_

WESTERN

UNION

2 5 0 0 E Belford Avenue, M 2

A 3 Englewood, C O 8 0

1 1

2 www.westernunion.com

July 22, 2011

VIA E-MAIL

Jennifer J. Johnson, Secretary

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue, N W

Washington, DC 2 0 5

5 1

Attention: Regulation E; Docket No. R-1419 and RIN 7100-AD76

Re:

Comments on the Notice of Proposed Rulemaking regarding Remittance Transfers

Dear Ms. Johnson:

Western Union Financial Services, Inc. ("Western Union") is pleased to submit

this letter to the Board of Governors of the Federal Reserve System ("Board") (and the

Consumer Financial Protection Bureau ("Bureau")) in response to the notice of proposed

rulemaking regarding remittance transfers as published in the Federal Register on May 23, 2011

at 76 Fed. Reg. 29902-29962 ("NPRM" or "Proposed Rule"). Specifically, the Proposed Rule

seeks to amend Regulation E, contained at 12 C.F.R. Part 205, which implements the Electronic

Fund Transfer Act ("EFTA") as amended by the Dodd-Frank Wall Street Reform and Consumer

Protection Act ("Dodd-Frank Act").

At the outset, Western Union would like to take this opportunity to commend the

Board for the open, transparent, and thoughtful manner in which it conducted its outreach prior

to issuing the Proposed Rule. Western Union is a leader in global money movement and

payment services, providing people and businesses with fast, reliable, and convenient ways to

send money and make payments around the world. The Western Union brand is globally

recognized for speed, reliability, trust, and convenience. As such, Western Union is very

supportive of providing disclosures that offer meaningful and useful information to consumers.

We believe that our efforts to provide consumers with informative and valuable disclosures has

contributed to making us a leader in this space. In light of Western Union's and the Board's

shared goals, Western Union strongly agrees with the Board's decision to not propose a rule that

would require the posting of model remittance transfer notices at storefront or on the Internet. In

addition, Western Union strongly supports the Board's study and findings on this issue and

believes that the findings demonstrate the trust and confidence that consumers currently place in

remittance transfer providers ("RTPs") to send their money around the world.

Furthermore, we believe that our comments reflect our experiences with

consumers and agree with the Board's study and findings demonstrating that RTP customers are

savvy and well-informed consumers. The final rule should be informed and shaped by the

Board's own research, studies, and reports in order to establish a consumer protection framework

that provides consumers with meaningful and useful disclosures as well as the optimal customer

experience when sending remittance transfers.

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This letter provides Western Union's comments to the Proposed Rule and

responses to certain questions raised in the NPRM, and seeks additional clarification on some

areas of the Proposed Rule. Western Union appreciates the opportunity to comment on the

Proposed Rule and respectfully requests that the Board consider integrating and adopting the

suggestions set forth herein.

For ease of reference, the Attachment contains a table of contents for this letter.

I. MOST SIGNIFICANT COMMENTS TO NPRM

Set forth below, please find Western Union's most significant comments and

concerns regarding the Proposed Rule.

A. Pre-Payment and Receipt Disclosure Requirements

The Proposed Rule Should Not Expand the Statutory Disclosure Requirements.

(a) The Proposed Rule Imposes a Disclosure Requirement That is Not

Expressly Required by Section 919 of

EFTA.

The NPRM would add a new disclosure that is not found in the Dodd-Frank Act

amendments to EFTA. Proposed section 205.31(b)(vi) would require the disclosure of any fees

and taxes imposed on the remittance transfer by unrelated third parties, regardless of whether the

RTP has knowledge of the amount of such fees or taxes.

Section 919(a)(2)(i) of EFTA requires the RTP to disclosure "the amount of

currency that will be received by the designated recipient, using the value of the currency into

which the funds will be exchanged." Some may suggest that this language requires the RTP to

disclose all third party fees, known and unknown, associated with a remittance transfer. Footnote 1.

"[T]he Board believes that the amount to be received by the designated recipient is intended to be the amount net

of all fees and taxes that would affect the amount received by the designated recipient." 76 Fed. Reg. 29902, 29913

(May 23, 2011). end of footnote.

respectfully suggest a different approach.

In the United States, Western Union is currently regulated under the laws of forty-

eight (48) states and four (4) U.S. territories. Among these jurisdictions, Western Union is

subject to various disclosure and receipt requirements. A number of these jurisdictions require

an RTP to provide a receipt which sets forth the total amount of money to be received by the

designated recipient. Footnote 2.

See, e.g., Cal. Fin. Code § 1843; Del. Code tit. 5, § 2313(b); Haw. Rev. Stat. § 489D-20; 205 I.L.C.S. § 657/65;

Tex. Fin. Code § 151.405; Tex. Fin. Code § 278.051; Rev. Code Wash. § 19.230.330(2). end of footnote.

To our knowledge, no U.S. state has taken the position that this

requirement imposes on the RTP an obligation to disclose all known and unknown third party

fees and foreign taxes that may be imposed on the remittance transfer.

Page 3

Rather, states have construed such language only to require an RTP to disclose the

amount of currency to be received by the designated recipient after applying the applicable

exchange rate. We respectfully suggest that this precedent from the states, which is grounded in

their laws and experience, be given deference. Accordingly, Western Union requests that the

Board remove the requirement to disclose known and unknown third party fees and taxes.

As discussed more fully below, in some cases, RTPs would not be able to

determine and would not know all of the third party taxes and fees that may apply to a remittance

transfer. As a result, such information could be misleading to a consumer. At the same time, the

disclosure requirement triggers various compliance obligations, including error resolution

procedures, refund obligations, and liability risks. Based on the Board's study, it appears that

consumers are satisfied with RTPs' existing disclosures. It appears that this disclosure

requirement would impose significant regulatory compliance costs without commensurate

benefits to the consumer. At a minimum, the Board should provide a clearer demonstration that

the consumer protections of the Proposed Rule outweigh the compliance costs before requiring

RTPs to disclose third party fees and taxes. Footnote 3.

See also 12 U.S.C. § 5512(b)(2)(A) ("In prescribing a rule under the Federal consumer financial laws the Bureau

shall consider the potential benefits and costs to consumers and covered persons. . . ."). We further note that the

Board is proposing the disclosure of third party fees and taxes pursuant to its authority under section 904(a) of

EFTA. 76 Fed. Reg. at 29913. The Board takes the position that the economic analysis requirements of section

904(a), which include a cost and benefits analysis and demonstration that the proposed regulation outweigh

compliance costs imposed on consumers and financial institutions, are met through the section-by-section analysis,

initial regulatory flexibility analysis, and Paperwork Reduction Act analysis found elsewhere in the preamble. 76

Fed. Reg. at 29906. It is unclear whether all of these and the other applicable statutory requirements, such as the

consultation requirements, have been satisfied. end of footnote.

(b) RTPs Should Not Be Required to Disclose Third Party Fees that They Do

Not Have Actual Knowledge Of.

Proposed section 205.31(b)(1)(vi) requires the RTP to disclose "[a]ny fees and

taxes imposed on the remittance transfer by a person other than the provider, in the currency in

which the funds will be received by the designated recipient." This disclosure requirement

imposes a greater obligation to disclose third party fees than the statute expressly requires.

Section 919(a)(2)(A)(ii) of EFTA only requires the disclosure of "any other fees charged by the

remittance transfer provider for the remittance transfer" (emphasis added).

Certain additional fees related to a remittance transfer may or may not be imposed

by third parties. For example, such fees may include cash advance fees imposed by credit card

issuers when a sender uses a credit card to purchase a remittance transfer online. As another

example, where a prepaid card product is covered as a remittance transfer, Footnote 4.

76 Fed. Reg. at 29907. end of footnote.

the issuer of the

prepaid card may impose certain fees and charges such that the amount of currency that the

designated recipient will obtain from the prepaid card is indeterminable by the RTP. Such fees

and charges may reduce the amount available to the designated recipient but are based on an

agreement between the issuer of the prepaid card and the cardholder. Similarly, where the

designated recipient receives funds on a mobile phone, the mobile phone provider may impose

charges related to the service the designated recipient has with the mobile phone provider. Page 4.

Western Union requests that the Board include more examples of the types of fees

contemplated by proposed section 205.31(b)(1)(vi). Specifically, the regulation should clarify

that third party fees that arise from agreements the sender or receiver enters into with a third

party for obtaining services offered by the third party are not meant to be covered by proposed

section 205.31(b)(1)(vi).

Proposed section 205.31(b)(1)(vi) would also require traditional RTPs to disclose

fees charged by financial institution intermediaries even though the RTPs have no knowledge as

to the amounts of such fees or when and if such fees will be imposed on a particular remittance

transfer. For example, when a sender conducts an account-to-account remittance transfer

through a traditional RTP, and not a financial institution, the RTP has no knowledge of the

intermediary fees imposed on the remittance transfer transaction as it travels through the

correspondent bank networks to the designated recipient's account. The Board appears to

recognize this in the context of international wire transfers between two account-holding

financial institutions, Footnote 5.

The Board notes, "[i]f the sending institution does not have a direct relationship with the intermediary or receiving

institutions, it likely does not have knowledge of all fees that might be imposed on the recipient." 76 Fed. Reg. at

29903. end of footnote.

but not necessarily in the context of a traditional RTP that offers

remittance transfer products that may include, as part of the transaction, an international wire

transfer. Intermediary fees are almost always unknown and undeterminable by the RTP. To the

extent that a remittance transfer is subject to bank intermediary fees, traditional RTPs should not

be required to disclose intermediary fees until banks have established a system to report such

fees to providers.

We further note that because RTPs do not have knowledge of the fees that may be

imposed on the remittance transfer by a person other than the provider, especially in the context

of intermediary fees and when the sender or receiver has elected to enter into a relationship with

the third party, RTPs will not know with certainty the exact amount of currency the designated

recipient will receive in all cases. As a result, unless Regulation E provides greater flexibility to

indicate that such amounts are anticipated amounts and may vary, our experience has been that

such definite disclosures may be inaccurate for some transactions. EFTA provides, "[w]hoever

knowingly and willfully gives false or inaccurate information . . . shall be fined not more than

$5,000 or imprisoned not more than one year, or both." Footnote 6.

15 U.S.C. § 1693n(a)(1) (EFTA § 917(a)(1)). end of footnote.

We do not believe Congress and the

Board intend such an outcome under these circumstances. We also do not believe that such a

result benefits consumers. For these reasons, we urge the Board to recast the third party fee

disclosure requirements to align more closely with the statutory requirements and that third party

fee disclosures be limited to those "transfer and other fees charged by the remittance transfer

provider for the remittance transfer."

Page 5

Transfer in a Currency Other Than the Local Currency Designated on the

Receipt.

Proposed section 205.31(b)(1)(vii) requires that the RTP disclose the amount that

will be received by the designated recipient in the currency in which the funds will be received.

In some countries, however, recipients of remittance transfers from the United States have the

option of receiving funds in the local currency or in U.S. dollars. For example, the recipient may

choose to be paid in U.S. dollars as opposed to the local currency because receiving funds in

U.S.

dollars is more convenient to the recipient. In addition, the recipient may choose to be paid

out in currency on hand if the agent does not have a sufficient amount of local currency based on

various considerations including risk analysis, fraud, or safety concerns.

Similarly, Western Union provides senders with the option of changing the

designated country (and thus also, in some cases, the local currency) where the recipient can

obtain the funds from the remittance transfer. This option is useful, for example, to customers

who send money to designated recipients who travel. A parent may send a remittance transfer to

a student who is traveling throughout Europe. The parent may initially request that the

remittance transfer be sent to the United Kingdom, but the student who is traveling eventually

needs to receive the remittance transfer in France. The parent can contact Western Union and

change the country where the recipient will obtain the funds.

