Patriot Ledger Op-Ed: Sending money transfers abroad just got easier

For anyone in the Commonwealth with family and friends in other countries, sending money abroad often is done by money transfers.

According to Boston's Independent Newspaper Group, Massachusetts families sent more than $2 billion using international remittances in 2012. Many of these transfers are sent to friends and relatives who rely on this financial help to make ends meet and support their loved ones.

Although money transfers are used by millions of people across the country, until this week there were few protections in place for consumers who send money abroad electronically.

This meant that people could not be sure that the amount of money they were sending abroad would be the amount that was received, and there was little accountability if transfers were mismanaged.

Consumers who want to send an international money transfer typically start the process by going to a bank or a company like Western Union. The company will often charge the consumer a fee to send the money overseas. Prices vary a lot, from no-fee transfers to $53, according to a recent World Bank study. But comparison shopping is tough, and the lack of transparency has been a real problem. For consumers to get the best prices, they need to be able to see those prices in advance.

Now, new rules issued by the Consumer Financial Protection Bureau (CFPB) have gone into effect to ensure that people have the information they need before sending remittance transfers. The CFPB's new rules help consumers see prices and risks upfront so they can shop for the best deal. The rules also protect families from errors during the transfer process by making it clear who is responsible for ensuring transfers are completed properly.

When I was helping to set up the consumer agency as Assistant to the President and Special Advisor to the Secretary of the Treasury, I was proud to work on tackling the issues surrounding remittance transfers. I'm very pleased that these strong protections are now being implemented.

In addition to requiring companies that transfer money to provide additional information upfront, the rules also include a cancellation window following a transfer and grant refunds if agreements are not met. In addition, the rules make companies responsible for errors made by their employees and require them to investigate consumer complaints about transfer errors.

These new rules, which took effect this Monday, will apply to remittances of more than $15 sent by Americans to people in foreign countries.

People sending hard-earned money to loved ones abroad shouldn't get surprised by hidden fees and frustrated by errors that don't get fixed. These new CFPB rules will make the terms of remittance transfers clearer and add much-needed protections for consumers. Now, families across Massachusetts can be more confident that the transfers they send are reliable and secure and that their hard-earned money will reach relatives abroad.

This is good for people here in Massachusetts and good for their loved ones around the world.

Read the op-ed on the Patriot Ledger's website here.

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