CFPB Seeks Public Comment on Proposed Rules Overhauling Regulation E

The Consumer Financial Protection Bureau published proposed rules and a request for public comment Friday dealing with changes to Regulation E, which implements the Electronic Fund Transfers Act (EFTA). The CFPB wants to change certain parts of its final rules on remittance transfers contained in subpart B to Regulation E. Under the proposal, the Bureau would “extend a temporary provision that permits insured institutions to estimate certain pricing disclosures” through July 21, 2020. Currently, that exception is set to expire July 21, 2015.

The CFPB argues that the exemption needs to change because ending it in 2015 would negatively affect the ability of insured institutions to send remittance transfers. Under the current rules, insured financial institutions can estimate certain third-party fees and exchange rates associated with a remittance transfer, so long as:

1. “The provider is an insured depository institution or credit union”
2. “The remittance transfer is sent from the sender’s account with the provider”
3. “The provider cannot determine the exact amounts for reasons outside of its control”

But after the CFPB’s 2013 Final Rule went into effect and created subpart B of Regulation E, the Bureau interviewed 35 consumer and industry stakeholders impacted by the rule. CFPB staff collected information on the remittance transfer market, industry practices and reliance on the temporary exception, and the impact of the exception and its potential expiration on consumers and institutions.

The comment period for these proposed rules ends May 27. However, regardless of the final outcome, these changes have very little direct impact on the debt collection industry, since accounts receivable management is mostly a domestic business dealing in domestic debt. However, the issuance of the rule itself should make collection agencies aware of the CFPB’s overall enforcement power; they should review their ACH transaction polices to make sure they are in line with what is required through Regulation E compliance.

Learn more about how Regulation E directly impacts the debt collection industry with Compliance Overview: Regulation E. This report is the first of its kind to provide real-world tools for the debt collection industry to comply with Regulation E. Follow our compliance checklist to see how your policies hold up against federal scrutiny. Use our terms and conditions template as a foundation for language that’s compliant and consumer-friendly. With online banking and pay portals on the rise, collection agencies need to protect themselves from EFTA violations.