Tens of billions of dollars are wired from the US each year, typically to family members living abroad, Reuters reported.
The CFPB’s rules require that companies transmitting money disclose to each customer any fees, the exchange rate and the amount that will be paid out to the recipient in local currency, the Associated Press reported. The rules also stipulate that customers must be given 30 minutes to cancel a transaction and disputes about issues such as funds that do not arrive must be investigated by the company.
"People sending money to their loved ones in another country should not have to worry about hidden fees," Richard Cordray, the bureau's new director, said, according to Dow Jones Newswires. "With these new protections, international money transfers will be more reliable. Consumers will know the costs ahead of time and be able to compare prices. Transfer providers will also be held accountable for errors that occur in the process."
The rules will take effect in one year’s time, Reuters reported.
According to Dow Jones Newswires:
The World Bank estimates that the total volume of remittance transfers to developing countries reached $325 billion in 2010 and that the US is the largest remittance-sending country in the world. The majority of remittances from the US are sent to the Caribbean and Latin America, according to the Federal Reserve.