In a letter to Richard Cordray, the director of the Consumer Financial Protection Bureau, 32 Congress members urged the watchdog agency to delay the effective date of new regulations on money transfers to avoid “irreparable harm to consumers.”
“We are very concerned that whatever price certainty and transparency that the final rule imparts will come at the cost [of] a significantly higher price and drastically reduced product availability,” the lawmakers said. “Hence, international transfers may no longer be feasible for consumers who support relatives overseas, for parents of students studying abroad and for consumers who purchase products and services overseas.”
The CFPB’s final rule on remittance transfers is scheduled to take effect in February, but the lawmakers urged the agency to delay its implementation for two years and to conduct a cost-benefit analysis, The Hill reports.
Consumer groups, however, have pressured congressional leaders to implement the new rules in a timely fashion, saying that financial institutions have plenty of time to come into compliance with the rules and that enough competition exists in the market to allow consumers a choice.
The remittance rules, mandated by the 2010 Dodd-Frank Act, were announced in January. The agency maintains that, at present, remittance transfers can be accompanied by hidden fees and exchange rates that reduce the amount of money being sent.
“People sending money to their loved ones in another country should not have to worry about hidden fees,” Cordray said, according to The Hill. “With these new protections, international money transfers will be more reliable. Consumers will know the costs ahead of time and be able to compare prices.”
The rules were updated to include an exemption for firms that do less than 100 transfers per year.