MTRA 2004 NEWS Archive

MTRA 2004 ANNUAL CONFERENCE A GREAT SUCCESS October, 2004 - MTRA's 2004 Annual Conference kicked off on September 13th in Denver, Colorado, with a record number of regulators and industry officials attending. More than 200 regulators and industry officials participated, representing 28 states and over 100 companies. In addition, the conference was attended by representatives of the federal government and a delegation of regulators from Mexico. The conference included an examiners school, separate meetings of regulators and industry and a vast number of presentations open to both regulators and industry representatives. This year's theme was entitled "Scaling New Heights: A Cooperative Approach to State Regulation" and the program provided an atmosphere designed to facilitate networking and exchange between both industry and regulators. Attendees were fortunate to have a number of distinguished speakers provide perspectives on topics such as global money transfers, anti -money laundering detection techniques and the importance of an independent audit in an anti-money laundering program, FinCEN's and IRS roles in implementation of the Bank Secrecy Act (BSA) and safety and soundness issues. MTRA members conducted annual business meetings and roundtable sessions on Monday morning and a successful Regulators School in the afternoon. The examiners school concentrated on BSA Implementation and Agent Monitoring. Regulators from Mexico and US federal government officials met with state regulators and discussed various issues relating to the BSA and the Patriot Act. Industry representatives conducted meetings during the afternoon moderated by Jorge Guerrero of Vigo Remittance and Ezra Levine, Partner in the Washington, D.C. law firm of Howrey Simon Arnold & White. The reception to open the conference was held Monday evening and well attended. On Tuesday morning, MTRA President J. Philip Goddard of Indiana opened the conference, and the participants were welcomed by Commissioner Richard Fulkerson, Colorado Division of Banking Denver, CO. The keynote speaker was Christina Gold, President of Western Union Financial Services, Inc who addressed the drivers behind the domestic and international money transfer business and the important strategic opportunities and issues her company and the industry are facing today. William J. Fox, Director of FinCEN, US Treasury and Maureen Sanders, National Program Manager, Anti-Money Laundering Program, Internal Revenue Service talked about state and federal cooperation in combating money laundering. Jerry LiVigni of the US Department of the Treasury, Office of Foreign Asset Control spoke on the benefit of working together with the states. Abdusalam Omer, Programme Manager, Governance & Financial Services, United Nations Program Somalia presented an update on the challenges and success of international money transfers in Somalia in the absence of central government. Carol Van Cleef, Esq, Partner Katten Muchin Zavis Rosenman Washington, DC moderated a panel that provided an insight into the failure of Cash Point. Bert Gonzales of Texas moderated a panel of state regulators who unveiled a joint examination program to be implemented by MTRA member states, and Ezra Levine, Partner Howrey Simon Arnold & White Washington DC entertained the audience with a discussion of regulatory and legislative challenges. The conference ended on Wednesday afternoon. Each year the conference enjoys the support of both regulators and industry participants and has the distinction of providing respected speakers with diverse perspectives on the industry and its activities. This year the conference attracted a record number of attendees, excellent speakers and was very successful from all angles. Here are some of the comments from evaluation forms: Great diversity in the program... MTRA did a great job dealing with the expanded level of industry and regulatory attendees...well organized...thank you for having excellent speakers and good topics. MTRA CORE EXAMINATION REPORT GIVEN TO STATE MEMBERS October 2004 - The MTRA core examination committee has successfully finalized the core pages that can be utilized for joint examinations and presented them and other examination documents at the business meeting of member states held during the MTRA 2004 Annual Conference in Denver last September. The committee members have been working diligently for about a year, working closely with different states and federal agencies to accomplish its mission. The members of the committee are:   Humberto Gonzalez, Texas, Chairman; Julio Prada, California, Vice Chairman; Marsha Massey, Colorado; Regina Stone, New York; John Bishop, Ohio; Christine Birkenmaier, Pennsylvania; Jose Saade, Puerto Rico; Greg Gonzales, Tennessee; Kwadwo Boateng, Washington. Humberto Gonzalez (Texas) informed the member states that he has the electronic version of the core pages and notification documents available to any member states that wishes to utilize them. Three committee members, including Chairman Gonzalez (Texas), Vice Chairman Julio Prada (California), and John Bishop (Ohio), participated in a panel discussion at the conference in Denver focusing on the committee's work relating to joint examinations. Conference attendees