Oppose HB141 Due to Compliance Costs for Utah Financial Institutions

I urge you to oppose HB141 as it moves to the Senate. While Rep. Stephanie Gricius frames this 2% tax on anonymous international wire transfers as targeting cartel money laundering, the bill will impose significant compliance burdens on Utah's banks and credit unions without achieving its stated goals. Financial institutions will face substantial costs implementing systems to verify immigration status and determine which customers qualify for the tax exemption. Banks and credit unions will need to develop new verification protocols, train staff on acceptable identification documents listed in the bill, modify their wire transfer systems, and create tracking mechanisms to ensure proper tax collection and remittance to the state. These compliance costs will ultimately be passed on to all customers through higher fees or reduced services. The bill's fiscal note projects revenue of $740,000 in fiscal year 2027 rising to $5.2 million by fiscal year 2030, but it fails to account for the administrative burden on financial institutions. Utah banks and credit unions already operate under extensive federal anti-money laundering regulations and know-your-customer requirements. Adding a state-level immigration status verification requirement creates redundant and potentially conflicting obligations. Rep. Hoang Nguyen correctly noted during House debate that this tax will push transactions into unregulated channels, making it harder for financial institutions to detect actual money laundering. When legitimate remittance services become prohibitively expensive, people turn to informal transfer systems that operate entirely outside the regulated banking system. This undermines the fraud prevention and anti-money laundering efforts that Utah's financial institutions work diligently to maintain. The bill also puts Utah banks and credit unions in the uncomfortable position of serving as immigration enforcement agents, a role they are neither equipped nor trained to perform. This creates legal liability concerns and damages customer relationships. I ask that you vote against HB141 to protect Utah's financial institutions from unnecessary regulatory burden and compliance costs that will harm all customers while failing to achieve the bill's stated objectives.