Nonbank international money transfer providers will now be under the scrutiny of the Consumer Financial Production Bureau (CFPB).
The CFPB last week finalized a rule that will allow the agency to supervise certain nonbank international money transfer providers to ensure that they are adhering to the existing protections for consumers sending money abroad.
Prior to the Dodd-Frank Act, international money transfers were not covered by federal regulations.
The rule will take effect on December 1, 2014.
Consumers send funds abroad for a number of reasons, like assisting family or friends with their expenses. Pricing for international money transfers is complex and may depend not only on fees and taxes, but also on exchange rates.
It's estimated that the nonbank providers that provider these services transfer about $50 billion annually through about 150 million individual international money transfer. The CFPB estimates that the rule will bring new oversight to about 25 of the largest providers.
Under the new rule, these companies must disclose information about exchange rates, fees, the amount of money being delivered abroad and when that money will be available. Customers will have 30 minutes to cancel a payment if it has not yet been received. If they cancel within that window, they will receive a full refund. Transfer providers will also be held accountable for certain types of errors and for mistake made by their agents.
Find a fact-sheet about the rule on the CFPB website.