InfoBytes Blog
Senators urge CFPB to increase transparency on “Remittance Rule”
On October 19, a group of five Democratic senators sent a letter to CFPB Director Rohit Chopra requesting that the Bureau strengthen its rule regarding remittances transfers. According to the letter, though remittance providers are required to display the exchange rate and fees associated with a transaction, as required by a May 2020 final rule (covered by InfoBytes here), some providers collect additional revenue by increasing exchange rates. The senators explained that because of various “loopholes in the rules, remittance providers may technically comply with the CFPB’s remittance rule requirements while providing insufficient price transparency to allow consumers to make informed comparisons and choose the lowest-cost provider.” The senators requested that the Bureau “strengthen the remittance rule to ensure greater transparency” so that remittance providers are not able to “advertise ‘no-fee remittances’ while simultaneously inflating exchange rates without limit or without providing accurate third-party costs.” Additionally, the senators stressed that the Bureau “should require remittance providers to display mid-market exchange rates, while only collecting revenue through added costs, including fixed third-party fees, openly displayed as ‘total cost,’ as recommended by the Remittance Community Task Force.” The senators also recommended that the Bureau “rescind the permanent exemption for non-covered third-party fees and encourage the adoption of new technology that would provide transparent, pre-transfer cost information.”