The three sites were selected by the Bureau of Justice Assistance (BJA) in a cooperative project funded by BJA. The analysis focused on the use of NBFIs to transfer money out of the United States into Mexico and sometimes back to the United States after is has been laundered. The research also examined the use of NBFIs to serve as remittance houses for drug traffickers. The analysis that State regulation has had a mixed effect on money laundering by these institutions. Although it has not eliminated money laundering through these businesses, it has made a significant impact and has proven to be an effective tool of law enforcement. However, regulation has had the additional impact of forcing some money exchanges across the border, moving some money launderers into other unregulated business, and forcing some honest but marginal operations out of business. Initial enforcement of licensing requirements has resulted in about half of existing businesses leaving the market. The recordkeeping mandated by the regulators has been of great value to law enforcement. The Treasury Department's new rule for wire transfers will also be of value to law enforcement. Findings indicate the need for a broadly worded law to enable State licensing and regulation of money exchange and money transmitters to be effective in reducing or stopping their use by money launderers. In addition, bank officials and other State regulatory agencies must realize that they have a role in the enforcement process. Footnotes and appended State laws and other background information