Legislature(2007 - 2008)BELTZ 211

04/03/2007 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Heard & Held
Bills Previously Heard/Scheduled
Moved CSSB 116(L&C) Out of Committee
               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                                                               
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                                                               
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                                                               

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