JEFFERSON CITY — Two bills that target immigrants who send money out of the country are currently moving through the House and Senate.
House Bill 2412, sponsored by Rep. Ben Keathley, R-Chesterfield, and a similar Senate Bill 1124, sponsored by Sen. Nick Schroer, R-Defiance, seek to require financial institutions verify the immigration status of individuals sending electronic money transfers to recipients outside of the United States.
Financial institutions in the state would not be permitted to transfer money overseas if the sender is an immigrant lacking permanent legal status.
Currently, Keathley’s bill is moving through the House and has completed public hearing, and Schroer’s bill has been referred to the Insurance and Banking Committee.
Both bills stipulate violations would result in a penalty against the institution of 25% of the amount transferred and would be deposited into the Missouri Disaster Fund.
The Department of Commerce’s Division of Finance would also conduct random quarterly audits to ensure compliance beginning July 1, 2027.
Failure to comply with quarterly audits could result in the loss of all licenses administered by the Division of Finance, both bills note.
If the bills were passed, institutions that facilitate foreign remittance transfers would be required to keep documentation such as records of transmission, bank statements, documentation used to verify the sender’s legal status, name, date of birth and the address for at least three years.
Keathley’s bill faced concerns over data privacy and potential burdens on financial institutions and immigrants. Schroer’s bill has not yet had a public hearing.
Data privacy concerns
One of the largest concerns over the bill is on data privacy and a lack of a clear procedure that financial institutions can follow to verify residency. Witnesses at the hearing noted that financial institutions would be required to hold an increased amount of a customer’s personal information for a significant period of time.
Sage Coram, representing the ACLU of Missouri, cited a lack of clarity regarding the types of documents stored, how they are being stored and required data sharing between financial institutions and businesses.
“This bill would require lawful Missourians to provide additional, sensitive and personal information,” Coram said. “This would impact everyday Americans that are potentially stationed overseas, or people studying abroad or working abroad, or people that are simply contributing to relief, charity or faith efforts as world events unfold.”
Alex Eaton, representing Remitly, a Seattle-based money transmitter for international transfers, and the Electronic Transactions Association, a Washington-based nonprofit, said that storing the documents would put Missouri residents at risk.
“This requirement presents serious privacy concerns for Missourians seeking to transmit money,” Eaton said. “They would be required to carry with them and present private identifying documentation that could put their financial security or identities at risk should a bad actor intervene.”
Keathley said this should not be an issue as he believes much of this information is already collected by financial institutions.
“All of these financial institutions have all of your private data right now in order to verify that you are allowed to move money around,” Keathley said.
Burden on financial institutions
Eaton also shared concerns regarding the verification process of a sender’s residency status. He said that the potential fines for noncompliance are too high.
Eaton said the increased requirements placed on financial institutions are unrealistic, and when combined with potential penalties, will likely hurt small business owners.
Eaton added that financial institutions already have guardrails to prevent money laundering and illicit activity, but do not have a process to verify legal status. He said that financial institutions may push the costs of any fees or new guardrails onto customers and that the verification process would likely slow down all transactions.
Keathley believes these financial institutions already go through verifying processes for identity, and that the addition of an extra step for residency status would be a small requirement to add.
“The idea that it’s somehow burdensome to give someone your social security number, your birthday, all this identifying information, but not ask them to verify what your residency or citizenship status is silly,” Keathley said.
However, Eaton said that financial institutions already collect enough information from Missouri residents and that the added requirements are not necessary.
Currently, licensed money transmitters are regulated by the Financial Crimes Enforcement Network and enforce strict anti-money laundering and Know Your Customer laws to verify senders.
“We believe these provisions cover foreign transactions,” Eaton said. “Money transmitters are one of the most regulated industries in the financial sector through state and federal oversight.
While testifying at the hearing, Treasurer Vivek Malek provided figures on foreign remittances related to criminal activity and his own experience with the immigration system. Malek said in 2023, an estimated $4.4 billion in remittances sent to Mexico were linked with the Cartel, but noted that remittance to Mexico was at $52 billion.
“This legislation addresses a critical gap in Missouri’s financial oversight, and House Bill 2412 establishes clear, enforceable standards for licensed money service businesses,” Malek said. “I respect the rules of this country and waited 17 years before it was my turn to become a U.S. citizen. Precisely because of my journey, I strongly believe that illegal immigration is an insult to immigrants who follow the law.”
Ethical concerns
Coram, representing the ACLU, pushed back on Malek’s testimony. Coram argued that this bill will increase the burden on everyday Missouri residents, disproportionately affect legal immigrants and encroach on people’s right to send money.
“This bill is a targeted attack on immigrants, but it would impact all residents of Missouri,” Coram said. “This bill targets immigrants and families that need to support their loved ones, and exploitively extracts hard-earned pay from a group of mostly low-income workers that already pay taxes.”
Representing the Immigrant Justice Collaborative in Springfield, Miles Pearson and Gabriela Stark said the harms this bill may inflict would affect all immigrants. Pearson said the bill is more about messaging than solving a problem, and explained that when a lot of immigrants send money overseas, it’s a lifeline for their families at home.
“What this bill is about is posturing: it’s saying we hate immigrants,” Pearson said. “When people are sending money to their families back home, this is a lifeline. Sometimes this money can be lifesaving. This is structural violence; if this bill passes, you can be certain it will be responsible for some deaths.”
Stark said as a Mexican American, she is concerned for her community.
“I myself am Mexican American, so I have seen the ways this bill could directly affect my community,” Stark said. “It is not a simple binary between people who have documentation and people who do not.”
Stark explained to committee members that this legislation is likely to impact those who do not have documentation but are currently applying for work visas.
According to U.S. Citizenship and Immigration Services, last summer it increased the cost of initial employment authorization document applications, which grant temporary authorization for noncitizens to work in the U.S., to $550. Stark said that until financial barriers to documentation and work status could be removed, this bill would likely hurt immigrants.