[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Rules and Regulations]
[Pages 44761-44763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18930]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 /
Rules and Regulations
[[Page 44761]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
RIN 3133-AD94
Remittance Transfers
AGENCY: National Credit Union Administration (NCUA).
ACTION: Interim final rule with request for comments.
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SUMMARY: NCUA is amending its rules to conform to amendments made to
the Federal Credit Union Act (FCU Act) by the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act). The interim final
rule adds remittance transfers, as now defined under the Electronic
Fund Transfer Act (EFTA), as an example of money transfer instruments
Federal credit unions (FCUs) may provide to persons within their fields
of membership.
DATES: This interim final rule is effective July 27, 2011. Comments
must be received by NCUA on or before September 26, 2011.
ADDRESSES: You may submit comments by any of the following methods
(Please send comments by one method only):
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the
instructions for submitting comments.
E-mail: Address to regcomments@ncua.gov. Include ``[Your
name] Comments on Interim Final Rule, Part 701, Remittance Transfers''
in the e-mail subject line.
Fax: (703) 518-6319. Use the subject line described above
for e-mail.
Mail: Address to Mary Rupp, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
FOR FURTHER INFORMATION CONTACT: Chrisanthy Loizos, Staff Attorney,
Office of General Counsel, at the above address or telephone: (703)
518-6540.
SUPPLEMENTARY INFORMATION:
I. Background
In 2006, the Financial Services Regulatory Relief Act of 2006 (Reg
Relief Act), Public Law 109-351, relieved a longstanding limitation on
FCUs regarding financial services. Specifically, Section 503 of the
Relief Act amended the FCU Act to permit FCUs to provide certain
financial services to all persons within their fields of membership.
Congress intended to allow FCUs ``to sell negotiable checks, money
orders, and other similar transfer instruments, including international
and domestic electronic fund transfers, to anyone eligible for
membership, regardless of their membership status.'' S. Rpt. 109-256,
p. 5; H. Rpt. 109-356 Part 1, p. 63. To implement this authority, NCUA
created a new regulatory section to address the provision of financial
services to persons within an FCU's field of membership and issued
Sec. 701.30 to implement Section 503. 71 FR 62875 (Oct. 27, 2006)
(interim final rule); 72 FR 7927 (Feb. 22, 2007) (final rule).
Section 1073 of the Dodd-Frank Act added a new Section 919 to the
EFTA, entitled ``Remittance Transfers.'' Public Law 111-203, Sec.
1073, 124 Stat. 2066 (2010). The new Section 919 of the EFTA creates
protections for consumers who, through remittance transfer providers,
send money to designated recipients located in foreign countries. 15
U.S.C. 1693o-1. Paragraph (d) of Section 1073 of Dodd-Frank amended the
FCU Act to specify that a remittance transfer, as defined by new
Section 919 of the EFTA, is an example of a money transfer instrument
that FCUs may sell to persons within their fields of membership. 12
U.S.C. 1757(12)(A).
Section 919(g)(2) of the EFTA, defines a remittance transfer as an
electronic transfer of funds requested by a sender to a designated
recipient that is initiated by a remittance transfer provider,
regardless of whether the sender has an account with the remittance
transfer provider or whether the transfer meets the statute's
definition of an EFT. 15 U.S.C. 1693o-1(g)(2). The law excludes small
value transactions from the definition. Remittance transfers, typically
consumer to consumer payments, may be executed through a variety of
means, including international wire transfers, international automated
clearing house transactions, other account-to-account or account-to-
cash products, and reloadable prepaid cards. The law requires
remittance transfer providers to give consumers certain disclosures,
including a receipt that contains remittance transfer fees, the
exchange rate to be used by the remittance transfer provider, the
amount of currency to be received by the recipient and the estimated
date of delivery. In addition, the law requires the sender to receive a
statement that addresses error resolution rights. The Federal Reserve
Board's recently proposed remittance transfer rule, which addresses
disclosure requirements and error resolution, provides a detailed
analysis of the services offered by remittance transfer providers. 99
FR 29902 (May 23, 2011).
FCUs have had the authority to transfer funds at the request of
consumers within their fields of membership to recipients
internationally since the adoption of the Reg Relief Act. The amendment
to the FCU Act's powers provision by the Dodd-Frank Act makes plain
that FCUs may offer all variations of remittance transfers, as now
defined by the EFTA, for the benefit of consumers within their fields
of membership, subject to certain consumer protections. The addition of
remittance transfers as an example of permissible money transfer
instruments, in addition to the newly-enacted consumer disclosures and
rights, demonstrate the clear intention of Congress to promote access
to remittance transfers and ensure protections for consumers.
Finally, Section 1073(d) of the Dodd-Frank Act adjusted Section
107(12) of the FCU Act by removing the reference to the receipt of
international and domestic EFTs from subparagraph (B). As explained
below, this simply eliminates a redundancy and does not affect the
ability of FCUs to offer EFT services.
[[Page 44762]]
II. Summary of the Rule
Similarly to the rulemakings that implemented Section 503 of the
Reg Relief Act, the NCUA Board (Board) is adopting amendments to Sec.
701.30 that directly track the statutory provisions of Section 1073 of
the Dodd-Frank Act. The Board amends paragraph (a) of Sec. 701.30 to
include remittance transfers as defined by Section 919 of the EFTA as
an example of permissible money transfer instruments. The Board also
makes a corresponding amendment to paragraph (b) to remove the language
referring to an FCU's receipt of international and domestic EFTs.
