CFPB puts Electronic Fund Transfer Act into effect

The Consumer Financial Protection Bureau has posted final amendments to Regulation E, which puts into effect the Electronic Fund Transfer Act, providing enhanced protection and disclosure to consumers who send money to home countries overseas.

Until the Dodd-Frank Act, federal regulations did not apply to these overseas money transfers or remittance transfers. With the enactment of the new law, the CFPB is required to issue rules on remittance transfers.

In order for the transfer to be qualified as a remittance transfer, it must be more than $15, made by a U.S. customer, and sent to a person or entity in another country.

The new provisions require that financial institutions provide full disclosure to consumers before accepting payment. The disclosure must now include the exchange rate, fees and the amount of money to be delivered. Proof of payment, along with the date money will be received, with the disclosure information in English, must also be provided to the consumer.

Additionally, the new rules require that consumers be allowed a 30 minute refundable period to cancel a transfer. If there is a problem with a transfer, the institution must investigate the issue and remedy the situation. Under the final rules, companies providing remittance transfers are responsible for any error that may occur.

The final rules are set to take effect in January 2013. The CFPB is currently seeking public comment on the amendments.

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