Western Union offers these options in order to provide our customers with high

standards of customer service, convenience, and choice. We request the Board to clarify that

these service options, which benefit consumers, are consistent with the requirements of section

919 of EFTA and the applicable provisions of Regulation E. In connection with the disclosure

requirements, we believe the Board has sufficient statutory authority pursuant to the "as

applicable" language in section 919(a)(2) of EFTA. Generally, the Board has discretion pursuant

to the rulemaking authority under section 904(c) of EFTA. Further, the Consumer Financial

Protection Act encourages the Bureau to consider the costs and benefits to consumers. Footnote 7.

See 12 U.S.C. § 5512(b)(2)(A). end of footnote.

Please

also see Section I.B.2(c) of our comment letter for our related comments under the error

resolution provisions.

The Estimates Provision Should Be Expanded and Clarified.

(a) Additional Basis for Estimating Foreign Exchange Rates.

In order to avail itself of the exemption under proposed section 205.32(b), an RTP

must use one of the listed approaches in proposed section 205.32(c)(1) to estimate the exchange

rate or estimate the exchange rate based on another approach "so long as the designated recipient

receives the same, or a greater amount, of currency that it would have received had the estimate

been based on a listed approach." Footnote 8.

We note that the applicability of this exception is unclear. The amount of currency the designated recipient

receives is a result of the actual transaction and is independent of the estimate. Further, exchange rates fluctuate up

and down. It is impractical to use an approach that would, for example, always provide an exchange rate estimate

that is more favorable to the consumer than an estimate based on the most recent wholesale exchange rate. end of footnote.

For non-ACH transactions, the Proposed Rule permits an

RTP to base the estimated exchange rate on the most recent publicly available wholesale

exchange rate or the most recent exchange rate offered by the person making funds available

directly to the designated recipient. The Board anticipates that the latter option would likely be

used by RTPs for currencies that are not listed by a U.S. news service. Page 6.

Western Union obtains foreign exchange rate information from the foreign

exchange dealers with whom we conduct transactions. Currently, we provide our customers with

estimates of foreign exchange rates based on the rates available to us and the rates in the

marketplace. Because the foreign exchange rates available in the wholesale interbank foreign

exchange market are not available to consumers, we believe that basing an estimate on such rates

may be misleading to consumers. Footnote 9.

Further, we note that it is unclear what "most recent publicly available wholesale exchange rate" means in

proposed section 205.32(c)(1)(ii). The proposed comment notes that the term means the rate available from a U.S.

news service. It is unclear whether the proposed regulation intended to refer to the rate published in the most recent

publication or to the rates that fluctuate online throughout the day. end of footnote.

For this reason, we recommend that the Board include as an

additional basis of providing exchange rate estimates "a foreign exchange rate based on the most

recent foreign exchange rate provided by the RTP to a remittance transfer receiver in the

applicable country."

(b) Clarification of Exemption for Authorized Dealer in Local Currency.

In some countries with thinly-traded currencies, only an authorized dealer in local

currency can set the exchange rate, and the exchange rate is set by the local dealer when the

remittance transfer is received in the country. Unlike the examples in proposed comment

32(b)(1), the government of the recipient country does not set the exchange rate. Rather, the

government's rules and regulations applicable to the transaction result in the authorized dealer

setting the exchange rate when the remittance transfer is received. This scenario is subtly

different from the examples provided, and we request clarification that this scenario would be

covered under the exemption in proposed section 205.32(b)(1).

RTPs Should Be Given a Grace Period to Implement System Changes When a

Third Party Imposes New Fees or Taxes on Remittance Transfers.

Proposed sections 205.31(b)(1)(ii) and (b)(1)(vi) generally require an RTP to

disclose any fees or taxes imposed on the remittance transfer by the RTP in the currency in

which the funds will be transferred or by a person other than the RTP in the currency in which

the funds will be received by the designated recipient. Western Union and other RTPs will need

time to implement system changes when a third party imposes new fees or taxes on remittance

transfer transactions, particularly where the fees or taxes are immediately effective or effective in

a short time period.

For example, the Central Bank of Haiti ("Central Bank") announced on May 20,

2011 that it was planning to impose a $1.50 per transaction fee on all inbound and outbound

remittance transfers beginning on June 1, 2011. Currently, under the Proposed Rule, RTPs

would be expected to disclose the Central Bank's transaction fee on pre-payment disclosures and

receipts (or combined disclosures) with only eleven (11) days to implement system changes

necessary to make such disclosures. However, Western Union estimates that it would take

several months to properly implement such system changes. Page 7.

Another example is the Oklahoma fee imposed on remittance transfer transactions

by the Oklahoma Drug Money Laundering and Wire Transmitter Act, which was enacted on

June 2, 2009 and effective on July 1, 2009. More importantly, the regulations that implemented

the fee were not effective until July 11, 2009 which created a situation where RTPs were

collecting the fee beginning on the effective date while they continued to obtain formal

clarification from the state on a variety of issues, including what services were covered by the

statute. Irrespective of the final disclosure requirements relating to third party charges, Western

Union urges the Board to adopt a grace period provision that would provide RTPs with a

reasonable time to implement system changes to disclose new fees or taxes imposed by third

parties to avoid a violation of the disclosure requirements under proposed sections

205.31(b)(1)(ii) and (b)(1)(vi) (or other final requirements) and liability under the error

resolution provisions. Footnote 10.

See 12 C.F.R. Proposed § 205.33(a)(1)(iii) ("[T]he term 'error' means . . . [t]he failure to make available to a

designated recipient the amount of currency stated in the disclosure provided to the sender [on the receipt or

combined disclosure]."). end of footnote.

Error Resolution and Cancellation Process

RTPs Should Be Permitted to Require Consumers to Assert Errors Directly to the

RTP.

Proposed comment 33(b)-5 states that a notice of error from a sender received by

an RTP's agent is deemed to be received by the provider for purposes of the 180-day time frame

for reporting errors. In the NPRM, the Board notes that it believes it is appropriate to treat

notices of error given to the agent as notice to the provider because in most cases, it will be the

agent with which the sender has the direct relationship, and not the provider. Footnote 11.

76 Fed. Reg. at 29929. end of footnote.

Western Union believes that implementing an error reporting process through its

agents would be unworkable and that such a requirement would be likely to result in significant

frustration for consumers and agents and significant liability for RTPs. Currently, U.S.

consumers are advised to contact us directly with questions so that trained customer service staff

can investigate and resolve the issue within our guidelines for error resolution. Our U.S. agents

have limited history or experience in resolving errors and are not compensated to handle this

process today. Under the Proposed Rule, agent locations in the United States would be required

to report errors that cannot be resolved at the point of sale directly to Western Union in order for

us to track receipt of the report and to determine whether the error triggers the Proposed Rule's

error resolution remedies and time frames. Trained Western Union customer service staff would

then be required to contact the sender at a later time to obtain the relevant information for

purposes of investigating the error. Page 8.

This reporting process is not the most reliable or efficient means for resolving and

investigating errors and does not create the optimal customer experience. This two-step error

reporting process will be extremely frustrating to consumers. Western Union believes that

requiring consumers to directly contact the trained customer services staff of RTPs to assert

errors will create a more streamlined and reliable process, which will translate into a better

consumer experience. For these reasons, Western Union requests that the final rule permit an

RTP to require consumers to assert errors directly to the RTPs and not through agents.

Exclusions from the "Error" Definition Should Be Expanded.

(a) The "Error" Definition Should Permit an RTP to Delay Transactions in

Accordance with its Terms and Conditions.

Proposed section 205.33(a)(1) defines the term "error" for purposes of the error

resolution provisions and proposed section 205.33(a)(2) lists the types of transfers or inquiries

that do not constitute errors. Subject to two exceptions, proposed section 205.33(a)(i)(iv) treats

as an error, an RTP's failure to make funds in connection with a remittance transfer available to

the designated recipient by the date of availability stated on the receipt (or combined disclosure),

including if a recipient agent or institution retains the transferred funds after the stated date of

availability, rather than making the funds available to the designated recipient. Western Union

commends the Board for providing the exceptions to the definition of error in proposed section

205.33(a)(i)(iv), which Western Union believes are both reasonable and important exceptions.

However, Western Union believes that the exceptions do not completely address

the range of circumstances when an RTP may delay a transaction. For example, we may

currently delay pay-out of a transaction in the following instances:

• When Required By Law. We may delay a transaction to comply with

Federal, state, or local laws, rules, and other applicable legal requirements.

For example, when the law of the sending or receiving country prohibits us

from promptly remitting funds (e.g., Office of Foreign Assets Control

("OFAC"), etc.), we delay or decline payment. Because of common names,

we often receive false matches to the OFAC list on U.S. originated

transactions. Western Union works to resolve these issues by requesting

additional information from the sender (e.g., date of birth, passport number,

etc.).

In some cases where the consumer sends us additional information

and we cannot resolve the issue, we send the information we receive to

OFAC and request OFAC to clear the transaction or advise us to hold the

funds.

In other cases, the consumer simply will not respond to our requests.

We will wait a certain period of time, and if we do not get a response, then

often, we will block the funds due to the age of the item. In both cases, our

processes and procedures may interfere with our ability to make funds

available by the estimated delivery date. Western Union also notes that

funds that are the subject of a positive OFAC hit may be forwarded to the

U.S.

government preventing our ability to refund these funds upon an

assertion of error. Other countries have similar lists and clearing processes

that we use to filter all applicable transactions. Page 9.

• When We Do Not Do Business With a Particular Person For Required

Institutional Risk Control. Western Union reserves the right to not do

business with a consumer for required institutional risk control in order to

protect the best interests of Western Union and consumers. For example, at

the request of state attorney general offices or persons acting in a fiduciary

or representative capacity on behalf of the consumer, Western Union may

decline transactions from consumers who have demonstrated a tendency to

being fraud victims. In addition, if Western Union finds patterns of fraud,

we may make independent decisions to block certain consumers from using

Western Union to send money.

• To Prevent Actual or Potential

Fraud.

If we believe that we can protect

against or prevent actual or potential fraud, unauthorized transactions,

claims or liability, we will delay a transaction until we can adequately

mitigate the risk that the transaction may be fraudulent or unauthorized.

• When There is a High Dollar Transfer. Western Union aggregates

transactions of high dollar users, and at certain thresholds, Western Union

will hold the transaction pending a personal interview with the user to

ascertain the reason for the transfer and to determine if we need to file a

Suspicious Activity Report (SAR) or Currency Transaction Report (CTR)

under the Bank Secrecy Act and its implementing regulations (collectively,

the "BSA").

• When We are Cooperating with an Investigation or in Response to

Regulatory Authorities. We may delay a transaction to comply with a

properly authorized civil, criminal, or regulatory investigation, subpoena, or

summons by Federal, state, or local authorities. In addition, we may delay a

transaction in connection with responding to government regulatory

authorities having jurisdiction over us for examination, compliance, or other

purposes as authorized by law.

• When Required By Our BSA and Anti-Money Laundering Programs. We

are continually enhancing our BSA and anti-money laundering ("AML")

programs to address emerging AML risks in certain areas of the United

States. As part of this effort, our BSA and AML programs may mandate

that certain transactions be declined or delayed even where such action may

not be mandated by any specific law.

Page 10

Accordingly, Western Union urges the Board to provide an exception or

clarification that would exclude situations where a transaction is delayed resulting in funds not

being available to the designated recipient by the date of availability stated on the receipt (or

combined disclosure) when the transaction delay falls into the above categories and when such

possibility is disclosed in the RTP's terms and conditions.

