WASHINGTON (Reuters) - The U.S. consumer watchdog on Thursday proposed extra scrutiny for big non-bank firms that provide international money transfers as part of ongoing efforts to oversee the industry.
The Consumer Financial Protection Bureau (CFPB) can already examine banks and credit unions that offer money transfers. The new proposal would let the bureau scrutinize non-bank firms that conduct more than a million foreign transfers each year.
That means the bureau would directly supervise about 25 of the largest providers of money transfers or remittances, including Western Union and MoneyGram International.
“Today’s proposed rule would help us provide oversight across the entire market so consumers get the protections they deserve,” CFPB Director Richard Cordray said in a statement.
The 2010 Dodd-Frank law, which created the bureau, allows the CFPB to send its examiners into banks and credit unions, as well as larger non-bank financial firms.
The bureau must define what it considers to be larger participants in certain markets before it can directly oversee non-bank firms. It has done this for student loan servicers, debt collectors and consumer reporting agencies so far.
The bureau said Thursday’s proposal would allow it to examine larger money transfer firms for compliance with new remittance rules that went into effect last year.
Those rules require remittance providers to disclose information about fees and exchange rates, correct errors and give consumers a 30-minute window to cancel transactions.
Before the bureau began scrutinizing the industry, international money transfers were mostly exempt from consumer protection rules. Non-bank providers transfer about $50 billion each year through about 150 million individual transactions, the CFPB said.
Firms will have 60 days to comment on Thursday’s proposal.
Reporting by Emily Stephenson; Editing by Bernadette Baum