Western Union 2013 Annual Report Download - page 128

2013 FORM 10-K
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Dodd-Frank Wall Street Reform and Consumer Protection Act and Other Similar Legislation
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") became United States federal law
in 2010. The Dodd-Frank Act created a new Consumer Financial Protection Bureau (the "CFPB") whose purpose is to issue and
enforce consumer protection initiatives governing financial products and services, including money transfer services. The CFPB
has created additional regulatory oversight for us. Regulations issued by the CFPB have affected our business in a variety of areas.
These include: a requirement to provide consumers sending funds internationally from the United States enhanced pre-transaction
written disclosures, including the disclosure of third-party fees and taxes, an obligation to resolve various errors, including certain
errors that may be outside our control, and an obligation to cancel transactions that have not been completed at a consumer's
request. We have modified certain of our systems, business practices, service offerings or procedures to comply with these
regulations. We also face liability for the failure of our money transfer agents and their subagents to comply with the rules and
have implemented and are continuing to implement additional policies, procedures, and oversight measures designed to foster
compliance by our agents. The extent of these policies, procedures, and measures may be considered by the CFPB in any action
or proceeding against us for noncompliance with the rules by our agents. The CFPB has also implemented a direct portal for
gathering information regarding consumer complaints in the money transfer area. It is likely that this effort will lead to additional
regulatory scrutiny. In January 2014, the CFPB proposed a rule to directly supervise “larger participants” in the market for
international transfers. If finalized, this rule will result in the direct examination and supervision of Western Union and its largest
competitors by the CFPB.
Additionally, rules adopted under the Dodd-Frank Act by the Commodity Futures Trading Commission, as well as by member
states of the European Union pursuant to the European Market Infrastructure Regulation ("EMIR"), have subjected our foreign
exchange hedging transactions, including certain intercompany hedging transactions, certain of the corporate interest rate hedging
transactions we may enter into in the future, and certain of the foreign exchange derivative contracts we offer as part of our Business
Solutions segment, to reporting, recordkeeping, and other requirements. Additionally, certain of the corporate interest rate hedging
transactions we may enter into in the future are subject to centralized clearing and margin requirements and certain of our other
transactions may become so in the future. Further, we may become subject to additional and potentially costly regulatory and
supervisory requirements if we exceed derivative transaction thresholds set forth in the Dodd-Frank Act and EMIR, including
subjecting our foreign exchange derivative transactions to centralized clearing and margin requirements under EMIR. Governments
outside of the United States and the European Union are also considering regulations similar to those described above. These
regulations have added costs to our business and any additional requirements could result in additional costs or impact the way
we conduct our hedging activities as well as impact how we conduct our business within our Business Solutions segment. For
further discussion of these risks, see Part I, Item 1A, Risk Factors - "The Dodd-Frank Act, as well as the regulations required by
that Act and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other
government authorities, could adversely affect us and the scope of our activities, and could adversely affect our operations, results
of operations and financial condition."
Unclaimed Property Regulations
Our Company is subject to unclaimed property laws in the United States and abroad. These laws require us to turn over to
certain government authorities the property of others held by our Company that has been unclaimed for a specified period of time,
such as unpaid money transfers and money orders. We hold property subject to unclaimed property laws and we have an ongoing
program to comply with the laws. We are subject to audits with regard to our escheatment practices.