I. INTRODUCTION
The Consumer Financial Protection Bureau (CFPB) issued a final rule to implement section 1073 of the Dodd-Frank Act (Act), which creates new protections for consumers who send “remittance transfers” to individuals and businesses in foreign countries. The Act requires the remittance transfer provider to give the consumer certain disclosures about the transfer and creates federal rights regarding cancellation, refunds, and error resolution. The regulations became effective on October 28, 2013.
II. OVERVIEW
The Act: (i) mandates disclosure by the remittance transfer provider of the exchange rate and the amount to be received, among other things, prior to and at the time of payment by the consumer for the transfer; (ii) provides for federal rights regarding consumer cancellation and refund policies; (iii) requires remittance transfer providers to investigate disputes and remedy errors regarding remittance transfers; and (iv) establishes standards for the liability of remittance transfer providers for the acts of their agents and authorized delegates.
The rule covers remittance transfers conducted through closed systems (where the provider offers services through a network of agents or other partners), open systems such as the Automated Clearing House, and hybrid systems that have elements of both. A person is a covered remittance transfer provider (“provider”) if it provides remittance transfers for a consumer in the normal course of its business regardless of whether it holds the consumer’s account. The rule covers electronic transfers sent by a consumer primarily for personal, family, or household purposes to a recipient in a foreign country, including wire transfers, international ACH transactions, online bill payments that a sender schedules in advance, transactions by money transmitters, and additions of funds to prepaid cards. Not covered are transfers of $15 or less and securities and commodities transfers that are also excluded from Subpart A of Regulation E.
Prior to conducting a transfer and before collecting payment, a provider is required to furnish the sender with a disclosure of the details of the transaction, including the amount, fees and taxes, exchange rate, and transfer amount. At the time of payment, a receipt must be provided indicating the date that the funds will be available, the recipient’s contact information, a statement about the sender’s error resolution and cancellation rights, the provider’s contact information, and a statement that the sender can contact the provider’s state licensing agency and the CFPB for questions or complaints. The pre-payment disclosure and receipt may be provided in a single disclosure.
The rule allows a temporary exception for banks and other depositories to allow them to provide estimates of the disclosure items where amounts are unknown for reasons beyondtheir control. The exception sunsets as of July 21, 2020. The Act also allows the CFPB to create exceptions with respect to certain countries whose laws or the methods by which transfers are made to such countries do not permit providers to determine the needed information. The CFPB has published a list of these countries.
Detailed error resolution procedures (separate and distinct from the existing Regulation E procedures for electronic funds transfers) are prescribed for remittance transfers. The procedures include specifications with regard to the content, formatting, timing, and manner of delivering disclosures. If a provider advertises or conducts its remittance transfer business in one or more foreign languages, then the disclosures and receipts must be in English and in the foreign language(s) used.
A provider’s error resolution obligations are triggered upon receipt of the sender’s error notice within the later of 180 days after the funds are made available or 60 days after the provision of additional information to the sender at the sender’s request. The provider must complete the investigation within 90 days and report the results within three business days thereafter.
If an error occurred, the report must include a notice of the available remedies. Then within one business day or as soon as reasonably practicable after receiving the sender’s instructions regarding the appropriate remedy, the provider must correct the error as indicated by the sender. The provider may choose to correct the error without an investigation and may also set a default remedy to be used if the sender does not designate a remedy within a reasonable time.
Separate procedures are prescribed for resolving different kinds of errors. For errors involving an incorrect charge, error in computation, or failure to deliver a remittance transfer, the provider may furnish an appropriate amount to resolve the error to the sender or the recipient at no additional cost to either. This may entail the provider incurring third party fees to conduct the remedial transfer. If the funds were not made available to the recipient within the time disclosed, then either the transfer amount or an amount necessary to resolve the error must be returned to the sender or a compensating amount made available to the recipient, and there is an additional obligation to refund any fees (including third party fees) and taxes imposed, where not disallowed. Detailed rules are also prescribed for giving disclosures and handling error resolutions pertaining to preauthorized transfers.
