U.S. Rep. Senfronia Calpernia Thompson (D-Houston) has proposed House Bill 2629 (HB 2629) that would require privately owned and unregulated "white-label ATMs" to be registered with the state in an attempt to help combat the human trafficking industry.
A Children At Risk factsheet about HB 2629 says that white-label ATMs, also referred to as WATMs, can be purchased by anyone from an internet site and have been "inextricably linked" to human trafficking.
"White-label ATMs (WATMs) can be owned and operated by anyone and purchased on the internet from sites such as Craigslist," the factsheet states. "There is almost no oversight. While WATMs are a valuable part of our financial system, particularly in rural areas where there are fewer brick-and-mortar banks, WATMs are also inextricably linked to financial crimes and human trafficking. Criminals can exploit our state’s lack of ATM regulation in order to transfer their illicit profits and cater to buyers."
According to the factsheet, illicit massage businesses in Texas are one the largest industries that deal in illegal business and human trafficking.
"For example, there are over 900 illicit massage businesses in the state of Texas, also known as IMBs," the sheet states. "These spas and parlors use the cover of the legitimate massage industry to engage in storefront prostitution and human trafficking and are predominately cash-only businesses. No sex buyer wants a massage parlor’s name on his credit card statement. In addition to IMBS, unlicensed strip clubs and illegal gaming rooms are common users of WATMs."
HB 2629 states that not only would independently owned unmanned ATMs be subject to registration, but those not registered with the state or those whose registration fees are unpaid would be additionally fined and could face civil action from the Texas Attorney General.
"Registration will be managed by means of a database operated by the Finance Commission," the sheet stated. "Registration will be kept as painless as possible by including fee caps ($3-$25 per ATM; $200 yearly cap) and a registration sticker system."
This proposed law has become very controversial with some believing it is unwarranted as information sought by law enforcement can still be obtained for investigations from all ATMs, whether registered or not.
In a recent ATM Marketplace article, ATM Industry Association (ATMIA) Executive Director David M. Tente stated that HB 2629 is based on the idea that law enforcement does not have access to investigate the white-label ATMs.
“The premise for this bill is completely false,” Tente said, reasoning that law enforcement can already access private-sector data – card info, dates, etc. – from ATM owners.
On the other hand, Children At Risk and The Austin-American Statesman advocate for the bill. The Austin-American Statesman said that HB 2629 would “yield tremendous results,” and that ATMs purchased and used by IMBs are for the purpose of allowing illicit, illegal business transactions and sex trafficking. The newspaper goes further, stating that these ATMs are ideal for illicit businesses and sex buyers to hide credit-card transactions because the ATMs are generic.
Children At Risk states on the factsheet that while WATMs are located at legitimate business, most business owners have them registered already per operational agreement between the business and money-transfer service or the owner and business itself.
"A business owner is not required to register a WATM (unless he or she owns it) on their premises," the factsheet states. "However, [if the bill passes] a civil fee will be imposed against businesses that allow an unregistered WATM to be operated in their place of business."
