In a report to Congress, the Consumer Financial Protection Bureau ("CFPB") evaluated a 2013 rule requiring remittance transfer providers to make certain disclosures to consumers regarding costs, fees and other information prior to purchase. Remittance transfer providers generally are stand-alone licensed money services businesses (which conducted 95.6 percent of all remittance transfers in 2017), as well as banks and other insured depository institutions.

Dodd-Frank Act Section 919 amended the Electronic Fund Transfer Act to establish a comprehensive system of consumer protection for remittance transfers. The rule implemented these new consumer protections, and also set forth cancellation and refund rights for consumers. The purpose of the CFPB report - titled the "Remittance Rule Assessment Report" - was to evaluate the effectiveness of the rule in meeting CFPB objectives.

The CFPB's findings suggest that after the rule's effective date, more consumers received timely information to make informed decisions when sending remittance transfers.

Key findings include:

  • new technologies, such as mobile phones, have changed the marketplace, which has made it more difficult to discern the rule's effects;
  • the volume of remittance transfers by money services businesses was increasing prior to the effective date of the rule and, afterward, continued to increase at the same or a higher rate (many factors other than the rule might have affected consumer demand for remittance transfers);
  • the number of banks transferring over 100 remittances has been steady or increasing since 2014;
  • the number of credit unions that reported offering remittance transfers went up in the two years after the rule took effect (comparable data are not available for banks prior to the rule coming into effect);
  • the average price of remittances was declining before the rule took effect and has continued to do so;
  • the CFPB's examinations have found "mixed levels" of rule compliance across the industry, including "both individual violations [at certain institutions] and wholesale failures to comply at others," but the CFPB has not filed any enforcement actions against institutions as of the date of the report; and
  • remittance transfer providers continue to incur compliance costs on top of one-time costs.

In addition, the CFPB found that:

  • in a survey of remittance transfer consumers that was conducted by a consumer advocacy group, 59 percent of those surveyed remembered that the rule-required disclosures included information about fees, and 63 percent recalled that the disclosures included an exchange rate;
  • available data sources reveal that consumers cancel between 0.3 and 4.5 percent of remittance transfers;
  • consumers report errors under the rule's provisions for between 0.5 and 1.9 percent of remittance transfers;
  • around one-fourth of asserted errors are found to be provider errors, as defined by the rule (available evidence points out that most asserted errors are due to consumer mistakes or other issues); and
  • the percentage of banks using the "temporary exception" (created to allow insured institutions to provide estimated disclosures in certain circumstances), which expires on July 21, 2020, fell since the rule took effect.

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