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June 26, 2001
Non-Bank Money Transmitters Now Regulated And Licensed By District Government
WASHINGTON, DC - Notice of a stringent, new licensing requirement affecting all non-bank money transmitters has been sent by the Department of Banking and Financial Institutions (DBFI) in the government's ongoing effort to protect District residents from unethical financial practices. The law, passed by D.C. City Council last year, regulates the 15 money-transmitting companies that collectively engage 426 authorized delegates predominantly located in low income District neighborhoods.
"Licensing money transmitters ensures that thousands of low-income and oftentimes non-English speaking residents are treated in a fair and equitable manner," said S. Kathryn Allen, Commissioner, Department of Banking and Financial Institutions. Non-bank transmitters serve over 24 million "unbanked" individuals that cannot afford bank fees, but need to conduct routine financial transactions. "Within the next few months, District residents can look for a new decal that all money transmitters and their agents will be required to display in a prominent location ," Allen stated.
Money transmitters, which includes among its ranks Western Union Financial Services, Inc., contract with private, neighborhood-based businesses that for a fee, sell money orders and wire money both nationally and internationally. DBFI, as the financial regulator for the District of Columbia, has authority to govern the way local money transmitter licensees conduct their business and to ensure the ethical treatment of money transmitter customers.
"As part of our regulatory efforts, we are also providing an avenue to register complaints about money transmitters," said Henry Scott, DBFI Bank Examiner. "If customers have a problem or believe they have been treated in an unfair manner, they can contact DBFI and we will investigate."
Money transmitter licensees must prove that their company is financially solvent before licensure is granted by DBFI. Specifically, each licensee must have a net worth of at least $100,000 and must be in good standing with the state of its incorporation. Additionally, a non-refundable fee in the amount of $500, plus $25 for each location must accompany each license application. A $50,000 surety bond, irrevocable letter of credit or other similar and acceptable security device must also accompany each license application to the Commissioner.
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