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From Banking and Finance Law Daily, September 12, 2014

CFPB to supervise international money transfers by large nonbank companies

By Andrew A. Turner, J.D.

Nonbank international money transfer providers that provide more than 1 million international money transfers annually will be subject to supervision by the Consumer Financial Protection Bureau, effective Dec. 1, 2014. By adopting a rule under authority granted by the Dodd-Frank Act to define larger participants of the international money transfer market, the CFPB estimates that it will be able to examine about 25 companies for compliance with regulations governing remittance transfers.

According to a CFPB fact sheet, nonbank companies carry out about 150 million international money transfers every year, totaling about $50 billion. Prior to the Dodd-Frank Act, international money transfers were generally not covered by federal consumer protection regulations. Under the new rule, the CFPB will be able to examine larger participant nonbank international money transfer providers to ensure compliance with requirements for disclosure, the option to cancel, and error correction.

“Last year, our new protections for consumers sending money abroad took effect,” said CFPB Director Richard Cordray. “Today’s rule gives us oversight of the larger marketplace and allows us to ensure that consumers are actually receiving those protections.”

Larger depository institutions that provide remittance transfer services already are subject to CFPB supervision. The bureau says it will use the same examination procedures for nonbanks that currently are used for banks, thrifts, and credit unions.

The Dodd-Frank Act gave the CFPB authority to supervise “larger participants” in consumer financial markets. This rule is the CFPB’s fourth larger participant rule. The first three rules involved markets for student loan servicing, debt collection, and consumer reporting.

MainStory: TopStory CFPB DoddFrankAct

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