Please tell me some of the reasons that you have given management as to why these type of businesses are considered "high risk" even when they are not mentioned on the list in the FFIEC exam manual. As a seasoned BSA professional I know the reasons but wanted to see what others have told management to make them understand why if we bank this type of business, we need to do have a program in place specific to the type of EDD required "prior" to marketing them.

Prior thread. Another.

If there is any consensus that a gun store is automatically high risk for money laundering, there has been no mention of it in this forum for the last 5 years.

I know the nature of selling guns can send a shivver down a spine ... and an examiner may look at it a little deeper ... but if it is a legitimate company, they are regulated with extreme scrutiny. I don't consider them any higher than any other business, as long as there are no other red flags (similar to other businesses) ... example - if they only sold guns online, I may take an extra peek.

I've seen situations where a gun shop is considered higher risk for the transaction activity on the account. For example, it may take in alot of cash, there by making it a cash intensive business. Just a thought...

Thank you for your input on this. I did not intend to imply that I had gotten the idea that gun dealers were high risk from the forum. However from my past experience with examiners, these customers and their activity were always scrutinized when identified during regulatory exams and we coded them as high risk for monitoring purposes.

I wanted to see if anyone had specific questions or information that was requested in addition to the normal due diligence performed at account opening. Thank you for any input you can offer.

No, I ask them the same questions I ask everyone else.

I do some Google searches on the owner & the business ... just to make sure there is no negative press/arrests. The account officer will also do a site visit, but mostly as a "sales" call & "how are you doing" ... kind of thing. Makes me feel better though that someone sets foot inside the location. ... but that's about it.

That is what I was thinking...it might be a cash intensive business.

It might, but that would be a function of its business practices. There's nothing about a gun shop that is inherently cash-intensive.

I know the nature of selling guns can send a shivver down a spine ... and an examiner may look at it a little deeper ... but if it is a legitimate company, they are regulated with extreme scrutiny. I don't consider them any higher than any other business, as long as there are no other red flags (similar to other businesses) ... example - if they only sold guns online, I may take an extra peek.

Dealers in Firearms and/or ammunition must have a Federal Firearms Dealer License. My dad, who did industrial engraving, had to get this license to even have the gun frames in his shop to engrave the caliber,serial numbers, manufacturer etc. for the manufacturer. This could be checked to verify the legitimacy of the dealer. It could possibly be another piece of CIP documentation in this case. The Bureau of Alcohol, Tobacco and Firearms is where you would probably start. They are pretty serious about these.