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#2230246 - 02/04/20 09:09 PM Tier II MRB? Supplier of Packaging
BSAGal Offline
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If you have a customer that is a supplier of packaging to a Tier I MRB, at what percentage of gross income would you consider the supplier to be a Tier II MRB? Is there such a magic number? Are they automatically a Tier II MRB, regardless of the amount of sales?

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#2230250 - 02/04/20 10:12 PM Re: Tier II MRB? Supplier of Packaging BSAGal
ColoradoAML Offline
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Tiers of MRBs are common in BSA P&P, but they aren't part of regulation. Whether or not they are a Tier II MRB, or what portion of revenue is required to call them that, depends on how your bank has defined Tier II MRBs.

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#2230839 - 02/12/20 05:50 PM Re: Tier II MRB? Supplier of Packaging BSAGal
Pat Patriot Act Offline
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Originally Posted by BSAGal
If you have a customer that is a supplier of packaging to a Tier I MRB, at what percentage of gross income would you consider the supplier to be a Tier II MRB? Is there such a magic number? Are they automatically a Tier II MRB, regardless of the amount of sales?


These types of questions are why, in my professional opinion, the "Three Tier" Model is unnecessarily complex. But I've seen Institutions have good results by modifying the guidelines to fit what makes sense to them.

IMHO, the "Tiers" of MRB make more sense when they're directly linked to SAR filing, such that Tier I = SAR customers and Tier II & III are not likely to be SAR customers. So, your organizational stance on whether or not you'll file SARs on "indirect" activity is key. While FinCEN has not publicly stated as much - believe it or not - some Institutions have gotten them to respond in writing that they do not consider "indirect" MRBs as warranting SARs unless some other type of suspicious activity is being conducted.

Presuming that you are filing on indirect activity, in my opinion, it makes practical sense to set the trigger not on the dollar percentage; rather, on the estimated monthly dollar volume of indirect marijuana-related activity. And the dollar amount should correspond with an estimated volume of activity that projects around a minimum of $5,000 per quarter (e.g. $1,500/mo.). That way there's a clear nexus between your guidelines and the actual risk that needs to be managed (the risk that an examiner would cite you for failing to file SARs on indirect MRB activity).
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