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Do we qualify for the safe harbor exemption from the Regulation E international remittance transfer rules? Our customers receive more than one hundred international ACH transactions (IATs) every year; do those transactions disqualify us? These IATs typically are Paypal transactions, and we are the receiving financial institution.

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No, we do not believe that IATs received by your bank would disqualify your bank from the safe harbor exemption in Regulation E.

The Regulation E remittance transfer rules exempt entities that provided one hundred or fewer remittance transfers in the previous and current calendar year. A remittance transfer is one “requested by a sender to a designated recipient that is sent by a remittance transfer provider.” For example, this would include an outbound IAT “sent by the sender’s financial institution at the sender’s request.” A “sender” is a consumer who requests a remittance transfer to be sent to a designated recipient.

Inbound IATs received by your customers would not count towards the safe harbor threshold of one hundred remittance transfers. For inbound IATs, your bank is not the provider of the transfer, and your customer is not the sender — instead, your customer is the recipient.

For resources related to our guidance, please see:

  • Regulation E, 12 CFR 1005.30(f) (“Remittance transfer definitions. . . . (f)(1) ‘Remittance transfer provider’ or ‘provider’ means any person that provides remittance transfers for a consumer in the normal course of its business . . . . (2)(i) Safe harbor. For purposes of paragraph (f)(1) of this section, a person is deemed not to be providing remittance transfers for a consumer in the normal course of its business if the person: (A) Provided 100 or fewer remittance transfers in the previous calendar year; and (B) Provides 100 or fewer remittance transfers in the current calendar year.”)

  • Regulation E, 12 CFR 1005.30(e)(1) (“A ‘remittance transfer’ means the electronic transfer of funds requested by a sender to a designated recipient that is sent by a remittance transfer provider. . . .”)

  • Regulation E, Official Interpretations, Paragraph 30(e), Comment 3 (“Examples of remittance transfers. . . . (D) International ACH transactions sent by the sender’s financial institution at the sender’s request. . . .”)

  • Regulation E, 12 CFR 1005.30(g) (“‘Sender’ means a consumer in a State who primarily for personal, family, or household purposes requests a remittance transfer provider to send a remittance transfer to a designated recipient.”)

  • Regulation E, 12 CFR 1005.30(c) (“‘Designated recipient’ means any person specified by the sender as the authorized recipient of a remittance transfer to be received at a location in a foreign country.”)