Reg E: The Remittance Rule

Question 1

Who created the Remittance rule?

Answer 1

Consumer Financial Protection Bureau

Question 2

What is the Remittance Rule also known as?

Answer 2

Subpart B

Question 3

Anytime consumers use an intermediary to transfer funds out of the country, they are protected by what type of rule?

Answer 3

The Remittance Rule
Subpart B

Question 4

The remittance rule requires transfer providers to disclose items, such as:

Answer 4

• The exchange rate.
• Certain fees related to the remittance.
• The amount of money that will be delivered abroad.
• The date the money will be available.

Question 5

A sum of money sent, especially by mail, in payent for good or services or as a gift.

Answer 5

Remittance

Question 6

How long does the consumer have to cancel a remittance?

Answer 6

30 minute window - and the recipient hasn’t yet picked up the money.

Question 7

For preauthorized transactions, senders may cancel the transfer as long as the request to cancel is received by the provider how long before the scheduled date of the remittance transfer?

Answer 7

at least 3 business days.
These cancellation rules are similar to stop payment rules.

Question 8

According to the remittance rule, transfer providers are generally held accountable for errors. When a consumer reports a problem with a transfer within __ days, the provider is required to investigate and correct errors.

Answer 8

180 Days

Question 9

Are Business to consumer transactions covered by the remittance rule?

Answer 9

No

Question 10

Are Consumer to business transactions covered by the remittance rule?

Answer 10

Yes

Question 11

These type of transfers is when a provider offers a service through a network of agents or other partners that help collect funds in the United states and disburse funds abroad. Through the contractual arrangements with those agents or partners, the principal provider can exercise some control over the transfer from end to end.

Answer 11

Closed Network Transfers

Question 12

These type of transfers is when no single provider has control over all of the participants that may collect funds in the United States or disburse funds abroad. Any participant may use the network to send transfers to unaffiliated institutions abroad with which it has no contractual relationship, and over which it has limited authority or ability to monitor or control.

Answer 12

Open Network Transfers

Question 13

These are generally open network transactions that can reach virtually any financial institution worldwide. They have generally been used for large transactions sent by consumers with deposit accounts to recipients with deposit accounts.

Answer 13

International Wire Transfers

Question 14

These generally operate through closed networks, receiving and disbursing funds through their own outlets or through agents, such as grocery stores or neighborhood convenience stores. These business typically focus on modest sized transfers.

Answer 14

Money Transmitters

Question 15

The sending financial institution may not conduct this itself. In these cases, the sending institution’s correspondent institution, the first cross border intermediary institution in the recipient’s country, or the recipients institution, may set the exchange rate that applies to the transfer. Like exchange rates applied to closed network transfers, exchange rates applied to these may reflect a spread between the retail rate and wholesale rate; this spread can be used to generate revenue or to help manage exchange rate risk.

Answer 15

Wire Transfer Foreign Exchanges

Question 16

The sending institution has no contractual, account, or other relationship with the recipient institution, communications may be indirect by sending funds and payment instructions to a correspondent institution, which will then transmit the instructions and funds to the recipient institution directly or indirectly through other intermediary institutions.

Answer 16

Sending Institution Communications

Question 17

Some depository institutions offer other methods for initiating remittance transfers, which provides for batched electronic fund transfers. The FedGlobal ACH Payments services have been designed for modest sized transfers.

Answer 17

International ACH

Question 18

How do you calculate exchange rates?

Answer 18

The exchange rate multiplied by the transfer amount gives you the amount of money in the recipients currency that will be transferred.

Question 19

True or False: The Remittance Rule requires remittance providers to include any taxes and fees collected by the receiving agency if it acts as an agent for the provider?

Answer 19

True

Question 20

Remittance providers have an obligation to investigate any errors involved with the remittance transfer. Investigation must be completed within how many days?

Answer 20

90 Days

Question 21

Remittance providers have an obligation to investigate any errors involved with the remittance transfer. If an error occurs, the provider must correct the error within how many days?

Answer 21

1 Day

Question 22

The CFPB has established a “Normal Course of Business” safe harbor to exclude businesses that conduct ___ or fewer remittance per year from the remittance rule.

Answer 22

500

Question 23

For pre-authorized transactions, senders may cancel the transfer as long as the request to cancel is received by the provider at least __ business days before the scheduled date of the remittance transfer?

Answer 23

3

Question 24

Who are generally held accountable for Remittance transfer errors?

Answer 24

Transfer Providers