How the CFPB is Protecting International Money Transfers
Written by: Kristy Welsh
Last Updated: August 30, 2017
Whatever your reason for wiring money to another country, it is obviously an important one, particularly in an emergency situation. So the last thing you need to worry about is a confusing or difficult remittance process. Thus, the CFPB's oversight of international money transfers, helping to ensure the process brings you less headache and more peace of mind.
CFPB Enforces Remittance Transfer Rules
To protect consumers of international money transfers, the CFPB created the Remittance Transfer Rule, an amendment to Regulation E in the Electronic Funds Transfer Act.
This amendment was one of many financial reform requirements stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The CFPB not only wrote the language of the Remittance Transfer Rule, but is also tasked with its enforcement.
The Remittance Transfer Rule requires that remittance transfer providers do as follows during the transfer of international money orders.
1) Disclose to consumers information about:
- Exchange Rate
- Fees and Taxes
- Amount of money that will be delivered
- Date the money will be available
- Right to cancel the transfer
- What to do in the event of an error
- How to submit a complaint
2) Allow consumers at least 30 minutes after payment to cancel a remittance if it has not yet been received, and making good on the money back guarantee regardless of the reason for cancellation.
3) Investigate and correct errors that are reported within 180 days of the transfer date and taking responsibility for mistakes made by their agents.
4) Complete the investigation of errors within 90 days of the complaint.
5) Report the results of the investigation to the consumer.
Note, institutions that process 100 or fewer money transfers are not subject to these new regulations, as they are not providing transfers "in the normal course of business."
CFPB Writes New Rules and Regulations
As new issues arise, the CFPB has the authority to address them, writing new rules and regulations as deemed necessary.
For instance, relative to money transfers, the CFPB proposed in early 2014 that it should be able to oversee money transfers made by non-banks. Every year, 7 million U.S. households send international money transfers through non-bank entities. This represents 150 million individual transfers totaling an estimated $50 billion.
The proposed rule would only apply to non-banks making more than 1 million international money transfers per year, which would affect as many as 25 non-bank entities, including Western Union and MoneyGram.
CFPB Accepts Money Transfer Complaints
Did a remittance transfer provider fail to provide you with the proper disclosure information?
Did they not allow you to cancel a transfer within 30 minutes after payment?
Did they fail to investigate an error within 90 days of you reporting it?
Whatever the issue relative to your money transfer, the CFPB wants to hear about it. When you submit a complaint to the CFPB:
- Your complaint and supporting documentation is forwarded to the company for their review.
- The company has 15 days to respond to the CFPB and to you.
- The CFPB provides you with email updates on your complaint status.
Note, the CFPB also shares complaints with state and federal law enforcement agencies, and sends a complaint report to Congress twice a year. Your complaint may also be posted to the Consumer Complaint Database (minus any personally-identifying information).