[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]
[Rules and Regulations]
[Pages 6025-6027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-01595]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 78, No. 19 / Tuesday, January 29, 2013 /
Rules and Regulations
[[Page 6025]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1005
[Docket No. CFPB-2012-0050]
RIN 3170-AA33
Electronic Fund Transfers (Regulation E) Temporary Delay of
Effective Date
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
issuing this final rule to delay the February 7, 2013, effective date
of final rules published by the Bureau on February 7, 2012, and August
20, 2012 (collectively, 2012 Final Rule), that amend Regulation E,
which implements the Electronic Fund Transfer Act (EFTA). The 2012
Final Rule implements statutory requirements set forth in section 1073
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) regarding remittance transfers. The Bureau is delaying the
effective date of the 2012 Final Rule pending the finalization of a
proposal, published on December 31, 2012 (December 2012 Proposal), that
would address three narrow issues in the 2012 Final Rule. The Bureau
will determine the new effective date when it finalizes the December
2012 Proposal.
DATES: The effective date of the Final Rules published February 7, 2012
(77 FR 6194) and August 20, 2012 (77 FR 50244) and technical correction
published July 10, 2012 (77 FR 40459) is delayed. The Bureau will
publish a document in the Federal Register announcing the new effective
date.
FOR FURTHER INFORMATION CONTACT: Eric Goldberg or Lauren Weldon,
Counsels, or Dana Miller, Senior Counsel, Division of Research,
Markets, and Regulations, Bureau of Consumer Financial Protection, 1700
G Street NW., Washington, DC 20552, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Overview
Section 1073 of the Dodd-Frank Act \1\ amended the EFTA \2\ to
create a new comprehensive consumer protection regime for remittance
transfers sent by consumers in the United States to individuals and
businesses in foreign countries. For covered transactions sent by
remittance transfer providers, section 1073 creates a new EFTA section
919, and generally requires: (i) The provision of disclosures prior to
and at the time of payment by the sender for the transfer; (ii)
cancellation and refund rights; (iii) the investigation and remedy of
errors by providers; and (iv) liability standards for providers for the
acts of their agents.
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\1\ Public Law 111-203, 124 Stat. 1376, section 1073 (2010).
\2\ 15 U.S.C. 1693 et seq. EFTA section 919 is codified in 15
U.S.C. 1693o-1.
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On February 7, 2012, the Bureau published a final rule to implement
section 1073 of the Dodd-Frank Act. 77 FR 6194 (February Final
Rule).\3\ On August 20, 2012, the Bureau published a supplemental rule
adopting a safe harbor for determining which companies are not
remittance transfer providers subject to the February Final Rule
because they do not provide remittance transfers in the normal course
of business, and modifying several aspects of the February Final Rule
regarding remittance transfers that are scheduled before the date of
transfer. 77 FR 50244. The 2012 Final Rule adopted an effective date of
February 7, 2013. In the February Final Rule, the Bureau stated that it
would continue to monitor implementation of the new statutory and
regulatory requirements. The Bureau has subsequently engaged in
dialogue with both industry and consumer groups regarding
implementation efforts and compliance concerns.
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\3\ A technical correction to the February Final Rule was
published on July 10, 2012. 77 FR 40459. For simplicity, that
technical correction is incorporated into the term ``February Final
Rule.''
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Upon further review and analysis of these concerns, the Bureau
published the December 2012 Proposal to refine several narrow aspects
of the 2012 Final Rule. 77 FR 77188 (Dec. 31, 2012). The Bureau also
proposed to extend the 2012 Final Rule's effective date until 90 days
after the finalization of the December 2012 Proposal. The comment
period on both the proposed substantive changes and the new effective
date of the 2012 Final Rule closes on January 30, 2013.\4\ The Bureau
intends to finalize the proposal expeditiously following the close of
this comment period.
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\4\ Details on how to submit a comment on both the substantive
changes in the proposal and the new effective date of the Final
Rule, are available at 77 FR 77188 (Dec. 31, 2012) or at https://www.federalregister.gov/articles/2012/12/31/2012-31170/electronic-fund-transfers-regulation-e. Comments must be submitted on or before
January 30, 2013.
