The Consumer Financial Protection Board Finalizes Remittance Rules
Richard Cordray is wasting no time at the Consumer Financial Protection Bureau. Forget Senate confirmation, Director Cordray has consumers to protect. With him at the helm, the CFPB finalized its amendment to the rules governing remittances from the United States.
For years, Americans wishing to send money to relatives living abroad have been victimized by predatory and under-regulated companies that charged an arm and a leg—often without disclosing the true rates. No more.
The Dodd-Frank Bill allowed for the CFPB to establish renewed rules on remittances, and (a few years later) the rules have arrived. This is no fledgling industry—over $400 billion dollars in remittances are sent each year. Following the rule changes, on every remittance of more than $15.00 companies will be required to disclose:
- Exchange Rate;
- Fees Charged; and
- Net Money to be Delivered.
The rules also enhance company liability for remittance errors and mandate a 30 minute window for a customer to cancel their remittance at no charge. Before the rule changes (which do not go into effect until January 2013), many money senders had no idea how much money truly arrived in their relatives' hands in South America, or Asia. Banks and other remittance-sending companies charged exorbitant rates and devalued the dollar, shortchanging the oft-unwitting customer. Talk about the American Dream—emigrate to the United States, make enough of a living to send some money back home to your spouse and parents, and have 40% of it stolen by the greedy banks. What could be more American?
Though we are disappointed that we have to wait a year until the rule changes go into effect—how long does it take to draft a disclosure and retrain a few employees?—this is the result of no small effort. Organizations like Appleseed, a group dedicated to seeking social justice, have worked hard in support of this rule and are to be commended for the result.
We look forward to additional efforts by the CFPB in furtherance of consumer protection and fairness. The Bureau continues to seek comments on the final rules at its website.
Assisted by David T. Martin
Steven N. Berk has over twenty years of litigation experience spanning both the private and public sectors. His practice ranges from representing Fortune 500 Companies, to consumers. Steven is based in Washington, D.C. and founded Berk Law in May 2009....
