Thread Options
#1736340 - 08/29/12 06:24 PM Confusion on check cashers
tmtz Offline
New Poster
Joined: Jun 2011
Posts: 12
We have a mom and pop convenience store that has been cashing checks for thier customers. They are always small checks (less than $1000). When questioned, the owners said that they were just helping out customers "after banking hours" and this in turn helped them because their customers would spend some money in the store.

We have had some discussion here at the bank concerning possible issues that may arise from this. Some argue that as long as they do not exceed $1000 per customer per day, we are fine. Others want the activity stopped right away.

I have tried looking up regulations concerning check cashers in Texas, but I think I just confused myself.

We are in the South Texas oil boom, and some larger stores (Wal Mart, HEB) are cashing payroll checks. Large Checks. Do we need to require something from these stores as far as MSB is concerned?

Return to Top
BSA/AML/CIP/OFAC Forum
#1736406 - 08/29/12 07:55 PM Re: Confusion on check cashers tmtz
BSABecky Offline
100 Club
BSABecky
Joined: Mar 2011
Posts: 126
Seymour, IN USA
Any business cashing checks for their customers above $1,000 per their customer per day MUST register as an MSB with FinCEN. Provided the mom & pop place isn't getting ton of chargeback checks, I don't see why there are people that "want the activity stopped right away". Texas does not have their own licensing for check-cashers.

As far as requirements for places like Wal-Mart that cash payroll checks, if they are your customer, it's possible they're an agent for an MSB. If this is the case, you can request a copy of their agent agreement to keep on file.
_________________________
My opinions do not necessarily reflect those of my employer.

Return to Top
#1736414 - 08/29/12 08:10 PM Re: Confusion on check cashers BSABecky
Dani York, CRCM Offline
Power Poster
Dani York, CRCM
Joined: Apr 2005
Posts: 3,663
TN
Originally Posted By: BSABecky
Provided the mom & pop place isn't getting ton of chargeback checks, I don't see why there are people that "want the activity stopped right away".


Agree, however, keep in mind, that you will want to increase monitoring of this account to watch for the over 1000.00 threshold that would trigger the MSB discussion.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

Return to Top
#1736834 - 08/30/12 06:23 PM Re: Confusion on check cashers tmtz
tmtz Offline
New Poster
Joined: Jun 2011
Posts: 12
The mom and pop store does not get many chargebacks at all. They seem to have a good handle on which checks to cash. I checked and the other check cashers are registered agents for Western Union.

Thanks for the replies!

Return to Top
#1736842 - 08/30/12 06:31 PM Re: Confusion on check cashers tmtz
Cape Codder Offline
Gold Star
Joined: Jul 2011
Posts: 413
I would not have expected a "Check Casher to be acting as an agent for a parent MSB. They can sell and redeem checks and transmit funds as an agent, but am missing something if they've been classified as a check cashing agent.
_________________________
Nothing difficult is ever easy.

Return to Top
#1737278 - 08/31/12 05:25 PM Re: Confusion on check cashers tmtz
NE Wx Forecast - Frosty Offline
Gold Star
NE Wx Forecast - Frosty
Joined: Mar 2011
Posts: 441
SE, Nebraska
Confusion abounds (with me too) on this subject of MSB's and Agents of...

We had a recent discussion about this on this forum. But to clarify, the question above is simply about a business that is not acting as an MSB agent, who happens to cash a few checks. By definition if they don't go over the $1,000/day/person rule they are fine. The book even says that based on risk, the minimum CDD may only be required.

In our case we have two that are indeed Agents for MSBs (selling MO's), yet their store policy limits to $100/day (far short of the $1,000 trip) and are not MSB's themselves. Some would argue that point. But we simply download a copy of the "parent" MSB registration application (which is all you can get now from FinCEN) and it satisfies our examiners and our auditors. But I still don't think that is necessary. The MSB has their own BSA program they administer it on our customers.

Return to Top
#1760431 - 11/23/12 06:21 PM Re: Confusion on check cashers tmtz
banker1976 Offline
Gold Star
Joined: Nov 2005
Posts: 344
Mid-Atlantic
Isn't there something somewhere that says if a business cashes a check exceeding $1,000 and it's a one time incident they don't have to register? Or am I not thinking correctly? Our situation is upon a regular review of a convenience store, they cash checks but always remain under $1,000 except for one check that exceeded $1,000 just once during a six month review of account transactions.
_________________________
CAMS
CAFP

Return to Top
#1760499 - 11/23/12 10:52 PM Re: Confusion on check cashers tmtz
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,645
Galveston, TX
If they are in the business of check cashing, if they exceed $1,000 then they are required to register.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1760603 - 11/26/12 03:45 PM Re: Confusion on check cashers banker1976
Ted Dreyer Offline
Diamond Poster
Ted Dreyer
Joined: Apr 2001
Posts: 2,245
banker1976: You may be thinking of this guidance regarding MSBs that cease cashing checks over $1000/day: http://www.fincen.gov/news_room/rp/rulings/pdf/fincen_ruling2005-3.pdf

Return to Top
#1760643 - 11/26/12 04:55 PM Re: Confusion on check cashers tmtz
jade1234 Offline
Member
Joined: Jul 2010
Posts: 97
Medford, Oregon
FinCEN Guidance, FIN-2006-G006, issued February 3, 2006, states that if a business crosses the $1,000 definitional threshold on a one-time bases, that one-time action, if not repeated, does not make the party in question a check casher, subject to all applicable requirements. If they have crossed this threshold once, there would be significant monitoring involved to ensure they did not cross the threshold again.

Return to Top
#1760656 - 11/26/12 05:13 PM Re: Confusion on check cashers tmtz
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,645
Galveston, TX
I would read that footnote to indicate if you were a business which does not engage in the business of being a "check casher". Also, in order to determine whether or not this is a one time event, it basically relegates the bank to examine every deposit they make to ensure no second occurrence. I would make them register or jettison the account.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z