A sender has 30 minutes after making payment to cancel a request and obtain a complete refund without charge. Finally, the rule holds providers responsible for the actions of agents and requires providers to develop and maintain written policies and procedures designed to comply with the error resolution requirements, including a requirement to retain documents related to error investigations.
III. KEY CONCEPTS AND DEFINITIONS
The existing definitions of Regulation E apply to the regulation, except as otherwise provided. Generally, a bank is covered by the rule if it conducts remittance transfers in the ordinary course of business. Following are some of the key definitions under the new regulation.
Remittance Transfermeans an electronic transfer of funds requested by a sender to a “designated recipient” and sent by a remittance transfer provider. Designated recipient (“recipient”) is further defined as a person who receives a transfer at a location in a foreign country. However note that the first requirement is that the transfer must be electronic. The second requirement is that the transfer must be sent by a remittance transfer provider. This means that there must be a third party directly engaged with the sender to send the transfer on the sender’s behalf. Excluded from the definition are transfers of $15 or less and most transfers, the primary purpose of which, is the purchase or sale of registered securities or commodities through a broker-dealer or futures commission merchant.
Examples are wire transfers, international ACH transactions, online bill payments and other electronic transfers that a sender schedules in advance, transactions by money transmitters, and additions of funds to a prepaid card where the card is sent by a participant in the program to a person in a foreign country.
Neither a bank holding the consumer’s account nor a network is a remittance transfer provider simply by virtue of facilitating a transfer (e.g., by routing through a payment system) if it does not directly engage with the consumer to send funds to a designated recipient. Whether a transfer is made to a recipient in a foreign country is determined by the location to which the funds will be received (that is, outside of any state), not the location of the recipient, which is difficult to ascertain. The recipient may be a natural person or an entity, and the sender and recipient may be the same individual. If the sender provides insufficient information to determine whether the funds will be received in a foreign country, the provider is required to decide based on available information at the time of the request. There is no suggestion that the provider has a duty to investigate.
An electronic bill pay service comes within the rule if the funds are received in a foreign country because the bank (or other provider) is deemed to undertake a specific transfer for a consumer to an identified recipient. A bill pay service is not covered if the terms of the service state that payments will be made solely by paper instrument drawn on the consumer’s account to be mailed abroad, and the payee(s) that will be paid in this manner are identified to the consumer. This provision prevents a provider from avoiding the rule solely because, it retains the discretion to use either electronic or non-electronic means to make the payment.
Determining whether a prepaid card program is covered can be problematic. The key is whether prepaid card funds (such as when reloading) will be received in a foreign country, which may be indicated by where the card is sent. This question is not dependent on where the institutional participants in the program hold the funds, as the CFPB believes such a rule would allow providers to circumvent the rule. Thus, if two prepaid cards are issued to two persons having access to the same funds and one person is in a foreign country, then the rule applies.
Remittance Transfer Provider means a person that provides remittance transfers for a consumer “in the normal course of its business” whether or not the consumer holds an account with that person. If a transfer involves more than one provider, the providers must agree which will comply with the rule. Nevertheless, each provider is responsible for compliance with all applicable requirements. (This is a key provision that may allow banks to cooperate with other responsible parties to conduct remittance transfers without. having to fulfill directly all of the attendant obligations). The comments to the rule suggest that a person conducts transfers in the normal course of business if it makes “multiple” transfers in a month, but not if it makes just “a couple” of transfers per year as an accommodation to customers. If a person provided 100 or fewer remittance transfers in the previous calendar year, and provides 100 or fewer remittance transfers in the current calendar year, the person is deemed not to be providing remittance transfers for a consumer in the normal course of its business. If a person crosses the 100 transfer threshold within a calendar year, and is then providing remittance transfers for a consumer in the normal course of its business, the person is permitted a reasonable time period, not to exceed six months, to begin complying with the final rule.