(b) The "Error" Definition Should Provide Flexibility with Respect to

Disclosing Third Party Fees Under Certain Circumstances.

Proposed section 205.33(a)(l)(iii) defines "error" to include the failure to make

available to a designated recipient the amount of currency stated in the written receipt or

combined disclosure (unless estimated in accordance with the Proposed Rule). As discussed

above in Section I.A.1(b) of our comment letter, certain third party fees related to a remittance

transfer, such as bank intermediary fees, or the method or form of payment used to send or

receive a remittance transfer, such as fees imposed by credit card issuers, prepaid card issuers, or

mobile phone providers {e.g., fees that arise because of arrangements between a sender and a

third party), may not be within the control of the RTP and consequently are undeterminable and

unknown fees that the RTP is incapable of disclosing or estimating when the transaction is

initiated and purchased. In addition, as discussed above in Section I.A.3 of our comment letter,

at times, fees or taxes may be imposed by states or sovereign governments on short notice, and

RTPs will not be able to implement system changes for their disclosures to accurately reflect

these newly imposed charges. Western Union believes that the failure to disclose third party

charges under these circumstances could result in potential liability under the resolution

provisions and urges the Board to create more flexible disclosure requirements relating to third

party charges and/or to accordingly tailor the definition of "error" significantly to address such

circumstances.

the Remittance Transfer in a Currency Other Than the Local Currency

Designated on the Receipt.

The Proposed Rule defines an "error" to include (i) the failure to make available

to a designated recipient the amount of currency stated in the written receipt or combined

disclosure (unless estimated in accordance with the Proposed Rule) and (ii) the failure to make

funds available to a designated recipient by the date of availability stated in the written receipt or

combined disclosure (unless certain exceptions apply). Footnote 12.

12 C.F.R. Proposed §§ 205.33(a)(l)(iii) and (iv). end of footnote.

This definition does not address the

following two situations: (i) when recipients elect payment in a currency other than the local

currency including when the election is due to a recipient traveling and requesting to pick-up a

remittance transfer in a different country than the one disclosed on the written receipt (or

combined disclosure); or (ii) when agents pay out in currency on hand if they do not have a

sufficient amount of local currency based on various considerations including consumer choice,

risk analysis, fraud, or safety concerns. It is impossible for Western Union to anticipate either

situation when providing the sender with disclosures. Therefore, Western Union requests that

the Board expressly clarify that an error cannot be asserted under the foregoing situations. Page 11.

(d) The Error Exclusion for Circumstances Outside the RTP's Control Should

Be More Broadly Interpreted.

Proposed section 205.33(a)(1)(iv) generally treats as an error an RTP's failure to

make funds available to a designated recipient by the date of availability stated on the receipt (or

combined disclosure), but excludes situations where the failure resulted from circumstances

outside the RTP's control. Footnote 13.

12 C.F.R. Proposed § 205.33(a)(1)(iv)(A). end of footnote.

The exception is limited to circumstances that are generally referred

to under contract law as force majeure, or uncontrollable or extraordinary circumstances that

cannot be reasonably anticipated by the RTP and that prevent the provider from delivering a

remittance transfer, such as war, civil unrest, or natural disaster. Footnote 14.

Proposed Comment 33(a)-5; 76 Fed. Reg. at 29928. end of footnote.

Western Union believes that

this exception should be more broadly interpreted to generally exclude errors caused by acts of a

third party beyond an RTP's control. In response to the Board's request, we believe that the

following additional examples should be included in the final rule to illustrate the exception: (i)

when funds are not available to a designated recipient's account due to errors on the part of the

recipient's bank; (ii) when funds are not available because the recipient's bank, a mobile network

operator or "wallet" provider, or a third party (not only a governmental entity) intercepts the

transfer in accordance with applicable law; and (iii) when funds are not available due to a bank

failure.

RTPs with a Comprehensive Fraud Prevention Program Should Not Be

Responsible for Fraudulent Pick-ups Under the Error Resolution Provisions.

An error under proposed section 205.33(a)(1)(iv) includes a circumstance in

which a person other than the person identified by the sender as the designated recipient of the

transfer fraudulently picks up a remittance transfer in the foreign country. This proposal does

not contemplate either of the following two situations: (i) where a fraudulent pick-up occurs even

though the pick-up location diligently complied with the RTP's fraud and risk management

policies and procedures; or (ii) where the sender may have been negligent with the money

transfer control number ("MTCN") or other information necessary to pick-up the funds.

In the NPRM, the Board notes that the proposed approach with respect to the

fraudulent pick-up of a remittance transfer is consistent with the scope of unauthorized electronic

fund transfers initiated through fraudulent means. Footnote 15.

76 Fed. Reg. at 29928. end of footnote.

However, the proposed approach does not

take into consideration the fact that RTPs do not necessarily have account-based relationships

with consumers, so preventing fraud is significantly more complex for entities like Western

Union. RTPs currently invest a substantial amount of money, time, and resources into fraud

prevention, but fraudulent pick-ups continue to be an issue because, in part, many countries,

including the United States, do not issue a national identification card and fake IDs are readily

available in many countries. Page 12.

In light of such issues, Western Union requests that the Board reconsider its

proposed approach relating to fraudulent pick-ups under the error resolution provisions. Western

Union proposes that RTPs with a comprehensive fraud prevention program should not be

responsible for fraudulent pick-ups under the error resolution provisions. The required elements

of a comprehensive fraud prevention program could include: (i) providing consumers with

awareness and education materials that send consumers a clear message about the fraud risks

associated with remittance transfer services; (ii) providing fraud prevention and awareness

training for new agents and refresher training for existing agents; (iii) electronically sending

banner messages and newsletters to agents to provide up-to-date alerts on specific scams that

may be taking place; (iv) providing incentives to front line associates at agent locations to detect

and prevent fraud; (v) providing a toll-free number that consumers and agents can call to report

fraud and to stop transactions that appear to be fraudulent; and (vi) actively participating with

government, consumer advocacy groups, and industry members in developing partnerships to

drive awareness and education to consumers and building alliances to help prevent consumer

fraud.

In addition, Western Union believes that the Board should impose certain

obligations on senders with respect to remittance transfers that are comparable to the existing

provisions of EFTA and Regulation E that impose certain obligations on consumers in

connection with unauthorized electronic fund transfers. Footnote 16.

See 15 U.S.C. § 1693g (EFTA § 909); 12 C.F.R. § 205.6. end of footnote.

For example, a sender should be

required to inform the RTP if the sender lost or misplaced the receipt (or combined disclosure) or

communicated the MTCN to a person other than the designated recipient.

RTPs Should Not Be Required to Refund the Total Amount of Transfer Fees

Upon a Valid Cancellation Request.

Proposed section 205.34(b) requires an RTP to refund, at no additional cost to the

sender, the total amount of funds tendered in connection with the requested transfer, including

any fees imposed in connection with the requested transfer. RTPs expend time and money

initiating and processing transactions and incur additional costs associated with initiating a

cancellation and issuing a refund which is why many RTPs currently do not refund transfer fees

upon a cancellation request. For example, once a remittance transfer is booked at an agent

location, we are obligated to pay our agent its portion of the transfer fees for the transaction.

Similarly, we pay our agents to process cancellation requests. We settle payments with our

agents on a daily basis, so if a sender cancelled a transaction after settlement (i.e., the next day),

we will be required to negotiate the return of such fees from the agent or bear the total loss of the

fees.

Western Union believes that RTPs should not be required to refund the total amount of

transfer fees upon a valid cancellation request in order to offset the costs associated with

initiating a cancellation and issuing a refund. This approach is consistent with a bank's ability to

charge fees in connection with a stop payment order on a check to cover the bank's costs

associated with having to stop payment and cancel the check. Page 13.

The Request to Refund Third Party Fees Due to an Error or Cancellation Request

Could Be Impermissible Under Local Law and Unreasonably Punitive for RTPs.

Proposed section 205.33(c)(2) may require an RTP to refund third party fees to

remedy an error and proposed section 205.34(b) requires an RTP to refund, upon a valid

cancellation request and at no additional cost to the sender, the total amount of funds tendered in

connection with the requested transfer, including any fees imposed in connection with the

requested transfer. Proposed comment 34(b)-2 further clarifies that all fees must be refunded

upon a sender's valid cancellation request regardless of whether the RTP or a third party, such as

an intermediary institution, imposed the fee.

We note that RTPs may not be permitted to refund certain third party fees under

local law. For example, at least one U.S. jurisdiction, Oklahoma, requires RTPs to impose a fee

on all remittance transfer transactions and to submit such fees quarterly to the Oklahoma Tax

Commission. Footnote 17.

See Drug Money Laundering and Wire Transmitter Act, 63 Okl. St. §§ 2-503.1a-2-503.1i. end of footnote.

The regulations that implement this fee do not expressly allow RTPs to refund

the fee if a consumer cancels a transfer. Footnote 18.

See Okla. Adm. Code §§ 710:95-15-1-710:95-15-6. end of footnote.

In the United States, we may be able to seek clarity

from states, such as Oklahoma, on a case-by-case basis regarding the permissibility of issuing

refunds (and a subsequent decrease in the amount we may be required to remit to the state, such

as Oklahoma). We note, however, that our ability to seek such guidance may be limited to U.S.

jurisdictions and potentially unavailable from other jurisdictions, like Haiti, which currently

imposes fees on remittance transfer transactions as further discussed above in Section I.A.3 of

our comment letter. Although guidance may be obtained from certain authorities, Western

Union believes that we will not always receive a response in time to start to comply with the

Proposed Rule's cancellation and refund requirements, particularly because such fees are

imposed on short notice, e.g., Haiti and Oklahoma fees discussed above in Section I.A.3 of our

comment letter. For these reasons and subject to the limitations described in Section I.B.4

above, Western Union suggests that the final rule should only require the refund of fees or taxes

to the extent permitted by applicable law.

In addition, Western Union is concerned that requiring RTPs to refund third party

fees to remedy an error or upon a valid cancellation request could create a stunningly punitive

result when such fees are not recoverable by the RTP. For example, if the RTP is required to

refund third party fees charged by credit card or prepaid card issuers or mobile phone providers

in connection with a remittance transfer, the RTP would bear the loss and have to refund such

fees out of pocket. This result seems unreasonable and punitive in nature for allowing

consumers the freedom to choose from various payments methods (e.g., through bank accounts,

credit or debit cards, etc.), particularly because the requirement to disclose third party fees is not

expressly mandated by statute.

Page 14

6. The Board Should Clarify That Complying with the Error Resolution Procedures

Constitutes the Sole and Exclusive Remedy Available to the Sender in connection

with Errors Related to Remittance Transfers.

A sender may assert an error based on the disclosure requirements of proposed

section 205.31(b)(1). As proposed, an error includes, but is not limited to, failure to disclose a

tax or fee that an RTP was unaware of, failure to make funds available by the date required to be

disclosed, and a fraudulent pick-up of a remittance transfer. Under the Proposed Rule, such

regulatory requirements may subject an RTP to additional civil liability risks under section 916

of EFTA.

These civil liability provisions were more appropriate under EFTA prior to the

amendment made by the Dodd-Frank Act. There are, however, substantial differences between

the types of consumer protections and customer relationships governed by EFTA prior to the

Dodd-Frank Act amendments and those consumer protections and customer relationships

contemplated for RTPs. Historically, EFTA has protected consumers from unauthorized

electronic fund transfers from a consumer asset account and has required various disclosures

including any charges for electronic fund transfers. Footnote 19.

