One afternoon twice a month for the past five years, Joseph Tabios has stepped into the Kwik Money Remittance office on North King Street and plopped down some of his hard-earned cash.

One recent day, the 34-year-old construction worker handed $405 in cash to employees there and within minutes, the money was made available for pickup by his wife and 7-year-old daughter at Kwik Money's branch office in the Philippine city of Laoag.

If Tabios wanted proof the money arrived, there was a live video feed from Laoag allowing him to talk to his wife as she picked up the money. Kwik Money also offers delivery from some of its locations.

Nodding toward Kwik Money owner Jorge Disuanco, Tabios explained why he prefers this procedure to using a bank to wire money home. It's quicker and it's cheaper, Tabios said. "And I trust him a lot."

Tabios is one of the thousands of Filipinos and other immigrants in Hawai'i who regularly sends money to families and friends left in their homelands.

The number of people making remittances, and the amounts, increase exponentially during the holidays. Disuanco estimated that of the roughly $25 million to $27 million he will handle this year, as much as a quarter of it will move during December.

But changes are coming to the remittance business here.

Hawai'i has been one of only a handful of states without any regulations governing money transmitting. So, after a bad experience with a transmitter, Disuanco joined forces with others to successfully push through the Legislature this year a bill that requires transmitters — from banks to mom-and-pop stores — to be licensed.

NEW RULES

Besides providing consumer protection, the new law is looked upon by supporters as a means of providing better monitoring of money-laundering and terrorist financing schemes in the wake of 9/11.

The state Department of Commerce and Consumer Affairs is required to set up rules and a licensing process by Jan. 1. Transmitters must be licensed by July 1.

Disuanco, who first went into business as a commercial printer, decided to go into transmittals himself in 2002 after being a victim of an unscrupulous transmitter.

Disuanco said the transmitter held on for two weeks at a time to large amounts of money he was sending back to the Philippines, presumably earning interest on the funds. The money eventually made it through, he said, but he quit doing business with the man.

Soon after, that transmitter went out of business, he said.

Attorney Marvin Dang said some companies take too much time, while others charge more than they promise. There have even been reports of some companies that have failed to deliver the money entirely, he said.

Besides Christmas time, money transfers also peak around June and October, when college starts up in the Philippines, said Dean Alegado, chairman of the Ethnic Studies Department at the University of Hawai'i at Manoa.

"Many people are sending money to help relatives go to school," said Alegado, who has been studying the phenomenon for years.

Alegado estimated one in every five Filipino families relies on remittances from immigrants abroad to supplement its income. Remittances rank as the fifth-biggest source of personal income in the Philippines after salaries, self-employment, business and farming.

"The impact on the Philippine economy is pretty big," he said.

According to a recent Associated Press story, the World Bank estimates $13 billion to $14 billion worldwide is being channeled to the Philippines by Filipinos overseas.

Alegado said more than half of that comes from the United States.

Most of the money from Hawai'i goes either to the Ilocos or Visayas regions, where most local Filipinos have roots.

A SUBSTANTIAL INDUSTRY

There are no official estimates on how much comes from Hawai'i. But Disuanco estimates he gets at least 3 percent of Hawai'i's remittance business. That would mean Hawai'i sends at least $700 million annually.

State financial institutions commissioner Nick Griffin said his agency is on target to meet the schedule for new regulation.

Commerce and Consumer Affairs has tried unsuccessfully to push through similar legislation in previous sessions. Griffin testified for the bill this year, saying that his agency today can't even provide an educated guess on the number of money-transmitter businesses in Hawai'i.

Dang said some believe that those wishing to send money back to their homelands encounter problems with money transmitters frequently.

"But who do you report it to?" he asked. "Because money transmitters aren't regulated by the state, if you complain to the consumer protector, they have no way of really dealing with organizations that aren't regulated."

The new law requires an individual or company to have a minimum net worth of $1,000 to apply for a money transmitter's license. An application also will need to include a surety bond or an irrevocable letter of credit for $1,000, or more if deemed necessary by the financial institutions commissioner.

"Most states have the requirement in the tens of thousands, and some states have them at a hundred thousand dollars or more," Dang said. "Some legislators wanted to make sure that the small mom-and-pop money transmitters were not going to be put out of business by having high net worth requirements."

The one-time application fee will cost from $1,000 to $4,000, with annual renewal fees costing from $500 to $2,000, depending on the number of authorized outlets. The statute also lists criminal and civil penalties for violations, and transmitters may be subject to on-site examinations and audits.

"It's not intended to be onerous to discourage what essentially is a valuable industry locally in Hawai'i," Griffin said. "We don't want to create a regulatory framework that's very burdensome."

To further guard against unexpected charges or lower-than-stated transfer amounts, transmitters will need to issue written receipts and provide refunds if money has not been delivered to or picked up by the designated parties within 10 business days after the transmitter receives the money.

The new law will add to his expenses, Disuanco said, and he believes he may need to increase his fees accordingly.

"But that's a small price to pay for the protection of the consumer, our country and our state," he said. Additionally, he said, "I want to legitimize the business."

While Filipino immigrants are not the only folks who send money back to their homelands, they are among the most diligent.

"The nature of the Filipino is we have to go send money and support our families," Disuanco said.