This guide is general legal information, not legal advice, and does not create an attorney–client relationship. Rules change and vary by state — verify current requirements with official sources or a licensed attorney.
If a consumer in the United States sends money to a person or business abroad, and the company handling the transfer does so in the normal course of its business, a detailed federal rulebook attaches. Subpart B of Regulation E — usually called the Remittance Transfer Rule — governs what must be disclosed before payment, what the receipt must say, how long the sender has to cancel, and how errors must be investigated.
The rule is prescriptive in a way that surprises product teams used to principles-based regulation. It dictates the content and, in places, the format of disclosures. It gives senders a cancellation right measured in minutes. And it imposes an investigation process with fixed deadlines and defined remedies when something goes wrong.
Key takeaways
- Subpart B applies to remittance transfers sent by consumers in the United States to recipients in a foreign country, by providers that make such transfers in the normal course of business.
- A safe harbour treats a person who made 500 or fewer remittance transfers in the previous calendar year, and 500 or fewer in the current year, as not providing them in the normal course of business — so occasional senders fall outside the rule.
- Providers must give an itemized prepayment disclosure before the sender pays and a receipt at payment, or a permitted combined disclosure; content requirements are detailed and set out in 12 CFR § 1005.31.
- Senders generally have at least 30 minutes after payment to cancel a transfer and receive a refund, with a longer window for transfers scheduled in advance.
- Error resolution requires investigation within a defined period after notice, with remedies including refund or re-sending funds at the sender's election.
Who the rule covers
Three elements have to line up. The sender must be a consumer located in a state. The recipient must be in a foreign country. And the provider must make remittance transfers for consumers in the normal course of its business. Miss any element and subpart B does not apply — though other law usually still does.
The normal-course element is where the safe harbour lives. A person that provided 500 or fewer remittance transfers in the previous calendar year and 500 or fewer in the current calendar year is deemed not to be providing them in the normal course of business, and so is not a remittance transfer provider. If a person under the threshold in the prior year crosses 500 during the current year, the safe harbour applies to the first 500 transfers, and the rule allows a reasonable transition period — not exceeding six months — to come into compliance.
Practical note: The safe harbour is a volume test, not a business-model test. A marketplace or payroll platform that sends a modest number of cross-border consumer payments today can cross the line simply by growing. Track the count as an operational metric with a compliance owner, not as an afterthought.
The two disclosures
The heart of the rule is a pair of disclosures. Both must be clear and conspicuous, generally in writing or electronic form that the sender can keep, and in the languages the rule prescribes.
The prepayment disclosure
Given when the sender requests the transfer but before payment, the prepayment disclosure must itemize the economics of the transaction. Under 12 CFR § 1005.31 it covers, in substance:
- the transfer amount in the currency the sender is paying in;
- fees and taxes imposed by the provider, in that same currency;
- the total the sender will pay;
- the exchange rate, rounded as the rule specifies;
- the transfer amount in the currency the recipient will receive, where relevant;
- other fees and taxes imposed on the transfer in the recipient's currency;
- the total that will be received by the designated recipient; and
- a statement that additional non-covered third-party fees or taxes may apply.
The receipt
At the time of payment, the receipt must repeat the prepayment content and add the operational and rights information: the date funds will be available in the foreign country, the recipient's identifying details, the provider's contact information, a statement of the sender's cancellation and error-resolution rights, and contact details for the state regulator and the CFPB. For transfers scheduled in advance, the transfer date appears as well.
A provider may instead give a single combined disclosure covering both sets of content, in which case proof of payment is provided when payment occurs. Transactions conducted by telephone have their own timing accommodation, allowing the receipt to be mailed within a defined period rather than delivered on the spot.
| Requirement | When | Core purpose |
|---|---|---|
| Prepayment disclosure | On request, before the sender pays | Let the sender compare the true all-in cost and the amount that will arrive |
| Receipt | When payment is made | Confirm the transaction and state cancellation, error, and complaint rights |
| Combined disclosure | Before payment, with proof of payment at payment | Permitted alternative that merges the two documents |
| Pre-authorized transfer disclosures | Before the first and subsequent transfers in a series | Keep senders informed about recurring cross-border payments |
The cancellation window
A sender generally has at least 30 minutes after making payment to cancel the transfer, provided the funds have not already been picked up by or deposited into the recipient's account. On a valid cancellation request, the provider must refund the full amount paid, including fees, within a defined period. Transfers scheduled in advance carry a longer cancellation window tied to the scheduled date.
