Vacated MoneyGram Case Will Hurt the World’s Most Vulnerable Populations
MoneyGram’s repeat offenses hurt immigrant communities and older populations
By Christine Chen Zinner
This week, the Trump administration withdrew a 2022 Consumer Financial Protection Bureau (CFPB) lawsuit against MoneyGram for its persistent failure to comply with consumer protection laws by failing to promptly deliver transfers, resolve disputes, and implement policies to comply with the law. The Trump CFPB’s refusal to hold MoneyGram accountable for its repeated and ongoing unlawful behavior is part of a pattern of willfully ignoring lawbreaking and letting financial scofflaws off the hook.
The Trump CFPB has already forgiven and returned the fine paid by a racist redliner. It has refused to enforce predatory lending laws. And the capitulation in the MoneyGram case is another in a long line of consumer protection cases abandoned by the CFPB that amount to corporate pardons for big banks, mortgage lenders, student loan companies, and other predatory lenders. The Trump CFPB’s recent withdrawal from its enforcement action against MoneyGram once again shows the Trump administration would rather work against everyday people instead of serving them. While New York is still pursuing the case, the Trump CFPB’s departure may leave everyone else around the country without relief for years of delayed remittances and other repeat offences.
MoneyGram is one of the world’s biggest money transfer companies, which provide wire transfers for utility bills or overseas remittances. People in the United States send nearly $80 billion to family and businesses overseas and the recipients of these funds need prompt access to the promised funds. Some of the most financially vulnerable people — mostly lower-income immigrant workers — lose $15.4 billion in hidden exchange rate markups when they send remittances to their families overseas. Customers are protected by the CFPB’s 2013 remittance rule that requires money transmitters to disclose when the transferred funds will be available, transparent pricing including fees and exchange rates, and how customers can get problems addressed.
MoneyGram consistently and repeatedly failed to transfer remittances on-time and as promised. For a decade between 2013 and 2022, MoneyGram repeatedly failed to provide accurate funds availability dates, refused to investigate complaints within three months, and did not remedy errors and return fees as required. When it missed deadlines and when transfers did not come through, MoneyGram failed to investigate and tell people what happened to their transactions as required by law. MoneyGram directed employees to close delay and error complaint files without investigations, remedies, or determinations of whether a delay or error occurred. And for years the company failed to implement procedures to address missed deadlines and resolve complaints about missing money.
The Trump CFPB’s actions to vacate its case against MoneyGram once again signals that it would rather side with billionaire private equity investors, like Madison Dearborn (who acquired MoneyGram in 2023) over everyday people. Letting companies exploit and ripoff immigrants is part of the administration’s xenophobic and racist anti-immigrant rhetoric and policies, including the unlawful disappearing and deportation of people. Failure to vigorously enforce and pursue this case gives a green light to MoneyGram and other remittance providers that it’s acceptable to routinely and persistently deceive customers, delay transfers, freeze customer accounts without resolution.
This case is just one of many others against MoneyGram, including ones involving processing thousands of transactions known to be linked to an international fraud scheme that targeted older populations and other vulnerable groups. Despite thousands of complaints from the defrauded, MoneyGram failed to fire agents they knew were involved in these scams and allowed the fraud to grow from 1,575 reported instances in 2004 to 19,614 by 2008.
The Trump CFPB’s surrender in this case — and many others — sends a clear message to financial predators that they can rip-off their customers and violate consumer protection laws with impunity.
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