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MoneyGram supports controversial money transfer compliance law

MoneyGram supports controversial money transfer compliance law

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MoneyGram, the giant international money transfer company, has emerged as a leading supporter of new disclosure laws.

MoneyGram supports controversial law

A few months ago, the Financial Crimes Enforcement Network and the Federal Reserve Board proposed new laws aimed at preventing money laundering. These rules will require all money transfer firms to collect and submit user data on all transactions above $250. Many firms have opposed these measures citing the high costs required to do that.

These rules have always been there. However, the main change in the new proposal is that the reportable amount will drop from $3,000 to $250. That will lead to higher compliance costs to many companies in the industry.

In a statement yesterday, MoneyGram said that it supported these rules. The firm said that the rules were necessary to protect customers against fraud and other activities. The CEO said:

“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.”

MoneyGram has been implementing these rules

There are other reasons why MoneyGram is supportive of these rules. For one, the firm has already been capturing this data since 2018. During this time, it required identifications for all people carrying out transactions bigger than $1. 

In the process, it has spent more than $100 million to boost its compliance and lost between 10% and 15% of revenue. 

Other players in the money transfer industry are against the proposals. For example,m the American Bankers Association (ABA) has called for the regulators to withdraw these rules. 

Recent reports have blamed money transfer firms like Western Union and MoneyGram for the rise in cybercrime. In a report released by the International Consortium of Investigative Journalits said that the two firms were used widely in aiding money laundering and international crime. The report said:

“The business model is predicated on moving cash fast, at a global scale, even when it means moving cash to that intent on carrying out murderous acts.”

Crispus Nyaga
Crispus Nyaga
Crispus is a financial analyst with over 9 years in the industry. He covers the stock market, forex, equities, and commodities for some of the leading brands. He is also a passionate trader who operates his family account. Crispus lives in Nairobi with his wife and son.