Allowing the Federal Government to Rely on State Examinations of Money Business Services (H.R. 4386)

What is H.R. 4386?

(Updated November 14, 2014)

This bill was enacted on August 8, 2014

Would simplify oversight for money services businesses (MSBs) like Check 'n Go and Money Tree, enabling the Financial Crimes Enforcement Network (FinCEN) at the Department of Treasury to rely on state agency examinations of non-bank financial institutions such as money services businesses (MSBs), gaming establishments and jewel merchants.  Current law prohibits information sharing between federal and state agencies. Many immigrants in the U.S. rely on money services businesses to send money to relatives and friends in their countries of origins. 

Argument in favor

Provides financial institutions with greater certainty when working with MSBs. Reduces MSBs' regulatory burdens.

Argument opposed

Leaves it up to state agencies to report money laundering and/or terrorist financing activities to federal agencies.

Impact

If enacted, the bill would do away with MSBs' need to comply with both federal and state agencies, in addition to allowing state and federal agencies to share information about MSB transactions.

Cost of H.R. 4386

A CBO cost estimate is currently unavailable.

Additional Info

Media: 

Rep. Keith Ellison (D-MN) Press Release

Twin Cities Daily Planet: Somali-Americans and MSBs

Of Note: 

-MSBs are of especial importance to Somali-Americans, who rely on these institutions--also known as "hawalas"--to send money to relatives at home. Because Somalia has no central banking system, Somali-Americans' options are few. Many banks have stopped working with Somali-owned MSBs out of concern that the hawalas may help fund terrorist activities abroad.  It is estimated that there are more than 15 million Somali-owned MSBs in the United States currently.