GAO Report Examines Effects of Proposed AML Legislation

The Government Accountability Office today published a report examining whether information that would be collected under a proposed Remittance Status Verification Act would assist federal agencies’ anti-money laundering efforts. The proposed legislation, if adopted, would require money transmitters and depository institutions to verify the legal status of remittance senders and impose a fine on those unable to provide proof of immigration. The report also examined whether the threshold at which money transmitters are required to report and track information funds transfers should be lowered from its current level of $3,000.

The report found that while large remittance providers generally did not object to a lower dollar threshold for information reporting requirements — as many voluntarily track transactions at lower dollar amounts — smaller providers could see increased operational costs if the compliance threshold were lowered. These costs would increase fees for senders, potentially driving them to send funds through less transparent channels. Additionally, many objected to the immigration status verification requirement, arguing that it may not be beneficial to AML efforts and could in fact cause senders to seek out alternative, less detectable channels for transmitting funds.