Comment on CFPB_FRDOC_0001-0050

The bureau should allow estimates on pre-payment disclosures and receipts when the sender schedules a transfer to take place more than 10 days after he authorizes it. Leaving aside the currencies pegged to the dollar, the currency exchange market is volatile. Fluctuations in exchange rates can come from unexpected source. Unless the provider is able to hedge his exchange rate risks, any amount disclosed on a transfer must necessarily be an estimate when the send schedules that transfer days in advance. Small providers would not have the scale or expertise to create the hedges necessary to comply with regulation. Allowing estimate would save them the costs of more hedging when they can use estimates on their disclosures and receipts. Moreover, no allowing estimates disproportionately impacts small providers relative to large providers. This creates an incentive to consolidate operations, which may lead to oligopolistic competition. The desirability of such a scenario is unknown. The number of days in advance of transfer for which estimate would be allowed should be less than 10. The consumers ultimately bear the costs and risks of transfers when providers use estimates. Scheduling a transfer far in advance would expose consumers to risks of sudden and large exchange rate fluctuations. Cost savings on the provider’s side do not offset this risk. Moreover, allowing estimate for transfers scheduled too far in advance create perverse incentives to forego hedging exchange rate risks even among the large providers. Such a result would systematically disadvantage senders by exposing them to surprise increases in their transfers. Ultimately, this could prevent the market from developing at all. Ideally, the bureau should set the number at some smaller number, say 7, and increase until the point of diminishing returns is reached.