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Given the impending February 7, 2013 effective date of the 2012
Final Rule, the Bureau simultaneously solicited comment on whether it
should temporarily delay the effective date pending finalization of the
December 2012 Proposal. The comment period on this narrow aspect of the
December 2012 Proposal closed on January 15, 2013.
II. Overview of Comments and Outreach
The Bureau received approximately 43 comments on its December 2012
Proposal to delay the effective date of the 2012 Final Rule beyond
February 7, 2013. Commenters generally supported, or did not oppose,
the temporary delay. All commenters that addressed the effective date
either directly expressed support for or did not object to the proposed
delay or indirectly supported the proposed delay by addressing the
December 2012 Proposal's 90-day proposed extension.
III. Summary of the Final Rule
Based on comments received, the Bureau is temporarily delaying the
effective date for the 2012 Final Rule pending finalization of the
December 2012 Proposal. The new effective date will be determined when
the substantive refinements to the December 2012 Proposal are
finalized. The new effective date will be after February 7, 2013. As
noted above, the Bureau proposed that the 2012 Final Rule and any
revisions resulting from the December 2012 Proposal would become
effective 90 days after the Bureau finalizes the proposal.
[[Page 6026]]
IV. Status of the Bureau's Remittance Rule Safe Harbor Countries List
On September 26, 2012, the Bureau issued a safe harbor list of
countries that qualify for an exception in the 2012 Final Rule that
permits estimated disclosures of certain figures where the laws of the
recipient country do not permit a determination of the exact
amounts.\5\ In that issuance, the Bureau explained that it would not
remove countries from the list before May 1, 2013. In light of the
temporary delay of the effective date of the 2012 Final Rule, the
Bureau will reassess the earliest date on which, if necessary,
countries may be removed from the list in connection with the
finalization of the December 2012 Proposal, although that date will not
be before May 1, 2013.
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\5\ See http://files.consumerfinance.gov/f/201209_CFPB_Remittance-Rule-Safe-Harbor-Countries-List.pdf (Sept. 26, 2012).
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In the meantime, the Bureau continues to welcome input on possible
amendments to the list. The Bureau's September 26, 2012 issuance on the
safe harbor list of countries contains details on how to submit this
feedback.
V. Legal Authority and Effective Date
Section 1073 of the Dodd-Frank Act creates a new section 919 of the
EFTA and requires remittance transfer providers to provide disclosures
to senders of remittance transfers, pursuant to rules prescribed by the
Bureau. In particular, providers must give a sender a written pre-
payment disclosure containing specified information applicable to the
sender's remittance transfer. The provider must also provide a written
receipt that includes the information provided on the pre-payment
disclosure, as well as additional specified information. EFTA section
919(a). In addition, EFTA section 919(d) directs the Bureau to
promulgate rules regarding appropriate cancellation and refund policies
and to investigate and remedy errors by providers.
In addition to the statutory mandates set forth in the Dodd-Frank
Act, EFTA section 904(a) authorizes the Bureau 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). EFTA section 904(c) further
provides that regulations prescribed by the Bureau 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 Bureau deems necessary or
proper to effectuate the purposes of the title, to prevent
circumvention or evasion, or to facilitate compliance.
This final rule will be effective on the date of publication in the
Federal Register. Under section 553(d) of the Administrative Procedure
Act (APA), the required publication or service of a substantive rule
shall be made not less than 30 days before its effective date, except
for (1) a substantive rule which grants or recognizes an exemption or
relieves a restriction; (2) interpretative rules and statements of
policy; or (3) as otherwise provided by the agency for good cause found
and published with the rule. 5 U.S.C. 553(d). This final rule does not
establish any requirements but rather delays the effective date of the
2012 Final Rule pending the finalization of the December 2012 Proposal.
Therefore, under section 553(d)(1) of the APA, the Bureau is publishing
this final rule less than 30 days before its effective date because it
is a substantive rule which grants or recognizes an exemption or
relieves a restriction. 5 U.S.C. 553(d)(1). The Bureau further finds it
has good cause pursuant to section 553(d)(3) of the APA to dispense
with the 30-day delayed effective date requirement because, on balance,
the need to implement immediately the delay of the 2012 Final Rule's
February 7, 2013 effective date before that date occurs outweighs the
need for affected parties to prepare for this delay.