This right has design consequences. A product that pushes funds irreversibly the instant a consumer taps "send" is difficult to reconcile with a rule assuming a short reversible period, so many providers build a hold or a soft-cancel state into the flow. The customer-facing description of that behaviour also needs to be accurate; overstating speed while relying on a cancellation buffer invites the kind of claim discussed in our article on UDAAP and CFPB enforcement.
Error resolution
Subpart B defines what counts as an error — including an incorrect amount paid by the sender, a computational mistake, the wrong amount received by the designated recipient, and failure to make funds available by the disclosed date — and prescribes the process.
- Notice from the sender. The sender must give notice within the period the rule allows after the disclosed date of availability, identifying themselves, the recipient, and the error.
- Investigation. The provider must promptly investigate and determine whether an error occurred, within the period specified by the rule after receiving the notice.
- Report and remedy. The provider reports the results to the sender. Where an error occurred, the sender generally chooses between a refund of the amount involved and having the correct amount sent to the recipient without additional charge.
- Records. The provider must retain documentation of the investigation and make it available to the sender on request.
Error-resolution failures tend to be systemic rather than one-off, which makes them attractive examination targets. A queue that misses deadlines during a volume spike produces a population of violations, not a single one.
How the rule fits with everything else
Subpart B is a disclosure and dispute regime. It says nothing about whether you are authorized to move the money in the first place. Cross-border consumer payments almost always sit on top of two other layers:
- Licensing. Receiving funds for transmission generally requires state money transmitter licences and federal registration, as set out in our guide to money transmitter licensing.
- Anti-money-laundering. Programme, recordkeeping, and reporting obligations administered by FinCEN, including the recordkeeping and travel rules that apply to funds transfers — see our AML and Bank Secrecy Act primer.
- Sanctions screening. Independent of Regulation E, and unforgiving of gaps in name and country screening.
- Partner bank expectations. Where a bank sits in the flow, its supervisory obligations pass through by contract, as described in bank–fintech partnerships.
State variation: Some states impose their own disclosure, receipt-language, or refund requirements on money transmission to foreign countries, and the licensing regime differs everywhere. Federal compliance does not answer the state question — check each jurisdiction where senders are located.
Frequently asked questions
Does the rule apply to business-to-business cross-border payments?
Generally no. Subpart B applies to transfers requested by consumers primarily for personal, family, or household purposes. A payment sent by a business is normally outside the rule, though licensing, anti-money-laundering, and sanctions obligations still apply, and some state laws reach commercial transfers.
What if the exchange rate is not known at the time of the disclosure?
The rule contemplates estimates in defined circumstances, with specified bases for calculating them and disclosure that the figures are estimates. The permitted uses of estimates are narrow and technical, so confirm the current text in Regulation E rather than assuming an estimate is always available.
We send fewer than 500 transfers a year. Are we free of the rule?
You fall within the normal-course safe harbour so long as you stayed at or below 500 in both the previous and the current calendar year. Growth ends that. Plan the compliance build before you approach the threshold, because the transition period the rule allows is finite and disclosure work is not quick.
Does the sender's cancellation right apply after pickup?
No. The right assumes the funds have not yet been picked up by, or deposited into an account of, the designated recipient. That is precisely why product design and cancellation policy have to be built together — a flow that completes instantly leaves nothing to cancel.
Who enforces subpart B?
The CFPB and, depending on the institution, other federal regulators; state authorities may also act under their own statutes. Consumers have private remedies under the Electronic Fund Transfer Act framework as well, so both supervisory and litigation exposure follow from systematic failures.
Building the compliance layer
A workable remittance programme has four moving parts: a disclosure engine that produces itemized, language-compliant documents at both stages; a transaction state machine that supports the cancellation window; an error-resolution queue with hard deadlines and evidence retention; and a volume monitor that tells you when the safe harbour stops applying. Each of those is easier to build before launch than to retrofit. Because the rule is highly prescriptive and periodically amended, verify the current requirements directly against the regulation text and check the licensing position in every state you serve. Related material is collected in the fintech law topic hub. This article is general information rather than legal advice.
