The Consumer Financial Protection Bureau has amended its January consent order against money transfer platform Wise, shrinking the nearly $2.5 million penalty imposed over remittance violations.
The amended consent order issued Thursday and signed by Acting Director Russell Vought requires the London-based fintech's U.S. unit to pay $45,000 to the CFPB — down from the $2.025 million it was ordered to pay on Jan. 30.
However, the CFPB noted that Wise must still set aside approximately $450,000 in a segregated account as redress for affected consumers. A Wise spokesperson confirmed the fintech has voluntarily refunded $450,000 to those affected but declined to comment on the amended consent order.
The bureau, under former director Rohit Chopra’s stewardship, alleged that the fintech engaged in “illegal remittance practices,” including advertising inaccurate fees and failing to disclose exchange rates properly. A CFPB probe found that Wise misled customers in the U.S. about its ATM fees and failed to refund remittance fees in the required timeframe after the money customers sent did not arrive on time.
“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” Chopra said in a statement in January. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”
Wise has about 3 million U.S. customers, the CFPB said in a Thursday release related to the matter. The federal agency also noted in the order that Wise U.S. unit had about $157.3 million in remittance transfer and prepaid account services revenue between April 2022 and March 2023.
Wise executives on Wednesday signed a stipulation of the amended consent order without admitting or denying any of the bureau’s findings. By consenting to the stipulation, the fintech waived the right to seek any administrative or judicial review of the amended consent order, according to the document.
“This Amended Consent Order and the accompanying Stipulation supersede any prior oral or written communications, discussions, or understandings,” the CFPB said.
The bureau has ordered Wise to create and implement a comprehensive compliance plan designed to ensure that the fintech’s remittance and prepaid account services comply with all applicable laws and regulations, and keep the company’s board updated on the status of compliance actions.
Wise must submit a comprehensive written plan detailing the redress offered to the affected consumers to the enforcement director. The director can approve the plan or ask Wise to revise it, and Wise must carry out the steps and recommendations mentioned within the deadlines.
The bureau requires Wise to create and retain all documents and records necessary to demonstrate full compliance with the plan, and each provision of the amended consent order.
The CFPB’s revised penalty is part of its ongoing agenda to adjust or eliminate Biden-era actions.
Since February, Vought has dismissed around 18 lawsuits and three civil investigative demands. Among the 21 dismissals or withdrawals of the 38 pending enforcement actions, 19 cases were initiated by Chopra, American Banker reported.
“The more we uncover at CFPB, the more we see how this agency was weaponized against targeted Americans,” Vought said in a statement in March when the bureau asked a federal judge to vacate a settlement with Townstone Financial and return $105,000 to the mortgage firm accused of redlining.
