If a customer cashes checks as part of their business but doesn't cash checks over 1000.00, are we required to do due diligence to ensure that they are state licensed? Is it best practice...?

They are still an MSB under BSA/AML rules, they just don't need to register with FinCEN. Same other due diligences are required.

MSB Due Diligence Expectations
Registration with FinCEN, if required, and compliance with any state-based licensing requirements represent the most basic of compliance obligations for MSBs. As a result, it is reasonable and appropriate for a bank to require an MSB to provide evidence of compliance with such requirements, or to demonstrate that it is not subject to such requirements due to the nature of its financial services or status exclusively as an agent of another MSB(s).

Thanks

I have a check casher that does meet the requirements to register for FinCEN or DFS. Even though we are still manual monitoring transactions, I am consistently monitoring their activity to make sure they do not cross any lines and a SAR filing necessary.

At our last FDIC exam, the examiner told us these were not MSBs and we needed to call them something besides MSBs. We treat them like MSBs, but need to come up with a different name for them - suggestions???

Check cashers???

Thanks rlcarey. I guess what I'm trying to get at are listed (below). Per FinCEN the definition of Money Services Businesses:

The term "money services business" includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:

(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler's checks, money orders or stored value.
(4) Seller or redeemer of traveler's checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.

An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler's checks, money orders or stored value; and seller or redeemer of travelers' checks, money orders or stored value. The threshold applies separately to each activity -- if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity.

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity. (I take this to mean the actual business (like Western Union - so an agent of Western Union is not an MSB).


1. If they are under the $1,000 threshold for all but Money transmitter, are these businesses even MSBs?
2. If they are - we can't call them MSBs so we need to call them something else.
3. Or do we even need to keep track of these customers if they don't meet the definition of MSB?

Well what you call them is really up to you - "Potential MSB's"? I am not sure of the context the examiner was driving at.

If you know these customers cash checks, without on-going monitoring, how are you ever going to know whether they started cashing checks or conducted other activity over the thresholds? Every bank I know tracks these "almost MSBs".

I have one, I just monitor them as if they were an MSB. For me, once an MSB, always an MSB, and you will always be high risk on my radar for increased monitoring. I do not know what your examiner was getting at in terms of calling them something else, just make sure you are tracking and monitoring them.

What about the local "mom & pop" grocery store that cashes checks with a limit of $100? This is the majority of what we are dealing with. Are these considered MSBs?

No, not unless they cash checks for over $1,000.00 in one day for same customer.