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ASG to begin regulating money transfer businesses

Attorney General, Talauega Eleasalo Ale
License fees, transfer fees, PLUS $10,000 security deposit for each MTB license issued
fili@samoanews.com

Pago Pago, AMERICAN SAMOA — The government, under legislation signed into law Apr. 29 by then acting governor, Talauega Eleasalo Ale, who is also the Attorney General, will soon regulate money transfer businesses in American Samoa.

(Talauega was acting governor when Lt. Gov. Lemanu Palepoi Sialega Mauga left for an off-island meeting Apr. 25 and returned May 2.)

The legislation, which originated from the Lolo Administration, creates a new law: Money Service Business Regulatory Act.

American Samoa now joins 49 US states with similar laws.

“Money Services Businesses (MSBs) are becoming an increasingly important part of the financial system,” Talauega wrote in a letter to Fono leaders about signing the measure into law. “Regulatory oversight is needed due to the large amount of monies handled by them.”

According to Talauega, the Act provides the statutory framework needed for the Office of Financial Institutions (OFI) to properly regulate MSBs.

“Proper regulation is needed to enable money services businesses to open accounts with local financial institutions when in full compliance with local and federal law,” the Lolo Administration said last month.

The Act shall become effective six months after the end of the session in which it is passed, according to language of the Senate version of the bill, passed by the House on Apr. 12 - the last day of the First Regular Session.

The House had agreed with two Senate amendments made to the original language of the bill. Senators were concerned over the full authority “given to one person” — the Commissioner — to make decisions as stipulated in several provisions of the bill.

One particular provision states that, in cases involving extraordinary circumstances requiring immediate action, the Commissioner, “may take any enforcement action authorized by this chapter without providing a prior hearing...”

The Senate amended this particular provision to state that the Commissioner, “after meeting with the Treasurer, or his/ her designee, and the director of the Department of Commerce, or his/ her designee, and arriving at a unanimous decision, may take any enforcement actions authorized by this chapter.”

The second change made by the Senate is the 50% “of fees collected” being deposited to an enterprise fund earmarked for the operation of OFI, and the remainder being deposited in the general fund.

Lawmakers argued that the special enterprise fund would ensure that there is a provision of the law, so continued funds are made available to operate OFI, which is part of the Treasury Department.

ASG officials told Samoa News early this week that the government supports the Fono’s amendments, and acknowledged senators concerns.

Because there weren’t any public hearings on the measure, some business reps had inquired about registration fees and other fees to be paid to the ASG Treasury.

The new law provides — among other things — fee schedules for money transfer businesses, as well as those sending money transfers:

  1. It’s $100 to register a money transfer company with the OFI.
  2. They must also pay $1,000 per location and the renewal fee is $1,000 per location.
  3. An authorized agent license and renewal is $100.
  4. Each money transfer will also be charged — There’s a $5 base fee and $5 for transfers of less than $500; and for all transfers over that amount, the fee is 1% of the transfer amount. These fees must be submitted with quarterly reports.
  5. There is also a required $10,000 security deposit for each license issued to MSBs; however, a deposit is not required of MSBs that do not offer money transmission services.