15 U.S.C. §§ 1693a, 1693f (EFTA §§ 903, 908). end of footnote.

The applicable disclosures typically have

been made in comprehensive customer agreements and periodic statements. EFTA has also

imposed important responsibilities on consumers, such as requiring the consumer to review

periodic statements for unauthorized electronic fund transfers and to report such transfers. Footnote 20.

See 15 U.S.C. § 1693g (EFTA § 909); see also Kruser v. Bank of Am., 230 Cal. App. 3d 741, 750 (Cal. App. 5th

Dist. 1991) ("Consumers must play an active and responsible role in protecting against losses which might result

from unauthorized transfers."). end of footnote.

The Dodd-Frank Act and the Proposed Rule establish a much different type of

regulatory framework for RTPs. The Proposed Rule requires RTPs to make certain disclosures

that may not be accurate and limits the amount of information an RTP can provide in order to

qualify such disclosures. Rather than creating clear and conspicuous disclosures, these

requirements may cause consumer confusion. Further, unlike EFTA, the Proposed Rule shifts

almost all of the burdens associated with errors to the provider (e.g., the RTPs).

As you know, EFTA provides an exemption from civil liability for any act done

or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the

Board. . . Footnote 21. 15 U.S.C. § 1693m(d)(1) (EFTA § 916(d)(1)). end of footnote.

We urge the Board to clarify that compliance with certain parts of the Proposed

Rule provide the necessary protection for RTPs from further liability. Further, given that the

disclosure and error requirements of Section 919 of EFTA and the Proposed Rule are more

prescriptive than the requirements of Regulation E, and in light of the possible risks of civil

liability discussed above, the Board should clarify that complying with the error resolution

procedures of proposed section 205.33 constitutes the sole and exclusive remedy available to

senders in connection with errors related to remittance transfers (unless the errors were the result

of knowing or willful violations by the RTP).

Page 15

Vicarious Liability for Acts of Agents

Western Union Strongly Supports the Implementation of Alternative B in the

Final Rule.

In the NPRM, the Board proposes two alternatives to implement section 919(f) of

EFTA with respect to acts of agents. Under Alternative A, an RTP would be strictly liable for

violations by an agent when such agent acts for the RTP. Footnote 22.

12 C.F.R. Proposed § 205.35. end of footnote.

Under Alternative B, an RTP would

not be liable under EFTA for violations by an agent acting for the RTP where the RTP

establishes and maintains policies and procedures for agent compliance, including appropriate

oversight measures, and the RTP corrects any violation, to the extent appropriate. Footnote 23.

12 C.F.R. Proposed § 205.35. end of footnote.

The Board

solicits comment on both alternatives. Footnote 24.

76 Fed. Reg. at 29934. end of footnote.

Western Union strongly believes that Alternative B is likely to yield the best

results for consumers and industry. Because Alternative A may exculpate an agent from

responsibility for its own conduct, even when an RTP trains and monitors such agent, Alternative

A may have the unintended consequence of incenting inappropriate agent behavior. Alternative

B offers a more balanced approach. Much like the BSA, Alternative B recognizes that RTPs and

agents each have an important role to play in protecting consumers. Alternative B incents RTPs

to train, monitor, and audit the compliance posture of its agents. It also recognizes that RTPs

who perform these obligations should not face administrative or civil liability for the

unauthorized conduct of a rogue agent employee. For companies like Western Union which

have invested heavily in comprehensive agent oversight and compliance programs, this

differentiation is critical. Accordingly, Western Union strongly supports the implementation of

Alternative B in the final rule and applauds the Board for its inclusion in the Proposed Rule.

Foreign Language Disclosure Requirements

The Foreign Language Disclosure Requirements Contemplated by the Proposed

Rule May Have the Unintended Consequence of Limiting Financial Access

Because RTPs May Choose to Limit Marketing and Service Languages.

Proposed section 205.31(g)(1) contains the general requirements for foreign

language disclosures and provides that written and electronic disclosures must be provided in

English and either: (i) in each foreign language that the RTP principally uses to advertise, solicit,

or market remittance transfer services at that office; or (ii) if applicable, in the foreign language

primarily used by the sender with the RTP to conduct the transaction (or to assert an error),

provided that such foreign language is principally used by the RTP to advertise, solicit, or market

remittance transfer services at that office. We appreciate the clarity the Board has added to this

requirement.

Page 16

In addition, proposed section 205.31(g)(3) would require RTPs to provide written

receipts for transactions conducted entirely by telephone in English and, if applicable, in the

foreign language primarily used by the sender with the RTP to conduct the transaction,

regardless of whether such foreign language is primarily used by the RTP to advertise, solicit, or

market remittance transfers. Alternatively, the Board notes that it could apply the general rule

proposed in section 205.31(g)(1) to the written receipt provided for transactions conducted

entirely by telephone, which would mean that an RTP would not be obligated to provide the

written receipt in a foreign language, even if such foreign language was used to conduct the

telephone transaction, unless the foreign language was principally used to advertise, solicit, or

market remittance transfers during the telephone call. Footnote 25.

76 Fed. Reg. at 29920. end of footnote.

In the NPRM, the Board indicates that

during its outreach with industry, RTPs generally stated that providing written disclosures in a

foreign language can be more costly and burdensome than providing oral disclosures in a foreign

language. Footnote 26.

76 Fed. Reg. at 29920. end of footnote.

As a result, the Board requests comment on whether proposed section 205.31(g)(3)

might have the unintended consequence of reducing the number of foreign languages RTPs may

offer for telephone transactions.

Western Union believes that proposed section 205.31(g)(3) may have the

unintended consequence of reducing the number of foreign languages RTPs use for telephone

transactions possibly resulting in consumers having less access to financial services. Western

Union currently conducts remittance transfer transactions by telephone in fifteen (15) to twenty

(20) foreign languages even though only less than 1% of telephone transactions are conducted in

a language other than English or Spanish. Western Union offers telephone transactions in

languages other than English and Spanish solely as a convenience and benefit to its customers.

In order to comply with proposed section 205.31(g)(3), Western Union may reduce the number

of foreign languages it offers for remittance transfer transactions by telephone to only English

and Spanish because it would not make economic sense to expend the money, time, and

resources necessary to provide written receipts in all fifteen (15) to twenty (20) languages in

comparison to the volume of telephone transactions conducted in these foreign languages. Cost

and expense analysis may dictate the reduction of foreign languages offered for telephone

transactions to English and Spanish. We note that similar concerns apply to transactions

conducted at the point of sale.

In the NPRM, the Board states that because the pre-payment disclosure will be

provided orally in the language primarily used by the sender with the RTP to conduct the

transaction, it believes that the same language should be used in the written receipt provided to

the sender for consistency. Footnote 27.

76 Fed. Reg. at 29920. end of footnote.

In Western Union's experience, most consumers can understand

written English although they may prefer to conduct a transaction orally in their native language

for the fluency, ease, and speed at which the transaction may be conducted when speaking in

one's native language. In light of our experience, we believe that the consumer benefits of

offering a variety of foreign languages for telephone transactions greatly outweigh the benefits of

offering consumers a foreign language written receipt for the sake of consistency.

Page 17

For the reasons discussed above and because proposed section 205.31(g)(3) is not

statutorily mandated by section 919 of EFTA, Western Union strongly urges the Board to apply

the general rule proposed in section 205.31(g)(1) to the written receipt provided for transactions

conducted entirely by telephone.

Foreign Language Disclosure Requirements Should Not Be Triggered by General

Marketing Activities.

Under section 919(h) of EFTA and proposed section 205.31(g)(1), the

requirement that an RTP provide a foreign language disclosure is based on whether the foreign

language is principally used to advertise, solicit, or market "at that office." Proposed comment

31(g)(1)-3 provides that an office includes any physical location, telephone number, or website

of an RTP where remittance transfer services are offered to consumers and includes locations

that do not exclusively offer remittance transfer services, e.g., if an agent of an RTP is located in

a grocery store, the grocery store is considered an office for purposes of proposed section

205.31(g)(1). Western Union is concerned that general marketing activities may unintentionally

trigger the foreign language disclosure requirements. For example, Western Union believes that

it is currently unclear whether the following situations would impose foreign language disclosure

requirements.

• An RTP provides a website that offers online remittance transfer services to

U.S.

consumers and international consumers. The RTP's website requires

consumers to select their country location to access the RTP's services and

the website would reload in the applicable country's language. For example,

our website permits a consumer in Germany to conduct a remittance transfer

online through our website by choosing Germany from a drop down menu.

Our website would then load in German. However, U.S. consumers conduct

remittance transfers online through our website by choosing the United

States from the drop down menu. Our website would then load in English

or Spanish depending upon the consumer's election. We request that the

Board clarify that under such circumstances the RTP is only deemed to be

marketing in English and Spanish for purposes of the foreign language

disclosure requirements.

• An RTP runs an advertisement in Korean in a Korean newspaper that is sold

or circulated in or near an agent location, e.g., at a newspaper dispenser

outside of an agent location or at a grocery store that contains an agent

location, but the agent location itself does not market, solicit, or advertise in

Korean.

• An RTP conducts general marketing efforts involving community affairs in

a Vietnamese neighborhood where several agent locations are present. The

general marketing events contain informational brochures in Vietnamese

and the RTP's representatives speak to consumers in Vietnamese when

explaining the RTP's services. However, none of the agent locations in the

neighborhood market, solicit, or advertise in Vietnamese. Page 18.

• An RTP runs a radio advertisement in Mandarin on a Chinese radio station

and an agent location is playing the same radio station in its store. However,

the agent location does not market, solicit, or advertise in Mandarin or

Chinese.

Western Union requests that the Board expressly clarify that the foreign language

disclosure requirements would not be triggered by general marketing activities and urges the

Board to include specific examples in the final Official Staff Interpretations to illustrate the types

of general marketing activities that would not trigger the foreign language disclosure

requirements, including the examples listed above.

Coverage

The Proposed Rule Should Only Cover Remittance Transfers Sent for Personal,

Family, or Household Purposes and Not for Business Purposes.

Under the Proposed Rule, the definition of "sender" is "a consumer in a state who

requests an RTP to send a remittance transfer to a designated recipient." Footnote 28.

12 C.F.R. Proposed § 205.30(f). end of footnote.

Regulation E

currently defines "consumer" as a"natural person," Footnote 29.

15 U.S.C. § 1693a(5) (EFTA § 903(5)); 12 C.F.R. § 205.2(e). end of footnote.

and the NPRM does not expand on the

definition or add a new definition. The current definition of "consumer" is intended to leverage

off of the definition of "account" (and its qualification of personal, family, or household

purposes) in determining Regulation E and EFTA applicability. Footnote 30.

15 U.S.C. § 1693a(2) (EFTA § 903(2)); 12 C.F.R. § 205.2(b)(1). end of footnote.

However, unlike the current

provisions of Regulation E, the applicability of the Proposed Rule is not dependent upon the

consumer holding an "account" with an institution. Footnote 31.

See 12 C.F.R. §§ 205.3, Proposed § 205.30(e). end of footnote.

Accordingly, whenever an individual is a

sender, it appears that the Proposed Rule applies regardless of whether the individual is

conducting the remittance transfer for personal or business purposes.

A Western Union affiliate, Custom House (USA) Ltd. d/b/a Western Union

Business Solutions ("WUBS"), predominantly offers international business-to-business money

transfers. Section 919 of EFTA and the Proposed Rule clearly do not apply to remittance

transfers conducted by businesses, Footnote 32.

