Driven by increased bank regulatory scrutiny, many banks are electing to close MSB accounts to minimize risks of money laundering, fraud and financial crime. It is crucial that MSBs have solid AML Compliance Programs and controls in place and provide that information to their banking partner to assure them that the risk of banking them is mitigated by those controls.
Some MSBs are reacting to economic pressures by cutting AML programs. It is imperative that adequate staffing and resources remain dedicated to transaction monitoring, employee training and agent oversight. Failure to do so will result in regulatory actions and the potential of criminal indictment.
The Independent Review Report is the MSB's assessment of the adequacy of its’ AML program. An MSB should pay careful attention to the findings of the independent review and adopt all recommendations. This will ensure that the company is prepared to regulatory examinations.
Compliance officers must insure that all employees are trained in recent fraud schemes so that they can identify and report suspicious activity. MSB's must also have robust branch and agent oversight programs to insure that all employees are complying with company AML policies and procedures.
MSBs should review recent penalty actions issued by regulators to identify deficiencies that the authorities cited in AML programs. Many times similar deficiencies exist within your own MSB.
In the past several years, major licensed money transmitters have been issued multi-million dollar penalties because of their agents' involvement with money launderers and fraud rings. It is imperative that MSBs have controls over their agents' activity through a robust Agent Oversight Program