Millions of Americans are served by Money Service Businesses such as financial service centers, money transmitters, and even your local post office. But in recent years, an increasing number of banks have ended the accounts of their Money Service Business (MSB) customers, affecting thousands of stores across the country. Some banks have even been refusing new accounts, and the number of these available depositories has been steadily shrinking.
The tragic events of September 11, 2001 and the subsequent enactment of the USA Patriot Act forever changed the relationship between MSBs and the banks that served them. In spite of records of compliance as good or better than most banks themselves, MSBs were deemed unacceptable risks.
But contrary to a widely held belief, MSBs are not a high risk for money laundering. In fact the industry’s Bank Security Act enforcement record is good, according to the Financial Service Centers of America, or FinCEN. Of all the civil penalties against banks and other financial institutions listed on the FinCEN website – many of them in multi-millions of dollars – only a handful have been assessed against check cashers and other MSBs.
Federal regulatory agencies have attempted to remedy this problem. It has also been addressed with bi-partisan legislation that would relieve banks of the requirement to review and monitor the compliance systems of their MSB customers, leaving regulation to Federal and State authorities.
Robert Frimet is a Certified Anti Money Laundering Specialist with twenty-five years of experience in the Money Service Business and related areas. Bob Frimet lives and works in Las Vegas, Nevada.
The tragic events of September 11, 2001 and the subsequent enactment of the USA Patriot Act forever changed the relationship between MSBs and the banks that served them. In spite of records of compliance as good or better than most banks themselves, MSBs were deemed unacceptable risks.
But contrary to a widely held belief, MSBs are not a high risk for money laundering. In fact the industry’s Bank Security Act enforcement record is good, according to the Financial Service Centers of America, or FinCEN. Of all the civil penalties against banks and other financial institutions listed on the FinCEN website – many of them in multi-millions of dollars – only a handful have been assessed against check cashers and other MSBs.
Federal regulatory agencies have attempted to remedy this problem. It has also been addressed with bi-partisan legislation that would relieve banks of the requirement to review and monitor the compliance systems of their MSB customers, leaving regulation to Federal and State authorities.
Robert Frimet is a Certified Anti Money Laundering Specialist with twenty-five years of experience in the Money Service Business and related areas. Bob Frimet lives and works in Las Vegas, Nevada.
