HR 4049 EHRFSCommentsClose CommentsPermalink

To amend section 5318 of title 31, United States Code, to eliminate regulatory burdens imposed on insured depository institutions and money services businesses and enhance the availability of transaction accounts at depository institutions for such business, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Money Service Business Act of 2008’.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

The Congress finds as follows:CommentsClose CommentsPermalink





(1) Check cashers, money transmitters, and other legally authorized and regulated money transmitting businesses (also designated as money services businesses) provide a wide range of necessary financial services and products to customers from all walks of life, including the under-banked and urban communities.CommentsClose CommentsPermalink





(2) Those services include domestic and international funds transfers, check cashing, money order and traveler’s check sales, and electronic bill payments.CommentsClose CommentsPermalink





(3) Regulatory guidance issued by, and expectations of, the Federal banking agencies and the Secretary of the Treasury urge insured depository institutions to conduct reviews of money services businesses’ anti-money laundering compliance programs, placing such depository institutions in the position of quasi-regulators.CommentsClose CommentsPermalink





(4) Consequently, many insured depository institutions have refused or closed money services businesses’ accounts in order either not to incur the burden, risk or potential liability for undertaking a de facto regulatory function, or else to avoid supervisory sanctions for not exercising such oversight.CommentsClose CommentsPermalink





(5) This trend endangers the existence of legitimate, regulated money services businesses industry and the ability of such businesses to deliver financial services and products.CommentsClose CommentsPermalink





(6) Loss of depository institution accounts by money services businesses threatens to drive the customer transactions of such businesses underground through unregulated channels, including bulk cash smuggling or other means.CommentsClose CommentsPermalink





(7) It is critical to the interests of national security that transparency of money services business transactions be maintained by ensuring such businesses have a reasonable process to demonstrate to insured depository institutions the compliance by such businesses with anti-money laundering and counter-terrorism financing obligations.CommentsClose CommentsPermalink





(8) Money services businesses are subject to Federal money laundering and terrorist financing control programs and reporting requirements as enforced by State and Federal regulators, including the Secretary of the Treasury, which are authorized to conduct compliance oversight and to impose sanctions through licensing, registration or other powers.CommentsClose CommentsPermalink





(9) These State and Federal regulators have committed to coordinate their supervision and enforcement of such money services businesses obligations.CommentsClose CommentsPermalink





(10) Insured depository institutions and Federal banking regulators should be able to rely on a regulatory process for conducting oversight of money services businesses’ compliance with subchapter II of chapter 53 of title 31, United States Code, as well as on a process of self-certification by legitimate money services businesses that attest to such compliance.CommentsClose CommentsPermalink





(11) Accordingly, to eliminate regulatory burden imposed on insured depository institutions and promote access by money services businesses to the banking system and to give full recognition to Federal and State agency authority to supervise and enforce money services businesses’ compliance with anti-money laundering and counter-terrorism financing obligations and their implementing regulations, it is appropriate and necessary to provide for the self-certification process established pursuant to this Act.CommentsClose CommentsPermalink

SEC. 3. SELF-CERTIFICATION PROCESS FOR MONEY SERVICES BUSINESSES ESTABLISHED.

(a) In General- Section 5318(h) of title 31, United States Code, is amended by adding at the end the following new paragraphs:CommentsClose CommentsPermalink





‘(4) MONEY TRANSMITTING BUSINESS ACCOUNTS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A federally insured depository institution that maintains an account for a money transmitting business (as defined in section 5330(d)(1)) shall have no obligation to review the compliance of that business, or any agent thereof, with that business’s or agent’s obligations under this section, if the institution has on file--CommentsClose CommentsPermalink





‘(i) a certification submitted by the money transmitting business that meets the requirements of paragraph (5)(A); orCommentsClose CommentsPermalink





‘(ii) in the case of an agent of a money transmitting business--CommentsClose CommentsPermalink





‘(I) the certification required under paragraph (5)(B); andCommentsClose CommentsPermalink





‘(II) a certification from the business that the named agent is authorized to act as the principal’s agent.CommentsClose CommentsPermalink





‘(B) PENALTIES-CommentsClose CommentsPermalink





‘(i) CIVIL PENALTIES- A money transmitting business or an agent of any such business making a material misrepresentation in a certification referred to in subparagraph (A) shall be subject to the civil penalties prescribed under section 5321 without regard to whether such violation was willful.CommentsClose CommentsPermalink





