WASHINGTON, Jan 23 (Reuters) – The U.S. consumer watchdog on
Thursday proposed extra scrutiny for big non-bank firms that
provide international money transfers as part of ongoing efforts
to oversee the industry.
The Consumer Financial Protection Bureau (CFPB) can already
examine banks and credit unions that offer money transfers. The
new proposal would let the bureau scrutinize non-bank firms that
conduct more than a million foreign transfers each year.
That means the bureau would directly supervise about 25 of
the largest providers of money transfers or remittances,
including Western Union and MoneyGram International
.
“Today’s proposed rule would help us provide oversight
across the entire market so consumers get the protections they
deserve,” CFPB Director Richard Cordray said in a statement.
The 2010 Dodd-Frank law, which created the bureau, allows
the CFPB to send its examiners into banks and credit unions, as
well as larger non-bank financial firms.
The bureau must define what it considers to be larger
participants in certain markets before it can directly oversee
non-bank firms. It has done this for student loan servicers,
debt collectors and consumer reporting agencies so far.
The bureau said Thursday’s proposal would allow it to
examine larger money transfer firms for compliance with new
remittance rules that went into effect last year.
Those rules require remittance providers to disclose
information about fees and exchange rates, correct errors and
give consumers a 30-minute window to cancel transactions.
Before the bureau began scrutinizing the industry,
international money transfers were mostly exempt from consumer
protection rules. Non-bank providers transfer about $50 billion
each year through about 150 million individual transactions, the
CFPB said.
Firms will have 60 days to comment on Thursday’s proposal.
