Credit Cardholders' Bill of Rights Act of 2009--Continued

Floor Speech

CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2009--Continued -- (Senate - May 13, 2009)

BREAK IN TRANSCRIPT

AMENDMENT NO. 1107 TO AMENDMENT NO. 1058

BREAK IN TRANSCRIPT

Ms. COLLINS. Mr. President, I ask unanimous consent the Senator from Connecticut, Mr. Lieberman, be added as a cosponsor of the amendment.

The PRESIDING OFFICER. Without objection, it is so ordered.

Ms. COLLINS. Mr. President, stored value cards have been used and are being used by Mexican drug cartels to smuggle their drug revenues back to Mexico. The Department of Justice estimates that up to $24 billion in cash is smuggled into Mexico each year from the United States and these stored value cards are one of the means by which the cash is smuggled back into Mexico. Stored value cards can be loaded anonymously by individuals who are involved in criminal enterprises, such as drug trafficking. The cards are then physically smuggled across the border and can be used to withdraw large quantities of cash from ATMs.

Under current law, cash and other monetary instruments that exceed $10,000 must be declared at the border. For those of us who have traveled to different countries, we are very familiar with the white form you have to fill out in which you have to indicate if you have cash that exceeds $10,000.

However, there is a loophole in the current law. Stored value cards, either individually or collectively in excess of $10,000, do not have to be reported because they are not considered to be monetary instruments under the law. The amendment Senator Lieberman and I are offering would require such reporting and make it a crime to launder money using these stored value cards.

The Deputy Attorney General of the United States has pointed out that large quantities of cash are put together and smuggled across the border to the south. He has pointed out that there are various ways this can be accomplished but that stored value cards are one of the means for smuggling this cash.

Mr. President, as you know as a loyal and diligent member of the Homeland
Security Committee, our committee has been investigating the problem of drug trafficking from these Mexican cartels. What we found is the drugs are coming north and cash and weapons are going south. By closing the loophole on reporting for large quantities of cash that are being smuggled back and forth using these stored value cards, we can help give law enforcement another tool to crack down on the smuggling of cash that is often the proceeds of criminal activity, including drug smuggling.

This is not just theoretical. It is not only the Deputy Attorney General who has pointed out that these cards can be a means of smuggling large quantities of cash but also law enforcement agents throughout the United States have been investigating criminal enterprises that are using these cards. Let me give a couple of examples.

Law enforcement agents in Dallas have been investigating a Colombian narcotrafficking organization that wanted to launder narcotic proceeds via stored value cards. The organization wanted to obtain 50 stored value cards that would be used to launder $100,000 in proceeds. These transactions would be structured in different increments per card for the total of $100,000. The cards would then be exported out of the United States to Colombia. The cards would be cashed out in Colombia and the dollar value would be converted to Colombian pesos at the official exchange rate.

In another example, law enforcement undercover operations have revealed at least nine transnational criminal groups engaged in moving criminal proceeds via stored value cards. These operations have revealed the cross-border movement of stored value cards loaded with millions of dollars of illicit proceeds. Numerous collateral investigations and enforcement actions have been conducted as a result of these undercover activities.

This is a loophole in our laws we need to plug and the Collins-Lieberman amendment would do that. It would treat these cards as the equivalent of cash because that is what they are. That is what they are. It would require that, just as if you crossed the border with $10,000 in cash or other monetary instruments you have to declare it, so would you have to declare it if you have these stored value cards. In addition, it would make a failure to report the amount of money on these cards, if it is $10,000 or more, as a crime, and it would also make it a crime to launder money using these cards.

This is a very concrete, needed action that we could take to help crack down on the smuggling of money that fuels the drug trafficking across the Mexican border. It is a very practical step we can take right now to close a loophole in the law and to provide law enforcement with a much-needed tool.

I know the managers of the bill are not on the floor at present so I will withhold asking for a vote on this amendment. I do believe we are in the process of clearing it on both sides, but I am uncertain whether that has been completed. It may be that the acting manager of the bill can inform me.

I yield the floor.

BREAK IN TRANSCRIPT

Source