MORRISON E FOÉRSTER LLP 2OOO PEN¡SYLVA}{TA AVE,, N!í to' RsrE R \øASHINGTON,D.c' NE\t YORK, S/.N FRANCISCO, MoRRrsoN LOS ÀNGELES, lALo ALTO, I 200061888 s^CRÀMENTO, SAN DIEGO, DENVER, NORTHERN VIRG¡N¡ At TELEPHONE: 202.887. 1500 \t /tSH¡NGToN, D.C, FACSIMILE: 202 .887.07 63 TOKYO, LONDON, DRUSSELS, BEtJING, SHANGHAI, HONG KONG wwwMOFO.æM Júy22,2011 Via Electronic Delivery Jennifer J. Johnson Secretary Board of Govemors of the Federal Reserve System 20th Street and Constitution Avenue, NW V/ashington, DC 20551 Re: DocketNo. R-1419 and RIN 7100'AD76 Dear Ms. Johnson: the Federal The Money Services Roundtable ("TMSRT') submits these comments on 1073 of the Consumer Reserve Bãard's ('Board") Proposed Rulemaking under Section national Financial protection ect oîzot-0. TMSRT is comprised of the following lnoney Travel Related transmittsrs: RIA Financial Services, SigUe Corporation, American Express MoneyGram services company, western union Financial services, Inc. ("Vy'estern union"), Systems' International (l'MoneyGram"), Travelex Americas,Inc. and lntegrated Payment use of intemet These corporations piovide a'vanety of funds transmission services, including sales outlet agents, kiosks, ATMs, mobile phones, etc' The Proposed Rulemaking Regulation E, which Section 1073 of the Consumer Financial Protection Act of 2010 amends StaffCommentary impi"*"rrt, the Electronic Fund Transfer Act ('EFTA ), and the Ofñcial consumers to itegulation E. In particular, the proposed rule contains new protections fol through the use of who send remittance transfers to consumers or entities in a foreign country disclosures and enor resolution tights. and,their customers To one degree or another, TMSRT',s members, their respective agents would be ãffected by the proposed rule. Outside of the obvious impact of higher cost- of the increased burdens on remittante transfãr providers, agents and consumers as a result regulatory burden, TMSRT believes that a much more important issue is at stake--national ,"ã*ity. That is, without striking a reasonable balance under the proposed rule that takes it is into consideration the operationJ limitations inherent in the remittance transfer system, hansfer likely that remittance hansfer providers would not be able to offer certain remittance dc-650696 MoRRrsoN I FOERSTER I Jennifer J. Johnson July 22,2017 Page Two As a result, a likely services that are highly valued and relied upon by their customers' underground to may tr tír" atirritrg of a signifrcant volume of retail remittances operate unregulated illicit"onrrqo.rr"e trærsfer operators. Such entities are invisible to law enforcement, consumer Ãd, u, such, are unlikely to comply with safety and soundness requirements, aìsigned to prwent mgney laundering and tenorist froi"ction láws or laws ihat at" - public interest of the United States hnarrcing. Neither the needs of lawinforcement nor the migrate to illicit-transfer is advanõed by providìn! any regulatory incentive for funds to effect of channeling money operators. Hence, any rãguútory -"**t that would have the the standpoint of consumer transmission transacti,ons"underground is counterproductive from protection, law enforcement and, ultimately, national security. to new technologies Similarly, the promulgation of inflexible rules that cannot be adapted to the use of legitimate and/or customer needimay provide yet another disincentive are offered by illicit transfer remittance transfer proviCårs when other innovative alternatives operators. described above, TMSRT is Therefore, given the possible far reaching consequences the efforts of providing commentsãn the proposed rulã.I Howãver, rather than duplicating the comments ãu, *"*i"rs, TMSRT geneialþ adopts and incorporates by reference TMSRT would like to submitted by Western tirriott *d Mott"yGram' Nevertheless, particularly emphasize the following issues: 1. Proposed Effective Date of time remittance hansfer The Board has specificallyrequested comment as to the length TMSRT believes that piã"i¿.ir wifl nåed to i*pr"*"nt a final rule on remittance transfers. publication of a final rule. As set forth the effective date should Le 1g to 24 months from the month period would be in more detail by westem union and MoneyGram,9ll-S.to 24 and costs r"""r.