CFPB Issues Consent Order Against Nonbank Remittance Transfer Provider Following Findings of Remittance Transfer Rule Violations

An October 4, 2022 press release states that the Consumer Financial Protection Bureau (CFPB)  issued a Consent Order against a nonbank remittance transfer provider (hereinafter, “the provider”). The press release explains that the order was issued subsequent to an examination of the provider that the CFPB conducted in 2020. The examination, as the press release states, was meant to determine if the provider was engaged in practices that violate the Remittance Transfer Rule, a rule that  relates to electronic fund transfers and requires certain disclosures be provided to consumers who use ATMs or electronically send funds. 

According to the October 4 press release, the CFPB found that since the Remittance Transfer Rule took effect in 2013, the provider engaged in practices that violated numerous provisions of the Rule, including the Consumer Financial Protection Act of 2010 and the Electronic Fund Transfer Act (EFTA). Specifically, the October 4, 2022 Consent Order details that the provider failed to use proper terms, accurately disclose when funds would be available to recipients, exchange rates, and transfer fees, and  provide disclosures in both English and Spanish as required by the Remittance Transfer Rule. The Consent Order also states that the provider failed to refund fees after senders properly submitted error resolution requests, failed to obtain consumer consent prior to providing receipts in electronic form on its mobile application and website platforms, failed to develop and maintain required policies and procedures for error resolution and included an improper waiver of consumer rights in its disclosures per the EFTA.  

The Consent Order imposes a $950,000 penalty that the provider must pay the CFPB. The Consent Order also requires that the provider implement compliance provisions to improve its policies and procedures, error resolution practices, record retention, compliance management, training, and audit and monitoring function.