were briefed on the progress the committee has made regarding the core examination pages and future plans and goals for 2005. The committee will now focus on encouraging the member states that currently perform examinations to communicate with each other so that joint examinations can be scheduled beginning in the first quarter of 2005. A list of entities that operate in multi-states will be circulated amongst those member states that are interested in participating in joint examinations so that the states can consider which companies are suitable candidates for a joint examination. The list will be circulated to the member states by November. NCCUSL AMENDS THE MONEY SERVICES ACT October, 2004 - Amendments and expansion of the Uniform Money Services Act (UMSA) presented by the Money Services Committee of the National Conference of Commissioners of Uniform State Laws (NCCUSL) were approved by the conference last August at its annual meeting in Portland, Oregon. The amendments included an interstate reciprocity for states adopting the UMSA. The Money Services Committee, headed by Virgin Islands Commissioner Tom Bolt, met in Arlington, Virginia in March 2004 and in May by telephone and explored the possibility of amending the UMSA in light of anti-terrorist measures suggested by a federal agency. It also considered revisions of the UMSA in light of the enactment of the US Patriot Act, which expanded the definition of money services business to include "hawala" or underground banking. Several other suggestions were also considered, including interstate licensing reciprocity. Former MTRA president and currently director Nick Kyrus and MTRA president Phil Goddard represented MTRA as advisors. The Committee rejected a proposal to expand the UMSA to require the fingerprinting of money transmitters (employees and agents). A similar suggestion failed in New York State in 2002. A representative from US Treasury told the committee members that the Administration is not in favor of the proposal and did not want to impose an unnecessary burden on the industry and the states. The Committee also found the UMSA compatible with the U.S. Patriot Act and saw no need for major amendments. Although the UMSA was passed two years before the passage of the U.S. Patriot Act, it gives the states the ability to regulate effectively the entry of new money transmitters into the market place and to supervise their activities for both safety and soundness and anti- money laundering purposes. For example, the UMSA's definition of money transmission includes informal transfers, such as hawala and hundi and many other forms of "underground banking" and was not necessary to amend the definition. The Committee also considered a proposal to provide for an exemption from the licensing requirements for money transmitters operating on the internet if licensed in the home state. After considerable discussion, the proposal was rejected. However, the Committee agreed to propose interstate reciprocity for all money transmitters rather than just for internet transmitters. Since only Vermont adopted the UMSA, the interstate reciprocity provisions will not apply to other states. The approved amendments as well as the Uniform Money Services Act (UMSA) can be found at: http://www.law.upenn.edu/bll/ulc/ulc.htm#msba JAIL SENTENCE FOR UNLICENSED MONEY TRANSMITTERS News Photos June, 2004 - On June 10, 2004, the U.S. District Court in Alexandria, Virginia sentenced Sonia Fantina Villeda and Carlos Omar Gonzalez to 30 months and 24 months in jail respectively for operating a money services business in Virginia and Maryland without the required state licenses. Sonia Fantina Villeda was the principal and Carlos Omar Gonzalez was an employee of Villeda Express that attempted to conceal and export $206,307 in stuffed toy unicorns and alligator's at Washington, Dulles Airport to Guatemala. Jose Ronald Sandoval, Sr., a courier, was also charged and held in jail since his arrest on January 28, 2004. He was found guilty of knowingly smuggling more than $10,000 without reporting the currency to Customs authorities and deported to Guatemala. In was the second time this year a courier working for Villeda express was intercepted at Dulles Airport. Sonia Villeda agreed to forfeit the entire $206,307 to the government. This case was the subject of a grand jury indictment in Alexandria last March whereby Villeda, Gonzalez, and Sandoval pleaded guilty as charged. Both Virginia and Maryland laws require a money transmission license prior to engaging in the money transmission business. The case was investigated by US. Immigration and Customs Enforcement with assistance from state and federal agencies. MTRA APPOINTS ADMINISTRATOR The MTRA Board of Directors engaged the professional services of Shermer & Associates, Ltd. of Harrisburg, Pennsylvania for the position of administrator. Last year Susan D. Shermer, President of Shermer & Associates, assisted MTRA with the planning of the MTRA conference in Orlando, Florida. This year MTRA revised the contract to include the provision of day-to-day administrative services. Susan has many years of expertise in this area and will be welcomed addition to MTRA. Susan can be reached at Shermer & Associates, Ltd. 587 James Drive, Harrisburg