Under the auspices of the Dodd-Frank Act, the Federal Reserve released proposed disclosure rules for providers of remittances, which are designed to ensure greater consistency of communicating pricing information to consumers using the services.
The proposed rule would require that remittance transfer providers make certain disclosures to senders of remittance transfers, including information about fees and the exchange rate, as applicable, and the amount of currency to be received by the recipient. In addition, the proposed rule would provide error resolution and cancellation rights for senders of remittance transfers.
A series of model forms is presented on the Federal Reserve website for review. Also released was a summary of consumer research commissioned by the Federal Reserve, detailing how consumers choose remittance providers, typical information received by users from their providers, reactions to proposed disclosures and forms, and problem resolution.
The importance of consumer fees was illustrated in the consumer research:
The most important factors to participants when choosing a remittance transfer provider were the amount of fees charged, the convenience of locations for the recipient, and the convenience of locations for the sender. Some participants said that these factors could vary depending on the situation. For example, a low fee might be the most important consideration when sending routine remittances, but speed and reliability were more important when sending money for emergencies.
In spite of the importance of pricing, consumers conducting transactions in person did not always pay attention to the pricing details on their receipts. Online transfer users received more detailed data, and were more likely to retain it.
Click here to read more: http://www.federalreserve.gov/newsevents/press/bcreg/20110512a.htm
Click here to read the disclosures: http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110512_ICF_Report_Remittance_Disclosures_(FINAL).pdf
