Governor Signs Lieu Bill Protecting Consumers Who Transmit Money

Sacramento, CA – Governor Schwarzenegger today signed AB 1508 by Assemblymember Ted Lieu (D-Torrance). The bill protects consumers who use money transmission services to transfer money to foreign countries.

The contents of the bill represented years of discussion between regulators, industry and consumers to provide for an up-to-date business friendly bill containing key consumer protections. 

Assemblymember Lieu commented: “This bill is  a win-win for consumers and industry that offers consumer protections and also streamlines the regulatory process.”  Lieu continued, "It’s important that we have strong protections for those who send money abroad as they tend to be non-English speaking immigrants who are supporting their families back home." 

AB 1508 allows the Department of Financial (DFI) Institutions, the regulator for money transmitters, to take immediate action against agents for misconduct and violations of the law.  It also requires licensees to quarterly file with DFI a report of agent and branch office locations in the state and volume of funds transmitted from California.  Finally, it requires that money transmitters maintain enough cash-on-hand to cover all of the transmissions currently in the process.

Assemblymember Lieu pointed out "significant competition exists within the California market due to the large amount of money sent to Mexico and other countries and increased competition from banks and credit unions." 

California currently has 61 licensed money transmitters, which operate through over 13,000 agents at over 21,000 locations in California.   The average cost to send money to Mexico via a money transmitter is $12.  The cost to send money to other countries is somewhat higher.