The rules for international money transfers are much clearer now, thanks to the CFPB. (Photo Credit: CC BY/Klearchos Guide to the Galaxy)
The Consumer Financial Protection Bureau has stepped in to clear the way for consumers who dabble in currency conversion. Effective immediately, those who remit money to friends and family in other countries will receive a more detailed breakdown of exchange rates and fees.
Money transfers, demystified
A statement issued by the CFPB clarified that the new rules will apply to all international money transfers. Exactly how much money the transfer recipient will receive must be clearly delineated in each transaction. This will make it easier for consumers to comparison shop for the best money transfer value.
From an administrative standpoint, the new CFPB regulations for money exchange and transfer centers will also require companies to investigate any consumer disputes and fix mistakes as they are discovered.
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CFPB Director Richard Cordray said the new money transfer rules will make things much easier for people who want to send money to family without the worries of hidden fees.
“With these new protections,” he said, “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 Wild West of monetary regulation
Previously, such things as international money transfers had largely escaped the scrutiny of U.S. federal regulation. Individual state laws may be strict, but such a stance has proven to be far from uniform.
Considering that U.S. consumers transfer tens of billions of dollars to foreign countries each year, the regulation brought on by the Dodd-Frank Wall Street Reform Act – as enforced by the CFPB – is necessary to spare consumers the exploitation inherent in an unregulated market.
While the CFPB notes that “a few additional adjustments” may still occur, consumers with a need to make money transfers should expect things to be much more clear from this point forward.
Mobile money transfers
Sources
Washington Post
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