America’s top consumer watchdog is reportedly looking to strengthen its rules for overseas money transfers.
The Consumer Financial Protection Bureau (CFPB) is considering new restrictions on the fees charged by money-transfer companies for wiring money overseas, bureau officials told the Wall Street Journal (WSJ) Monday (Jan. 16).
PYMNTS contacted the CFPB for comment Monday and received a reply from the bureau Wednesday (Jan. 18) that it had no other information to provide. The agency has of late been trying to crack down on unfair and unnecessary fees across the financial system.
In this case, bureau officials are looking into whether differences in the way money transfer companies disclose exchange rates and fees can make it tough for the immigrants and other workers who send money overseas to find the most affordable option.
“We continue to see a lack of transparency about fees, exchange rates, and taxes, which comprise the true cost to consumers of sending money abroad,” CFPB director Rohit Chopra said in a letter to Sen. Elizabeth Warren, D-Mass., published by the WSJ.
Chopra added that his agency “believes there is significant noncompliance” with the CFPB’s remittance rules by nonbank money-transfer firms.
Among those companies is Choice Money Transfer, which was fined $950,000 by the CFPB in October after the bureau accused it of multiple violations of money transfer laws.
As PYMNTS reported in October, the CFPB said Choice Money had failed to accurately provide crucial prepayment information to remittance senders, including money transfer fees, current exchange rates, and the date the recipient would get their funds.
“Choice Money was required to accurately disclose key information to customers sending remittances, but didn’t,” Chopra said at the time. “Choice Money also failed to refund certain fees when recipients did not receive their money transfers on time.”
PYMNTS noted late last year that the business of overseas money transfers tends to be resilient in lean economic times, as migrant workers are consistently sending money home.
“For us as a company, we’re always leaning into the product to make sure the user experience is fully enhanced and making sure we’re addressing any sources of customer churn,” said Mitchell, whose company is the newly formed overseer of two global cross-border remittance firms WorldRemit and Sendwave.