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#1691079 - 04/20/12 04:56 PM Identifying an MSB
rachelchri Offline
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We currently have a business customer who cashes checks for local people. I'm aware of the $1,000 theshold before being considered an MSB. Is there a minimum amount of times he can do this before being considered an MSB. Or is it 1 time and then considered to have to get licensed? HELP!

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#1691084 - 04/20/12 05:00 PM Re: Identifying an MSB rachelchri
rlcarey Online
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rlcarey
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Galveston, TX
If he typically cashes checks he is already an MSB - so any activity over $1,000 requires registration.
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#1691190 - 04/20/12 06:56 PM Re: Identifying an MSB rachelchri
rachelchri Offline
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Even though the customer doesn't cash checks for over $1,000 (per person/per day) he would still be considered an MSB?

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#1691352 - 04/21/12 01:50 PM Re: Identifying an MSB rachelchri
rlcarey Online
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rlcarey
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Galveston, TX
OK, I was a little quick on the trigger as there was recently a long discussion on whether agents for an MSB (i.e. western union) were MSBs whether or not they had to register.

So, the correct answer in your case would be no. They are not an MSB unless they cash checks in an amount greater than $1,000 for any person on any day in one or more transactions. Once they do that however, they are an MSB and the registration requirements apply. Since your customer is in the business of cashing checks, exceeding that threshold once would push them into that definition.
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#1691381 - 04/22/12 02:10 AM Re: Identifying an MSB rachelchri
BrendaC Offline
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BrendaC
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Sweet Home AL
You should also compare their activity to state registration requirements if any exist in your location. State requirements can vary significantly.
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#1691455 - 04/23/12 02:07 PM Re: Identifying an MSB rachelchri
rachelchri Offline
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Thanks! We weren't sure if it was "once, and we'll let it slide" type of thing. Good to know once and register!

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#1691623 - 04/23/12 06:35 PM Re: Identifying an MSB rachelchri
jade1234 Offline
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Medford, Oregon
According to FIN-2006-G006 issued February, 3, 2006 (item 5 at the bottom): In addition, if a business crosses the $1,000 definitional threshold on a one-time basis, that one-time action, if not repeated, does not make the party in question a check casher, subject to all the applicable requirements.

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#1691645 - 04/23/12 07:27 PM Re: Identifying an MSB rachelchri
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
If you want to monitor every deposit they make to ensure that it never happens again - be my guest......... I would not be taking that risk and I would require registration if they want to maintain the account at the bank.
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#1691661 - 04/23/12 07:48 PM Re: Identifying an MSB rachelchri
rachelchri Offline
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I agree with rlcarey. As nice as it would be to brush off a one-time incident it's better for the Bank to require registration. Thanks to everyone for all the awesome input!

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#1691888 - 04/24/12 02:38 PM Re: Identifying an MSB rachelchri
BrendaC Offline
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Sweet Home AL
On two occasions I elected not to consider customers as MSBs following a conversation with each client where it was apparent that they were unaware of the requirements. Obviously, I would explain that the bank was not trying to tell them how to run their business, but that we needed to understand their business plan. They did not want to cross the MSB line and provided us with a letter stating that, in the future, they would not cash one or more checks for a person for over $1000 on one day. We would periodically pull transactions for testing.

Our examiners were fine with this approach.
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