WASHINGTON (9/15/14)--Effective Dec. 1, larger nonbank international money transfer providers become subject to the Consumer Financial Protection Bureau's remittance rules that were adopted in 2013.
"Last year, our new protections for consumers sending money abroad took effect," said CFPB Director Richard Cordray in announcing the new rule. "Today's rule gives us oversight of the larger marketplace and allows us to ensure that consumers are actually receiving those protections."
The CFPB estimates that nonbank providers transfer approximately $50 billion annually through about 150 million individual international money transfers. The bureau further estimates that the rule, proposed in January and adopted Friday, will bring new oversight to about 25 of the largest providers in the market.
The CFPB's remittance rule requires transfer firms to provide prepayment and receipt disclosures to the consumer sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer. Remittance transfer providers are also required to investigate disputes and correct errors.
Credit unions and other financial institutions are already subject to the CFPB's remittance rule.
The Credit Union National Association remains concerned that many credit unions have reduced or eliminated international payment services in light of the remittance rule generally. CUNA continues to urge an exemption from the rule beyond the current 100 transfers per year threshold that the rules currently provide, as well as additional flexibility for credit unions.