MoneyGram Settles Lawsuit with $250,000 Fine

By Jonathan Stempel

NEW YORK (Reuters) – MoneyGram has agreed to pay a $250,000 fine to settle a lawsuit filed by New York State regarding its remittance transfers. This settlement comes two months after the U.S. Consumer Financial Protection Bureau (CFPB) withdrew from the civil case.

The agreement, announced on Monday by New York Attorney General Letitia James, addresses allegations that MoneyGram violated a 2013 federal rule aimed at facilitating money transfers to friends and family abroad.

Remittance transfers allow U.S. residents to send money electronically internationally. The lawsuit, filed in April 2022, claimed that MoneyGram caused delays in fund delivery, failed to inform senders about transfer statuses, and did not adequately resolve complaints.

While MoneyGram did not admit or deny any wrongdoing in the settlement filed in federal court in Manhattan, it includes provisions for improved disclosures regarding error investigations and states that customers will not be held liable.

MoneyGram, which was acquired by private equity firm Madison Dearborn Partners in 2023, expressed satisfaction in bringing closure to this longstanding issue. General counsel Cory Feinberg stated the matter involved no consumer harm.

The CFPB had retracted its involvement in the case in early April, attributing its decision to new leadership and a commitment to justice and fairness. Since January, the CFPB has reduced its enforcement activities amid changes under the Trump administration, which included significant staff terminations.