CFPB and NY AG File Suit Against Money Transfer Company for Alleged Violations of the Remittance Rule and NY Law

The CFPB and the New York Attorney General recently filed suit against a large money transfer company, alleging that the company failed to timely make international money transfers (remittance transfers) available to recipients; provided inaccurate data to consumers; and failed to address consumer complaints about their remittance transfers, thereby violating the Remittance Rule of the Electronic Fund Transfer Act (EFTA), the Consumer Financial Protection Act (CFPA), Regulation E, and New York Executive Law §63(12).  The CFPB alleges that it previously conducted an examination of the money transfer company at which time it identified violations and directed the company to take specific compliance actions, and that the company’s violations continued after that examination.

The complaint alleges that the money transfer company repeatedly failed to disclose an accurate date of availability for transferred funds.  It also alleges that the company failed to promptly investigate noticed errors; determine within 90 days if an error occurred; report the result of an error investigation to a consumer within the required period; provide a written explanation of findings or provide notice of the right to request documents related to the investigation when the money transfer company determined no error or a different error occurred; and provide fee refunds when required to remedy the errors.  Further, the complaint alleges that the company failed to develop and maintain proper compliance, error-resolution, and document retention policies.  The CFPB alleges that these actions violate the Remittance Rule, the CFPA, and, broadly, Regulation E.  The New York Attorney General alleges that these actions violate the CFPA and New York Executive Law § 63(12).

The relief demanded by the complaint includes permanent injunctions, monetary relief, civil money penalties, and attorney’s fees and related costs.