When it comes to moving your money, you’re covered under federal law.
Americans send some $133 billion a year to friends, family and businesses in other countries around the world, so says the Pew Research Center.
With so much at stake, here’s what you should know about the regulations in place to protect you — and your money — when sending money out of the US. And how we got here in the first place.
What is a money transfer?
Also called an international remittance, a money transfer is an easy way to send money to loved ones and businesses overseas.
Generally, you provide money to a bank or independent money transfer specialist, which then exchanges your money into your destination currency — sometimes padding the rate with a commission. It then sends your money to your recipient in another country.
Learn more about costs, rates and delivery in our guide to international money transfers.
Who regulates money transfers?
Things have changed since 2010, when Congress passed the Dodd–Frank Wall Street Reform and Consumer Protection Act in the fallout of 2008’s financial crisis. Until 2010, regulation was fragmented among consumer protection agencies whose terminology didn’t always agree.
Dodd–Frank immediately set to expand the 1978 Electronic Funds Transfer Act to include disclosures and procedures that protect consumers when sending, withdrawing or moving around their money.
Importantly, Dodd–Frank established the Consumer Financial Protection Bureau, which regulates the financial products Americans use every day: credit cards, loans — and even international money transfers. Today, the CFPB enforces compliance with the Remittance Transfer Rule that applies to international remittances of $15 or more.
What does the Consumer Financial Protection Bureau do?
The CFPB is an independent US government agency authorized by the Dodd–Frank Act of 2010 to protect consumers doing business with banks and credit unions, mortgage providers, payday lenders, foreclosure services, debt collectors and independent money transfer specialists.
Its priorities began with mortgages, credit cards and student loans but since expanded to other consumer financial products and services. In short, it provides protection from any financial institution — traditional or otherwise — you might come in contact with when moving around your money.
It not only regulates protections, but it also solicits and publishes consumer complaints to the public to help others make more informed financial decisions.
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What rights do I have as a consumer?
The CFPB’s Remittance Transfer Rule requires most banks, credit unions and independent financial services to provide you with clear, detailed information upfront and after any money transfer of $15 or more.
Before your money transfer
Before you agree to your money transfer, your provider must provide you with:
- The exact exchange rate you’ll receive.
- The total fees and taxes you’ll pay for your transfer.
- Fees you’ll pay to any overseas agent involved in the process.
- The total your recipient will receive on their end.
Your bank or provider is also required to disclose and define any important terms you don’t understand, how it will resolve any problems and how you can cancel your transfer.
After your money transfer
Your provider must provide you with:
- A receipt confirming your payment, expected arrival, instructions on your right to cancel and how you can report a problem.
- The right to cancel your transfer without penalty up to 30 minutes after you’ve initiated it, unless your money is picked up or deposited into your recipient’s account.
If you discover a problem with your transfer — your money isn’t received as promised, for instance — you have up to 180 days to report it for investigation. At that time, your bank or provider has 90 days to work through any problems and report its outcome. In some cases, you can get a refund or resend your transfer at no additional cost.
The CFPB under fireIn June 2017, the Trump administration proposed making good on its campaign promise to curb the Dodd–Frank Act and how the Consumer Finance Protection Bureau regulates financial industries overall based on what it considers an overreach of power.
Soon after, in September 2017, the State Education Department ended its agreements with the CFPB to share data on student loans, limiting the agency’s oversight into student lending.
Time will tell how far President Trump limits this watchdog agency’s regulatory oversight. But it doesn’t appear that the CFPB will go without a fight: In October 2017 — after five years of haggling with Congress — it finalized a rule that prevents rollover charges and refinancing on payday loans, much to the chagrin of the lending community.