I have a registered MSB as a check casher that operates a grocery store account. However during edd it was determined that the store's deposits are made up of small under $ 100 checks made payable to the store for even amounts of money. From repeat customers; ie, $50, $75.00 and $ 100, We do not allow accounts to be operated as a MSB due to not willing to do all the requirments surrounding MSB dd.

Would checks written to the business name and cashed be considered as check cashing activity for BSA edd.??

they have to cash over $1,000 for one customer in one day to be considered a check casher under MSB regs.

If they are REGISTERED as an MSB I think you have to treat it as an MSB for BSA purposes.

If all they are doing are cashing checks under $1,000 - then they wouldn't need to be registered in the first place.

There may be state laws that apply (California requires registration if you charge over a certain fee) ...

It sounds like they are cashing small checks for their regular customers as a convenience. But as stated by others, if they are registered, they are covered.

Also, if these items do not aggregate to amounts over $1,000 per person per busienss day (even aggregated as some try to sneak those in also... been there, busted that.), they are not required to register with FinCEN.

Your customer cannot unregister, but it can repent in writing and sin no more. Excerpt:

A business that develops, implements, and abides by, written policies and procedures that provide that it will no longer cash checks in amounts sufficient to reach the $1,000 definitional threshold for a check casher would cease to be a check casher for purposes of Bank Secrecy Act regulations. Assuming the business offers no other services that would cause it to be treated as a money services business, the business would therefore not be held responsible for compliance with Bank Secrecy Act requirements applicable to money services businesses under 31 CFR Part 103. This is so even if the registration period for the former check casher has not yet expired at the time the business ceases to meet FinCEN’s regulatory definition of check casher.

That gets you out of having to follow the MSB guidance, but not monitoring in general. (You have to make sure they do not backslide.)

So, if the business described by Comply "repents" would they still be considered an NBFI? It sounds like they cash checks for their customers, but not 3rd party checks and not in amounts that exceed the MSB thresholds. I've got a couple of customers who do similar activity, and I'm not quite sure what to do with them.

Any customer that provides financial services, including check cashing, should be classified as an NBFI (customer subject to expanded examination overview).

Monitoring levels are up to the individual bank, but my opinion is we spend too much time treating MSBs as if they represent greater risks than a garden variety NBFI. Once a customer becomes an MSB what you can expect from them in terms of documentation, etc. becomes very clear and they get a federal regulator (IRS) they did not have before. In my opinion, they are easier to document and no more difficult to monitor than any other NBFI.

Thanks Ken! I was getting hung up on the fact that they cash checks that the customers make payable to the business. It's a lot easier to tell what's going on when you see the third party checks going through their account.