REMITTANCE TRANSFER RULE CONSENT ORDER

On August 27, 2019 the Consumer Financial Protection Bureau (CFPB) announced a settlement with Maxitransfers Corporation (Maxi), a company that serves consumers looking to send money overseas. This is the CFPB’s first enforcement action based on violations of the Remittance Transfer Rule, which implements the Electronic Fund Transfer Act (EFTA).

Maxi provides remittance transfer services from more than 1,600 third-party locations in the U.S., such as grocery stores and pharmacies, to over 19,500 payment locations in Mexico, Central and South America.  The company is headquartered in Irving, Texas.  From October 2013 until May 2017, Maxi sent approximately 14.5 million remittance transfers for consumers in the U.S.  For each transfer, Maxi was required to provide consumer protection disclosures and to comply with other requirements of EFTA and the Remittance Transfer Rule.

According to the consent order, the CFPB found that Maxi violated:

  • The Consumer Financial Protection Act of 2010 (CFPA) by stating to consumers that it would not be responsible for errors made by its third-party payment agents when in fact the Remittance Transfer Rule makes Maxi responsible for the acts of the agent when the agent acts for the provider.
  • The EFTA and the Remittance Transfer Rule by using inaccurate language in disclosures and failing to maintain required policies and procedures to comply with error resolution procedures.

Under the terms of the consent order, Maxi must:

  • Pay a civil money penalty of $500,000;
  • Refrain from violating the CFPA by stating that it is not responsible for the acts of its agents; and
  • Take steps to improve its compliance management to prevent future violations of the CFPA, EFTA, and Remittance Transfer Rule.

 

A copy of the consent order is available here.

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