Bureau and NY AG sue MoneyGram

UPDATE: On April 7, 2025, the CFPB filed a Consent Motion to withdraw as a plaintiff, leaving the People of the State of New York as the sole plaintiffs in this case.


The Consumer Financial Protection Bureau (CFPB) and New York Attorney General Letitia James have announced they are filing a lawsuit against MoneyGram International, Inc. and MoneyGram Payment Systems, Inc.—one of the largest remittance providers in the U.S.—for systemically and repeatedly violating various consumer financial protection laws and leaving families high and dry. The lawsuit specifically alleges that the company stranded customers waiting for their money when it failed to deliver funds promptly to recipients abroad.

Dallas-based MoneyGram International, Inc. is a financial services company that enables consumers to send money, known as remittances. A significant portion of the company’s money-transfer transactions are initiated by immigrants or refugees in the United States sending money back to their native countries. The company’s reach is broad, operating in more than 200 countries and territories, and serving 47 million customers in 2021. The company is subject to multiple consumer financial protection laws, including the CFPB’s 2013 Remittance Rule [subpart B of Regulation E], which was written after Congress adopted a new set of legal protections to make remittance transfers more transparent and less risky in 2010. As one of the biggest players in the market, MoneyGram knew it had new laws to follow and that it had to change some of its ways of doing business. The company was also clearly subject to CFPB supervision after the Bureau began supervising the market in 2014.

The current action
Under the Consumer Financial Protection Act of 2010 (CFPA), the CFPB has the authority to take action against companies and people that violate federal consumer financial laws. The CFPB alleges that MoneyGram violated Regulation E and the Remittance Transfer Rule, which implement the Electronic Fund Transfer Act, and the CFPA. Specifically, the CFPB and New York Attorney General James allege that MoneyGram:

• Stranded customers waiting for their money: MoneyGram failed to transmit money as quickly as possible and held up funds unnecessarily, harming people who were relying on that money to pay for necessary living expenses. In addition, the company repeatedly failed to accurately disclose how long it would take to make funds available to the recipients abroad.
• Botched instructions to its employees on how to resolve disputes: MoneyGram failed to instruct or direct its employees on how to comply with laws on resolving disputes. The company also failed to report the results of its error investigations to consumers and failed to provide a written explanation of its findings to consumers.
  Neglected to develop and document policies and procedures: MoneyGram failed to put in place policies and procedures designed to ensure compliance with money-transferring laws. MoneyGram also failed to retain evidence of its compliance with certain error resolution requirements as required.

The complaint seeks monetary relief for harmed consumers, an injunction to stop future violations, and imposition of civil money penalties. The complaint is not a final finding or ruling that the defendants have violated the law.