[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Rules and Regulations]
[Pages 44761-44763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18930]

Rules and Regulations
                                                Federal Register

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Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / 
Rules and Regulations

[[Page 44761]]


12 CFR Part 701

RIN 3133-AD94

Remittance Transfers

AGENCY: National Credit Union Administration (NCUA).

ACTION: Interim final rule with request for comments.


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) 


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, 
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:


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]

2. Amend Sec.  701.30 as follows:
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.''
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]