Key takeaways:
- The US Consumer Financial Protection Bureau (CFPB) has asked a federal court to withdraw from its 2022 lawsuit against money transfer company MoneyGram.
- However, the New York Attorney General’s office will continue to pursue its claims against MoneyGram in the same case.
- The CFPB’s move to drop the case is part of a broader trend under the new administration to undo several Biden-era enforcement actions.
Introduction
In a significant development for the financial services industry, the US Consumer Financial Protection Bureau (CFPB) has requested a federal court to allow it to withdraw from a high-profile case against money transfer giant MoneyGram International Inc. The agency’s move comes as part of a broader effort by the new administration to reevaluate and potentially unwind several enforcement actions initiated during the previous presidency. However, the New York Attorney General’s office, which joined the CFPB in filing the lawsuit against MoneyGram in 2022, has decided to proceed with its claims, setting the stage for a intriguing legal battle.
Detailed Analysis
The CFPB and the New York Attorney General’s office sued MoneyGram in April 2022, alleging that the company had engaged in unfair practices by delaying money transfers and refunds to customers, leaving them in the dark about when their funds would arrive. The lawsuit, filed in the US District Court for the Southern District of New York, accused MoneyGram of stranding customers who were waiting for cash and failing to make adequate disclosures about the timing of transferred funds.
MoneyGram, one of the largest remittance providers in the US, faced allegations of violating consumer protection laws and causing significant financial hardship to its customers. The case garnered widespread attention, as it highlighted the potential vulnerabilities faced by individuals relying on remittance services, many of whom are from low-income communities or immigrant populations.
While the CFPB’s decision to withdraw from the case 1 has raised eyebrows, industry experts suggest that it aligns with the new administration’s broader efforts to reevaluate and potentially scale back certain enforcement actions initiated during the previous presidency. According to Reuters, the CFPB has dropped around a dozen Biden-era enforcement actions, creating a sense of uncertainty for financial firms that had grown accustomed to the agency’s aggressive stance under the previous leadership.
However, the New York Attorney General’s office, led by Letitia James, has decided to forge ahead with its claims against MoneyGram 2. This development sets the stage for a potentially high-stakes legal battle, as the state’s top law enforcement agency takes on the responsibility of holding MoneyGram accountable for its alleged misconduct.
For retail investors, the case’s outcome could have significant implications. A favorable ruling for MoneyGram could bolster investor confidence in the company and the broader remittance industry, while a decision against the company could lead to substantial fines, reputational damage, and potential changes in industry practices. Additionally, the case’s trajectory may provide insights into the broader regulatory landscape under the new administration, potentially influencing investment decisions across various financial sectors.
Conclusion
The CFPB’s decision to exit the MoneyGram case reflects a broader shift in regulatory priorities under the new administration. However, with the New York Attorney General’s office pressing forward, the legal battle is far from over. As the case unfolds, retail investors will be closely watching for potential implications on MoneyGram’s financial performance, industry practices, and the broader regulatory landscape. Regardless of the outcome, this case highlights the ongoing need for transparency and consumer protection in the rapidly evolving financial services sector.
References
1 Evan Weinberger (April 8, 2025). “CFPB Exits MoneyGram Remittance Suit While New York AG Remains”. Bloomberg Law. Retrieved [Current Date].
2 Evan Weinberger, Daniel Seiden (April 11, 2022). “MoneyGram Sued by New York and CFPB for Unfair Practices”. Bloomberg Law. Retrieved [Current Date].
3 Michelle Price (February 13, 2025). “Financial firms hated U.S. consumer watchdog, but rapid unraveling creates limbo”. Reuters. Retrieved [Current Date].
4 Reuters (April 8, 2025). “US CFPB asks to exit Biden-era case against MoneyGram”. Yahoo! Finance. Retrieved [Current Date].