PA 17112-2273; Telephone (717) 545-9991; FAX (717) 545-9247 sshermer@shermer-assoc.com; www.shermer-assoc.com MTRA ACTIVATES ANNUAL MEMBERSHIP FEE June, 2004 - The Board of Directors of the MTRA decided to introduce an annual membership fee to help pay for administrative expenses of the association. For the last fourteen years, MTRA suspended annual fees and relied on volunteers to run the affairs of the association. However, the growth of the money transmission industry and growing complexity required a commensurate regulatory response which placed a demand on MTRA for the provision of more services to its member states, such as training and coordination of regulatory responses. Recently, MTRA engaged the services of an administrator. The Board of Directors determined that there should be an annual fee for each State that maintains a membership in the association to fund rising administrative expenses of the association. The fee was determined to be the nominal amount of $500.00 annually and shall be billed annually in May and paid no later than July 15th. REMITTANCES: A GATEWAY TO UNBANKED IMMIGRANTS Fall 2004 - The OCC's Community Affairs Department recently released an edition of the Community Developments Insights which examines the role of banks in providing money transfer services and reviews the goals of banks in offering these products. It describes how banks can use these products to attract unbanked immigrants into the banking system and become providers of a variety of financial products and services that immigrants can use. It addresses some of the key risks and regulatory issues presented by bank involvement in these products, as well as structural and cultural barriers to the growth of bank remittance products. Although immigrants in the U.S. remit funds to countries throughout the world, this analysis addresses the Mexican market because it is the largest and where banks have focused most of their attention. The report can be accessed at: http://www.occ.treas.gov/cdd/Remittances1.pdf THE POWER OF PLASTIC: HOW BANKS ARE USING TECHNOLOGY TO REACH THE UNBANKED Fall 2004 - The Office of the Comptroller of the Currency recently released its Fall 2004 Community Developments newsletter focused on technology-driven products and services being offered by financial institutions to reach the unbanked. It can be accessed at: www.occ.treas.gov/cdd/fall04index.html. ARTICLES AND PAPERS ON MONEY TRANSMISSION You will find below a list of interesting articles and papers on money transmission. They are available on the internet. The information provided can be used in one of the search engines to locate the articles and download. ARTICLES ON MONEY LAUNDERING, STORED VALUE AND MONEY TRASMISSION 1. Article: EXAMINING THE INCREASE IN FEDEEAL REGULATORY REQUIREMENT AND PENALTIES: IS BANKING FACING ANOTHER TROUBLED DECADE? Author: John J Byrne, Douglas W. Densmore and Jeffery M. Sharp Publication: Capital University Law Review Citation: 24 Cap. U.L. Rev 1 2. Article: MONEY LAUNDERING AND WIRE TRANSFERS: WHEN THE NEW REGULATIONS TAKE EFFECT WILL THEY HELP Author: Flethcher N. Baldwin, Jr. Publication: Dickinson Journal of International Law Citation: 14 Dick. J. Int'l L. 413 3. Article: SPORTS GAMBLING IN THE CYBERSPACE ERA Author: Anthony N. Cabot Robert D. Faiss Publication: Chapman Law Review Citation: 5 Chap. L. Rev. 1 4. Article: THE ELECTRONIC FUTURE OF CASH: ESSAY "HOW TO REGULATE ELECTRONIC CASH: AN OVERVIEW OR REGULATORY ISSUES AND STRATEGIES" Author: Simon L Lelieveldt Publication: The American University Law Review Citation: 46 Am. U. L. Rev. 1163 5. Article: FINANCIAL INSTITUTIONS FRAUD Author: Sandra Gramman, Darren Nicholson & Andrew Szygenda Publication: American Criminal Law Review Citation: 37 Am. Crim. L. Rev. 551 6. Article: REGULATING ELECTRONIC MONEY IN SMALL-VALUE PAYMENT SYSTEMS Author: Randall Sifers Publication: Federal Communications Law Journal Citation: 49 Fed. Comm. L. J. 701 7. Article: NEW AND CONTINUING CHALLENGES IN FIGHT AGAINST MONEY LAUNDERING Author: Henry B. Gonzalez Publication: Fordham University School of Law Citation: Fordham Int'l L. J. 1543 8. Article: INTERNATIONAL MONEY LAUNDERING LAW ENFORCEMENT & AND THE US PATRIOT ACT OF 2001 Author: Andres Rueda Publication: Michigan State-DCL Journal of International Law Citation: 10 MSU-DCL J. Int'l L. 141 9. Article: THE NEW MONEY Author: Kerry Lynn Macintosh Publication: Berkeley Technology Law Journal Citation: 14 Berkeley Tech. L.J. 659 10. Article: THE ELECTRONIC FUTURE OF CASH Author: Walter A. Effross Publication: The American University Law Review Citation: 46 Am. U. L. Rev. 961 1 1. Article: STORED VALUE CARS AND THE CONSUMER: THE NEED FOR REGULATION Author: Mark E. Budnitz Publication: The American University Law Review Citation: 46 Am. U. L. Rev. 1027 12. Article: LEGAL ISSUES IN CYBERSPACE Author: John K. Halvey Publication: 1996 The Emory School of Law Citation: 45 Emory L. J. 959 13.Article: BANKING ON THE NET: EXTENDING BANK REGULATION TO ELECTRONIC MONEY Author: Catherine Lee Wilson Publication: Creighton L. Review 1997 Citation: 30 Creighton L. Rev. 671 14. Report: REMITTANCE SENDERS AND RECEIVERS: TRACKING THE TRANSNATIONAL CHANNELS Author: Roberto Suro Publication: The Pew Hispanic Center, Washington, D.C.