CFPB enacts new rules for consumers who use money transfer services
While many people have found that sending money home to their native country is easier and more convenient by doing it electronically, some may still be hesitant to do it because they aren’t sure how it works. But a new rule adopted by a consumer protection group may help ease these concerns.
According to the Consumer Financial Protection Bureau, an organization that was formed in the wake of the financial system and housing collapse a few years ago, remittance transfer providers will be required to disclose additional information on their websites before individuals make wire transfers. This includes exchange rates, what fees are charged and requiring providers to investigate any issues that result in the recipient not receiving their funds.
A testimony to Xoom’s quality assurance is that virtually all of the new rules are already in effect with Xoom. Exchange rates among all 30 countries Xoom services are posted, fees are clearly identified and there is a window in which users can cancel transactions.
In addition to heightening the disclosure process, the rule also requires transfer providers to make any and all payment information available upon first request. This information should be repeated after the payment is made, CFPB indicates. Furthermore, individuals who are sending money will have half an hour to cancel a transaction after it’s been made.
While the rule is considered to be final, financial transfer companies have one year to implement the changes. In other words, the new requirements will become mandatory starting January 21, 2013.
Richard Cordray, newly appointed director of the CPFB, said the last thing people should have to worry about is how they can send money to their families back home.
“People sending money to their loved ones in another country should not have to worry about hidden fees,” said 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.”
CFPB states that before 2010, there were limited regulations on international wire transfers which weren’t subject to the same kind of scrutiny as other activities. That changed with the passage of the Dodd-Frank Act, which overhauled the nation’s financial system. One of the things the bill required was the issuance of new protections for remittance transfers.