- 35 years of government and private sector experience in law enforcement, regulatory and management expertise in the areas of regulatory compliance, financial crimes and customs violations
- Expertise includes independent reviews and investigations, threat/risk assessments, domestic and international training, expert testimony and anti-money laundering program development
- Former Deputy Director, Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury
- Former Executive Director of Operations, Director of Financial Investigations, Group Supervisor, and Special Agent for the U.S. Customs Services
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Money Services Businesses, or MSBs, are non-bank financial entities or individuals who engage in certain monetary exchanges and services. MSBs include:
- Money transmitters
- Check cashers
- Currency dealers
- Issuers or sellers of travelers checks or money orders
- Providers of pre-paid access
In 2001, Congress expanded its efforts to combat money laundering and other financial crimes to include MSBs. One step was amending the Bank Secrecy Act to regulate them much the same as banks, savings and loans and credit unions.
Specifically, the USA PATRIOT Act extended to MSBs the requirement of creating "paper trails" by keeping records and filing reports on certain transactions.
Here are some of the regulatory requirements for MSBs:
- Certain MSBs must register and maintain a list of agents, if any.
- Most states require MSBs to obtain a license from their individual state financial division.
- If an MSB knows, suspects or has reason to suspect that any transaction or activity is suspicious and it involves or aggregates funds or other assets of $2,000 or more, it must file a Suspicious Activity Report (SAR).
- All MSBs are required to develop and implement an Anti-Money Laundering (AML) Compliance Program.
- If an MSB provides either a cash-in or cash-out transaction of more than $10,000 with the same customer in a day, it must file a Cash Transaction Report (CTR).
- If an MSB provides money orders or traveler's checks for cash of $3,000-$10,000, inclusive, to the same customer in a day, it must keep a record.
- If an MSB provides money transfers of $3,000 or more to the same customer in a day, regardless of the method of payment, it must keep a record.
- If an MSB provides currency exchanges of more than $1,000 to the same customer in a day, it must keep a record.
Failure to comply with these regulations subject MSBs to large civil and criminal monetary fines and the possibility of prison sentences for those deemed accountable.
The "four pillars" of Anti-Money Laundering compliance, as set forth by the U.S. Treasury's FinCEN, or Financial Crimes Enforcement Network, are applicable to Money Services Businesses. They are:
- Establish internal controls.
- Designate a compliance officer.
- Conduct independent testing.
- Establish a training program.
Best Practices are detailed here for addressing each of the "four pillars" (see Best Practices 2-5) and for fully meeting other requirements for compliance with Anti-Money Laundering (AML) provisions of the Bank Secrecy Act.
EDITOR'S NOTE: Unless indicated otherwise, descriptions of government regulations, legal definitions and guidelines for compliance used in this topic are taken in part or in full from the Bank Secrecy Act Anti-Money Laundering Examination Manual, published by the Federal Financial Institutions Examination Council. http://www.ffiec.gov/bsa_aml_infobase/pages_manual/manual_online.htm