Sender means a consumer in a state who primarily for personal, family, or household purposes requests a provider to send a remittance transfer to a designated recipient. If the account from which a transfer is sent is located in a state, then the consumer is deemed to be located in a state. Where the consumer’s location is not readily ascertainable, for example, because a transfer is requested electronically or by telephone and the transfer is not from an account, the provider may make a determination based on information available to it, such as an address provided by the consumer.
Business Day means “any day on which the offices of a remittance transfer provider are open to the public for carrying on substantially all business functions.” A business day includes the entire 24-hour period ending at midnight, and thus any notice covered by the rule is effective even if given outside of normal business hours. The phrase “substantially all business functions” would exclude as a business day a Saturday in which the offices are open for customers to request transfers but not for performing back office internal functions (such as investigating errors). An abbreviated day may be treated as a business day at the discretion of the provider.
Covered third-party fees means fees imposed on the remittance transfer by a person other than the provider, except for fees considered to be non-covered third-party fees. The fees must be directly related to the transfer. Non-covered third-party fees means fees imposed by the designated recipient’s institution (unless the recipient’s institution is an agent of the provider). Non-covered third-party fees apply only to transfers deposited in a designated recipient’s account. Specifically excluded from the definition of an account are credit cards, prepaid cards, or virtual accounts held by an Internet-based or mobile telephone company that is not a bank, savings association, credit union or equivalent institution.
Designated recipient means any person the sender specifies as the authorized recipient of a remittance transfer to be received at a location in a foreign country. While the sender must be a natural person, the designated recipient may be a natural person or an organization. A remittance transfer is received at a location in a foreign country if funds are to be received at a location that is physically outside a state. If the remittance transfer is to an account of a designated recipient, the location of that account controls. Finally, note that it is possible for the same person to be both the sender and the designated recipient, such as where the sender requires a transfer from his or her account in a state to his or her account in a foreign country.
IV. SCOPE OF COVERAGE
The CFPB’s final rule adopts a safe harbor with respect to the phrase “normal course of business” in the definition of “remittance transfer provider,” which determines whether a person is covered by the rule. The final rule states that if a person provided 100 or fewer remittance transfers in the previous calendar year, and provides 100 or fewer remittance transfers in the current calendar year, then the person is deemed not to be providing remittance transfers for a consumer in the normal course of its business. Importantly, if a person crosses the 100-transfer threshold, and is then providing remittance transfers for a consumer in the normal course of its business, the final rule permits a reasonable time period, not to exceed six months, to begin complying with subpart B of Regulation E.
V. REQUIRED DISCLOSURES
Providers are required to give a disclosure before a consumer pays for a transfer (“pre-payment disclosure”) as well as a receipt at the time of payment. The general rule is that disclosures must be clear and conspicuous and provided to the sender in writing in retainable form. As a request for a transfer may be received in a variety of forms, oral and electronic disclosures are permitted in specific circumstances.
A. Pre-Payment Disclosure
A provider is required to disclose, before collecting payment, the items of information below to the sender who requests a remittance transfer. Disclosures may contain commonly accepted or readily understandable abbreviations or symbols, such as “USD” or “MXN” (Mexican pesos).
The first three items must be grouped together; (the terms in parentheses or a substantially similar term must be used):
(The next two disclosures are grouped together)
Only those items that are applicable need to be disclosed. Thus, exchange rate information need not be included if the transfer is funded and received in the same currency. A provider may choose to omit an item or disclose it and state that it is “not applicable,” “N/A,” or “None.” Also, only those taxes and fees that are specifically related to the remittance transfer and that are charged either to the sender or the recipient must be disclosed. For example, the provider is not required to disclose any overdraft fees charged to the recipient by the recipient’s bank, nor bank-to-bank charges if they are not charged to the sender or recipient.
