Your next door neighbor's college aged kids decided to take the summer off and tour Italy, France and Spain. Everything is going great, and then the neighbor gets THAT call...Mom, send me MONEY$$$$$. So, the neighbor calls you and says what do I do? You explain to your neighbor that she should come on down to your institution and wire funds to help her kids finish their vacation. Don't you wish they would have invited you to go with them?
Is your neighbor's wire to her children considered a Remittance Transfer? Let's take a look at the definitions of Remittance Transfer and Remittance Transfer Provider.
A Remittance Transfer is defined as an electronic transfer requested by a consumer ("Sender") to be sent to a designated recipient (either a consumer or a business) in a foreign country. It could be an international wire, an international ACH, even a bill pay if it is an international electronic bill pay that is not normally a check. There is an exception to this rule. If the amount of the transfer is $15 or less, it is not counted as a Remittance Transfer. In our scenario above, (assuming your neighbor sent more than $15) the wire is a Remittance Transfer and your neighbor is considered the Sender.
Once we have determined the definition of Remittance Transfer, we need to go a step further and determine if your institution is considered a Remittance Transfer Provider ("Provider"). For an institution to be consider a Provider, the institution must provide Remittance Transfers in the normal course of its business. There is a safe harbor built into this definition. If your institution made 100 or fewer Remittance Transfers in the previous calendar year and 100 or fewer transfers in the current calendar year, the safe harbor applies and the institution is not considered a Provider. In the event the institution exceeds 100 Remittance Transfers in the current calendar year, then the institution has up to 6 months to comply with the Rule. Therefore, it is important that each institution implement a monitoring system to determine if or when the safe harbor limits are exceeded. If those limits are exceeded, then the institution must comply with the Remittance Transfer Rule. Being proactive is a positive step for your institution. Take a hard look at your activity and have an action plan in place in the event your institution does exceed the safe harbor limits.
If you have found that your institution is a provider, you must comply with the various disclosure, error resolution and cancellation rules. Here is a quick snapshot of those three requirements.
There are two required disclosures for a Remittance Transfer. Those are a pre-payment disclosure before payment is made and a receipt when payment is made. Of course, there are also exceptions to this Rule (as with many regulations). You may opt to provide a combined disclosure before payment is made, but you will have to provide proof of payment when payment is made.
Providers are also held to specific error resolution obligations. The sender must report the error within 180 days of the disclosed date of availability. The provider must investigate and make the determination within 90 days of receiving the error claim. The provider must report results within three business days after completion of the investigation. If an error occurred, the provider is required to correct the error within one business day, or as soon as reasonably practicable.
Senders have the right to cancel a transaction up to 30 minutes after making payment for a Remittance Transfer. If the sender changes their mind and decides to cancel the transaction, a provider may issue a refund in cash or in the same form of payment initially received from the sender. If cash was initially received, the provider may mail a check to the sender. All funds must be refunded, including fees and taxes (not prohibited by law) when the sender presents a timely cancellation request. This includes any fees and taxes by third parties such as an intermediary bank, state or governmental body or agent or bank in the recipient country. The refund must be provided within three business days of a sender's request to cancel the Remittance Transfer.
To wrap it all up, if your neighbor decides not to wire the funds to her children because she wants to fly over to Europe herself, I recommend packing your bags and taking a spontaneous trip with her. I'm sure you both will enjoy the adventure.