Regulation E and Remittance Transfer Threshold

Issue/Inquiry

The Bank asks, “What are the ‘safe harbor’ thresholds for remittance transfers under Regulation E?”

Response Summary

The Bank will have a safe harbor and not be required to comply with the remittance transfer rules if it provided 100 or fewer remittance transfers in the previous calendar year and provides 100 or fewer remittance transfers in the current calendar year.

Response Detail

Under the remittance transfer rules of Regulation E, a “remittance transfer” is the electronic transfer of funds for family, personal, or household services from a sender in the U.S. to a person in a foreign country designated by the sender as the authorized recipient, which is sent through a remittance transfer provider. Transfer amounts of $15 or less are excluded. 12 CFR §1005.30(e).

If a bank provides remittance transfers to consumers in the normal course of its business, it is considered to be a “remittance transfer provider.”

A “safe harbor” pertains to what constitutes the “normal course of business.” A bank is deemed not to be providing remittance transfers for consumers in the normal course of its business if:

• It provided 100 or fewer remittance transfers in the previous calendar year
• It provides 100 or fewer remittance transfers in the current calendar year. 12 CFR §1005.30(f)(1),(2)(i)

A bank that qualifies for the safe harbor exclusion is not subject to the remittance transfer rules. In determining whether a bank qualifies for the safe harbor, the number of remittance transfers includes any transfers excluded from the definition of “remittance transfer” due simply to the safe harbor. Official Interpretations, 1005.30(f) – 2.ii.

If the bank falls under the safe harbor in one calendar year but subsequently crosses the 100 remittance transfer threshold the following calendar year, it will be considered a remittance transfer provider and must comply with the remittance transfer rules within a reasonable time, not to exceed six months after it is deemed to have begun providing remittance transfers in the normal course of business.  12 CFR §1005.30(f)(2)(ii); Official Interpretations, 1005.30(f) – 2.iv.

This entry was posted on Monday, October 30th, 2017 at 6:00 am.