[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4049 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  2d Session
                                H. R. 4049

_______________________________________________________________________

                                 AN ACT


 
  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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Money Service Business Act of 
2008''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (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.
            (2) Those services include domestic and international funds 
        transfers, check cashing, money order and traveler's check 
        sales, and electronic bill payments.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (9) These State and Federal regulators have committed to 
        coordinate their supervision and enforcement of such money 
        services businesses obligations.
            (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.
            (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.

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:
            ``(4) Money transmitting business accounts.--
                    ``(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--
                            ``(i) a certification submitted by the 
                        money transmitting business that meets the 
                        requirements of paragraph (5)(A); or
                            ``(ii) in the case of an agent of a money 
                        transmitting business--
                                    ``(I) the certification required 
                                under paragraph (5)(B); and
                                    ``(II) a certification from the 
                                business that the named agent is 
                                authorized to act as the principal's 
                                agent.
                    ``(B) Penalties.--
                            ``(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.
                            ``(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.
                    ``(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.
                    ``(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.
                    ``(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).
            ``(5) Paragraph (4) certification.--
                    ``(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:
                            ``(i) The business is in compliance with 
                        paragraph (1) and regulations prescribed by the 
                        Secretary under such paragraph.
                            ``(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).
                            ``(iii) The business is licensed or 
                        registered as a money transmitting business by 
                        each State--
                                    ``(I) within which the business 
                                operates as a money transmitting 
                                business; and
                                    ``(II) which requires such 
                                licensing or registration.
                            ``(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.
                    ``(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:
                            ``(i) The agent is an agent of a money 
                        transmitting business that meets the 
                        requirements of clauses (i) through (iv) of 
                        subparagraph (A).
                            ``(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).
                            ``(iii) The agent--
                                    ``(I) operates as an agent for a 
                                money transmitting business pursuant to 
                                a written contract;
                                    ``(II) will act honestly and in 
                                compliance with all applicable laws 
                                when conducting any business as an 
                                agent for a money transmitting 
                                business; and
                                    ``(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.
                            ``(iv) The agent is licensed or registered 
                        as a money transmitting business, or as an 
                        agent of such business, by any State--
                                    ``(I) within which the agent 
                                operates as an agent of a money 
                                transmitting business; and
                                    ``(II) which requires any such 
                                licensing or registration.
                            ``(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).''.
    (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.

            Passed the House of Representatives July 22, 2008.

            Attest:

                                                                 Clerk.
110th CONGRESS

  2d Session

                               H. R. 4049

_______________________________________________________________________

                                 AN ACT

  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.