Electronic Fund Transfer Act

CFPB Proposed Amendment to Rule on Remittance Transfers

On December 21, 2012, the CFPB issue a proposed amendment to subpart B of Regulation E under the Electronic Fund Transfer Act regarding remittance transfers.  The proposed amendment:  (i) provides flexibility regarding the disclosure of foreign taxes, as well as fees imposed by a designated recipient’s institution for receiving a remittance transfer in an account; (ii) limits a remittance transfer provider’s obligation to disclose foreign taxes to those imposed by a country’s central government; and (ii) revises the error resolution provisions that apply when a remittance transfer is not delivered to a designated recipient because the sender provided incorrect or insufficient information.  Comments must be received within 30 days of publication of the proposed amendment in the Federal Register.  CFPB Release.  CFPB Proposed Amendment. 

Fed, Treasury Proposed Amendments to Bank Secrecy Act Definitions

On November 29, the Fed and the Financial Crimes Enforcement Network, a bureau of the Treasury, proposed amended definitions of “funds transfer” and “transmittal of funds” under the regulations implementing the Bank Secrecy Act.  The proposed amendments maintain the current scope of funds transfers and transmittals subject to the Bank Secrecy Act following amendments to the Electronic Fund Transfer Act made pursuant to the Dodd-Frank Act.  Comments must be submitted no later than January 25, 2013. Fed Release.   Fed Proposed Rule.

Fed Adopts Rule Implementing Durbin Amendment

On July 29, the Fed issued a final rule, Regulation II (Debit Card Interchange Fees and Routing), establishing standards for debit card interchange fees and prohibiting network exclusivity arrangements and routing restrictions. The rule implements Section 920 of the Electronic Fund Transfer Act, which was added pursuant to Section 1075 of the Dodd-Frank Act, referred to as the Durbin Amendment. The provisions of the rule regarding interchange fees and routing restrictions will be effective on October 1. The effective date for the network exclusivity prohibition is October 1 for payment card networks, April 1, 2012 for certain issuers, and April 1, 2013 for issuers of certain health-related and other benefit cards and general-use prepaid cards.

Also on July 29, the Fed approved an interim final rule allowing for an upward adjustment of no more than 1% to an issuer’s debit card interchange fee if the issuer develops and implements certain fraud prevention procedures. Comments on the interim final rule are due by September 30. The adjustment is effective on October 1, and the Fed will re-evaluate the adjustment based on comments received. Fed Release. Final Rule. Interim Final Rule.