The exchange rate used to calculate third party fees, taxes, and the amount transferred to the recipient must be the disclosed exchange rate (or allowable estimated exchange rate, discussed below) but before rounding. The exchange rate may not be disclosed as “unknown,” “floating,” or “to be determined.” If the provider does not have specific knowledge about the currency in which the funds will be received, it may rely on the sender-provided information. If the sender does not know, the provider may assume that the transfer will be received in the same currency used to fund it.
If a provider does not have specific knowledge regarding the variables used to determine taxes imposed by other jurisdictions (such as the tax status of the sender or recipient, or whether the receiver is a resident of the destination country), here too, the provider may rely on the sender’s representations. If the sender does not know, the provider may disclose the highest possible tax that could be imposed for the transfer with respect to any unknown variable. No guidance is offered about how to ascertain such limit, but the CFPB notes in the preamble that a provider does not have a duty to research. The CFPB’s desire is to prevent surprise to the sender if the amount received is reduced by more taxes than had been disclosed. Model disclosures are provided in the Appendix to the rule (Model Forms can be found by going to the Consumer Financial Protection Bureau website at http://www.consumerfinance.gov/ and searching for Remittance Transfer Rule).
B. Third-Party Fees and Foreign Taxes
Amendments to the final rule eliminate the requirement to disclose certain third-party fees and foreign taxes and excludes the third party fees and foreign taxes from the calculation of the amount to be received (“Total to Recipient”) described in section V. A, above. The third-party fees affected are those imposed on the remittance transfer by a person other than the provider, charged to the designated recipient and specifically related to the transfer. Third party fees imposed by agents of the provider and fees imposed by the provider must still be disclosed. Amendments to the final rule also eliminate the requirement to disclose any taxes collected by a person other than the provider. Providers are still required to disclose information about any tax the provider collects.
C. Disclaimer
The provider must include a disclaimer on the pre-payment disclosure and the receipt or the combined disclosure to indicate that a recipient may receive less than the amount disclosed due to fees charged by the recipient’s bank. The disclaimer must be clear and conspicuous and in close proximity to information about the amount received and the model forms to the rule include sample language for the disclaimer.
D. Receipt Disclosures
In addition to the pre-payment disclosures described above, at the time a sender pays for the transfer, the provider is required to furnish a receipt that includes the items of information listed below. (The terms in parentheses or a substantially similar term must be used):
If the transaction is conducted entirely by telephone, these disclosures may be mailed or delivered to the sender (1) if the transaction involves the transfer of funds from the sender’s account with the provider, on or with the next regularly scheduled periodic statement for that account (or, if no statement is provided, within 30 days after payment is made) or (2) in all other cases, on the next business day after payment is made. The disclosures that must appear on this receipt include, as applicable:
1. Combined disclosures
At its option, the provider may combine both sets of disclosures that are given to the sender at the time the transfer is requested and before the sender pays for it. If the provider elects to do so, and the sender completes the transfer, the provider must give the sender proof of payment when the payment is made. This proof of payment must be clear and conspicuous, must be given in writing or electronically, and must be in a retainable form.
2. Error resolution and cancellation notice
If the sender requests one, the provider must promptly give the sender a long-form notice describing the sender’s error resolution and cancellation rights, using language substantially similar to Model Form A-36.
VI. FORMATTING AND DELIVERY OF DISCLOSURES
All required disclosures must be provided on the front of the page on which they are printed, and both written and electronic disclosures (but not a disclosure via mobile application or text) must be in at least 8-point font. The pre-payment disclosure, receipt, combined disclosure, and long form error resolution and cancellation notice that are provided in writing must be in equal prominence to each other. Also, all required disclosures provided in writing or electronically must be “segregated from everything else” and contain only information that is directly related to the disclosure.