The Board notes the amendment to Sec. 701.30(b) will have no
effect on FCUs. The Board views the deletion of the phrase ``and
receive international and domestic electronic fund transfers'' from the
Section 107(12)(B) of the FCU Act as a housekeeping amendment.
When adopting the phrase in Section 107(12)(B) through the Reg
Relief Act, Congress simply clarified the authority it granted to FCUs
in Section 107(12)(A). 12 U.S.C. 1757(12). Section 903 of the EFTA
defines ``electronic fund transfer'' as ``any transfer of funds * * *
initiated through an electronic terminal, telephonic instrument, or
computer or magnetic tape so as to order, instruct, or authorize a
financial institution to debit or credit an account.'' 15 U.S.C.
1693a(6); see also 12 CFR 205.3(b). By expressly authorizing FCUs ``to
sell'' international and domestic EFTs in Section 107(12)(A) of the FCU
Act, Congress permitted FCUs to send or receive funds upon instruction
because, by definition, EFTs are authorizations to debit or credit an
account. To read the power ``to sell'' EFT services separately from the
ability to ``receive'' EFTs would be wholly inconsistent with
Congressional intent to provide EFT services to persons in the field of
membership, particularly for those who may not have ready and
affordable access to these services. It would also be unfeasible for an
FCU to offer consumers the ability to initiate transfers from their
accounts but not receive EFTs. As discussed above, Congress clearly
intended to promote the availability of services to consumers under
Section 1073 of the Dodd-Frank Act by explicitly referencing remittance
transfers services. The amendment to FCU Act Section 107(12)(B) was not
meant to restrict or otherwise limit an FCU's ability to effectively
provide services to consumers.
III. Interim Final Rule
As with the initial rulemaking adopting Sec. 701.30, the Board is
issuing this rulemaking as an interim final rule because there is a
strong public interest in having advantageous and consumer-oriented
rules that enhance credit union services for members and consumers. The
amendments of Section 1073 of the Dodd-Frank Act are self-implementing.
The rule strictly conforms to the statutory language and expressly
recognizes FCU authority to provide remittance transfers to persons
within their fields of membership, subject to new consumer protections.
The Board finds these reasons are good cause to dispense with the 30-
day delayed effective date requirement under section 553(d)(3) of the
Administrative Procedure Act. Accordingly, the Board finds that,
pursuant to 5 U.S.C. 553(b)(3), notice and public procedures are
unnecessary and contrary to the public interest; and, pursuant to 5
U.S.C. 553(d)(3), the rule will be effective upon publication in the
Federal Register. Although the rule is being issued as an interim final
rule and is effective upon publication, the Board encourages interested
parties to submit comments.
IV. Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact a rule may have on a
substantial number of small credit unions, defined as those under ten
million dollars in assets. This rule only clarifies and improves the
available services FCUs may provide to their members and persons within
their fields of membership, without imposing any regulatory burden. The
interim final amendments would not have a significant economic impact
on a substantial number of small credit unions, and, therefore, a
regulatory flexibility analysis is not required.
Paperwork Reduction Act
NCUA has determined that the interim final rule would not increase
paperwork requirements under the Paperwork Reduction Act of 1995 and
regulations of the Office of Management and Budget. 44 U.S.C. 3501 et
seq.; 5 CFR part 1320.
Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. In
adherence to fundamental federalism principles, NCUA, an independent
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies
with the executive order. The interim final rule would not have
substantial direct effects on the states, on the connection between the
national government and the States, or on the distribution of power and
responsibilities among the various levels of government. NCUA has
determined that this rule does not constitute a policy that has
federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this interim final rule would not
affect family well-being within the meaning of section 654 of the
Treasury and General Government Appropriations Act, 1999, Public Law
105-277, 112 Stat. 2681 (1998).
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996,
Public Law 104-121 (SBREFA), provides generally for congressional
review of agency rules. A reporting requirement is triggered in
instances where NCUA issues a final rule as defined by Section 551 of
the APA. 5 U.S.C. 551. NCUA has requested a SBREFA determination from
the Office of Management and Budget, which is pending. As required by
SBREFA, NCUA will file the appropriate reports with Congress and the
General Accounting Office so that the interim rule may be reviewed.
Agency Regulatory Goal
NCUA's goal is to promulgate clear and understandable regulations
that impose minimal regulatory burden. We request your comments on
whether the proposed amendments are understandable and minimally
intrusive if implemented as proposed.
List of Subjects in 12 CFR Part 701
Credit unions.
By the National Credit Union Administration Board on July 21,
2011.
Mary Rupp,
Secretary of the Board.
For the reasons stated in the preamble, the National Credit Union
Administration amends 12 CFR part 701 as set forth below:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
1. The authority citation for part 701 continues to read as follows:
[[Page 44763]]
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767,1782, 1784, 1786, 1787, and 1789. Section
701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also
authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3619.
Section 701.35 is also authorized by 42 U.S.C. 4311-4312.
Sec. 701.30 [Amended]
0
2. Amend Sec. 701.30 as follows:
0
a. Add to paragraph (a) the phrase ``and remittance transfers, as
defined in section 919 of the Electronic Fund Transfer Act'' after the
words ``electronic fund transfers.''
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b. Remove the phrase ``and receiving international and domestic
electronic fund transfers'' after the words ``money orders'' from
paragraph (b).
[FR Doc. 2011-18930 Filed 7-26-11; 8:45 am]
BILLING CODE 7535-01-P