Posted By: ledfoot

NBFI/ MSB - 01/16/13 05:23 PM

Management is reconsidering whether we will open any new MSB accounts. In most cases when they refer to MSB they are only thinking "check casher" but I consider not only in that regard but also include services they provide in an agent role.
What I need to know or understand is what's the difference in regulatory requirements for monitoring a MSB/check casher/agent vs a NBIF. Isn't a NBFI just another way of describing a business that is not required to be registered but provides financial services as an agent of a MSB (i.e. sells money orders for Western Union, wires money through Sigue etc.)? I want to be able to explain to management the additional time consumed to monitor these accounts and additional risks in handling these.
Posted By: ComplianceNerd

Re: NBFI/ MSB - 01/16/13 06:05 PM

Entities can conduct any of the following activities to be considered an "MSB"
- Check cashing
- Purchase / Sale of Money Orders
- Currency Exchange
- Traveler's Checks
- Money Transmission
- Stored Value *(Gift Cards) *The definition of an issuer, seller or redeemer of stored value is further limited in our regulations to only those persons that issue, sell or redeem more than $1,000 in stored value per person per day in one or more transactions. For example, one customerís simultaneous purchase of three stored value cards, each with a face amount of $500, would reach this threshold. (From FinCen)

Now... if the customer is a registered agent acting on behalf of Western Union or something similar, they're not required to be considered an MSB nor registered as an MSB. High risk customer? Probably. But they don't have the necessary requirements set forth by FinCen.

I hope this helps you a little. You've got a lot of definitions that need to be defined before you can really say, what's the difference between this and that... etc.

Posted By: edAudit

Re: NBFI/ MSB - 01/16/13 06:10 PM


Posted By: devsfan

Re: NBFI/ MSB - 01/16/13 06:26 PM

I am going to disagree with 1 of EXT's statements in that a business that is a registered agent of another MSB such as Western Union, Sigue, etc is certainly considered an MSB with the only difference being that the business does not have to register with FinCEN. You would need to follow the FinCEN guidance on banking MSBs.
Posted By: ComplianceNerd

Re: NBFI/ MSB - 01/16/13 10:07 PM

Eeek! Sorry about that!

But I agree w/ you though. smile