The circular is part of the agency’s efforts to curtail junk fees and foster competition among consumer financial services companies, the CFPB said. The agency noted that it had issued a consent order against Chime in October 2023, because the company allegedly made deceptive advertisements about the cost and speed of its financial services.

“Consumers should not be paying junk fees on international money transfers that are advertised as free,” CFPB Director Rohit Chopra said in the statement. “The CFPB will continue to work with law enforcement to ensure companies don’t illegally burden families with fees or inflated exchange rates using false or misleading claims.”

The agency also warned that disclosing terms may not offer protection from agency action. “Remittance providers may be liable under the CFPA for deceptive marketing practices regardless of whether the provider is in compliance with the disclosure requirements of the Remittance Rule,” the release said.

The CFPB has been working to rein in deceptive practices pertaining to remittance fees. In a report released last October, the agency found that remittance companies had charged consumers fees without disclosing them, or failed to refund fees if the funds didn’t arrive at their destination on schedule. 

Besides the CFPB, other entities have focused on improving the remittance process for consumers. Last October, the international group of nations known as the G20 reiterated its aim to reduce the cost of remittances to 3% or less.

As the CFPB seeks to spur more competition among remittance providers to improve services, existing companies have been vying for more customers. Earlier this year, Remitly leaned into online advertising to reach more remittance customers. Plus, Visa and Western Union partnered in early March to let Western Union customers send funds to Visa cards.