On August 27, 2019, the Consumer Financial Protection Bureau (CFPB) announced its first enforcement action for violations of the Remittance Transfer Rule and Regulation E. The twenty-page consent order is with Maxitransfers Corporation (Maxi), a private nonbank headquartered in Texas that provides remittance transfers including international money transfers and bill payment services. The order describes several Regulation E and Remittance Transfer Rule violations including how Maxi failed to maintain written error resolution policies and procedures. Also, in about 14.5 million remittances processed by Maxi, it provided a disclosure that stated in part “…Maxitransfers Corp. is not responsible for errors made by banks or payment agents, or for any other reasons out of our control.” In fact, Regulation E and the Remittance Transfer Rule specifically set forth that remittance transfer providers are responsible for errors by their agents. Maxi was ordered to pay a civil money penalty of $500,000 and develop policies and procedures, and a compliance management system that ensure compliance with the Remittance Transfer Rule and Regulation E.

 

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.