Going thru the inter-agency guidance from April (FIL 32-2005) as well as the new BSA/AML exam manual (which basically just says to refer back to the guidance), I'm not seeing any requirements/guidance on verifying if our customers are MSBs. Am I overlooking it?

If there isn't any guidance, do you feel it's necessary to perform any due diligence beyond verifying that the customer is not listed as an MSB? My impression from the guidance was that the regulators were telling us we didn't need to be the police force verifying that businesses are registering as MSBs if they need to.

Thanks!

To me, your bigger problem are those "MSB"s that aren't registered! We review retail accounts for MSB-like activity. If they cash a 3rd party check one time for $1000, they are an MSB whether they realize it or not...then it's time to take action. So yes, due diligence on account monitoring is very important, and was apparent during our last (recent) BSA exam.

My confusion here lies in that there seems to be nothing stated in the guidance or BSA exam manual that says we must be policing our customers to make sure we don't have any unregistered MSBs. What feedback did you get at your BSA exam regarding these, and was your exam after the inter-agency guidance?

No, it was pre-guidance, however they found some accounts that fit the category that we had not found yet and they dunned us for it. We have installed new software since that time and have found many more! They put alot of emphasis on it (FED).

You say you have installed new software. Is it specifically for BSA/AML monitoring?

If you forget the fact that you are talking MSBs for a moment, - what is expected of you is that you Know Your Customers. "The nature of the business and the source of the funds."
That concept applies to all your customers.
As you determine the nature of the business the relevant monitoring requirements kick in.