I 111th CONGRESS 1st Session H. R. 4331 IN THE HOUSE OF REPRESENTATIVES December 16, 2009 Mr. Bachus (for himself, Mr. Gutierrez, and Mr. Tiberi) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend title 31, United States Code, to establish the Office of Money Services Business Compliance within the Department of the Treasury for the purpose of assuring compliance with subchapter II of chapter 53 of such title by money services businesses and such other duties as the Secretary of the Treasury may delegate, and for other purposes.

1.

Short title

This Act may be cited as the Money Services Business Compliance Facilitation Act of 2009.

2.

Office of Money Services Business Compliance established

(a)

In general

Subchapter I of chapter 3 of title 31, United States Code, is amended by inserting after section 313 the following new section:

314.

Office of Money Services Business Compliance

(a)

Establishment

There is hereby established the Office of Money Services Business Compliance (hereafter in this section referred to as the Compliance Office) as an office within the Department of the Treasury. (b)

Management

(1)

In general

The management of the Compliance Office shall be vested in a Director of Money Services Business Compliance (hereafter in this section referred to as the Director). (2)

Appointment

The Director shall be appointed by the President, by and with the advice and consent of the Senate, without regard to political affiliation and solely on the basis of integrity and demonstrated ability, and after consultation with the Chairman of the Board of Governors of the Federal Reserve System and the Comptroller of the Currency (or successor to any such individual with regard to bank supervisory authority), from among individuals who are specially qualified to serve in that position by reason of their education, training, and experience. (3)

Term of office

(A)The Director shall be appointed for a term of 5 years. (B)

Vacancy

A vacancy in the position of Director shall be filled in the manner the original appointment was made and any individual appointed to fill any such vacancy shall be appointed only for the remainder of the term in which the vacancy occurs. (4)

Removal

(A)

In general

Notwithstanding paragraph (3), the Director may be removed by the President at any time for good cause. (B)

Notice to the Congress

Upon the removal of a Director under subparagraph (A), the President shall promptly transmit a notice to the Congress of the removal together with a detailed explanation of the basis for the removal. (C)

Additional information

After providing notice under subparagraph (B), the President shall promptly respond to any request by any committee of the Senate or the House of Representatives for additional information or supporting documents. (c)

Duties

(1)

In general

The duties of the Director shall be to assure compliance by money services businesses with all applicable requirements of subchapter II of chapter 53, regulations prescribed under such subchapter and any other duty delegated by the Secretary under paragraph (3). (2)

Registration of money services businesses

(A)

In general

No person may operate a money services business without registering annually, to the satisfaction of the Director under this paragraph. (B)

Criteria

The Director, in consultation with the Secretary, the appropriate Federal banking agencies, and appropriate representative State officials, shall establish such procedures and criteria for registration, commensurate with the purposes of this section, as the Director determines to be appropriate. (C)

Registration as compliance

Any money services business registered to the satisfaction of the Director under this section shall be deemed to be registered with the Secretary for purposes of section 5330. (D)

Compliance

Any money services business, and any agent of a money services business, which fails to register and keep current a registration to the satisfaction of the Secretary under this paragraph shall, after the expiration of a 30-day period beginning on a notice of violation issued by the Director or an agent recognized by the Director, be subject to the same penalties as described in subsection (f)(3)(D) for a violation of an order issued under subsection (f)(3). (3)

Delegated functions

The Director shall carry out any other duty delegated by the Secretary of the Treasury to the Director. (d)

Rule of construction

No provision of this section shall be construed as limiting or pre-empting any State law or regulation or order concerning the regulation and oversight of the money service business industry, or agents of money services businesses, for purposes of consumer protection, safety and soundness, or the prevention of money laundering or the financing of terrorism. (e)

Recognition of self-regulatory organizations relating to money services businesses

(1)

Registration

The Director may, after notice and opportunity for comment and upon application by an organization representing money services business that meets such criteria as the Director may establish under this section, approve the registration of such organization as a self regulatory organization to carry out the duties of the Director under paragraph (1) with respect to the money services businesses represented by such self regulatory organization. (2)

Procedures and requirements for sro

The Director shall establish such procedures and requirements to become a self regulatory organization as the Secretary determines to be appropriate, including periodic reviews of such organization and reporting requirements by such organization to the Director to ensure the success of such organizations in ensuring compliance by the money services businesses, taking into account in particular the requirements of subsections (g), (h), (l), (m), and (n) of section 5318 and section 5318A. (3)

