By Benjamin Goad - 04/15/14 04:14 PM EDT
The Consumer Financial Protection Bureau (CFPB) is moving to revise regulations on international money transfers to give banks a five-year extension on a mandate to tell consumers exactly how much they stand to shell out in third-party fees.
Proposed revisions announced Tuesday update the watchdog agency’s 2013 rule meant to protect people who send remittances to other countries from exposure to hidden and exorbitant fees.
“It is critical that we are able to protect consumers who send money abroad and that we preserve access to such services,” CFPB Director Richard Cordray said. “Today’s proposal would allow banks and credit unions to have more time to resolve certain implementation challenges while maintaining these important, new consumer protections.”
The rule, already subject to two previous revisions, generally requires banks and other companies in the money transfer business to clearly disclose fees they charge, as well as taxes and exchange rates.
They also allow people to cancel most transfers within 30 minutes at no cost and report errors to the company within 180 days.
Dodd-Frank allowed federally insured financial institutions, like banks and credit unions, to estimate fees and exchange rates in cases when they could not determine exact amounts. That exception was due to expire in July of next year.
The revisions announced Tuesday extend the compliance deadline for exact disclosures by an additional five years.
The extension follows pleas from banks, which said current market conditions make it impossible to know exact fees for certain transactions.
“Without the exemption, these insured institutions report that they would be unable to send some transfers to certain parts of the world that they currently serve,” according to the CFPB.
The CFPB will accept comments on the proposal for 30 days before final language is issued.