Consumers who send money internationally will still get the new protections created by a federal rule set to take effect later this year, or at least most of those protections.
That's because the final rule has been tweaked a bit to help facilitate compliance, according to the Consumer Financial Protection Bureau, the federal agency that promulgated the rule.
Tens of billions of dollars are transferred from the U.S. to foreign countries each year in transactions known as remittances. One example would be a wire transfer from a person in the U.S. to someone in a foreign country.
The revised rule still requires banks and other financial companies that process remittance transfers to disclose certain fees, taxes and the currency exchange rate that will apply to the transfer. However, a requirement that foreign taxes, and in some cases fees, imposed at the receiving end of the transfer also be disclosed will now be optional. If applicable, financial companies must include a disclaimer that such fees and taxes might apply.
The revised rule still gives consumers new cancellation rights and procedures to help resolve mistakes. However, if funds are deposited into the wrong account because the sender gave the company an incorrect account or routing number, and certain other conditions are satisfied, the financial services company will be required to attempt to recover the funds but won't bear the cost of those funds if the money cannot be recovered.
CFPB Director Richard Cordray said in a statement that the final rule maintains crucial new consumer protections while facilitating compliance for providers of remittance transfers.
The Credit Union National Association, a trade group that represents credit unions, said in a statement that the final rule gives credit unions and other remittance transfer companies added flexibility in disclosures for these transactions.
The rule will take effect Oct. 28 and will apply to most companies that offer remittance transfers, including banks, thrifts, credit unions and money transmittal companies.
Do you use these remittance transfers? What has been your experiences with them?
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