The applicable exchange rate (including estimates) in the prepayment disclosure must be displayed in close proximity to the rest of the disclosure. The disclosure of rights in the receipt must be in close proximity to the rest of the information in the receipt, except for a disclosure provided via mobile application or text message. A pre-payment disclosure may be provided electronically if a request is made electronically, without regard to the consumer’s consent or other applicable provisions of the E-Sign Act. In contrast, the consent and other applicable requirements of the E-Sign Act do apply to the electronic provision of the receipt. An electronic disclosure is considered furnished in a retainable form if it is provided online in a format that is capable of being printed. Electronic disclosures may not be provided through a hyperlink or in another manner that may be bypassed. It is not necessary to confirm that the sender has read an electronic disclosure.
A. Telephone Transactions/Oral Disclosures
If a transaction is conducted orally and entirely bytelephone, the information required in the pre-payment disclosure may be given orally (in a foreign language, if applicable). In such circumstance, the provider must also orally disclose, before collecting payment, the sender’s right to cancel. Obviously, the requirement for the disclosure to be in retainable form does not apply to permissible oral disclosures. The receipt may be mailed or delivered to the sender no later than one business day after payment. If the telephone transaction involves a transfer of funds from the sender’s account held by the provider, the receipt may be provided on or with the next regularly scheduled periodic statement or within 30 days after payment if a periodic statement is not provided. A request is not made entirely by telephone if it begins with a telephone call and the sender then comes to the provider’s office to pay and complete the transaction.
B. Mobile Application and Text Message Transactions
The information required in the pre-payment disclosure may be provided either orally (for example, by return call) or via “mobile application” or text message (in a foreign language, if applicable) if the transaction is conducted entirely by telephone via mobile application or text message, but only if it includes notice of the sender’s right to cancel which is delivered before collecting payment. If these criteria are met, the disclosure also need not be provided in retainable form, and the grouping, proximity, prominence, size and segregation requirements do not apply. In contrast, the disclosure must be in a retainable form if provided electronically to a mobile telephone, but not if provided via mobile application or text message (for example, via electronic mail, even if the sender accesses it by mobile telephone).
C. Foreign Language Disclosures
Generally, disclosures must be in English and (if applicable) either in all of the foreign languages that the provider primarily uses when marketing remittance transfer services in the office where transactions are conducted or an error is asserted, or the foreign language that the sender primarily used with the provider to conduct the transaction or assert an error (if that language is one of the languages that the provider uses as described above). Thus, the provider has the option to provide a multiple foreign language disclosure or a specific foreign language disclosure. When the circumstances allow for oral or mobile or text disclosures, the foreign language requirement may be satisfied by using the language primarily used by the sender to conduct the transaction or assert the error.
D. Accuracy
Required disclosures must be accurate as of the time of sender’s payment for the transfer (except as to allowable estimates), but see the rules regarding scheduled payments below. The disclosed terms need not be guaranteed for any period of time, but if any disclosure is not accurate when a sender pays for the transfer, the provider is required to give new disclosures before accepting payment.
VII. ESTIMATES
The regulation creates two exceptions to the general requirement that all disclosures be accurate at the time they are made that permit the use of estimates. The first exception is only for insured depository institutions (as defined in Section 3 of the Federal Deposit Insurance Act, 12 U.S.C. § 1813) and only applies if (1) the remittance transfer is sent from the sender’s account with the institution and (2) the provider cannot determine the exact amounts of certain prepayment disclosures for reasons beyond its control. Under this exception (which expires on July 21, 2015), estimates may be used for the exchange rate, the Transfer Amount, the Other Fees and Other Taxes, and the Total to Recipient (all in the destination currency). The second exception is for all providers and applies only if the provider cannot determine the exact amounts of those same prepayment disclosures because the laws of the recipient country or the method by which transactions are made in such country don’t permit such determination. The CFPB will publish a list of countries where estimates are permitted under the second exception (but a provider may not rely on that list if it has information to the contrary).
