CFPB Issues Consent Order Against Money Transfer Company for Remittance Failures

On October 4, 2022, the Consumer Financial Protection Bureau (CFPB) announced that it has issued a consent order against a nonbank provider of a money transfer service for multiple violations of the Electronic Fund Transfer Act (EFTA), 15 U.S.C. § 1693 et seq., and its implementing Regulation E, 12 C.F.R. Part 1005, including that the company did not accurately disclose certain money transfer fees, exchange rates or the date the recipient would receive the funds.  The CFPB alleged in the consent order that, in addition to these violations, the company had deficient practices for enabling consumers to dispute erroneous transactions and receive a refund.  The consent order requires the company to pay a nearly $1 million penalty.

The CFPB’s action follows an examination of the company in 2020, which led to an investigation to determine whether the company had violated the Remittance Transfer Rule, 12 C.F.R. § 1005.30 et seq., which requires certain disclosures be provided to consumers who use ATMs or send funds electronically.  According to the consent order, the CFPB found that the company had violated the Remittance Transfer Rule in at least ten ways:

  • It “disclosed inaccurate ‘date available’ information to some senders on disclosures, stating a date that was not the latest date on which the funds would be available,” and its “point-of-sale receipts listed the availability date as the same date as the date of transfer.” Consent Order ⁋⁋ 17-18.
  • It “disclosed exchange rates . . . that invariably displayed an exchange rate of 0.00, which is inaccurate.” Id. ⁋ 23.
  • It “did not accurately characterize certain types of ‘Transfer Fees’ in pre-payment disclosures and receipts provided to senders.” Id. ⁋ 29.
  • Its “point-of-sale English and Spanish language prepayment disclosure templates” did not use the terms it was required to use when making required disclosures to consumers, or terms that were substantially similar to the required terms. Id. ⁋⁋ 34, 36, 38, 40.
  • Its “written disclosures . . . disclosed required terms in a font size smaller than eight point.”  Id. ⁋ 45.
  • It “repeatedly did not refund fees when a sender properly submitted an error notice alleging a date of availability error and [the company] determined that such error occurred.” Id. ⁋ 50.
  • In its “point-of-sale receipts, and its website and mobile application pre-payment disclosure and receipt, [the company] disclosed the exchange rate as a string of digits with no currency designation or indication of the particular currency the disclosed rate was being converted to or from,” and thus “did not clearly and conspicuously disclose the exchange rate.” Id. ⁋⁋ 55-56.
  • It “did not provide disclosures in English and the foreign language used by the sender to conduct a transaction or principally used by [the company] to advertise,” and “[i]n point-of-sale transactions that met the requirements for Spanish disclosures, [the company]’s agents only provided the disclosures in Spanish and not both required languages.” Id. ⁋⁋ 60-61.
  • It “did not obtain consumer consent prior to providing receipts in electronic form on its mobile application and website platforms.” Id. ⁋ 65.
  • It “did not have policies and procedures designed to ensure compliance with the Remittance Rule’s specific document retention requirements of § 1005.33(g)(2),” and its “policies and procedures also failed to account for [several other] provisions of the Remittance Rule.” Id. ⁋⁋ 71-73.

Further, the consent order alleges that the company violated Regulation E by failing to retain evidence demonstrating its compliance with the Remittance Transfer Rule’s error-resolution requirements, and that it violated the EFTA by including an improper waiver of consumer rights in its point-of-sale disclosures.  Id. ⁋⁋ 75-83.

This is the fourth CFPB enforcement action in the Chopra-era focused on purported violations of the EFTA, and the second action during the same time that specifically focuses on the Remittance Transfer Rule.