New rules target money transfer companies

Western Union, MoneyGram and more than 20 other international money transfer companies are the target of new rules from the Consumer Financial Protection Bureau.

The CFPB announced Friday it is moving forward with plans to regulate non-banks like Western Union that let people send money overseas, oftentimes to help their families pay bills or to make purchases.

{mosads}The same rules already apply to banks and credit unions, but up to this point international money transfer companies have been exempt.

“Last year, our new protections for consumers sending money abroad took effect,” said CFPB Director Richard Cordray. “Today’s rule gives us oversight of the larger marketplace and allows us to ensure that consumers are actually receiving those protections.”

Money transfer companies will be required to disclose information about exchange rates and fees, when the money will be available to the person they are sending it to, and give senders 30 minutes to cancel a transfer, the CFPB said.

But the rules would only apply to a couple dozen larger money transfer companies that make more than 1 million international money transfers each year.

The CFPB estimates these companies process about $50 billion in transfers each year.

The CFPB proposed expanding the rules to money transfer companies in January. They go into effect on Dec. 1.

The rules stem from the Dodd-Frank financial reform law passed in 2010.