WASHINGTON — The Consumer Financial Protection Bureau issued a final rule Friday that will impose new disclosure requirements for remittance transfers.
Under the rule, remittance transfer providers must disclose the fees, the exchange rate and the amount of money to be received by the recipient. Providers must disclose the information when the customer first requests the transfer, and again when the 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,” Richard Corday, the bureau’s director, said in a press release. “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.”
The new rules, required by the Dodd-Frank Act, provide for a one-year implementation period.
At the same time, the CFPB is also seeking comment on whether to make a few final adjustments to the rule, including setting a threshold that would minimize the impact of the regulation on community banks, credit unions and other companies that don’t normally process the transactions.
Some experts estimate that only half the money that travels abroad goes through mainstream channels like banks and money transmitters. As consumers grow in confidence and empowerment, more may start using banks, credit unions and money transmitting organizations.