Due Diligence in Overseeing MSB Accounts

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Question:

As a community bank, we do not open accounts for MSBs due to the risk. However, we have several businesses that are agents of MSBs such as Sigue Corp, RIA Financial, Moneygram, and Western Union. Is the MSB responsible to see that these businesses are meeting reporting requirements, or are we to enhance our due diligence in overseeing these accounts?

Answer:

It's likely that those agents are, in fact, MSBs (depends on size of transactions) even though they don't have to register as such with FinCEN. I think that most banks would consider agent MSBs higher risk than most businesses, if perhaps not as high risk as an independent (non-agent) MSB.

First published on BankersOnline.com 7/18/11