H.R. 4049 helps ensure access to critical financial services
On July 22nd, the House of Representatives passed H.R. 4049, the “Money Services Business Act of 2007.” This legislation is critical to addressing the ongoing problem of bank discontinuance, the blanket termination of MSB bank accounts by traditional financial institutions in response to unclear guidance from federal regulators. Without such access, MSBs cannot conduct business.
Why is this important? There are currently millions of Americans who rely upon MSBs every year to conduct at least part of their financial business. A key element of this segment is the multi-line financial service center (FSC) industry. With more than 13,000 stores nation-wide, this industry provides millions of low- and moderate-income consumers with the financial services they need – many of which are not readily available at banks. These services include: check cashing, bill payments, money remittances, money orders, prepaid debit and phone cards, direct deposit, and small dollar, short term loans. Through new technologies, they even have expanded those financial opportunities with products that are virtual bank accounts that include savings options tied to a prepaid debit card. Today, there are currently approximately 30 million consumers who use FSCs to conduct more than 350 million transactions each year totaling an estimated $106 billion in products and services.
Passage of H.R. 4049 is essential to ensuring the long term access to basic financial services that millions of Americans take for granted. The bill enjoys strong support among a broad array of companies and trade associations in the financial services industry. As a sign of the strong bi-partisan Congressional support the bill enjoyed, it was passed by voice vote under the House “Suspension Calendar,” generally reserved for non-controversial bills. The bill now moves to the Senate for consideration.
Hopefully, upon its return from the summer recess the Senate will move expeditiously to pass this legislation so it can be signed by President Bush and enacted into law this fall.
