The fast-maturing remittance market growing at 3.9% CAGR has greatly attracted the attention of government financial agencies like the United States Consumer Financial Protection Bureau (CFPB) to ensure the protection of users’ interest.
In a release published by the CFPB on May 11, titled “Remittance Transfers under the Electronic Fund Transfer Act (Regulation E),” the agency noted that it is amending Regulation E and its official interpretation. The amendment, according to CFPB, addressed some of the problems likely faced by insured institutions due to the expiration of an exception rule that grants institutions to reveal an approximated amount rather than the exact amount.
CFPB in the report stated that it has been monitoring the remittance transfer market for a while, and observed Ripple’s expansion and its growing partners.
Ripple and its cryptocurrency XRP, proffers a solution that let financial institutions and individual settle cross-border payment easily, this, CFPB says it observed as part of the development that is progressing in the industry.
CFPB also mentioned the maturation and development of the Society for Worldwide Interbank Financial Telecommunication (SWIFT)’s tracking product, “global payment innovation” (gpi).
The Bureau in the report said the adoption rate of Ripple and SWIFT gpi products has caught its attention, and it thinks that both can let banks and credit unions have information about the actual final amount that would be received by the recipients of remittance transfers before the transfer is been made.
CFPB averred that both companies let intuitions have up-front information about a transaction that is yet to be made.
Thanks to the General Counsel at Ripple, Stuart Alderoty, who unearthed the information. Stuart said the Bureau’s perception of Ripple’s service is right.
The Consumer Financial Protection Bureau believes that Ripple's products could allow banks and credit unions to know the exact final amount that recipients of remittances will receive before they are sent. So do we!https://t.co/GTVQYf3wAM
— Stuart Alderoty (@s_alderoty) May 16, 2020
The Remittance Transfers under the Electronic Fund Transfer Act (Regulation E) report was first published in December 2019.
However, the latest report serves as the final rule and official interpretation of the act. CFPB said that the exception granted to insured institutions will expire on July 21, 2020 and the new rule will take effect the same day.