Short title

This Act may be cited as the

Money Service Business Act of 2008

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.

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.