-y in order to accommodate the technical difficulties, complexities rule' associated with complying and implementing any such final remittance transfer For example, in addition to the complexities that would confront p*"i¿rtrl i*pf.tn""tirrltn" propåsed rule, which would, among other things, entail software platforms and the significant changes ã;;; co*ptiuttc" functions, hardware and transfer agents would possibility of renegotiation of individual agent conhacts, remittance proposed rule'. Because n"ea u*pt" time tõ implement certain requirements under.the majority of providing remittance transfers is not a coie business function for the vast no control over iáitt*ð" transfer agents, and because remittance transfer providers have statutory terms.of section 1073, we note r while some of our comments focus on issues that a¡e based in the to make exceptions to the statutory that the Board has substarrtial authority under EFTA section 904(c) with the regulatory requirements' requirements, particularly where such changes will facilitate compliance dc-650696 I MORRTSON I UOERSTER Jennifer J. Johnson Ju\y22,2011 Page Three changes to agent budgetary constraints and upgrade schedules, implementation of significant hãw remittance transfer agents operate would require considerable lead time. 2. Disclosures and ReceiPts with an The proposed rule would require remittance transfer providers to provide consumers inidl disclosure, prior to conducting a transaction, and a receipt following a transaction' retained These two disclosures must be in writing and must be capable of being þV 1tt" both the sender. The proposed rule would also pãrmit a combined disclosure containing required information from the initial disclosure and the receipt. a harbor for rernittance TMSRT supports the inclusion of model forms that provide ¡afe of remittance transfer pro.,ridrrr. Nevertheless, given the flexibility that will be required new technology and transfer providers with respect to new services, new delivery chartnels, forms should be flexible state law disclosure requirements, TMSRT believes that the model and adaptable enough to accommodate such changes' among other In addition, we note that the proposed rule would require that receþts contain, the things, coniact information fãr ttre remittance provider's plry*y state regulator-and Conîumer Financial Protection Bureau ("CFPB') and a toll-free telephone number in the established by the CFPB. Given the operational hurdles that would be involved individual disclosure of state regulatois for remitt¿nce transfer providers and their a.gents, protection especially those that operate in multþle states, and the negligible consumer in-addition to. båefit that would be âfforded to consumers by disclosing the state regulator receipts should not contact information for the CFpB, TMSRT beiieves that post-transaction lators.Foramoredetaileddiscussionwithrespectto Western Union disclosures and receipts, please refer to the relevant MoneyGram and comments. 3. Foreign Language Disclosures disclosures arid The proposed rule would require remittance transfer providers to provide ,"""iptri1 English and in "eäch of the foreign languages principally used by the remittance either orallg in tansfer proviãer to advertise, solicit, or market remittance tansfer services, by the writing ôr electronically, at that office," oI "itl the foreign langUage primari]V used (or for written or sendeiwith the remittance transfer provider to conduct the transaction foreign elecfonic disclosures made pursuant to the [error resolution procedures] in the provider to assert the language primarily used by the sender with the remittance transfer princþally used by the remittance hansfer iró't'ided that such ioreign language is writing, pro,,iáår"oõr¡, to advertise, solicit, oimarkét rèmifiance tansfer services, either orally, in or electroni cally, at that office'' dc-650696 I MORRTSON I UoERSTER Jennifer J. Johnson July22,2011 Page Four Furthermore, the proposed rule provides that post-tansaction receipts required to be provided to iie r"idðt for transãctions conducted entirely by telephone "shal-l be made in 'English and, if applicable, in the foreign language primarityused by the sender with the remittance hansfer provider to conduct the transaction'" TMSRT believes that the proposed foreign language disclosure requirements woul! provide wide range a significant disincentive io remittance fiansfer providers to make available the of foreìgn language services that are currently offered to their customers as a convenience and assist beneñt as tñe utitity to print receipts and disclosures in every language utilized to customers is, for many providers and agents, an operational impossibility' Hence, without the ability to communicate in a customer's language of choice, we believe to send that illicit transfer op.rutorc will appear to such customers to be the "no hassle" way non- money to family anå friends, resulting in the loss of transactions to non-licensed, reguláted underground businesses. For a more detailed discussion with respect to foreign ñg,rd; ¿isctoJures, please refer to the relevant MoneyGram and Western Union cominents' 4. Disclosure of Exchange Rates and Amounts Received Under the proposed rule, the prepayment disclostues