We have a customer who is a contractor. He has immigrant individuals working for him who do not have accounts at any local bank. He writes them a check (over $1,000). He then comes with them to the bank to get the checks cashed. The worker signs the check over to the contractor; the contractor endorses it and we cash it. He then gives the cash to the worker. I know we provided the cash but didn't he technically cash the check? He accepted a check and gave cash back. Doesn't this qualify him as an MSB?

It is his check so I would say no. The purpose of monitoring MSB's to to prevent money laundering. I would take the opportunity to turn this situation into a positive experiencve for your institution, the contractor, and his worker.

1. Suggest that the immigrant open an account with your institution.

2. Suggest that the contract withdraw cash to pay the immigrant.

3. By doing so, it avoids your institution worry about two parties coming to the teller (security risk) and allows the Contractor to be a good employer to the immigrant.

Make this a great customer service opprortunity.

When you say it is his check, who do you mean? I am still struggling with this. The contractor accepted the immigrant's check, and gave him cash in return. That seems to be a plain and simple check cashing and would therefore qualify as an MSB, would it not?

Any thoughts on this?

The bank cashed the check, not the company. Your customer is simply using his banking relationship to help the workers cash their payroll checks.

I think that the jury is still out. Technically he is cashing checks for third parties in excess of $1,000. The OCC mentioned in their webinar that businesses cashing their own employee checks for over $1,000 would be considered MSBs. There is no specific guidance. I think we will have to wait for something more from FINCEN for a definitive answer.

When you say immigrant individuals what you really mean is illegal aliens. Any person who is in the U. S. illegally does not have the right to work. If the bank engages in such transactions it is violating Federal and State laws. You need to stop this practice immediately.

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If the bank engages in such transactions it is violating Federal and State laws.

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No, it's not. Please provide a citation to a law or regulation that says otherwise.

One of the few things that banks are not responsible for enforcing is U.S. immigration policies. Particularly immigration policies that our country does not have the will to make.

Agreed!! We are not ICE agents and in fact it is well known that many of the MSB customers in certain areas are undocumented workers.
IRS agents have told us over and over again that this issue is not our concern.
There is an OFAC issue here though, and I do perform random OFAC checks on these items.
I think in the case that Jap has it is not an MSB as the contractor is (a) at the bank with the worker, so it is not the employer cashes them in his office scenario, and (2) he is maintaining an audit trail. This is a good thing.

If the so-called immigrant worker-- read illegal alien-- is engaged in some illegal activity or worse terrorism the bank is violating the U. S. Patriot Act for having completed the transactions while knowing that the criminal/terrorist was circumventing the law because the actions of bank personnel are prima facie evidence of that fact. The bank could also be sued by anyone who was harmed by any criminal act or any terrorist act committed by that so-called immigrant worker.

It was a statutory violation, but now it's civil liability? Repeating a single Latin phrase is not the same as providing a citation.

Keep in mind, most of our ancestors were illegal aliens. The Native Americans are the ones who should have had better immigration laws.

The only thing you would need to consider is if the combined cash-out conducted by the customer exceeds $10,000. Then you would need to file a CTR.

I also think FinCEN needs to qualify when someone is engaged in the business of "cashing checks."

IMHO - In order to be in the business of "cashing checks", I think it can only involve those situations where the person providing the cash (for more than $1,000 in any one day to any one person) does so when the check is NOT written by either the person seeking encashment or the person providing the cash.

IOW - only when a person provides cash for "third-party" checks would you enter the realm of "check cashing." This would eliminate the two silly and impossible enforcement issues:

1. An employer providing cash for a check he wrote to an employee is not a check casher.

2. A store that provides "cash-back" to a person who writes the check directly to the store (two-party check) is not a check casher.

The problem with situation number 1 is that I cannot believe that Congress EVER intended to lump employers paying their workers into the same category as check cashing stores.

The problem with situation #2 is how the heck do you know if the check that John Doe wrote to ABC Liquor for $1,500 was for cash or if John Doe was thowing a heck of a party.
(And if he was, why wasn't I invited?)