The rule includes guidelines that must be followed when providing estimates, and if one of the listed approaches is not followed, the provider is still deemed to be in compliance if the recipient receives at least the amount of funds disclosed. The estimated exchange rate must be based on one of the following:
If the exchange rate is published multiple times throughout the day, any exchange rate available on that day may be used. The estimated transfer amount that is received in another currency and any third party fees calculated based on a percentage of the transfer amount must be based on the estimated exchange rate before rounding. Third party fees must be based on the provider’s most recent remittance transfer to the recipient’s institution, or a representative transmittal route identified by the provider. Taxes imposed in the recipient country that are a percentage of the amount transferred must be based on the estimated exchange rate and estimated fees. Ultimately, the amount of currency that will be received by the recipient must be derived from these estimates.
VIII. ERROR RESOLUTION PROCEDURES
A provider must comply with those error resolution procedures if (1) an oral or written notice of an error is received from the sender within 180 days after the disclosed date the remittance transfer would be available to the designated recipient, (2) that notice permits the provider to identify the sender’s name and telephone number or address, the designated recipient’s name (and, if known, telephone number or address), and (3) that notice indicates why the sender believes an error exists and provides (to the extent possible) the type, date, and amount of the error. If the notice of error is based on documentation, additional information, or clarification requested by the sender, the notice is timely if the provider receives it within the normal 180-day period or, if later, within 60 days after the provider sent the requested documentation, additional information, or clarification.
Definition. An error is defined as:
The term error does not include:
As a provider is entitled in certain circumstances to rely on sender-provided information (such as the exchanged currency and the variables affecting taxes), facts that vary from sender-provided information generally do not constitute errors. Thus an “error” does not include a change in the amount or type of currency received by the designated recipient from the amount or type disclosed to the sender if the provider relied on information provided by the sender in making the disclosure.
Once noticeof error is received, the provider must investigate promptly and determine within 90 days if an error occurred. Within three business days after completing its investigation, the provider must report the results of that investigation (including notice of any remedies available for correcting any error) to the sender. If the provider determines that an error did occur, the provider must (within one business day of, or as soon as reasonably practical after, receiving the sender’s instructions as to the appropriate remedy) correct the error as instructed by the sender.
If the provider determines that no error occurred or that an error other than the one described in the notice occurred, the provider’s report of its investigation must include a written explanation of the provider’s findings and inform the sender of his or her right to request copies of the documents that the provider relied upon in making its determination. The explanation must address the specific complaint of the sender. If the sender makes a request, the provider must promptly give the sender copies of the documents used by the provider in making its error determination.
For errors in the amount paid by a sender, a computational or bookkeeping error, or in the amount made available to the recipient, the provider must either “[refund] to the sender the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted” or pay the sender or the recipient at no additional cost to either an amount “appropriate to resolve the error.” But if the error arose because the sender provided erroneous information, the sender may choose to have the provider make funds available to the recipient subject to third party (but not the provider’s) fees for resending the transfer. The rule leaves some ambiguity about the sender’s ability to request a full refund for any error in amounts disclosed, even if partial. The Bureau’s comments in the preamble to the rule suggest that, at least in the instance of an overcharge, a refund of the excess paid is appropriate. An amount appropriate to resolve the error means the amount that should have been transferred absent the error, but excluding consequential damages.
For a late transfer, the remedy is similar except that, in addition, the provider must refund any fees (including third party fees) and taxes imposed (if allowed). Here too, if the sender had provided incorrect or insufficient information, then third party fees may be imposed for resending the transfer.
A request to resend is treated as a request for a remittance transfer, so the disclosure requirements apply. The general rule is that, on a resend, the originally disclosed exchange rate must be applied. But if the resend was occasioned by erroneous information provided by the sender (unless the funds from the initial attempted transfer had already been exchanged) the exchange rate applicable on the date of re-transfer must be used.
