Yes, from what you have told us, the customer is required to register as an MSB with FinCEN. A business that provides check cashing services “in an amount greater than $1,000 for any person on any day in one or more transactions” must register as an MSB. Since the grocery store is not acting as an agent for another MSB, it should be registered with FinCEN.

However, it is unlikely that the customer is required to be licensed as a currency exchange under the Illinois Currency Exchange Act. The Act requires a business to be licensed as a currency exchange if it charges a fee for cashing checks, but it exempts a retailer that cashes checks only as an incident to its primary business. This determination depends on the character and nature of the store’s check cashing business, not the number or dollar amounts of checks cashed at the store.

The Illinois Supreme Court has held that a grocery store was not required to be licensed because its check cashing service was incidental to its primary business. In that case, the check cashing service was provided for the customer’s convenience, it was advertised as an inducement to bring in customers, a flat fee was charged irrespective of the amount of the cashed check and the service operated at a substantial loss to the store. If your customer’s check cashing service also is incidental to its primary business of selling groceries, it will not be required to obtain a currency exchange license.

For resources related to our guidance, please see:

• FinCEN Regulations, 31 CFR 1010.100(ff)(2) (A money services business is a “check casher,” which is defined to include “[a] person that accepts checks . . . in return for currency . . . in an amount greater than $1,000 for any person on any day in one or more transactions.”)

• Currency Exchange Act, 205 ILCS 405/1(b) (“Nothing in this Act shall be held to apply to any person, firm, association, partnership, limited liability company, or corporation who is engaged primarily in the business of . . . selling tangible personal property at retail who, in the course of such business and only as an incident thereto . . . cashes checks, drafts, money orders or other evidences of money.”)

• Heidelberger v. Jewel Companies, Inc., 57 Ill.2d 87, 93 (1974) (“The incidental character of the check-cashing service is established by the advertising and operation of the service as an inducement to customers to shop at Jewel, the convenience aspect of the service insofar as customers are concerned, the method of charging a flat fee irrespective of the amount of the check cashed, the fact that the service is operated at a substantial loss and the general procedures followed by Jewel in conducting the service.”)