Sen. Elizabeth Warren (D-Mass.) applauded the CFPB’s rule on international money transfers that took effect on Monday—the rule expands federal protections for consumers who send remittance transfers abroad.
Previously, remittance transfers were generally not covered by federal consumer protections. The 2010 Dodd-Frank Act, however, expanded the scope of the Electronic Fund Transfer Act to provide additional protections to consumers who send money abroad.
The rule applies to remittance transfers over $15 initiated by a U.S.-based consumer and sent to a person or company in a foreign country. Consumers are generally able to cancel a transfer within 30 minutes at no additional cost, and companies are required to investigate reported problems and grant refunds. Firms are also required to remedy errors made by employees that resulted in a mismanaged transfer.
Consumers are also entitled, under the law, to receive upfront information regarding the exchange rate, taxes, fees and amount to be received in the local currency.
“People sending money to loved ones abroad shouldn’t get surprised by hidden fees and frustrated by errors that don’t get fixed,” Warren said. “The CFPB’s new rules help consumers see prices and risks upfront so they can shop for the best deal, and remittance providers will be held accountable for investigating and addressing errors when they occur. I applaud the CFPB for the steps they’re taking to make transfers reliable and secure, and protect consumers from financial fraud.”