Admin calls for regulation of money transfer businesses in territory
The American Samoa Government is moving to regulate money transfer businesses in the territory, with proposed legislation submitted to the Fono.
The move by the Lolo Administration to regulate this growing industry comes years after lawmakers and others in the community have discussed creating some sort of regulatory body to oversee money transfer businesses, or “money services business (MSB)” in the territory.
What has been a concern to many lawmakers, who have also requested the government for a specific report, is how much money is being transferred out of American Samoa, instead of being kept locally to circulate and grow the economy.
Gov. Lolo Matalasi Moliga recently submitted proposed legislation to the Fono to establish by law, the “Money Services Business Regulatory Act”.
“Money service businesses (MSB) play an increasing role in providing financial services to the unbanked and self-banked communities across the United States,” Lolo wrote to Fono leaders.
“Currently, 49 states regulate MSBs, however they operate in the territory without any regulatory oversight.
“Due to the large amount of monies handled by these types of businesses, regulatory oversight is needed to ensure monies are handed properly,” said Lolo, adding that the proposed legislation regulates two types of MSBs: foreign currency exchanges; and money transmitters.
“Another reason for regulation is to enable money service businesses to open accounts with a local financial institution,” Lolo explained. “Finally, in order to help ASG carry out its vital services, this bill requires that a money transmitter collect a transfer fee on every money transmission transaction.”
The bill is to be introduced in the Fono when lawmakers reconvene Mar. 12 following a 4-week mid-session recess.
According to the US Internal Revenue Service (IRS), the federal Bank Secrecy Act (BSA) requires many financial institutions, including money services businesses (MSB), to keep records and file reports on certain transactions to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
An MSB is generally any person offering check cashing; foreign currency exchange services; or selling money orders, travelers’ checks or pre-paid access (formerly stored value) products; for an amount greater than $1,000 per person, per day, in one or more transactions.
A person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity. More detailed information online at: www.irs.gov or www.fincen.gov
Samoa News notes that highlighting the amount of cash that may be leaving the Territory, are two cases making their way through the court, concerning a highly visible MSB on island, Western Union. Two former WU employees are being charged with stealing and embezzlement from WU — they are alleged to have stolen thousands of dollars in cash that WU customers were sending to their families in China.