MONEY LAUNDERERS' DELIGHT: A WELL-INTENTIONED CONGRESSMAN FILES A BILL THAT WOULD FACILITATE MSB MONEY LAUNDERING

It has been my experience that Congressional staffers are generally highly educated, and extremely bright . I have been wondering all week how those staffers working for a certain Midwestern Congressman ever allowed HR 4986 to be filed. The bill would allow money service businesses to engage in money laundering, with regulatory oversight stripped away. Doesn't anyone look at the practical, real-world consequences of proposed legislation any more ?

The bill, whose intention is to pull Federal regulators away from their campaign against the predatory payday lending industry, which has been known to charge up to 800% interest on small loans extended to needy consumers caught between paydays, who have an urgent need for funds, could result in MSBs   freely engaging in money laundering and terrorist financing. Here's the nightmare:

(1) The bill provides that financial institutions would be prohibited from "restricting or discouraging" the opening of accounts for MSBs that hold a valid license, and are duly registered as a money service business, OR have an attorney's opinion letter, attesting to the fact that the firm is operating within the law. This means that the banks must provide service to MSBs, if they seek to open accounts.

(2) Regulators would be severely restricted from investigating such MSBs.

Anyone with even a rudimentary knowledge of money laundering techniques knows that this proposed law opens a hole in anti-money laundering large enough to drive a truck, laden with a trillion dollars in criminal proceeds, through it. I understand that the Congressman believes that payday lenders are currently being unfairly targeted by Federal investigators and regulators, but open the gateway for MSB money laundering is not exactly the way to do it. Please review the bill yourself, and call your elected representative, to advise him that this bill could undo decades of AML/CFT legislation. It is an absurd response to the efforts of regulators and law enforcement to rein in a usurious, predatory industry. Frankly, payday loans should be abolished, Mr. Congressman, unless the lenders clean up their practices.