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#367497 - 06/02/05 10:07 PM MSB - Money Transmitter
Anonymous
Unregistered

One of our customer's is a gift shop that accepts utility payments from their customers. In turn, they submit ACH payments to the utility company. They accept both checks and cash from their customers for payment (not aware that they would be accepting more than $1,000 in cash). Is this business considered a MSB as a money transmitter? Our examiner seemed to think so but I have yet to be convinced. Anyone else have a similar situation?

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#367498 - 06/03/05 10:20 AM Re: MSB - Money Transmitter
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
They are transmitting monies from their customers to the utility company, but I do not think that qualifies them as an MSB.
Have you done a site visit to see what other services they offer?

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#367499 - 06/03/05 10:40 AM Re: MSB - Money Transmitter
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The MSB definition has some language that allows some common sense in determining who is a money transmitter:

(ii) Facts and circumstances; Limitation. Whether a person ``engages as a business'' in the activities described in paragraph (uu)(5)(i) of this section is a matter of facts and circumstances. Generally, the acceptance and transmission of funds as an integral part of the execution and settlement of a transaction other than the funds transmission itself (for example, in connection with a bona fide sale of securities or other property), will not cause a person to be a money transmitter within the meaning of paragraph (uu)(5)(i) of this section.

Magic City has given you good advice in that you should verify that these are the only financial activities your customer is engaging in. If they are, I think the above language indicates they are not an MSB. The ACH payments they generate are a method executing another transaction, the payment of utility bills. If your examiner's conclusion is correct, virtually any business using ACH would be an MSB...
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