Each year, tens of billions of dollars in remittances are sent abroad by immigrants in the United States. Money transfers to Mexico alone, for example, were an estimated $24 billion in 2011, according to the World Bank.
Beginning in January 2013, the Consumer Financial Protection Bureau, as directed by the Dodd-Frank Act, will implement new rules to protect those sending international money transfers by enhancing disclosure requirements for remittance transfer providers. Money-transfer companies will be required to disclose information about exchange rates and fees, and to investigate customer complaints and remedy errors. Consumers will also have 30 minutes to cancel a transaction after a payment is made.
Reactions To The New Rules
In a July 30, 2012 letter addressed to Congress, the American Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, the National Association of Federal Credit Unions and the National Bankers Association expressed opposition to the new rules. The letter argues that the international remittance rules “impose arbitrary and unworkable requirements on consumer-initiated international transfers of all sizes and purposes that will drastically curtail the availability of international transfers to consumers.” Consumer Groups, in contrast, praise the new rules for increasing transparency in remittance transactions.
While opinions may vary, it remains important for remittance transfer providers like Western Union, MoneyGram and Intermex (headquartered in Florida) to take note of the new rules and procedural guidelines that will govern transfers, coming into effect early next year.
For detailed information on the new rules governing remittance transfers, please click on the link below.
New Rules for Remittance Providers by Serge Pavluk and Andrew Pompa
See also Brian J. Hurh and Andrew Owens’ article CFPB Issues Final Remittance Transfer Regulations Under Dodd-Frank Act.