VI. Section 1022(b)(2) of the Dodd-Frank Act
Section V of the December 2012 Proposal contained the Bureau's
preliminary analysis under section 1022(b)(2) of the Dodd-Frank Act of
the potential costs of the December 2012 Proposal to consumers and
covered persons (as defined in Dodd-Frank Act section 1002(6), 12
U.S.C. 5481(6)). In the final portion of that section, the Bureau
addressed the impact of the proposed delay of the effective date on
covered persons and consumers. See Section V.3. of the December 2012
Proposal.
In the proposal, the Bureau stated that the temporary delay of the
2012 Final Rule's effective date would generally benefit remittance
transfer providers by delaying the start of any ongoing compliance
costs. The additional time might also enable providers (and their
vendors) to build solutions that cost less than those that might
otherwise have been possible.
The Bureau also recognized that the proposed temporary delay of the
effective date would impose some costs on senders by temporarily
delaying the time when they would receive the benefits of Dodd-Frank
section 1073 and the 2012 Final Rule from February 7, 2013 to the
ultimate effective date. Thus, consumers at most will only lose
benefits from Dodd-Frank section 1073 that would have accrued during
the length of the temporary delay. (As noted above, the Bureau has not
yet determined when the 2012 Final Rule will take effect but has
proposed that it would become effective 90 days after the Bureau
finalizes the December 2012 Proposal.) The Bureau also noted that
senders may benefit from the temporary delay to the extent that both
the proposed refinements and the additional time providers have to
implement the 2012 Final Rule may eliminate any disruptions in the
provision of remittance transfer services.
Further, the Bureau is not aware of any unique impact that this
final rule might have on insured depository institutions or insured
credit unions with total assets of $10 billion or less as described in
section 1026(a) of the Dodd-Frank Act, or on rural consumers.
VII. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996, requires each
agency to consider the potential impact of its regulations on small
entities, including small businesses, small governmental units, and
small not-for-profit organizations. The RFA generally requires an
agency to conduct an initial regulatory flexibility analysis (IRFA) and
a final regulatory flexibility analysis (FRFA) of any rule subject to
notice-and-comment rulemaking requirements, unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. The Bureau did not perform an
IFRA because it determined and certified that the December 2012
Proposal, if adopted, would not have a significant economic impact on a
substantial number of small entities. The Bureau did not receive any
comments regarding its certification of the delayed effective date
proposed in the December 2012 Proposal, and is adopting that aspect of
the December 2012 Proposal without change.
A FRFA is not required for this final rule because it will not have
a significant economic impact on a substantial number of small
entities. This final rule will temporarily delay the February 7, 2013
effective date of
[[Page 6027]]
the 2012 Final Rule, pending the finalization of the December 2012
Proposal that would address three narrow issues in the 2012 Final Rule.
The Bureau will determine the new effective date when it finalizes the
December 2012 Proposal. The delay in effective date will generally
benefit small remittance transfer providers, by delaying the start of
any ongoing compliance costs. The additional time might also enable
providers (and their vendors) to build solutions that cost less than
those that might otherwise have been possible.
Accordingly, the undersigned hereby certifies that the final rule
will not have a significant economic impact on a substantial number of
small entities.
VIII. Paperwork Reduction Act Analysis
The Bureau may not conduct or sponsor, and, notwithstanding any
other provision of law, a respondent is not required to respond to, an
information collection unless it displays a currently valid OMB control
number. The Bureau determined that the December 2012 Proposal's
proposed delay of the effective date of the 2012 Final Rule does not
impose any new recordkeeping, reporting, or disclosure requirements on
covered persons or members of the public that would be collections of
information requiring OMB approval under the Paperwork Reduction Act
(PRA), 44 U.S.C. 3501, et seq. The Bureau did not receive any comments
regarding this conclusion, to which the Bureau adheres.
List of Subjects in 12 CFR Part 1005
Banking, banks, Consumer protection, Credit unions, Electronic fund
transfers, National banks, Remittance transfers, Reporting and
recordkeeping requirements, Savings associations.
Dated: January 19, 2013.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2013-01595 Filed 1-25-13; 4:15 pm]
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