This morning the Federal Reserve Board (“FRB”) published in the Federal Register a proposed rule setting forth an entirely new regulatory scheme for companies that provide remittance transfers, including banks.1 Remittance transfers are electronic transfers of money from U.S. consumers to recipients in foreign countries. The FRB’s proposal would (1) require that specific disclosures be given to each “sender” of a remittance transfer showing how much money will be received by the recipient of the transfer in local currency; (2) enable senders to dispute errors for up to 180 days following a remittance transfer; and (3) impose vicarious liability on remittance transfer providers for the acts or omissions of their agents. Comments on the proposal are due July 22, 2011.

Section 1073 of the Dodd-Frank Act added a new section 919 to the Electronic Fund Transfer Act (“EFTA”) to require certain disclosures and to impose new error resolution provisions with respect to remittance transfers.2 These provisions are to be implemented by rules proposed initially by the FRB, but rulemaking authority will transfer to the Consumer Financial Protection Bureau (“CFPB”) on the Designated Transfer Date – July 21, 2011 – which is the date that administration of the EFTA formally transfers from the FRB to the CFPB. See Dodd-Frank Act § 1084 (amending EFTA by “striking ‘Board’ each place that term appears and inserting ‘Bureau’”). As a practical matter, this means that the FRB has begun the rulemaking process, but the rules will eventually be completed by the CFPB.