See 76 Fed. Reg. at 29909. end of footnote.

and accordingly, WUBS' predominant business should not

be subject to either section 919 of EFTA or the Proposed Rule. However, many of WUBS'

customers are sole proprietors. Under the proposed definition of "sender" and the current

definition of "consumer" under Regulation E, it is unclear whether a remittance transfer is

covered by the Proposed Rule when the sender is a sole proprietor.

Page 19

Therefore, Western Union requests that the Board define "consumer" for purposes

of Subpart B of Regulation E to mean "a natural person who enters into or seeks to enter into a

remittance transfer for personal, family, or household purposes." This definition is consistent

with the general consumer protection theme of the remittance transfer provisions in the Dodd-

Frank Act and parallels the purpose and coverage of section 919 of EFTA and the Proposed

Rule, which do not apply to remittance transfers conducted by businesses. Footnote 33.

See 76 Fed. Reg. at 29909. end of footnote.

In addition,

Western Union believes that this clarification is consistent with the definition of "sender" in

EFTA and the Proposed Rule, which requires that the remittance transfer be sent "for the

consumer." The "for the consumer" language appears to be intended to limit senders to natural

persons who request remittance transfers for a natural person, i.e., personal reasons. Our

proposed definition of "consumer" is necessary to more clearly articulate the implications of the

"for the consumer" language and erases any doubt as to the scope and coverage of the Proposed

Rule.

F. Timing

The Bureau Has No Authority to Issue Regulations Prior to Appointment of the

Bureau Director.

As acknowledged in the NPRM, the authority to issue a final regulation transfers

from the Board to the Bureau on July 21, 2011. The authority of the Bureau to issue substantive

regulations is found in section 1022 of the Dodd-Frank Act. This section states that the Director

of the Bureau ("Director") may "prescribe rules and issue orders and guidance, as may be

necessary or appropriate to enable the Bureau to administer and carry out the purposes and

objectives of the Federal consumer financial laws."

The term "Federal consumer financial laws" includes EFTA, as well as all of the

other laws transferred to the Bureau under subtitles F and 1-1 of the Dodd-Frank Act. Footnote 34.

Dodd-Frank Act § 102(14). end of footnote.

Section

1022 also specifies the standards and considerations that the Director is to take into account

when promulgating regulations, such as the potential benefits and costs to consumers and the

potential reductions in consumer access to financial products and services. Finally, section 1022

states that notwithstanding any other provision of Federal law except section 1061(b)(5) (relating

to Federal Trade Commission ("FTC") authority), to the extent that a provision of Federal

consumer protection law authorizes the Bureau and another agency to issue regulations, the

Bureau shall have exclusive authority.

Although the Bureau was established on the day after the date of enactment of the

Dodd-Frank Act Footnote 35.

Dodd-Frank Act § 4. end of footnote.

(July 21, 2010), no person has been appointed Director, and the position has

not been filled. Until a Director has been appointed by the President and confirmed by the

Senate, or until a Director has been appointed by the President under his authority to make recess

appointments, the Bureau has no authority to issue regulations under Section 1022.

Page 20

We are aware that some assert that section 1066 of the Dodd-Frank Act authorizes

the Secretary of the Treasury to promulgate regulations for statutes transferred to the Bureau

under subtitle F. Footnote 36.

See Joint Response of the Inspectors General for the Department of the Treasury and the Federal Reserve Board to

questions posed by Chairman Spencer Bachus (Jan. 11, 2011). end of footnote.

Under this argument, the authority to issue regulations under EFTA will shift

from the Board to the Secretary of the Treasury until a Director has been appointed. For a

number of reasons, we believe that this position does not hold up to legal scrutiny.

Section 1066 authorizes the Secretary to perform the functions of the Bureau

under subtitle F until a Director is confirmed by the Senate. Subtitle F deals with the transfer of

functions and personnel from a number of regulatory agencies to the Bureau. It deals with

"housekeeping" issues, such as the continuation of lawsuits, status of existing regulations and

orders, protection of personnel and civil service benefits.

The authority of the Bureau to issue regulations is established in section 1022,

which is not part of subtitle F. This section provides the standards and procedures for the

Bureau's rulemaking, and there are no similar instructions in subtitle F for the Department of the

Treasury. Further, it is apparent that Congress was very much concerned that the Bureau have as

much independence as possible in its rulemaking and enforcement functions. Providing that the

Secretary of the Treasury could exercise the Bureau's substantive rulemaking authority is not

consistent with this overarching goal. And it certainly is not consistent with taking rulemaking

authority from an independent agency, the Board in the case of EFTA, and transferring it to the

Treasury Department. Finally, the Dodd-Frank Act provides that if any provision of Federal law

provides that two agencies have rulemaking authority with respect to a consumer law, the Bureau

is deemed to have exclusive rulemaking authority. The only exception is for section 1061(a)(5),

which is the provision in subtitle F transferring the FTC's authority. There is no exception for

section 1066. Thus, from a statutory construction perspective, section 1066 provides the

Treasury with administrative coordination authority relating to the transfer of functions and

personnel, but not the authority to issue substantive regulations under EFTA.

Any other construction of section 1066 would also run into significant

constitutional problems. Under the Appointments Clause, the Congress is prohibited from

appointing individuals to become officers of the executive branch. If section 1066 is interpreted

as giving the Secretary of the Treasury the enormous rulemaking authority of the Director with

respect to all of the transferred statutes, it would raise a significant constitutional question about

the authority of the Congress to appoint the head of an independent regulatory agency. Thus,

when Congress stated that the head of the Federal Home Loan Bank Board was to be the first

Director of the Office of Thrift Supervision, the action was held to be unconstitutional. Footnote 37.

Olympic Fed. Savs. and Loan v. Dir. Office of Thrift Supervision, 732 F. Stipp. 1183 (D.C. 1990). end of footnote.

If the

statute is interpreted as effectively appointing the Secretary of the Treasury as the head of the

Bureau, a similar result would apply.

Page 21

The Effective Date Should Be Eighteen (18) to Twenty-Four (24) Months from

the Date the Final Rule is Published.

In the NPRM, the Board solicits comment on whether an effective date of one (1)

year from the date the final rule is published, or an alternative effective date would be

appropriate. Footnote 38.

76 Fed. Reg. at 29906. end of footnote.

We urge the Board to consider imposing an effective date of eighteen (18) to

twenty-four (24) months from the date the final rule is published to accommodate the technical

difficulties, complexities, and costs that RTPs will face in complying with the Proposed Rule.

Specifically, Western Union anticipates that at a minimum the completion of the items listed

below would most likely take between eighteen (18) to twenty-four (24) months from the date

the final rule is published.

• Amending Agent Contracts and Policies and Procedures to Cover Compliance

with Cancellation and Refund Procedures. If required by the final rule,

Western Union will need to amend contracts with our global system of agents

worldwide and in the United States to cover the reversal of fees paid to agents

in accordance with the cancellation and refund procedures under proposed

section 205.34.

• Reprogramming at the Point of Sale and Websites to Comply With Disclosure

Requirements. Western Union will need to reprogram all point of sale

terminals, kiosks, registers, and websites to comply with the proposed section

205.31 disclosure requirements, including the installation of new printers or

reprogramming of current printers to print characters (e.g., Chinese

characters) required for compliance with the foreign language disclosure

requirements under proposed section 205.31(g).

• Agent Training. Western Union anticipates developing a comprehensive

EFTA training program for agents and agent employees. We currently

estimate that this training program will reach approximately 500,000 people.

Depending on the final resolution of many of the items noted in this letter, this

training will address new technologies and forms, new in-store processes for

some of our offerings, and training on the agent's role in EFTA compliance.

• Developing Systems for Record Retention and Error Resolution Procedures.

Western Union will need to develop and implement a global record retention

program, an error resolution compliance program, and error resolution

software to track and monitor the timeliness of responses to all consumer

complaints to comply with the error resolution procedures under proposed

section 205.33.

• Host-to-Host Systems Reprogramming at Agent Locations to Support Changes

Mandated by the Proposed Rule. We work with our agents in the host-to-host

environment to integrate our proprietary software into their software so that

the agents' employees can conduct regular sales transactions (e.g., purchase of

clothing or food) and a Western Union money transfer transaction at the same

Proposed Rule will need to be retrofitted into the agent's system. This will

involve reprogramming efforts by Western Union and the agent. In order to

accomplish these changes, we will need to renegotiate our contracts with

agents, to include potential reprogramming costs and coordinate with each

individual agent to schedule these technological changes. We currently

anticipate that the following issues may occur during this process that will

make a one (1) year implementation date impracticable: (i) agents' systems

may not be able to support a two-step receipt process using current

technology; (ii) agents may not be able to support a refund process if a

customer wants to cancel a transfer because the agent may hold customer

funds in trust under state and contract law and/or the agent is concerned that

the refund process may encourage bad behavior among its employees; and

(iii) it is common for agents to have technological changes scheduled in

advance for a year or more that, in turn, will delay our ability to implement

changes in order to comply with the Proposed Rule. Page 22.

In addition, Western Union believes that an extended implementation period is

appropriate and consistent with the Board's prior implementation times when newly mandated

Regulation E disclosures required reprogramming of terminals at the point of sale. For example,

in order to minimize the implementation costs associated with reprogramming terminals at the

point of sale, the Board provided a one (1) year delayed compliance date for the requirement to

disclose the amount of the returned item fee under Regulation E. Footnote 39.

71 Fed. Reg. 69430, 69432 (Dec. 1, 2006). end of footnote.

The one (1) year delayed

compliance date essentially provided institutions with almost two (2) years from the date the

final rule was published to implement this particular disclosure requirement. Footnote 40.

On January 10, 2006, the Board published the final rule addressing the requirement to disclose the amount of the

returned item fee under Regulation E which established an effective date of January 1. 2007. See 71 Fed. Reg. 1638

(Jan. 10, 2006). On August 30, 2006, the Board published an interim final rule to clarify certain provisions in the

January 2006 rule. See 71 Fed. Reg. 51451 (Aug. 30, 2006). Therefore, institutions initially had approximately one

(1) year from the date the final rule was published. The Board then published another final rule on December 1,

2006 delaying the compliance date for institutions relating to this particular requirement. See 71 Fed. Reg. 69430

(Dec. 1, 2006). end of footnote.

Page 23

II.

ADDITIONAL SIGNIFICANT COMMENTS TO NPRM

Set forth below please find Western Union's additional significant comments and

concerns regarding the Proposed Rule.

A. Pre-Payment and Receipt Disclosure Requirements

RTPs Should Be Permitted to Provide Written Receipts for Remittance Transfers

Conducted via Text Messaging or Mobile Phone Applications by Email or

Website.

In the NPRM, the Board solicits comments for purposes of determining how the

disclosure requirements could be applied to transactions conducted via text messaging or mobile

phone applications. Footnote 41. See 76 Fed. Reg. at 29910, 29915-29916. end of footnote.

In Western Union's experience, although using cash to send a remittance

transfer is the most popular method for most consumers, there is increasing consumer demand to

provide additional options for sending money, including through mobile phones. To satisfy this

consumer demand, Western Union currently offers consumers a mobile phone application of its

online money transfer services (www.westernunion.com). In addition, Western Union has been

developing a mobile money transfer service that will offer consumers several options to send and

receive funds using their mobile phones and mobile wallets. A mobile wallet is an electronic

account that is linked to a person's mobile phone in which money can be electronically deposited

and used the same as cash. Using Western Union's service, consumers can send funds as

follows:

• Cash-to-Mobile. A consumer initiates a money transfer by submitting cash

at a Western Union agent location. The funds are sent to a receiver whose

mobile phone operator offers mobile money transfer in partnership with

Western Union. Funds are deposited into the receiver's mobile "wallet," or

account tied to the mobile phone. This is the only version of the service

currently offered in the United States.

