Legislature(2007 - 2008)BELTZ 211
04/03/2007 01:30 PM LABOR & COMMERCE
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 116-UNIFORM MONEY SERVICES ACT CHAIR ELLIS announced SB 116 to be up for its second committee hearing and that it had a new CS. 1:36:55 PM SENATOR STEVENS joined the committee. SENATOR KIM ELTON, sponsor of SB 116, and his staff, Jesse Kiel, took the committee through the CS. SENATOR ELTON said the money transfer industry brought this to his attention. It provides regulations of the industry to induce good behavior. It has as its purpose, not only consumer protection and guaranteeing good services to people who use money transfers, but an element of homeland security. It allows better tracking of money that is transferred from the U.S. to foreign countries. 1:38:11 PM SENATOR BETTYE DAVIS joined the committee. SENATOR KIM ELTON said SB 116 is supported by consumer protection agencies and industry as well as the Department of Commerce, Community & Economic Development. It has a fiscal note of $80,000, but the fees collected from industry support the function and there is no general fund impact. 1:39:22 PM SENATOR BUNDE joined the committee. SENATOR STEVENS asked if the consumer would be paying more to cover the costs and what other impacts would be on the consumer if this bill passes. SENATOR ELTON said this should not cost the consumer anything, but if it does, it won't be much and in return the consumer gets a guarantee that the money they are transferring is going to get there and will have the value they expect it to have when it does arrive. CHAIR ELLIS asked Mr. Kiel to review the proposed CS to SB 116, Bannister 4/3/07 version K. 1:41:09 PM JESSE KIEL, staff to Senator Elton, reviewed version K, starting with the significant changes. The first was a question of interpretation that was brought to their attention by the Department of Commerce, Community & Economic Development staff who noted that the Uniform Money Services Act was subject to a possible interpretation that a money transmitter who originally gets his licensure in another jurisdiction that has adopted this uniform act might not have to pay fees in Alaska. According to the National Conference of Commissioners on Uniform State Laws as well as Mr. Levine, who testified last week on behalf of the large money transmitters, both of them said that was never their intent. So, this CS makes it clear that a money transmitter who gets his license by virtue of prior licensure in another state with this law is subject to the fees and all the requirements for filing and renewals and is potentially subject to investigation just as thought they were originally licensed in Alaska. It will be a much less cumbersome initial licensure process for them, because another state under comparable law has done the due diligence and the homework; however it won't be free ride. Changes were also made to the definition section to address that and make it very clear. 1:43:11 PM MR. KIEL said the significant changes to AS O6.55.810 begin on page 25, line 7. This section of the bill would require a notice to consumers anywhere money services are provided whether through an authorized delegate or directed by a licensee. A sign needs to go up showing the business is regulated and giving contact information for the department in case there are complaints or questions. Section 06.55.820 simply requires timely transmission. He explained that the industry has been trending more and more in recent years towards instant transfers where money is transmitted immediately to a bank account. This takes in to account the possibility the consumer might order a faster service through a money transmitter, but in the more traditional money transmission services, it's got to be available to the destination within 10 days. MR. KIEL explained that the receipt and refund portions work together and they say that a consumer needs to get on paper a statement that says how much money was transmitted, what the fees were and either what the exchange rate is if it's being transmitted and will be picked up in a different currency or if the exchange rate floats, it's got to say (on page 26, line 4) how that works. He said the bill doesn't interfere with how money service businesses choose to set their exchange rates - whether they are fixed or whether they float. "It simply says the consumer has got to know." 1:45:22 PM SENATOR BUNDE said 10 days seems like an inordinately long time for a transfer of funds. He asked how that time frame was chosen. MR. KIEL replied that both Hawaii and Washington states adopted that language. Many small money transmitters specialize in a particular region of the world and offer extremely competitive rates. Ten days should be the absolute outside extreme for any money transmission. Customers might be willing to accept a slower service for a lesser fee. SENATOR ELTON wanted to standardize this licensure as much as possible, so that people don't have to review individual state laws and deal with them differently. The 10 day time frame is a ceiling and in these days of hyperinflation, you do want it to happen as fast as possible. "It's not arbitrary; it's kind of what the standard is out there that other states have established." 1:47:57 PM SENATOR STEVENS moved to adopt CSSB 116(L&C), version K. There were no objections and it was so ordered. 1:48:39 PM SENATOR STEVENS moved to pass CSSB 116(L&C) from committee with individual recommendations and attached fiscal notes. There was no discussion or objection and CSSB 116(L&C) moved from committee.