‘(ii) CRIMINAL PENALTIES- A person who knowingly makes a material misrepresentation in a certification referred to in subparagraph (A) shall be subject to penalties prescribed under section 5322 without regard to whether such violation was willful.CommentsClose CommentsPermalink





‘(C) RULE OF CONSTRUCTION- No provision of this paragraph shall be construed as requiring any federally insured depository institution to establish, maintain, administer or manage an account for a money transmitting business or an agent of any such business.CommentsClose CommentsPermalink





‘(D) RELIANCE FOR INSURED DEPOSITORY INSTITUTIONS- A federally insured depository institution shall have no liability under this chapter for the failure of any money transmitting business or an agent of any such business to comply with any provision of this section and regulations prescribed under any such provision.CommentsClose CommentsPermalink





‘(E) FEDERALLY INSURED DEPOSITORY INSTITUTION DEFINED- The term ‘federally insured depository institution’ means any insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act) and any insured credit union (as defined in section 101(7) of the Federal Credit Union Act).CommentsClose CommentsPermalink





‘(5) PARAGRAPH (4) CERTIFICATION-CommentsClose CommentsPermalink





‘(A) MONEY TRANSMITTING BUSINESS- A certification by a money transmitting business meets the requirement of paragraph (4) if the money transmitting business certifies as follows, to the satisfaction of the Secretary:CommentsClose CommentsPermalink





‘(i) The business is in compliance with paragraph (1) and regulations prescribed by the Secretary under such paragraph.CommentsClose CommentsPermalink





‘(ii) The business maintains an anti-money laundering program covering all of the identified capacities through which the business acts as a money transmitting business that includes the components of the program specified in subparagraphs (A) through (D) of paragraph (1).CommentsClose CommentsPermalink





‘(iii) The business is licensed or registered as a money transmitting business by each State--CommentsClose CommentsPermalink





‘(I) within which the business operates as a money transmitting business; andCommentsClose CommentsPermalink





‘(II) which requires such licensing or registration.CommentsClose CommentsPermalink





‘(iv) The business is registered with the Secretary in accordance with section 5330, and regulations prescribed under such section, and remains in full compliance with such section and regulations.CommentsClose CommentsPermalink





‘(B) AGENTS OF A MONEY TRANSMITTING BUSINESS- A certification by an agent of a money transmitting business meets the requirement of paragraph (4) if the agent certifies as follows, to the satisfaction of the Secretary:CommentsClose CommentsPermalink





‘(i) The agent is an agent of a money transmitting business that meets the requirements of clauses (i) through (iv) of subparagraph (A).CommentsClose CommentsPermalink





‘(ii) If applicable, the agent appears on the list of agents of the money transmitting business maintained by the business pursuant to section 5330(c)(1).CommentsClose CommentsPermalink





‘(iii) The agent--CommentsClose CommentsPermalink





‘(I) operates as an agent for a money transmitting business pursuant to a written contract;CommentsClose CommentsPermalink





‘(II) will act honestly and in compliance with all applicable laws when conducting any business as an agent for a money transmitting business; andCommentsClose CommentsPermalink





‘(III) will immediately notify any federally insured depository institution to which the certification is submitted of the occurrence of any material change in the relationship of the agent with the money transmitting business, including termination or suspension, or the institution of any criminal or administrative proceeding commenced against the agent.CommentsClose CommentsPermalink





‘(iv) The agent is licensed or registered as a money transmitting business, or as an agent of such business, by any State--CommentsClose CommentsPermalink





‘(I) within which the agent operates as an agent of a money transmitting business; andCommentsClose CommentsPermalink





‘(II) which requires any such licensing or registration.CommentsClose CommentsPermalink





‘(v) The agent is not required to be registered with the Secretary as a money transmitting business pursuant to regulations prescribed by the Secretary under section 5330(c)(2).’.CommentsClose CommentsPermalink





(b) Regulations- The Secretary of the Treasury shall prescribe such regulations as the Secretary determines to be appropriate to implement the amendments made by subsection (a), in final form, before the end of the 120-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

Passed the House of Representatives July 22, 2008.CommentsClose CommentsPermalink

Attest:CommentsClose CommentsPermalink

Clerk.