HF4767

Purpose

• Establish verification requirements for foreign remittance transfers to ensure the sender is lawfully present in the United States.
• Create enforcement mechanisms, including penalties, audits, and a complaint process, to ensure compliance by licensees that handle money transfers to recipients outside the U.S.
• Update Minnesota law (amending 53B.50 and adding 53B.521) to strengthen oversight of foreign remittance transactions.

Main Provisions

• What a foreign remittance transfer is

  • The bill defines a foreign remittance transfer as a remittance transfer to a recipient located outside the United States, and ties this to how it is regulated under Minnesota law.

• Verification of the sender’s status

  • Licensees are prohibited from initiating a foreign remittance transfer unless they verify that the sender is lawfully present in the United States.
  • The sender must provide one form of documentation to verify lawful presence. Acceptable forms include: REAL ID-compliant driver’s license or state ID, valid unexpired U.S. passport, birth certificate, consular birth abroad documents, permanent resident card (including certain DHS forms and extensions), Form I-551-related documents, Forms I-94/I-94A with photo, DS-232 with DHS admission stamp, naturalization/citizenship certificates, work authorization documents, or certain foreign passports with accompanying DHS-validated admission documentation.
  • Documents used for verification must be legible and unaltered.

• Documentation and reporting requirements

  • Licensees must provide confirmation of verification on forms prescribed by the commissioner.
  • All required verification forms must be submitted to the commissioner no later than the 15th day of the month following the close of each calendar quarter.

• Records and accessibility

  • Licensees must maintain specified records for at least three years, including:
  • records of each outstanding money transmission obligation
  • general ledger and related asset, liability, income, and expense accounts
  • bank statements and reconciliations
  • records of penalties paid
  • last known names/addresses of licensees and authorized delegates
  • documentation showing verification of sender’s lawful presence
  • Records may be kept outside Minnesota if they are accessible to the commissioner with seven business days’ notice.
  • All records are open to inspection by the commissioner.

• Penalties and enforcement

  • Civil penalties apply to licensees who initiate a foreign remittance transfer in violation of the verification requirement: a penalty equal to 25% of the USD amount transferred (excluding licensee-imposed fees).
  • Penalties must be remitted to the commissioner quarterly with the required forms.
  • The commissioner can accept complaints from the public; individuals filing good-faith complaints are protected, while false or frivolous complaints can be a misdemeanor.
  • The commissioner must notify the licensee and direct payment of penalties when a valid complaint substantiates a violation.

• Audits

  • The commissioner must conduct random quarterly audits of licensees to check compliance.
  • Licensees must produce records used to verify lawful presence for each sender.
  • Audits are generally limited to once every two years unless a previous audit found noncompliance within the last six months.

Significant Changes to Existing Law

• Adds mandatory verification for foreign remittance transfers and ties this to civil penalties for noncompliance.
• Expands record-keeping requirements for licensees and broadens the scope of records subject to inspection.
• Creates and defines a formal process for complaint handling, enforcement, and quarterly reporting of penalties.
• Introduces ongoing, random quarterly audits to ensure compliance with the verification and record-keeping requirements.
• Integrates specific documentation standards and a defined list of acceptable forms of proof of lawful presence, including REAL ID, U.S. passports, birth certificates, DHS-related documents, and other DHS-approved verification documents.

Terminology and Key Phrases (Explicitly Mentioned)

• foreign remittance transfer
• verification
• lawfully present in the United States
• licensee
• records and record-keeping
• penalties (civil penalties)
• United States
• real ID (REAL ID)
• Driver’s license or identification card (license/ID) compliant with REAL ID
• bank statements and reconcilations
• general ledger
• authorized delegates
• documented verification forms
• commissioner (state regulator)
• audits (random quarterly audits)
• complaint process
• Form I-551, I-94, I-766 (EAD), I-688B, N-series certificates, DS forms, DS232
• 53B.50 and 53B.521 (Minnesota statutes)
• United States Code title 15 § 1693o-1
• CFR references (e.g., 45 C.F.R. 155.20)

Relevant Terms - foreign remittance transfer - verification of lawful presence - licensee obligation - compliant records (3-year retention) - penalty equal to 25% of transfer amount - commissioner enforcement - audits and inspection - REAL ID and other acceptable identification - documented proof of presence (birth certificate, passport, naturalization, DHS forms) - money transmission obligations - complaint and misdemeanor for false filings