Can you imagine the nightmare if we started to require MSB registration for any business that deposits checks of more than $1,000? It would be sheer lunacy, and would cripple not only the MSB registration system, it would cripple our economy.

I agree with Bonnie that more guidance is needed. I would like to think that my contractor mentioned in the original post is definitely not an MSB but I don't think it's as clear cut as some posters here would believe. As far as violating immigration restrictions by cashing these checks for the contractor, would the anonymous poster refuse if the person standing next to the contractor was caucasion? Who knows, they might be an illegal immigrant from Ireland or Brittian.

What the bank employees are doing in this situation is violating the U. S Patriot Act. Read it.

Ken,a citation from the U. S. Patriot Act was posted and then removed by a biased moderator who who wants to control the discussion.

No need to throw stones at each other. What bankers need is clear guidance from the Feds. In their most recent statements to calm the fears of MSB's being closed down by banks, the Feds said that banks were not expected to be the "defacto" regulator of MSB's, but that is just where they have put us. As always, we are the pawns that are most at risk, if something were to happen on our watch. We'll be the first to get blamed and the Feds will look like kings and the lawmakers will say "I told you so". How much more accountablility and enforcement are banks going to be required to provide in lieu of good law enforcement and intelligence gathering? Whew!

The USA PATRIOT Act does not contain any provisions that would criminalize or otherwise prohibit cashing checks for people who are in this country illegally.

If someone locates language they believe indicates otherwise, please post it here. In order to avoid confusing others unnecessarily, please read it carefully and make certain it says what you think it says.

I am struggling with a situation currently involving a customer that is knowingly hiring illegal aliens. When I see cases such as the recent Wal-Mart action and the article discussing 11 illegal aliens that were pulled off of a plane recently in Raleigh-Durham I feel compelled to file a SAR. I have knowledge of what appears to be illegal activity based on these and other similar situations; however, when I look to define regulatory expectations I am left more confused than before I started. I don't have the time nor the energy for "defensive" SAR filings and I don't want to send otherwise good customers out the door, but I don't know that I have any other choice without clear guidance from our regulators. If this continues, I will earn the title of "anti-sales" officer.

BrendaC: Section 103.18 of the Bank Secrecy regulations requires an SAR for certain activity "conducted or attempted by, at, or through the bank". Is there some connection between the hiring and your bank?

The checks written to a known undocumented worker are clearing through an account at our bank. But it isn't against the law to write a check to an undocumented worker, is it? It is against the law to evade taxes, but I do not know whether taxes are being paid; although I offer a personal opinion that most undocumented workers are not paying taxes.

We just decided to sell AMEX gift cards and travel cards to non-customers - <2,500 cash sales per day. What's your input on CIP, OFAC, etc. What about Visa Cash Advances - same daily limit. One of my conserns is multiple transactions at various branches that exceed $2,500. Any of the same issues to consider if we sell to non customers via our website using credit cards for the purchaes?

I never thought about cash advances - what are others doing about these!

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If bank personnel know or had reason reason to know that the person receiving the money is an employee of that employer and is in the U. S. illegally than it's against the law to do the transaction. Any bank employee who knowing does these type of transactions is committing a felony

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Wrong, completely irresponsible, and not diluted by "It's just my opinion."

Some of the posts in this thread serve only an example of why I firmly believe there should not be any Anonymous posters on BOL. It’s impossible to hold Anonymous accountable for either the tone or the content of his posts.

The California Vehicle Code does not say you can't run somebody over. But does that mean it's okay to do that? No of course not. Most laws are written in a general way because they'd be 100 times bigger if the legistators tried to get specific about everything. So don't be fooled by people who say it's legal just because it isn't specifically prohibited.
Another issue is enforcement. Just because the government isn't enforcing a law doesn't mean the wrong doing is somehow legal. That is silly. It just means the government isn't enforcing it right now.
And you are not really free to interpete the law, only judges have the authority to do that.
As a bank employee you are expected to follow the law, not try to find some loop hole or excuse to get around it.