Federal legislation introduced to protect access to basic financial services

July 1, 2009

In mid-June, the Money Service Business Act of 2009 was introduced in the U.S. House of Representatives. H.R. 2893 is important legislation that will help ensure that millions of Americans will continue to have access to basic financial services for years to come. Money service businesses (MSB) are alternative financial service providers, such as check cashers, money transmitters and payday advance providers. Unfortunately, due to an ongoing problem of bank discontinuance – the unwarranted, blanket termination of MSB bank accounts by traditional financial services entities, like banks and credit unions, in response to misguided regulatory pressure – MSBs are facing a real threat to their ability to conduct business.

Why is this so important? Most Americans have ready access to financial services; they simply go to their bank or credit union to conduct their transactions. However, more than 30 million Americans rely upon alternative financial service providers either instead of or in addition to their bank to access the financial services they need.

As a result of these bank account closures, many businesses that serve these consumers must struggle to keep their doors open, since MSBs, like all businesses, depend on bank accounts to conduct their operations. Bank discontinuance has long-term consequences at the family, neighborhood and even national economic levels which is why enactment of the Money Services Businesses Act is so crucial.

H.R. 2893 is a rare bill, because it has the support of mainstream financial institutions and was introduced with bipartisan support from senior leadership of the House Financial Services Committee. It is identical to legislation that passed the House unanimously last year. Unfortunately, Congress adjourned before the senate could consider it.

The Money Service Business Act will help ensure that all Americans continue to have access to basic financial services, and that is why the Coalition for Financial Choice is a strong supporter of the bill. Please contact your U.S. Senators and Congressmen and urge them to cosponsor and vote for this important legislation.