Money Services Businesses

 

Money Service Businesses must establish a program tailored to their operations and the money-laundering risks posed. The Bank Secrecy Act requires money services businesses to establish anti-money laundering programs that include an independent audit function to test programs. The relevant Bank Secrecy Act regulation requires MSB to provide for independent review to monitor and maintain an adequate AML Compliance Program. The independent review determines whether the MSB is operating in compliance with the requirement of the Bank Secrecy Act and the MSB’s own policies and procedures.

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The anti-money laundering compliance program must be in writing and must be reasonably designed to prevent the money services business from being used to facilitate money laundering and the financing of terrorism.  At a minimum, the program must:

  • Incorporate policies, procedures and internal controls reasonably designed to assure compliance with the Bank Secrecy Act including:

    • Verifying customer identification;
    • Filing reports;
    • Detecting suspicious activity;
    • Creating and retaining records; and
    • Responding to law enforcement requests.

  • Designate a compliance officer to assure day-to-day compliance with the program. The responsibilities of such person include assuring that:

    • The business properly files reports and creates and retains records;
    • The compliance program is updated as necessary to reflect current requirements and related guidance issued by the Department of Treasury; and
    • The business provides appropriate training and education.

  • Provide for ongoing training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions.

  • Provide for an independent review to monitor and maintain an adequate program.  The scope and frequency of the review should be commensurate with the risk of the financial services provided by the money services business. Such review may be conducted by an officer or employee of the MSB so long as the reviewer is not the person designated as the compliance officer.

In addition, the rule provides that compliance programs should be commensurate with the risks posed by the location and size of, and the nature and volume of financial services provided by, the money services business. 

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All categories of money services businesses subject to BSA regulation under 31 CFR part 103 must implement an anti-money laundering compliance program, including:

  • Currency dealers or exchanges

  • Check cashers

  • Issuers, sellers, and redeemers of travelers checks, money orders, or stored value cards; and

  • Money transmitters

Policies, procedures, and internal controls developed and implemented shall include the following to the extent they are applicable to MSBs:

  • Procedures for assuring that applicable customer identification requirements are met;

  • All reports required under 31 CFR part 103, including but not limited to suspicious activity reports are filed in a timely fashion;

  • All records are maintained in complete and accurate form;

  • Requests for information from law enforcement agencies are handled with appropriate speed; and

  • To the extent that automated data processing systems are used, MSBs should integrate their compliance procedures with such systems.
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