Withdrawal of registration

(A)

In general

After notice and opportunity for hearing, the Director may withdraw the registration of any self regulatory organization previously approved under this subsection. (B)

Notice to the Congress

Upon the withdrawal of the registration of any self regulatory organization under subparagraph (A), the Director shall promptly submit a notice to the Congress of the withdrawal together with a detailed explanation of the basis for the withdrawal. (C)

Additional information

After providing notice under subparagraph (B), the Director shall promptly respond to any request by any committee of the Senate or the House of Representatives for additional information or supporting documents. (4)

Requirements for rules enforced by self regulatory organization

The Director may establish minimum requirements for— (A)rules established by any self regulatory organization for members regulated by the organization; (B)enforcement procedures and enforcement activities by self regulatory organization, with respect to the enforcement of the rules referred to in subparagraph (A); and (C)requirements established by a self regulatory organization for withdrawal of membership of any noncomplying member, monetary penalties, and the removal of officers and employees of a noncomplying member business. (5)

Notice requirements

The Director shall establish procedures under which any self regulatory organization shall report to the Congress on a regular basis on— (A)violations by members of the organization of any law, any regulation prescribed by the Director, or any rule established by the organization since the date of the last report; and (B)any enforcement actions taken by the organization since such date. (f)

Powers

(1)

In general

For purposes of carrying out this section, the Director shall have all the powers of the Secretary under subsections (b), (c), (d), and (e) of section 5318. (2)

Rule of construction

No provision of this section shall be construed as limiting or superseding the enforcement authority of the Secretary under subchapter II of chapter 53 with respect to any violation of such subchapter. (3)

Cease and desist

(A)

Determination of violation

If the Director determines that any money services business, or any officer, director, agent, or employee of any such business, may be violating or may have violated this section, subchapter II of chapter 53, or any other provision of law or any regulation subject to the jurisdiction of the Secretary, or may be about to violate such section, subchapter, or provision of law or regulation, the Director may issue a temporary order or permanent order directing such money services business, and any officer, director, agent, or employee of such money services business— (i)to cease and desist from the violation or threatened violation; (ii)to take such action as is necessary to prevent the violation or threatened violation; or (iii)to take such action as is necessary to prevent, as the Director determines to be appropriate— (I)significant harm to consumers or the public interest; or (II)frustration of the ability of the Director to conduct the proceedings or to redress the violation at the conclusion of the proceedings. (B)

Timing of entry

An order issued under this paragraph shall be entered only after notice and opportunity for a hearing, unless the Director determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. (C)

Effective date of temporary order

A temporary order issued under this paragraph shall— (i)become effective upon service upon the respondent; and (ii)unless set aside, limited, or suspended by the Director or a court of competent jurisdiction, remain effective and enforceable pending the completion of the proceedings. (D)

Enforcement

Any money services business, and any officer, director, agent, or employee of such money services business, which violates any temporary or permanent order issued under this paragraph shall forfeit and pay a civil penalty of not more than $5,000 for each day during which such violation continues. (E)

Assessment

The Secretary shall assess any penalty in the same manner and subject to the same limitations as assessments under section 5321(b). (g)

Money services business defined

For purposes of this section, the term money services business has the meaning given to the term in section 103.11(uu) of title 31, Code of Federal Regulations, as in effect on the date of the enactment of the Money Services Business Compliance Facilitation Act of 2009. (h)

Authorization of appropriations

There is authorized to be appropriated to the Secretary for each of fiscal years 2010, 2011, and 2012 such sums as may be necessary to carry out this section, to be made available to the Director. (i)

Long-Term funding planning

Before the end of the 18-month period beginning on the date of the enactment of the Money Services Business Compliance Facilitation Act of 2009, the Director shall submit a report to the Congress containing recommendations for an appropriate long-term funding model for the Compliance Office to ensure the independence of the Compliance Office.

. (b)

Technical and conforming amendment

Section 111 of the Act approved on October 28, 1974 (12 U.S.C. 250), is amended by inserting the Director of Money Services Business Compliance, after Director of the Office of Thrift Supervision,. (c)

Clerical amendment

The table of section for chapter 3 of title 31, United States Code, is amended by inserting after the item relating to section 313 the following new item: 314. Office of Money Services Business Compliance. .