Newsroom
October 18, 2023
CFPB fines Chime $3M for app’s UDAAP, remittance issues
The CFPB Tuesday issued an order against Chime Inc. for deceiving consumers about the speed and cost of remittance transfers through its mobile app, Sendwave. The bureau ordered Chime to refund affected consumers nearly $1.5 million in fees and pay a $1.5 million penalty into the CFPB’s victims relief fund.
The bureau alleged that Chime, doing business as Sendwave:
- violated the Electronic Fund Transfer Act (EFTA) by requiring consumers to sign agreements that waived the consumers’ rights and limited Sendwave’s liability;
- committed unfair, deceptive, or abusive acts or practices (UDAAP) violations by deceptively advertising the speed of remittance transfers (claiming the transfers would be instantaneous or would occur “in seconds” when they actually took much longer) and cost of remittance transfers (specifically, Sendwave advertised no fees for transfers sent to Nigeria, which the CFPB says was false);
- violated Regulation E by failing to provide required disclosures and failing to track, investigate, and resolve errors; and
- violated Regulation E’s Remittance Transfer Rule by failing to timely provide a receipt within one business day of payment.
Remittance fees were included in the CFPB’s recent special edition of supervisory highlights on “junk fees.”
NAFCU will continue to monitor the bureau’ efforts and keep credit unions informed of developments that could impact operations.