• Mobile-to-Cash. A consumer whose mobile operator offers mobile money

transfer in partnership with Western Union uses his/her phone to send a

cross-border money transfer. The sender notifies the receiver via text

messaging or phone that the funds have been sent and provides the MTCN.

The receiver then picks up the funds at a Western Union agent location.

This version of the service is currently not offered in the United States, but

Western Union plans to eventually offer this service to U.S. consumers.

• Mobile-to-Mobile. A consumer whose mobile operator offers mobile money

transfer in partnership with Western Union uses his or her phone to send a

cross-border money transfer to a receiver whose mobile operator also offers

mobile money transfer in partnership with Western Union. The funds go

directly into the receiver's mobile wallet or account tied to the mobile phone.

Page 24

This version of the service is currently not offered in the United States, but

Western Union plans to eventually offer this service to U.S. consumers.

Western Union would like to emphasize to the Board that using mobile phones to

conduct money transfers is a quickly evolving and emerging space that involves not only RTPs,

but also mobile phone operators and providers. Therefore, Western Union urges the Board to

take into consideration the infant stages of these types of products when issuing the final rule in

accordance with its authority under section 904(a) of EFTA and to carefully balance providing

the consumer protections afforded by section 919 of EFTA without stifling innovative mobile

remittance transfer products.

In response to the Board's request for comments on how to satisfy the written

receipt requirement for remittance transfers conducted by text messaging or mobile phone

applications, Western Union believes that RTPs should be permitted to provide the written

receipt for such transfers by emailing the receipt to a sender or by providing the sender with a

link to a website containing the receipt. Western Union believes that providing written receipts

on the sender's mobile phone via text messaging or through a mobile phone application will not

provide the consumer with meaningful, consumer friendly disclosures and that consumers will

not receive the written receipt in a retainable form as required by proposed section 205.31(a)(2).

Western Union questions how meaningful the receipt will be to consumers when viewed on their

mobile phones, particularly because of the lengthy disclosures a written receipt must contain.

However, if the written receipt may be sent to a sender's email or provided via a website that the

sender can access, the sender will be able to print the written receipt and will be provided with a

receipt in a format that is easy to read. Western Union requests that the Board consider applying

the "retainable in form" requirement under proposed section 205.31(a)(2) to only the written

receipt for mobile phone transfers and not the pre-payment disclosure, particularly because the

written receipt will contain the pre-payment disclosures. Western Union also believes that if the

written receipt is required to be provided via text messaging or through mobile phone

applications consumers may bear increased costs depending on their data plans with mobile

phone providers that would be a disincentive to using such products.

For the reasons discussed above, Western Union urges the Board to permit RTPs

to provide the written receipt for remittance transfers conducted via text messaging or mobile

phone applications by email or making them available at a website that the consumer can access.

At a minimum, Western Union requests that the Board create flexibility with respect to providing

disclosures for remittance transfers conducted via mobile phones.

The Combined Disclosure Should Be Acceptable if Presented Following

Payment.

Proposed section 205.31(e) provides that if a combined disclosure is used, it must

be provided to the sender when the sender requests the remittance transfer, but prior to payment

for the remittance transfer. Section 919(a)(5)(C) of EFTA does not expressly require that a

combined disclosure be provided to the sender prior to payment, but only requires that the

combined disclosure be "accurate at the time at which payment is made."

Page 25

The combined disclosure exemption inherently causes compliance difficulties.

Subsection (a)(2)(B) is a receipt requirement. Receipts typically contain the date and time of a

transaction, the amount paid for goods or services and a transaction number, elements which help

establish proof of payment. The combined disclosure cannot contain "accurate" receipt

information prior to payment. Similarly, as the Board notes in the Proposed Rule, the

requirement that the combined disclosure be accurate at the time at which payment is made

appears to be superfluous if the combined disclosure could be provided after payment. This

exemption is a conundrum.

Nevertheless, the exemption exists and Western Union strongly advocates in

favor of a combined disclosure exemption where the combined disclosure is provided after

payment and the pre-payment disclosure information is provided at the point of sale orally by an

RTP's trained agent or through a toll free number, on a computer screen, or by another method

(e.g., through mobile phone technology). Western Union acknowledges that the Board rejected

RTPs'

suggestions that pre-payment disclosure information be permitted to be provided at the

point of sale either orally or on a computer screen. Western Union agrees that it is appropriate

and correct to reject this approach for providing pre-payment disclosure information in the

context of the two-step disclosure process, i.e., the provision of a pre-payment disclosure before

payment and a receipt after payment. However, we urge the Board to reconsider this approach in

the context of the Board's section 919(a)(5) EFTA exemption authority permitting the

establishment of a combined disclosure and in light of the Bureau's duty to consider "the

potential benefits and costs to consumers and covered persons." Footnote 42.

12 U.S.C. § 5512(b)(2)(A)(i). end of footnote.

We note that half of the participants in the Board's consumer testing preferred to

receive a combined disclosure that evidenced proof of payment. Footnote 43.

About half of the participants in the Board's consumer testing preferred the combined disclosure rather than

receiving two disclosures. And some of the participants who preferred to receive both the pre-payment disclosure

and receipt expressed concern about receiving the combined disclosure without receiving proof of payment. See 76

Fed. Reg. at 29915. end of footnote.

Western Union agrees with

these participants. We, like the Board, have considered various options of providing proof of

payment on a combined disclosure that is provided prior to payment. Options we have

considered include signatures, stamps, money transfer control numbers and running the paper

through the printer multiple times. We have limited practical experience with some of these

options, but the comment period has not provided us with enough time to develop, implement

and test any of these approaches sufficient for our various risk, fraud, AML, compliance, legal,

customer service and operational teams to all gain comfort with any of the solutions we have

considered. Additionally, since we have not conducted trials with such processes and

procedures, we have limited experience and data to anticipate how such processes and

procedures related to providing the combined disclosure prior to payment would impact our

business.

Western Union urges the Board to permit RTPs to provide the combined

disclosure after payment and the pre-payment disclosure information at the point of sale orally,

on a computer screen, or by another method. Western Union customers are generally frequent

users of our services that know and understand the costs and fees associated with sending a

remittance transfer. The Board should not lose sight of this fact when implementing the

combined disclosure requirement. The Board should also take into consideration the fact that the

Board's study and findings indicate that requiring the disclosures prior to payment will likely not

change consumer behavior, i.e., the consumer will go through with the transaction regardless of

whether he or she receives the combined disclosure prior of after payment. Footnote 44.

Among participants who wanted to receive information before their transactions, approximately half wanted this

information to be in writing (the other half thought it should be given orally or presented on a screen). Most of these

participants wanted the information on paper as a record of what they had been told and only a few participants said

that they would use the pre-transaction disclosures to compare providers. See Report from ICF Macro to the Board

of Governors of the Federal Reserve System, Summary of Findings Design and Testing of Remittance Disclosures,

pp. 16-17 (Apr. 20, 2011). end of footnote.

Page 26.

Failing that, we recommend that the Board use its section 904(c) authority in

conjunction with the combined disclosure exemption and, at a minimum, permit the combined

disclosure to be provided after payment to those senders who have conducted a transaction with

us in the past. As the Board knows from its studies, Western Union has many customers who

regularly use Western Union to send remittance transfers. Where Western Union can identify

such consumers who have conducted transactions with Western Union in the past, for example,

through our Gold Card Rewards Program, Footnote 45.

The Western Union Gold Card Program is a loyalty rewards program that enables our customers to take advantage

of unique benefits and rewards each time the customer uses his or her Gold Card at a participating Western Union

location to send money. Most Gold Card members are frequent and repeat users of our services and are well

informed and understand our fees, the related charges imposed in connection with sending money, and applicable

exchange rates. end of footnote.

Western Union should be able to provide such

consumers with the combined disclosure prior to or after payment. Pre-payment disclosure to

those consumers would provide almost no consumer benefit.

The Board Should Provide Guidance to RTPs on Compliance Obligations

Associated with New Service Offerings and Emerging Remittance Transfer

Products.

One recent product innovation, the Western Union goCASH money transfer

service ("goCASH"), is a product that provides additional convenience, flexibility, and choice for

Western Union's customers, but does not fit neatly within the confines of the statutory

requirements or the proposed regulatory requirements. goCASH is basically a two-step money

transfer product that is packaged in Western Union branded materials offered at retailers that are

agents of Western Union ("Retailers"). goCASH contains instructions that include, among other

things, designation of the pre-denominated principal amount of funds transmission to be

purchased, fee information, and information for contacting Western Union to effect the transfer.

Consumers purchase a goCASH money transfer at the Retailer point of sale using

standard in-lane purchase procedures available at the Retailer. Consumers either contact

Western Union by telephone or use Western Union's website to designate a recipient for the

funds transfer and to effect the transfer. If the consumer contacts Western Union by telephone,

Page 27

Western Union provides various disclosures to the consumer at this time, including applicable

foreign exchange rates based on the location of the recipient, and gives consumers the option to

hear and ask questions about the refund procedure if they do not agree to the rates. Following

execution of the transfer, Western Union sends the goCASH purchaser a receipt that includes

relevant information about the transaction. Such receipts are sent by e-mail or regular mail, at

the consumer's option. If the consumer uses the Internet to effect the transfer, information

related to the exchanges rates, refund procedures, and receipt information are provided on

Western Union's website.

Based on the provisions of section 919 of EFTA and the Proposed Rule, goCASH

would not be covered as a remittance transfer at the point of sale because the purchaser does not

designate a recipient at the point of sale. Moreover, the purchaser may not have decided where

the transfer may be directed (inside or outside the United States) or in what currency the transfer

may be made when goCASH is purchased at the point of sale. Once the purchaser initiates the

transfer via telephone or the Internet by designating a recipient in a foreign country, the product

would appear to be covered as a remittance transfer. Accordingly, although the goCASH

product is purchased at a Retailer, if the transaction is initiated by telephone, the transaction

would appear to be conducted entirely by telephone for purposes of proposed section

205.31(a)(3)(i) because until that point there was no remittance transfer, and the consumer could

have used the goCASH product to initiate a transfer to someone inside or outside the United

States. Consistent with the consumer protection theme of EFTA, payment would be deemed

made for purposes of proposed section 205.34 upon the consumer designating a recipient in a

foreign country and agreeing to go forward with the goCASH transaction after hearing the

relevant disclosures, since any earlier deemed payment under proposed section 205.34 would not

afford consumers the full benefit of the refund and cancellation period intended by proposed

section 205.34. Western Union's position is that it is the designation of a recipient in a foreign

country coupled with payment for purposes of proposed section 205.34 that constitutes the entire

transaction for purposes of proposed section 205.31(a)(3)(i).

goCASH illustrates the difficulty of applying the requirements of section 919 of

EFTA and the Proposed Rule to certain money transfer products, especially newer and more

innovative products. Western Union also anticipates similar difficulties with applying these

requirements to its various prepaid product offerings that are either in a market today or being

contemplated to enhance the pay-out methods available to designated recipients. While the

primary objective of EFTA is individual consumer rights, the purpose of EFTA and Regulation E

is to establish a basic framework establishing the rights, liabilities, and responsibilities of

participants in remittance transfer systems taking into consideration the evolution of electronic

banking services and technology. Footnote 46.

