More remittance firms closing

As less money is sent overseas, several remittance centers have closed down.

So far this year three remittance centers —PQ Corporation, Sapphire Enterprises, Inc. and TKL Enterprises— have closed. Saipan Galing Remittance Center is in the process of notifying the public it is closing.

The four centers accounted for $7.9 million of the $93.6 million remitted in 2007. TKL Enterprises remitted the majority of the money—$7.1 million in 2007.

Four remittance companies closed their business in 2007, namely America Joint-Partner Corp., Micronesia Money Exchange Co., Oceania Remittance Center and Yun Mee Corp.

Total remittances have dropped significantly in the last few years.

Overseas remittances went down 8.4 percent from $102.2 million to $93.6 million in 2007.

The remittance figures last year were the lowest since Commerce reported total remittances of $80.5 million in 2003. The following two years, remittances increased by double figures—17.5 percent to $94.6 million in 2004 and 19 percent to $112.6 million in 2005.

Remittances fell 3.3 percent from the second quarter of 2008 to the third quarter of this year.

Because of the drop in numbers and centers closing, the Department of Commerce is proposing new regulations in order to protect the public.

Under the proposed regulations, companies that transmit money would be required to make a $100,000 security deposit or bond. Currently, companies are required to make a $50,000 deposit or bond. Remittance companies would also be required to file electronic copies of their quarterly reports and provide more information in the reports, and comply with federal registration and reporting requirements.

Fees for foreign currency exchange companies and remittance companies would increase under the proposed regulations.

Currently, a company must pay $300 for a foreign exchange dealer license and $30 for an agent license. Under the proposed changes, foreign exchange companies would pay $300 for a dealer license and pay $50 for an agent license. Remittance companies would pay $300 for a license and $50 for a remittance agent license.

For companies desiring to withdraw their license, the new regulations would create strict guidelines, including submitting an application and placing a notice of intention to close in the newspaper with specific language.