We are looking at banking an MSB that for the most part appears to have a good program. They have PPP and their BSA Officer has a lot of experience and they appear to have a working TMP. We are not taking their main operating account and would like to proceed with establishing the relationship. My only concern is they have not registered with FinCEN. Their GC is indicating that the bank who has their main relationship hasn't required them the register. I've been pushing back on this asking for the regulation for this stance and nothing has come of it. We would like to proceed but not at the risk of opening an account for an unregistered MSB.

Any thoughts on this? Has anyone run into this before?

"Their GC is indicating that the bank who has their main relationship hasn't required them the register."

If they are required to be registered, it is Federal law that they do so - not what their main bank requires.

If they are not registered and they need to be, then you are buying yourself SAR filings into perpetuity by opening the account relationship.

That's my concern Randy. We open the account and are filing SARs forever. I've looked over the exemptions to register and I don't see any that would apply in this case.

If you have reviewed the business and determined they are an MSB, I don't see how they are exempt from registering. Reminds me of some advice I have seen on these forums before. Never take advice from the other guys lawyer....in this case bank.

In my perspective, banking only part of an unregistered MSB could be more risky than banking the entire noncompliant MSB. Maybe there's more to it and good reasons that this part of their relationship isn't suited for their primary institution, but it could also help them obfuscate suspicious transactions, and with no regulatory oversight.

If they know enough to have a good program, they should know enough to explain why they aren't required to register. Every bank's risk tolerance is different, but I'd say no.

Agree with everyone else. We wouldn't touch this one.

Thank you everyone.