"It is the purpose of this title to provide a basic framework establishing the rights, liabilities, and responsibilities

of participants in electronic fund and remittance transfer systems. The primary objective of this title, however, is the

provision of individual consumer rights." 15 U.S.C. § 1693(b) (EFTA, § 902(b)). "In prescribing such regulations,

the Board shall . . . take into account, and allow for, the continuing evolution of electronic banking services and the

technology utilized in such services." 15 U.S.C. § 1693b(a)(1) (EFTA, § 904(a)(1)). end of footnote.

Western Union firmly believes that protecting consumer

rights and product innovation are entirely compatible. We urge the Board, however, to use its

authority under EFTA section 904(c) to allow a remittance transfer provider to request a staff

interpretation on a case-by-case basis as a safe harbor for compliance and to clarify such

procedure by regulation. Page 28.

Disclosure of State Regulatory Agency Contact Information Should Be Permitted

by Reference to the Websites and Toll-Free Telephone Numbers of the RTP and

the Bureau.

Section 919(a)(2)(B)(ii)(II)(bb) of EFTA requires that an RTP provide

"appropriate contact information" for its state regulator. Proposed section 205.31(b)(2)(vi)

requires an RTP to disclose (1) a statement that the sender can contact the state regulatory

agency that regulates the RTP for questions or complaints about the RTP and (2) the telephone

number and website of the state regulatory agency that regulates the RTP.

Western Union is licensed in forty-eight (48) states and four (4) U.S. territories

and believes that the technical difficulties, complexities, and costs associated with programming

systems, terminals, and registers at the point of sale to print state-by-state receipts containing the

specific applicable state regulatory agency information will greatly outweigh the benefits to

consumers. In addition, any changes to state regulatory agency information will require time

sensitive and costly reprogramming of such systems, terminals, and registers at the point of sale.

Because many state regulators have offered Western Union guidance on the prominence and

placement of their contact information on our website, we also suggest that the Board consult

with the various state agencies for insight and recommendations on how such agencies may

prefer to have this information disclosed. Western Union further notes that many states have

posting or signage requirements that require RTPs to provide applicable state regulatory agency

contact information at brick and mortar locations and on the websites of RTPs with respect to

online transactions. Many state regulatory agencies typically want consumers to contact the

licensee before contacting the agency for questions and complaints. These state regulatory

agencies typically advise licensees to provide disclosures in a manner that directs consumers to

contact the licensee prior to contacting the state regulatory agency.

For the reasons discussed above, Western Union urges the Board to interpret the

phrase "appropriate contact information" contained in section 919(a)(2)(B)(ii)(II) of EFTA to

include a statement that would refer the sender to such information through other sources.

Specifically, Western Union requests that the Board permit the disclosure of state regulatory

agency contact information by including a statement that would refer the sender to the website or

toll-free telephone number of the RTP to obtain contact information for the sender's state

regulatory agency. In addition, Western Union believes that the Bureau should also maintain

contact information for state regulatory agencies so that the information is centrally stored at one

location for consumers. Footnote 47.

We note that this recommendation is consistent with provisions of the Consumer Financial Protection Act, which

provide, "The Director shall establish a unit whose functions shall include establishing a single, toll-free telephone

number, a website, and a database . . . to facilitate the centralized collection of, monitoring of, and response to

consumer complaints regarding consumer financial products or services. . . . To the extent practicable, State

agencies may receive appropriate complaints from the systems established." 12 U.S.C. § 5493(b)(3). end of footnote.

Western Union proposes that receipts should also contain a statement

directing senders to contact the Bureau to obtain such information. Western Union believes that

providing consumers with state regulatory agency contact information in this manner is just as

useful to consumers as providing the state regulatory agency's contact information in accordance

with proposed section 205.31(b)(2)(vi). Page 29.

Error Resolution and Cancellation Process

The Requirement to Refund Within Three (3) Business Days Should Not Require

the RTP to Have the Refund in the Hands of the Sender Within Three (3)

Business Days.

Proposed section 205.34(b) requires an RTP to refund the total amount of funds

tendered in connection with the requested transfer within three (3) business days of receiving the

sender's valid cancellation request. Western Union requests the Board to clarify that an RTP is

only required to initiate, issue, or make funds available at a pick-up location within three (3)

business days, but the funds do not necessarily have to be in the hands of the sender within three

(3) business days. Western Union believes this clarification is necessary to address the following

situations: (i) an RTP issues and mails a refund check within three business days but it can take

several days for the refund check to be delivered to the sender; (ii) for cash transactions, an RTP

will make the refund available for pick-up at an agent location, but the sender may take several

days before picking up his refund; or (iii) for credit/debit card transactions, an RTP will issue a

chargeback to the sender's credit/debit card account, but the credit can take several days to

appear due to credit/debit processing systems.

The Proposed Cancellation Rights Should be Clarified.

(a) RTPs That Act as an Agent of Billers for International Bill Payment

Services Do Not Have the Ability to Cancel Payments.

Under proposed section 205.30(d), international bill payments will fall within the

scope of the Proposed Rule, Footnote 48.

See 76 Fed. Reg. at 29908. end of footnote.

and proposed section 205.34 permits senders to cancel a

remittance transfer received no later than one business day from when the sender makes payment

to the RTP. We currently provide the Western Union Quick Pay service ("Quick Pay") to

consumers and companies which, for purposes of the Proposed Rule, allows U.S. consumers to

send bill payments to participating international companies ("Billers"). U.S. customers of the

Billers will go to a Quick Pay participating Western Union agent location, complete a form

providing certain identifying Biller information, and send his or her payment for a bill via Quick

Pay. Western Union accepts payment from consumers on behalf of and as agent of the Billers.

Technically, we are obligated to the Biller for the funds when we send data to the Biller, and we

do not have the ability to cancel the transaction and refund the amount of payment. Western

Union requests that the Board clarify the Proposed Rule such that the cancellation rights relating

to RTPs that act as agents of international billers for purposes of collecting and sending bill

payments for customers of such international billers.

Page 30

(b) Request for Reasonable Opportunity to Act on Cancellation Requests.

Proposed section 205.34 permits senders to cancel a remittance transfer received

no later than one business day from when the sender makes payment to the RTP provided that

the transferred funds have not been "deposited into an account of the designated recipient."

Unlike cash-to-cash remittance transfer transactions, RTPs may not have the ability to cancel

certain transactions within 24 hours, such as cash-to-account remittance transfer transactions.

We recommend that the regulation clarify that the cancellation request can only be honored if the

RTP has a reasonable opportunity to act upon the cancellation request. Footnote 49.

This is consistent with the treatment of stop payment orders under the 2011 NACHA Operating Rules and

Guidelines. See, e.g., NACHA Rules, OG 190, OG 219-220. end of footnote.

Definitions

The "Business Day" Definition Should Exclude Saturdays, Sundays, and

Holidays.

Proposed section 205.30(b) defines "business day" to mean any day on which an

RTP accepts funds for sending remittance transfers, and proposed comment 30(b)-1 explains that

a business day includes the entire 24-hour period ending at midnight. Western Union accepts

funds for sending remittance transfers seven (7) days a week, including holidays. Therefore, for

purposes of Western Union's business, the term "business day" means seven (7) days a week and

24 hours a day. Although we operate seven (7) days a week and 24 hours a day, the U.S. postal

service does not maintain the same hours, and we will need to rely on the U.S. postal service to

mail certain disclosures required under the Proposed Rule.

Western Union is concerned that the proposed definition of "business day" does

not under any circumstances exclude Saturdays, Sundays, or holidays. Under certain situations,

it will be impossible for Western Union to comply with the requirement to mail a receipt no later

than one business day after the date on which payment is made for a remittance transfer

transaction conducted entirely by telephone in accordance with section 919 (a)(5)(B) of EFTA

and proposed section 205.31(e)(2). For example, if a remittance transfer transaction is conducted

entirely by telephone on a Saturday at 5:00pm, Western Union is required to mail or deliver a

written receipt to the sender no later than one business day after the date on which payment is

made. Because the U.S. postal service does not operate after 5:00pm on Saturday or on Sunday,

Western Union will not be able to mail the written receipt until Monday (if that Monday is not a

nationally recognized holiday).

Western Union recognizes that the requirement to mail a written receipt no later

than one business day after the date on which a transaction is conducted entirely by telephone is

statutorily mandated. Footnote 50.

See 15 U.S.C. § 1693o-1(a)(5)(B) (EFTA § 919(a)(5)(B)). end of footnote.

Therefore, amending the definition of "business day" is the only means

by which the Board can address the issue described above. Western Union requests that the

Board exclude Saturdays, Sundays, and holidays from the definition of "business day."

Page 31

Western Union acknowledges that by amending the definition of "business day,"

other timing requirements under the Proposed Rule relating to error resolution and cancellation

procedures will be affected. Footnote 51. See, e.g., 12 C.F.R. Proposed §§ 205.33(c), 205.34. end of footnote.

However, unlike the timing requirement for the provision of

written receipts for transactions conducted entirely by telephone, the Board has flexibility in

drafting timing requirements for error resolution and cancellation procedures (i.e., the Board is

not required by statute to use the term "one business day" or "business day"). Footnote 52.

See 15 U.S.C. § 1693o-1(d) (EFTA § 919(d)). end of footnote.

In the event the

Board defines "business day" to exclude Saturdays, Sundays, and holidays, the Board should

consider whether use of the term "business day" is the appropriate term to use with respect to the

timing requirements under error resolution and cancellation procedures. For example, if a

business day does not include Saturdays, Sundays, and holidays, Western Union believes the

term "business day" should not be used to establish timing requirements for the cancellation and

refund of remittance transfers because the sender could potentially have a longer cancellation

time frame than currently contemplated under proposed section 205.34(a). Western Union

strongly agrees with the Board's current cancellation time frame of one business day and urges

the Board to incorporate that time frame in its resolution of the issue discussed above.

The "Remittance Transfer" Definition Should Expressly Exclude the Sale or

Issuance of Money Orders, Checks, or Other Paper Instruments.

The Proposed Rule applies to "any person that provides remittance transfers for a

consumer in the normal course of its business, regardless of whether the consumer holds an

account with such person." Footnote 53. See 12 C.F.R. Proposed §§

205.3,

205.30(e). end of footnote.

A "remittance transfer" is defined as "any electronic transfer of

funds requested by a sender to a designated recipient that is sent by a remittance transfer

provider." Footnote 54.

12 C.F.R. Proposed § 205.30(d)(1). end of footnote.

Proposed comment 30(d) states that "non-electronic remittance methods are not

remittance transfers," but notes that there may be an electronic transfer of funds if a provider

makes an electronic book entry between different settlement accounts to effectuate the transfer. Footnote 55.

76 Fed. Reg. at 29954. end of footnote.

Western Union offers a retail money order service by which customers use

Western Union branded money orders for making purchases, paying bills, and as an alternative

to checks that can be deposited directly into bank accounts or cashed at check cashers, some

banks,

and some retailers. Western Union is concerned that proposed comment 30(d) creates

ambiguity as to whether a money order sold to a consumer is considered a "remittance transfer"

under proposed section 205.30(d)(1). Western Union urges the Board to expressly exclude the

sale or issuance of money orders, checks, or other paper instruments from the definition of

"remittance transfer." Such a bright line is also consistent with the exemption for checks from the

definition of "electronic fund transfer" under Regulation E.

Page 32

Additional Comments

Model Forms A-30 through A-32.

Appendix A to the Proposed Rules ("Appendix A") contains Model Forms A-30

through A-32 which demonstrate how an RTP could provide the required disclosures for a

remittance transfer exchanged into local currency. Footnote 56.

See 76 Fed. Reg. at 29943-29945. end of footnote.

