MoneyGram Backs Move To Strengthen US Anti-Money Laundering Laws


MoneyGram International is putting its muscle behind U.S. regulators’ proposal to tighten financial reporting required of financial institutions (FIs).

The Wall Street Journal reported that the money transfer company said that strengthened standards would help the industry do a better job of protecting customers from fraud and other illegal pitfalls. MoneyGram has already spent about $100 million since 2012 to improve its own compliance programs following allegations of consumer fraud, the Journal said.

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board had sought comment this fall on such a proposed rule, which would amend record-keeping and travel rule regulations under the Bank Secrecy Act (BSA) of 1970. The goal is to beef up anti-money laundering (AML) laws.

A proposed amendment would require FIs to collect, retain and transmit to other institutions certain information related to international transfers and transmittals of funds above $250, down from $3,000. This has raised concerns in the money transfer industry.

Since 2018, however, MoneyGram has actually required verification of all sender and receiver identities for every transaction exceeding $1. Executives at the Dallas-based company said tighter controls would help close gaps in compliance.

Right now, the Journal reported, the threshold for transactions in which customers’ information is collected and checked is applied inconsistently in the industry. Some companies, such as MoneyGram, simply set their limits below the required level, even while the rules vary from state.

“One of the keys that we need to do in this industry is … to get a more uniform standard,” said MoneyGram CEO Alexander Holmes. “It’s not going to allow the bad actors to basically shop around and avoid, say, somebody like us, who is going to be able to see the totality of their transactions, and then go to companies with weaker controls that are not going to be as effective.”

This fall (Oct. 30), MoneyGram’s earnings announcement said that its online D2C channel saw 111 percent year-over-year transaction growth.