House committee advances bill to tighten reporting, penalties for large cash transactions

At a House committee meeting, members voted to advance HB 297 as substituted, a bill that adds state-level reporting requirements and raises penalties for large or suspicious cash transactions handled by licensed money transmitters. The substitute requires reporting of certain cash transactions within specified time windows, retention of transaction records for multiple years and creates civil and criminal penalties for violations.

Representative Fiddler, the bill sponsor, said the substitute tightens the penalty schedule and increases the data required from businesses that handle cash transactions. "Any suspicious activity must be reported," Fiddler said, and records must be kept for five years. Fiddler added that fines collected under the measure would be deposited into the general fund and earmarked to a line item for the sheriff's education and training fund.

Amanda Bowden, speaking for enforcement staff, told the committee that financial institutions already keep transaction records and that subpoenas have been used to obtain money-transmitter records. "All financial institutions are required to keep records of every transaction," Bowden said, adding that licensees such as Western Union are responsible for producing records from their agents at retail locations.

Under the substitute's text described to the committee, licensees must report suspicious cash transactions of $2,000 or more within 30 days and retain the records for five years. Transactions totaling $10,000 or more with the same customer must be reported within 15 days and retained for four or five years as specified. Transactions of $1,000 or more must be recorded and maintained for five years from the date of the transaction. The substitute also references a provision making certain violations felonies (first offense class C, continued violations class B) and establishes a civil penalty of $5,000 for each day a violation remains outstanding. The substitute directs collected fines to the general fund with a line item for the sheriff's education and training fund.

Committee members asked whether the substitute would change routine bank reporting and customer-facing procedures; staff and the sponsor clarified that the substitute is targeted at cash transactions negotiated over the counter at licensed transmitters and does not change existing federal thresholds for bank reporting. The sponsor also said the substitute largely follows practices the state Securities Commission has used in investigations and is intended to give the commission additional authority to pursue bad actors.

The committee adopted the substitute and then gave HB 297 a favorable report as substituted. The motions to adopt the substitute and to give the bill a favorable report passed by voice vote with no recorded opposition.

The measure will move to the next step in the legislative process as a favorably reported bill from committee.