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#509589 - 03/07/06 06:38 PM Money Services Business
CrashDavis Offline
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Joined: Jun 2005
Posts: 283
Our bank has a customer in one of our small towns. This person has a Dry Goods Business and also sells furniture. In reviewing his accounts we see third party checks that he appears to be cashing for the customer. He indicates he doesn't cash checks for customers. They come in and buy merchandise whether it is furniture or dry goods and he gives them the difference in cash. It is times over $1,000.00. In some cases people buy furniture on layaway and they come in and make payments. Their pay checks are used to make a payment and he gives them the difference in cash. Most of these customers do not have checking accounts and they do this so they do not have to pay a check cashing fee.

My question is should this business be considered a Money Service Business. The customer refuses to register as a MSB. Can we get a statement from him that he doesn't cash checks and would this suffice.

Any opinions.

Thanks

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#509590 - 03/07/06 06:46 PM Re: Money Services Business
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Look at the amount of cash going back across the counter. If he takes my $1400 check and I buy a $900 sofa, no problem. If he takes my $1400 check and I make my $85 monthly payment or buy a pack of gum, he is an MSB. Any statement from him that he doesn't cash checks would be something of a lie and put him in a position to say that you said it was okay.
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#509591 - 03/07/06 07:04 PM Re: Money Services Business
CrashDavis Offline
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Joined: Jun 2005
Posts: 283
That was my thinking. I believe he is cashing checks. It doesn't matter whether it is giving the whole amount back in cash or partial. In some situations the amount given back to the customer is over $1,000.00. These people he does business with doesn't have a checking account for whatever reason, some I think I know why. I believe he is a MSB.

Thanks for your response.

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#509592 - 03/07/06 07:13 PM Re: Money Services Business
Skyline Offline
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Skyline
Joined: Sep 2005
Posts: 589
I agree with you that he would be acting like a MSB, but what puzzles me is how you know that the "cash back" is >$1000. Do you see the actual sales ticket in your deposit or is there a notation on the check of the amount given back in cash? Are they repeat customers?
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