CFPB Remittance Rule Proposal Seeks Authority Over Non-Bank International Remittance Businesses
The Consumer Financial Protection Bureau has proposed a rule that would allow it to oversee non-banking international money transfer businesses.
While the CFPB currently has the power to regulate international money remittance provided by large banks and credit unions, these new rules would grant the CFPB authority to a wider segment of the industry.
According to Richard Cordray, the CFPB Remittance Rule “provides strong consumer protections like better disclosures and the correction of errors. Today’s proposed rule would help us provide oversight across the entire market so consumers get the protections they deserve.”
The Dodd-Frank Act introduced a Remittance Rule expanding the Electronic Fund Transfer Act. These were put in place to better protect consumers by mandating a disclosure of exchange rates and fees, and a date of availability for transferred funds.
It gave customers the guarantee that if a transfer was cancelled within a 30-minute window, customers would receive their money back no questions asked.
These rules also put responsibility on these remittance providers to investigate and correct customers’ reported errors within 180 days.
By expanding the CFPB’s oversight capabilities, more U.S. consumers who send funds abroad will be better protected.
According to the CFPB, $50 billion is sent abroad annually through a total of 150 million individual transfers. If finalized, the expansion of rules will allow the CFPB to oversee 25 more of the largest international remittance providers.
The proposal can be seen here.