Senate Joint Memorial 8004 — State of Washington, 67th Legislature, 2021 Regular Session

Summary

Senate Joint Memorial 8004 of the State of Washington 67th Legislature, 2021 Regular Session, by Senators Hasegawa and Saldaña, read first time 02/03/21 and referred to the Committee on Business, Financial Services & Trade. The memorial petitions the President and Congress about de-risking, in which financial institutions terminate or restrict business relationships with clients, and its effect on money transmitters serving underserved diverse communities. It prays that Congress pass legislation implementing strategies and recommendations that result from directives to the Government Accountability Office and the Treasury Department under the NDAA. It also asks that the legislation require financial institutions to disclose a specific reason when denying or closing an account.

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     S-0811.1

                           SENATE JOINT MEMORIAL 8004


     State of Washington        67th Legislature        2021 Regular Session

     By Senators Hasegawa and Saldaña

     Read first time 02/03/21.       Referred   to   Committee   on   Business,
     Financial Services & Trade.




 1       TO THE HONORABLE JOSEPH R. BIDEN, JR., PRESIDENT OF THE UNITED
 2   STATES, AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE
 3   HOUSE   OF   REPRESENTATIVES,   AND  TO   THE   SENATE   AND HOUSE   OF
 4   REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED:
 5       We, your Memorialists, the Senate and House of Representatives of
 6   the   State   of   Washington,   in   legislative   session  assembled,
 7   respectfully represent and petition as follows:
 8       WHEREAS, The State of Washington welcomes refugees and immigrants
 9   who bravely leave behind everything familiar to seek safety, build a
10   better life, and provide resources for loved ones in their country of
11   origin; and
12       WHEREAS, Approximately one in every seven Washington residents is
13   an immigrant and another one in every seven Washington residents is a
14   native-born U.S. citizen with at least one immigrant parent; and
15       WHEREAS, Many immigrants to Washington transfer money to loved
16   ones in their country of origin in the form of remittances, and money
17   remitted by migrants competes with international aid as one of the
18   largest financial inflows to developing countries; and
19       WHEREAS, Many immigrants have continued to try to send money to
20   their    families    despite   uncertain    and   changing   employment
21   circumstances throughout the COVID-19 pandemic; and
22       WHEREAS, The federal government needs to limit remittances that
23   present significant security risks, and the federal Bank Secrecy Act
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 1   and related Anti-Money Laundering rules (BSA/AML) impose due
 2   diligence,   record-keeping,   reporting,  and   compliance   program
 3   requirements on financial institutions with respect to remittances to
 4   foreign countries; and
 5       WHEREAS, Some of the countries to which immigrants to Washington
 6   want to remit money have little or no central banking infrastructure
 7   that makes compliance with BSA/AML rules difficult or impossible, and
 8   prevents immigrants from being able to remit money in a safe,
 9   reliable manner; and
10       WHEREAS, Financial institutions such as banks play a pivotal role
11   in facilitating commerce and enabling individuals to build financial
12   prosperity; and
13       WHEREAS, Many of the local or community-based money transmitters
14   that service underserved diverse communities in Washington have
15   experienced difficulty in obtaining or maintaining accounts from
16   traditional financial institutions and have seen their accounts
17   closed without explanation or justification, leaving underserved
18   communities without banking options; and
19       WHEREAS, Many financial institutions appear to be engaging in de-
20   risking, whereby they terminate or restrict business relationships
21   with clients or categories of clients in order to avoid, rather than
22   manage, risk; and
23       WHEREAS, De-risking has detrimentally impacted the ability of
24   smaller, Washington-based money transmitters to serve underserved
25   diverse communities, to the benefit of larger money transmitters that
26   operate on a nationwide basis; and
27       WHEREAS, De-risking also presents a threat to public safety, as
28   unbanked businesses often must store and transport large sums of cash
29   at great risk to owners and their employees; and
30       WHEREAS, The state of Washington has an interest in promoting
31   financial inclusion and in ensuring that every individual or business
32   operating in compliance with the law can access regulated financial
33   systems; and
34       WHEREAS, The federal National Defense Authorization Act (NDAA)
35   for fiscal year 2021 expresses Congress's sense that "anti-money
36   laundering, countering the financing of terrorism, and sanctions
37   policies must ensure that the policies do not unduly hinder or delay
38   legitimate access to the international financial systems for
39   underserved individuals, entities, and geographic areas;" and


                                     p. 2                         SJM 8004
 1       WHEREAS,   The  NDAA   directs   the  United   States   Government
 2   Accountability Office (GAO) to analyze financial services de-risking
 3   and report to Congress, and it directs the Treasury Department and
 4   others to review reporting requirements now in effect and propose
 5   changes to reduce unnecessarily burdensome regulation and to develop
 6   a strategy to reduce de-risking and related adverse consequences;
 7       NOW, THEREFORE, Your Memorialists respectfully pray that:
 8       (1) Congress pass and the President sign legislation implementing
 9   strategies and recommendations that result from directives to the GAO
10   and the Treasury Department under the NDAA; and
11       (2) Such legislation also include:
12       (a) Provisions giving federal banking regulators clarity on how
13   to improve examiners' ability to evaluate banks' BSA/AML compliance
14   as applied to money transmitter accounts;
15       (b) A requirement that financial institutions disclose a specific
16   reason when denying or closing an account; and
17       (c) Provisions to help financial institutions mitigate the cost
18   of due diligence required to comply with BSA/AML provisions impacting
19   money transmitters.

20       BE IT RESOLVED, That copies of this Memorial be immediately
21   transmitted to the Honorable Joseph R. Biden, Jr., President of the
22   United States, the President of the United States Senate, the Speaker
23   of the House of Representatives, and each member of Congress from the
24   State of Washington.

                                  --- END ---




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