By Tim Devaney - 01/23/14 07:41 PM EST
The Obama administration is looking to regulate international money transfer companies like Western Union and MoneyGram to ensure they are following new transparency rules.
The Consumer Financial Protection Bureau, which already regulates money transfers from banks and credit unions, announced plans Thursday to expand its authority to include as many as 25 nonbank financial institutions that let consumers send money overseas.
Financial institutions that offer money transfers are required to disclose information about exchange rates and fees, when the money will be available, and give consumers the opportunity to cancel a transfer within 30 minutes.
These remittance rules went into effect in October for banks and credit unions, but the CFPB wants to scrutinize other money-transfer companies to make sure they are also complying with the regulations. Under the new proposal, the CFPB would only look into companies that conduct more than one million international transfers each year.
The CFPB estimates nonbank money transfer companies process $50 billion in transfers each year.
The Dodd-Frank financial reform law created the CFPB and gave it the authority to regulate banks, credit unions and other financial institutions. So far, the CFPB has tackled new rules for student loan servicers, debt collectors and consumer reporting agencies.
Before it can move forward with these money transfer rules for financial institutions that aren't banks or credit unions, the CFPB must propose the rule and leave it open for public comment.