My company is a payment processor who was previously determined to not need a documented and implemented formal BSA Policy since it was maintained and administered through our bank sponsor.

We have now registered with FinCEN to be an MSB, however we have not as of yet conducted any transactions. Our outside counsel is stating we are in violation of BSA because our still drafted BSA Policy is not board-approved.

I don't agree. A BSA Policy is not a requirement to register, though I certainly feel it must be implemented before any transactions are accepted or initiated. Also, while I support board-approval due to our risk profile, I don't agree that the policy must be board-approved.

Any thoughts on the matter would be greatly appreciated.

BTW - we are still within the 90-day threshold for when we received the federal license (date business was established).

" Our outside counsel is stating we are in violation of BSA because our still drafted BSA Policy is not board-approved."

Since you are paying them and they have made such a claim, it should not be a problem for them to provide you with a citation to support that statement.

By the way, they won't find one for MSB operations.

If you are not already, you want to get familiar with this document. It probably has the most MSB materials in it regarding FinCEN expectations for MSBs. Some of the expectations regarding senior management or the board of an MSB can be found starting around page 55. Not every MSB has a Board is one reason it is not a requirement carved in stone, like at a financial institution.


http://www.fincen.gov/news_room/rp/files/MSB_Exam_Manual.pdf

Thanks. I was of that mindset as well. Poking around I have discovered this particular lawyer has a penchant for making proclamations of fact that, while sound business practices, are not often supported by b&w.

Ah yes, the most dangerous type of legal counsel