Money travels much faster and farther than before Financial Institutions Bureau Commissioner Joe Face began working as an inspector at the State Bank 40 years ago. In the agency’s latest effort to protect Virginians, he focused on remittances to Somali refugee camps.
In 2021, the Department of Financial Institutions wanted to examine the books of Hashi Money Wiring, a Washington-based company with agents in Northern Virginia. The company remits most of its business to Somali refugees in Somalia and neighboring countries.
Such inspections are required on a regular basis to ensure compliance with state laws that require, among other things, that money transfer companies have the financial capacity to honor their commitments to transfer and pay.
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But Patrick Hunt, the agency’s chief financial analyst, found that some records were missing or incomplete.
He also documented nine instances in which companies provided him with inaccurate information at examiner hearings, according to the Times. National Enterprise Commission. The SCC is the agency’s parent agency.
In response to the examiner’s recommendation for a fine of $72,500, the firm’s attorneys wrote: There is reason to believe that any form of remittance business does not meet the BFI’s financial requirements. ”
This was an unusually high fine for a financial institution case, or even for a larger case handled by the SCC. insurance bureau Or its securities department.
The goal is not just bureaucratic complexity, Faith said.
“We do compliance checks. It’s consumer protection,” he said. “Money goes everywhere instantly these days. It’s not like when I started.”
In Hashi’s case, the agency’s investigation concluded that the funds may not be protected when Virginia consumers use the company’s services. The Bureau wanted to revoke the company’s license to operate here. However, the SCC did not revoke Hashi’s license, as the BFI had originally suggested.
The agency is seeking financial information about whether the company has record-keeping mandates under the Patriot Act and the U.S. Treasury Department that ensure the company complies with U.S. economic and financial sanctions, and who pays the money. I wanted to confirm whether on the other end.
However, Hasi filed quarterly reports with the National Intelligence Exchange for the data several months late, and the required postings to the general ledger did not take place through much of 2020, according to the agency. It is said that
Hunt said the lack of data meant he could not assess the company’s financial position.
In particular, the agency wanted to see quarterly “call reports” detailing transaction volumes and the investments that sending companies must hold to back their promise to ship customers’ money.
State law requires money transfer providers to have sufficient funds on hand to cover at least the sum of outstanding exchanges and all outstanding money transfer transactions, not only in Virginia, but in all states in which they do business. Obliged.
On appeal against the hearing examiner’s recommendations, Hasi said he transfers $4 million to $5 million a year from agents in Virginia, more than 75 percent of which are in Somali or Somali refugee camps in Ethiopia and Kenya. reported that the money was being sent to
The company’s president, Abdulhakim Hashi, told the Inquirer that the company was backed by about $400,000 in a credit union account in his name.
He said the company hadn’t had a bank account in its name since a local Washington state bank closed it in 2016 or 2017 to reduce its own risk.
Hunt said the inspection process revealed that Hashi had to surrender its Massachusetts license because it was unable to obtain a bank account.
Hunt said he did not notify the agency when Hashi returned his state license after Texas began the process of revoking it.
A lawyer for the company said Mr. Hasi’s bookkeeping and financial reporting problems were a result of the COVID-19 pandemic, and the company has since fixed the problem.
The SCC also formally ordered Hashi to stop violating any portion of state law regulating money transfer providers.
It also ordered Mr. Hasi to keep the $500,000 bond until at least the agency’s next inspection is completed in 2024.
Hashi did not respond to a message left on the Seattle headquarters phone. Phones in Northern Virginia did not work.
