CFPB publishes procedures to be used in examinations of remittance providers

cfpbThe CFPB published last week procedures it plans to use during examinations of remittance transfer providers.

“Consumers need and deserve to have greater transparency and basic consumer protections when transferring money internationally,” CFPB Director Richard Cordray said. “Today’s examination procedures will help ensure that they are getting just that from their remittance providers.”

Before the Dodd-Frank Act, international money transfers were generally not covered under federal consumer protection laws. Dodd-Frank expanded the scope of the Electronic Fund Transfer Act to provide senders of remittance transfers with enhanced protections.

Last February, the CFPB issued its final rule on how remittance providers should handle such transactions. The rule, which takes effect on Monday, has been revised to address concerns related to implementation.

Under the rule, companies that consistently provide 100 or fewer remittance transfers and transactions under $15 are exempt from the regulations. The rule applies to banks, credit unions and money transmitters.

The CFPB requires providers to disclose information about fees, the exchange rate, and amount to be received. Disclosures must be provided at the time of a consumer’s request for a transfer, and some consumers are entitled to additional information after payment.

Remittance providers must also investigate and resolve errors using procedures that include notifying the customer of the investigation’s outcome. Consumers are also able to cancel most transfers up to thirty minutes after payment. Examiners will ensure that providers refund the consumer’s money at no additional cost within three business days, if the consumer makes the request in time.

Examiners will also review the activities of transfer providers for other risks, including unfair, abusive or deceptive practices. When necessary, examiners will coordinate with the CFPB’s enforcement staff to take enforcement action.

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