The Financial Technology Association (FTA) submitted a letter to the CFPB to encourage a solution to promote transparency and empower consumers in relation to cross-border and international payments. The letter reads in part:

The Financial Technology Association (FTA) appreciates the opportunity to raise an important policy issue and propose a solution that can benefit and empower millions of individuals in the United States and abroad who engage in international (cross-border) payments transactions. Consumers and small businesses are often unaware of the costs involved when sending or spending money abroad, in part due
to a lack of clear disclosure on the exchange rate they are paying to convert from US dollars into a foreign currency, or vice versa. The solution to this problem is simple: the CFPB and Congress should consider pro-consumer changes to the “Remittance Rule” and price disclosure standards in order to eliminate hidden fees and ensure consumers have complete information to make informed decisions.

The FTA is a nonprofit trade organization representing some of the world’s leading technology-centered financial services companies. We focus on informing tomorrow’s regulations, policy frameworks, and public understanding to safeguard consumers and advance the development of trusted, digital financial markets and services. This letter and our proposal are in-line with this mission and can help ensure better financial choice and outcomes for millions of impacted individuals.

More specifically, recent research revealed that American consumers and small businesses were charged $16.3 billion in fees when sending or spending money abroad in 2019, and more than half of those fees ($8.7 billion) were hidden in exchange rate markups that are commonly not clearly presented to users of payments services. Furthermore, only 18% of consumers correctly identified that there were fees baked
into the exchange rate they were offered when sending money abroad. This opacity impacts migrant workers, small businesses, service members, people buying property abroad, foreign exchange students, vacationers, and others, who do not understand the “hidden fees” they are being charged. Indeed, despite baking economic profits into inflated exchange rates, providers will commonly refer to such offerings a being “no fee.”

Access a PDF of the full letter here