Proposed instruction 4 to Appendix A

provides that additional information not required by the Proposed Rule may be presented

consistent with the segregation requirement of proposed section 205.31(c)(4), Footnote 57.

76 Fed. Reg. at 29962. end of footnote.

which requires

that the Proposed Rule's disclosures be segregated from everything else and must contain only

information that is directly related to the disclosures required under the Proposed Rule. Any

additional information not required by the Proposed Rule must also be presented consistent with

the clear and conspicuous requirement of proposed section 205.31(a)(1). Footnote 58.

76 Fed. Reg. at 29962. end of footnote.

RTPs that make

revisions that do not comply with the proposed instruction 4 to Appendix A will lose the benefit

of the safe harbor for appropriate use of the model forms. Footnote 59.

76 Fed. Reg. at 29962. end of footnote.

Western Union is concerned that Model Forms A-30 through A-32 do not

include certain disclosures relating to exchange rates that are necessary in order for them to be

accurate. First, Model Form A-30 for pre-payment disclosures should contain a statement that

the exchange rate changes throughout the day to clearly convey to consumers that the exchange

rate quoted or estimated on the pre-payment disclosure is not fixed and may change if the

consumer returns to the RTP an hour or more after receiving the pre-payment disclosure to

conduct and complete the subject remittance transfer. Second, Model Forms A-30 through A -

32 should contain the following (or substantially similar) statement: "We also make money from

foreign currency exchange." Accordingly, Western Union requests that the Board amend Model

Forms A-30 through A-32, as applicable, to include these suggested disclosures.

Western Union Supports the Board's Proposal to Permit Itemized Disclosures.

Proposed section 205.31(b)(1)(ii) provides that the applicable disclosure related to

fees and taxes imposed by the RTP may use the term "Transfer Fees," "Transfer Taxes," or

"Transfer Fees and Taxes" or a substantially similar term. Proposed comment 31(b)(1) permits

itemized disclosures. The Board requests comment on the language used to describe the fees and

taxes imposed on the remittance transfer by the remittance transfer provider pursuant to proposed

section 205.31(b)(1)(ii). Western Union notes that at least one U.S. jurisdiction, Oklahoma, Footnote 60.

See Drug Money Laundering and Wire Transmitter Act, 63 Okl. St. §§ 2-503.1a - 2-503.11. end of footnote.

requires RTPs to impose a fee that is not a tax. In order to comply with the requirement that the

disclosures be clear and conspicuous and in order to provide consumers with meaningful

disclosures related to the remittance transfer fee imposed by the RTP, Western Union supports

the proposed language to the extent the applicable fees and taxes imposed by the RTP can be

clearly and accurately itemized. Page 33.

The Bureau's Contact Information Should Always Be Provided on Disclosures.

Proposed section 205.31(b)(2)(vi) requires a statement that the sender can contact

the Bureau for questions or complaints about the RTP. The Board requests comment on whether

it is appropriate to require the disclosure of the contact information of the Bureau in all

circumstances or whether it is appropriate to instead require the contact information of the

appropriate Federal regulator of the RTP for consumer complaints. Footnote 61.

76 Fed. Reg. at 29914. end of footnote.

Western Union believes

that the Bureau's contact information should always be provided to ensure that the Bureau has a

better line of sight into consumer complaints and issues in the remittance transfer space rather

than having consumer complaints and issues spread across several Federal regulators. Western

Union believes that this approach is more consistent with the intent of the Dodd-Frank Act.

Requirement Related to Rounding the Exchange Rate.

Proposed section 205.31(b)(1)(iv) requires that the exchange rate used be rounded

"to the

1/100th

of a decimal point." We note that for certain currencies, such as the Indonesian

Rupiah and the South Korean Won, using the hundredth of a decimal point for foreign exchange

quotes adds de minimis value to a consumer transaction and may result in a transaction amount

being quoted in the foreign currency for which no coins are available to precisely complete the

transaction. Providing such a precise amount that the designated recipient will receive in the

foreign currency may cause confusion. Technically, such foreign exchange quotes could trigger

frivolous error resolution complaints. We recommend a de minimis exemption for error

resolution requirements that are triggered based on rounding. We also note that, while the

language mimics the statutory language in section 919(a)(2)(A)(iii) of EFTA, the language itself

is stilted. We recommend that the regulation refer to the exchange rate being rounded "to the

nearest two decimal places," or other appropriate language.

Disclosure of the Amount of Funds Transferred.

The Proposed Rule at sections 205.31(b)(1)(i), (ii) and (iii) require certain

disclosures "in the currency in which the funds will be transferred." This is not clear. If a sender

gives the RTP dollars, the electronic transfer may be in the form of dollars, may be in the form of

the currency used in the foreign country of the recipient, or may even be in the form of a third

currency, such as Euros. The regulatory language could be interpreted to mean any of these

currencies. We would suggest that the regulatory text be amended to clarify that the disclosure

relates to the currency given by the sender to the RTP.

6. Taxes Imposed by the RTP.

Proposed section 250.31(b)(1)(ii) requires the disclosure of any fees and taxes

imposed on the remittance transfer by the RTP. A tax is imposed by a government, not by an

RTP.

We suggest deleting the word "taxes" to avoid confusion as to what information must be

disclosed under this section. Page 34.

Eight Point Font and Equal Prominence.

Proposed section 205.31(c)(3) requires that written and electronic disclosures

must be in a minimum eight point font. In an electronic communication, the size of font that a

reader sees is often determined by the settings on the consumer's computer or email system. The

RTP cannot necessarily control the size of the font set by the consumer.

This section also requires that the written and electronic disclosures must be in

"equal prominence to each other." Since electronic disclosures are an alternative to written

disclosures, this requirement is inexplicable.

III.

CONCLUSION

Western Union wants to thank the Board for giving it the opportunity to provide

comments to the proposals and issues discussed in the NPRM. Western Union supports the goals

of the Board's Proposed Rule and respectfully urges the Board to consider all of the comments

and suggestions set forth herein.

If you have any questions, or if Western Union may be of any additional service,

please feel free to contact the undersigned. Western Union would also be very pleased to meet

with the Board or Bureau at its convenience to further discuss the issues addressed in these

remarks.

Very truly yours,

Signed.

Joseph Cachey III

Acting General Counsel

Chief Compliance Officer

TABLE OF CONTENTS

I. MOST SIGNIFICANT COMMENTS TO NPRM

A. Pre-Payment and Receipt Disclosure Requirements

The Proposed Rule Should Not Expand the Statutory Disclosure Requirements.

(a) The Proposed Rule Imposes a Disclosure Requirement That is Not

Expressly Required by Section 919 of

EFTA.

(pp. 2-3)

(b) RTPs Should Not Be Required to Disclose Third Party Fees that They Do

Not Have Actual Knowledge Of. (pp. 3-4)

Transfer in a Currency Other Than the Local Currency Designated on the

Receipt. (p. 5)

The Estimates Provision Should Be Expanded and Clarified.

(a) Additional Basis for Estimating Foreign Exchange Rates. (pp. 5-6)

(b) Clarification of Exemption for Authorized Dealer in Local Currency.

(p.

RTPs Should Be Given a Grace Period to Implement System Changes When a

Third Party Imposes New Fees or Taxes on Remittance Transfers. (pp. 6-7)

Error Resolution and Cancellation Process

RTPs Should Be Permitted to Require Consumers to Assert Errors Directly to the

RTP.

(pp. 7-8)

Exclusions from the "Error" Definition Should Be Expanded.

(a) The "Error" Definition Should Permit an RTP to Delay Transactions in

Accordance with its Terms and Conditions. (pp. 8-10)

(b) The "Error" Definition Should Provide Flexibility with Respect to

Disclosing Third Party Fees Under Certain Circumstances. (p. 10)

the Remittance Transfer in a Currency Other Than the Local Currency

Designated on the Receipt. (pp. 10-11)

(d) The Error Exclusion for Circumstances Outside the RTP's Control Should

Be More Broadly Interpreted. (p. 11)

RTPs with a Comprehensive Fraud Prevention Program Should Not Be

Responsible for Fraudulent Pick-ups Under the Error Resolution Provisions.

(pp.

11-12)

RTPs Should Not Be Required to Refund the Total Amount of Transfer Fees

Upon a Valid Cancellation Request. (pp. 12-13)

The Request to Refund Third Party Fees Due to an Error or Cancellation Request

Could Be Impermissible Under Local Law and Unreasonably Punitive for RTPs.

(p.

13)

6. The Board Should Clarify That Complying with the Error Resolution Procedures

Constitutes the Sole and Exclusive Remedy to the Sender in connection with

Errors Related to Remittance Transfers. (p. 14)

Vicarious Liability for Acts of Agents

Western Union Strongly Supports the Implementation of Alternative B in the

Final Rule. (p. 15)

Foreign Language Disclosure Requirements

The Foreign Language Disclosure Requirements Contemplated by the Proposed

Rule May Have the Unintended Consequence of Limiting Financial Access

Because RTPs May Choose to Limit Marketing and Service Languages.

(pp.

15-17)

Foreign Language Disclosure Requirements Should Not Be Triggered by General

Marketing Activities. (pp. 17-18)

Coverage

The Proposed Rule Should Only Cover Remittance Transfers Sent for Personal,

Family, or Household Purposes and Not for Business Purposes. (pp. 18-19)

F. Timing

The Bureau Has No Authority to Issue Regulations Prior to Appointment of the

Bureau Director. (pp. 19-20)

The Effective Date Should Be Eighteen (18) to Twenty-Four (24) Months from

the Date the Final Rule is Published. (pp. 21-22)

II.

ADDITIONAL SIGNIFICANT COMMENTS TO NPRM

A. Pre-Payment and Receipt Disclosure Requirements

RTPs Should Be Permitted to Provide Written Receipts for Remittance Transfers

Conducted via Text Messaging or Mobile Phone Applications by Email or

Website. (pp. 23-24)

The Combined Disclosure Should Be Acceptable if Presented Following

Payment. (pp. 24-26)

The Board Should Provide Guidance to RTPs on Compliance Obligations

Associated with New Service Offerings and Emerging Remittance Transfer

Products. (pp. 26-28)

Disclosures of State Regulatory Agency Contact Information Should Be

Permitted by Reference to the Websites and Toll-Free Telephone Numbers of the

RTP and the Bureau. (pp. 28-29)

Error Resolution and Cancellation Process

The Requirement to Refund Within Three (3) Business Days Should Not Require

the RTP to Have the Refund in the Hands of the Sender Within Three (3)

Business Days. (p. 29)

The Proposed Cancellation Rights Should Be Clarified.

(a) RTPs That Act as an Agent of Billers for International Bill Payment

Services Do Not Have the Ability to Cancel Payments. (p. 29)

(b) Request for Reasonable Opportunity to Act on Cancellation Requests.

(p.

30)

Definitions

The "Business Day" Definition Should Exclude Saturdays, Sundays, and

Holidays. (p. 30-31)

The "Remittance Transfer" Definition Should Expressly Exclude the Sale or

Issuance of Money Orders, Checks, or Other Paper Instruments. (p. 31)

Additional Comments

Model Forms A-30 through A-32. (p. 32)

Western Union Supports the Board's Proposal to Permit Itemized Disclosures.

(p.

32-33)

The Bureau's Contact Information Should Always Be Provided on Disclosures.

(p.

33)

Requirement Related to Rounding the Exchange Rate. (p. 33)

Disclosure of the Amount of Funds Transferred. (p. 33)

6. Taxes Imposed by the RTP. (p. 33-34)

Eight Point Font and Equal Prominence. (p. 34)

III.

CONCLUSION (p. 34)