Money Services Businesses, or MSBs, are non-bank financial entities or individuals who engage in certain monetary exchanges and services. MSBs include:
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:
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:
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