They are an MSB, but they don't need to register with FinCEN if their MSB activity is all done as a Western Union agent. If they have other MSB activity that meets the trigger levels, they'll need to register in spite of their WU agent status.
However, they may still have to register with or obtain a license from a state authority, depending on your state's requirements.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8