The U.S. Consumer Financial Protection Bureau has just released a final rule that implements some protection against consumer credit transfers, as outlined in the Electronic Fund Transfer Act.
The rule is designed to protect U.S. citizens who send international transfers by ensuring that they know the cost of the transfer, the exchange rate, the amount the recipient receives, and when payment is completed.
While primarily designed to help regulators enforce the law, the rule is also examining the money transfer landscape as a whole, specifically citing both Ripple and the crypto asset XRP as potentially transformative cross-border payment solutions.
“The Agency has continued to monitor the money transfer market since the publication of the assessment report and notes that most of these developments continue …
Examples include the continued growth and expansion of virtual currency companies’ partnerships, such as Ripple, which provide both a payment messaging platform to support cross-border credit transfers and a virtual currency, XRP, which can be used to settle those transfers. to accomplish. . ‘
Under the last line, the CFPB believes that Ripple’s payment technologies and improvements to the old payment network Swift could give banks more control over how money is moved.
“To the extent that banks and credit unions rely more on closed network payment systems for sending money transfers and other cross-border money transfers, the Agency notes that this could lead to more standardization and more convenience for sending institutions to know exact covered third party fees and exchange rates .
The Agency also believes that greater acceptance of SWIFT’s gpi product or Ripple’s product suite in the same way could enable banks and credit unions to know the exact final amount that remittance recipients will receive before shipping. “
The new protection implemented by the CFPB was first added to the Electronic Fund Transfer Act as part of a series of sweeping Wall Street and bank reforms were implemented in 2010.
Before the reforms, cross-border credit transfers were largely outside the scope of federal consumer protection law.