International money transfer counter in Miami. (Photo: Associated Press)
New rules for international money transfers by U.S. remittance providers generally require full disclosure of the exchange rate and all fees associated with a transfer.
The new rules also require remittance transfer providers to investigate disputes and remedy errors.
The U.S. Consumer Financial Protection Bureau has set the new requirements under its mandate in the Dodd-Frank financial reform law.
Prior to the reform, international money transfers were mostly excluded from existing consumer protection regulations.
Dodd-Frank expanded the scope of the Electronic Fund Transfer Act to provide protections for senders of remittance transfers, and mandated that rules implementing certain provisions be issued by January 21, 2012.
Remittance transfer providers must disclose the fees, the exchange rate, and amount to be received by the recipient in the destination country.
Disclosures must generally be provided when the consumer first requests a transfer, and again when payment is made. Consumers will generally have 30 minutes after payment is made to cancel a transaction.
“People sending money to their loved ones in another country should not have to worry about hidden fees,” said CFPB Director Richard Cordray. “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. Transfer providers will also be held accountable for errors that occur in the process.”
See the CFPB’s Rule and Notice of Proposed Rulemaking.