For delivery of funds to an unintended recipient account in cases in which the sender provided the wrong account number or recipient institution identifier, the provider is not liable to resend or refund the funds only if all of the following apply:
If the provider determines that no error or a different error occurred, then in addition to following the foregoing procedures, as applicable, the provider must explain the results of the investigation and note the sender’s right to request the underlying documentation (which must be provided “promptly” upon request), and address the sender’s specific complaint. There can be no charge assessed for performing error resolution procedures.
A provider may set a default remedy to be used if the sender does not designate a remedy within a reasonable time, which is deemed to be 10 days after providing the report. The provider has no further responsibilities over an error if it has complied with the error resolution procedures with respect to that error, except as to a notice following a request for further information (which, as discussed, is itself treated as an error). If the sender asserts and then withdraws an error, the provider need not respond, but the sender may re-assert a withdrawn error within the original time limits and trigger the provider’s duties.
IX. CANCELLATION OF REMITTANCE TRANSFERS AND REFUNDS
The new regulations give the sender a special right to cancel a remittance transfer. To exercise this right, the sender must give the provider an oral or written request to cancel a remittance transfer no later than 30 minutes after making payment for the transfer. If (1) that notice enables the provider to identify the sender’s name and address or telephone number and (2) the particular transfer to be cancelled and the transferred funds have not been picked up by the designated recipient or deposited into the designated recipient’s account, then the provider must comply with that notice and must refund to the sender the total amount of funds provided by the sender in connection with the cancelled transfer (including any fees and, to the extent not prohibited by law, taxes imposed in connection with the cancelled transfer). That refund must be made within three business days of receiving the cancellation, request.
The cancellation right applies even after the provider’s business hours. The provider could offer a phone number to call for after-hours use, and it could use a cutoff time after which no requests will be taken.
No additional fees may be charged for the cancellation. The refund may be in cash (i.e., a check) or in the same form of payment received for the transfer.
X. PREAUTHORIZED REMITTANCE TRANSFERS
The new regulations also contain special requirements for so-called “preauthorized remittance transfers” - those that are authorized in advance to recur at substantially regular intervals. Under these special requirements, the provider must give the sender the prepayment disclosures and the receipt disclosures for the first scheduled transfer in accordance with the general timing requirements described above. For each subsequent transfer, the provider must mail or deliver prepayment disclosures to the sender within a reasonable time before the scheduled date of such subsequent transfer. In addition, receipt disclosures for each subsequent transfer must be mailed or delivered to the sender (1) if the transaction involves the transfer of funds from the sender’s account with the provider, on or with the next regularly scheduled periodic statement for that account (or, if no statement is provided, within 30 days after payment is made) or (2) in all other cases, on the next business day after the transfer is made.
Moreover, consistent with Regulation E’s general treatment of preauthorized transfers, if a sender schedules a remittance transfer at least three business days before the date of the transfer, the provider must comply with the sender’s oral or written request to cancel that transfer if it (1) enables the provider to identify the sender’s name and address or telephone number and the particular transfer to be cancelled and (2) is received by the provider at least three business days prior to the date on which the remittance transfer is scheduled to be made.
XI. LIABILITY FOR AGENTS
An agent of a provider is not a provider, but a provider is liable for a violation by an agent acting on its behalf. The comments to the rule notes that a provider must comply with the rule even if an agent or other person performs functions for the provider and regardless of whether the provider has an agreement with downstream entities. Recall that the rule also allows multiple providers to allocate compliance duties amongst themselves (but each remains responsible).
XII. COMPLIANCE PROGRAM
The rule states that providers are required to establish written policies and procedures to comply with the rule’s error resolution requirements, but does not mention other aspects of the rule.
XIII. RECORD RETENTION
Providers must retain documentation related to error investigations and evidence demonstrating that the provider’s procedures reasonably ensure the sender’s receipt of required disclosures and documentation for a period of two years.