New Rules Will Make Money Transfers Abroad Safer
Today, the Consumer Financial Protection Bureau (CFPB) will begin implementing a new rule that will make it safer and cheaper to send money to loved ones abroad. Consumers wire billions of dollars to foreign countries every year, but remittance providers can sometimes tack unnecessary, exorbitant costs onto those money transfers. In 2009 alone, immigrants from Mexico wired almost $23 billion in remittances and spent an estimated $1.5 billion in fees and other costs to perform these transactions. With the adoption of these new provisions, consumers will finally have the information they need to make good decisions about remittance products and the confidence of knowing that a consumer watchdog is looking after their interests in this market.
The new provisions require that:
- Financial institutions must provide full disclosure to consumers before accepting payment.
- Disclosures must include the exchange rate, fees, and the amount of money to be delivered.
- Proof of payment, along with the date the money will be received, must also be provided to the consumer.
- Companies providing remittance transfers are responsible for any errors that occur.
NCLR applauds the CFPB for pushing new banking and financial reform efforts that directly help Latinos and other immigrants. The remittance market is huge but historically has been loosely regulated. Thankfully, the CFPB has worked collaboratively with groups like NCLR to ensure that our concerns are addressed. These provisions will help consumers better understand up front what they are paying for, giving them the opportunity to shop for the best deal. Having worked on this issue for years, NCLR is pleased to see this sensible outcome and will continue working with the CFPB to make sure these new rules work for everyone.
