board of Governors of the
Federal Reserve System, May 11, 2011.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2011–12019 Filed 5–20–11; 8:45 am]
BILLING CODE 6210–01–P

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