Credit unions and other institutions that allow money transfers abroad have to be more transparent about fees and exchange rates, according to a new regulation from the Consumer Financial Protection Bureau.
The financial institution must disclose fees, exchange rates and the amount of money that the recipient will receive, under the provisions of the regulation issued Friday by the CFPB.
The provision on disclosing how much the recipient will receive contains two exceptions. One is if the laws or transaction methods in the recipient’s country make it impossible to determine the amount; the other is a temporary exception – expiring on July 21, 2015 – for depository institutions that “cannot determine certain disclosed amounts’’ for reasons beyond their control.
The consumer will “generally’’ have 30 minutes after making a payment to cancel the transaction, according to the rule.
The bureau said in a statement that it would seek input to determine if it needs to make additional changes to the rule, which had been originally proposed by the Federal Reserve, including “setting a threshold that would minimize the impact of the rule on community banks, credit unions and other companies that do not normally process these transactions.’’
The CFPB was given jurisdiction overt the regulation of remittance transfers under the Dodd-Frank financial overhaul bill that Congress passed in 2010.
