FinCEN Outlines Rules on Providing Banking Services to MSBs
The Financial Crimes Enforcement Network (FinCEN) issued a statement on November 10, 2014, regarding money services businesses (MSBs) losing access to banking services.
FinCEN believes financial institutions are terminating MSB accounts due in part to the perceived high risk they pose to financial institutions. Over the past several years FinCEN has periodically taken steps to address Bank Secrecy Act (BSA) risks posed by MSBs. According to FinCEN, MSBs pose a varying degree of BSA risk and not all MSBs are high risk.
FinCEN expects financial institutions to assess the risk of each individual MSB and not make a blanket prohibition on doing business with all MSBs. It is important for financial institutions to provide sufficient due diligence upfront at the account opening to understand its risks, and then provide ongoing due diligence over the life of the account relationship. FinCEN expects financial institutions to treat MSBs on a case-by-case basis based on risk.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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