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January 6, 2015
Business Accounts Documentation and Procedures with Beneficial Ownership
Deborah Crawford

January 6, 2015
FFIEC Cybersecurity Initiatives and Observations from the 2014 Assessments
Susan Orr

January 15, 2015
The ABC's of IRAs - The Basic Ingredients
Patrice Konarik

January 20, 2015
B & Z Appraisal Rules - Getting Them Right
Jack Holzknecht

January 21, 2015
HMDA Soup to Nuts
David Dickinson

January 22, 2015
Navigating the Treacherous Waters of IRA Rollovers, Transfers and Beneficiary Payouts
Patrice Konarik

January 28, 2015
Mortgage Life Cycle
Part I
David Dickinson and Jerod Moyer



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#1585876 - 08/01/11 12:50 PM 3rd Party Payment Processor
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1862
Loc: NYC
We have a newly opened sole proprietorship account and the type of business indicated is "merchant service". We asked the branch for more info and they replied that he is an agent for bankcard service. A review of his documents shows that he received his Green Card in April of this year and that he just registered the business last week. This raises the question in my mind of what due diligence the credit card companies conduct on their agents. From what I can see this individual has no business experience in the US, is just "off the boat" and now he is a merchant service provider. What am I missing? I have reviewed the info in the FFIEC examination procedures on payment processors and don't see how our new customer has any of the background info that we would be asking for. Any thoughts on this would be helpful.

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BSA/AML/CIP/OFAC
#1585892 - 08/01/11 01:12 PM Re: 3rd Party Payment Processor [Re: devsfan]
BSA_Jay Offline
Member

Registered: 03/03/10
Posts: 58
Loc: New York
You're not responsible for the EDD that the credit card agency conducts on their customer.

As long as you run your CIP on the customer and their business then you should be good.

Also be certain to monitor the account for the ACH activity as well as where the outgoing payments are going.

As long as that information can be justified you guys will be ok.
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#1585918 - 08/01/11 01:48 PM Re: 3rd Party Payment Processor [Re: BSA_Jay]
devsfan Offline
Diamond Poster

Registered: 06/25/04
Posts: 1862
Loc: NYC
Jay, I know that we are not responsible for the EDD that the c/c company conducts on their agents but I was looking for anyone's experience about folks like this becoming a merchant service processor without any history, business or personal, in the country. Also, I believe that we need to go beyond CIP and basic monitoring since we need to do a risk assessment, know who their customer's are, etc.

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#1585934 - 08/01/11 02:07 PM Re: 3rd Party Payment Processor [Re: devsfan]
BrendaC Offline
Power Poster

Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
"...he just registered the business last week..."

Does your CIP permit foreign businesses? Most community banks don't have the resources and expertise to manage such relationships. Not saying that you can't, just asking whether you want to.
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Life without Jesus is like an unsharpened pencil - it has no point.

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#1585939 - 08/01/11 02:14 PM Re: 3rd Party Payment Processor [Re: BrendaC]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2495
Loc: Southeast
You may want to review this article.

http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum11/managing.html

There are some links in the footnotes to sites that would also be worth viewing.
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Politicians are like diapers. They need to be changed often and for the same reason.

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#1586135 - 08/01/11 07:16 PM Re: 3rd Party Payment Processor [Re: Retread]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 51225
Loc: Galveston, TX
"he is an agent for bankcard service."

I would like someone to kindly explain exactly what this means??
_________________________
The opinions expressed are my own, take them or leave them.

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#1586168 - 08/01/11 08:15 PM Re: 3rd Party Payment Processor [Re: rlcarey]
BetsyS Offline
Gold Star

Registered: 06/10/09
Posts: 418
My best guess is he works/sub-contracts for a Merchant Bankcard ISO (Independent Sales Organization)rather than a finacial institution reselling merchant Bankcard services. Because they're just salesmen, they don't need to be trained in payment processing. Many receive a percantage of the transaction income off of any merchant they sign up.

As a merchant acquirer, we sometimes run into their sales reps trying to sign-up our merchants. There are good ISOs and bad ISOs. I recommend checking his parent company out on complaint boards and see if you want to be affiliated with his business.
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Let's start at the very beginning; A very good place to start...

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#1586172 - 08/01/11 08:40 PM Re: 3rd Party Payment Processor [Re: BetsyS]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 51225
Loc: Galveston, TX
Why would you subject this person to any more scrutiny than any other sales person then??? They should just receive a commission check from the ISOs they work for, say an agent for Fuller Brush? There shouldn't be actual transactions running through their account. Would I monitor it for a a couple of months, maybe...., but probably not any more than any other NRA account.
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The opinions expressed are my own, take them or leave them.

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#1586416 - 08/02/11 01:27 PM Re: 3rd Party Payment Processor [Re: rlcarey]
BetsyS Offline
Gold Star

Registered: 06/10/09
Posts: 418
For an example, here’s a link to one of many unscrupulous companies reselling bankcard services:

http://www.bbb.org/central-northern-west...nix-az-97017441

In this scenario, he may be a victim of the parent company. Bankcard Empire continued to market their services despite cease & desist orders in multiple states. According to articles on the company, one of their principles was also convicted of money laundering in 2001.
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Let's start at the very beginning; A very good place to start...

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