I tried searching (here and on FinCEN), but couldn't find an answer.

If a business is registered as an MSB as a check casher, can they cash checks made out to businesses themselves?

I have a check casher who is cashing checks made out to businesses, and then depositing them into his check cashing accouner here, and I'm trying to figure out if that's 'allowed', just a bad practice, and who could be held liable (BSA wise or otherwise).

Thank.s

I believe that this is covered in your state's law. I am located in NY and there are businesses that are specifically licensed by the NYS Banking Department as Commercial Check Cashers. They cash checks payable to businesses while retail check cashers in NY can only cash checks payable to individuals. In addition to the licensing requirement, we see large dollar checks cashed by these commercial check cashers so the risk is higher. To mitigate this risk we require independent examination reports from audit firms that we approve.

Many banks that I deal with will not allow this. It serves no real business purpose for a business to cash checks made payable to themselves at an MSB unless they are cooking the books for the IRS. The risk is huge if you have an employee or other person cashing these checks and they lack authorization. These checks could come back for years. If the MSB doesn't have enough assets to cover them or is long gone - the bank will eat them all.

It's common for MSBs in some states, Florida among them.

My state does not allow it. It would not be up to the bank to enforce the restriction per se. Nevertheless, there are good reasons for the restriction and even better reasons why banks should not put up with that much risk.

Thanks so much for your input.

Does anyone from MN happen to be reading this and know where our state stands on the issue? I can't seem to find it in the statutes. At least not yet

bump - can anyone in California chime in? Is this even allowed? I can't find anything on the DFI or Attorney General website

We have some retail check cashers in CA and they have a Check Casher Permit issued by the Office of the Attorney General. There is a phone # on the permit for inquiries so you might try there to see about licensing requirements for commercial check cashers. The # is 916-227-3250.