We have a customer that provides its customers with wire transfer services through Western Union. This customer does not have to register as a money services business (MSB) since it is an agent for an MSB. This customer requires its customers to pay cash to wire money and only sends wires of $800 at a time, although there is no limit on the number of times its customers can wire money in a day. Do we need to do a full risk assessment of this customer and create enhanced account reviews? Also, if this customer is a registered company on the New York Stock Exchange (NYSE), is it exempt from currency transaction report (CTR) filings?

We believe this customer is an MSB, and as a result, you should undertake the necessary risk assessment and account reviews required for MSBs. However, this customer would be exempt from CTR filings if it is listed on the NYSE.

MSBs include “money transmitters” which FinCEN defines as “[a] person that provides money transmission services,” meaning “the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.” Based on this definition, we believe a business that facilitates wire transfers as an agent of Western Union would be considered an MSB. Although businesses that are MSBs solely because they serve as an agent of another MSB are not required to register with FinCEN, you still must perform the same due diligence for such customers as you would for registered MSBs.

The “Interagency Interpretive Guidance on Providing Banking Services to Money Services Businesses” sets forth the minimum due diligence expectations for opening and maintaining accounts for MSBs, which include: (1) applying the bank’s Customer Identification Program (CIP), (2) confirming the MSB is registered with FinCEN, if required, (3) confirming compliance with state and local licensing requirements, if applicable, (4) confirming agent status, if applicable and (5) conducting a BSA/AML risk assessment to determine the level of risk associated with the account and whether further due diligence is necessary.

The OCC also has issued guidance providing that OCC-supervised banks should “assess the risks posed by each MSB customer on a case-by-case basis and to implement appropriate controls to manage the relationship commensurate with the risks associated with each customer.”

Additionally, banks are not required to file CTRs in relation to entities that are listed on the NYSE. Accordingly, your customer would be exempted from CTR filings if it is listed on the NYSE.

For resources related to our guidance, please see:

FinCEN Regulations, 31 CFR 1010.100(ff)(5)(i) (“Money services business [includes a] . . . (5) Money transmitter. . . . (A) A person that provides money transmission services. The term ‘money transmission services’ means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. ‘Any means’ includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; or (B) Any other person engaged in the transfer of funds.”)

FFIEC BSA/AML Examination Manual, Nonbank Financial Institutions—Overview, Footnote 283 (“Refer to 31 CFR 1022.380. All MSBs must register with FinCEN (whether or not licensed as an MSB by any state) except: a business that is an MSB solely because it serves as an agent of another MSB

Interagency Interpretive Guidance on Providing Banking Services to Money Services Businesses Operating in the United States, page 4 (April 26, 2005) (“Based on existing Bank Secrecy Act requirements applicable to banking organizations, the minimum due diligence expectations associated with opening and maintaining accounts for money services businesses are: [1] Apply the banking organization’s Customer Identification Program; [2] Confirm FinCEN registration, if required; [3] Confirm compliance with state or local licensing requirements, if applicable; [4] Confirm agent status, if applicable; and [5] Conduct a basic Bank Secrecy Act/Anti-Money Laundering risk assessment to determine the level of risk associated with the account and whether further due diligence is necessary.”)

OCC Bulletin 2014-58, Banking Money Services Businesses: Statement on Risk Management (“MSBs present varying degrees of risk to an institution. Not all MSBs should be considered high risk. In keeping with the OCC’s mission and commitment to ensuring all customers have fair access to financial services, the agency expects OCC-regulated banks to assess the risks posed by each MSB customer on a case-by-case basis and to implement appropriate controls to manage the relationship commensurate with the risks associated with each customer.”)

FinCEN Regulations, 31 CFR 1010.311 (“Each financial institution other than a casino shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000, except as otherwise provided in this section.”)

FinCEN, Frequently Asked Questions Regarding the FinCEN Currency Transaction Report (CTR), Question 17 (“Should we aggregate ‘multiple transactions’? What is the proper way to complete a CTR on transactions involving multiple business entities? Yes. All the individual transactions a financial institution has knowledge of being conducted by or on behalf of the same person during a single business day must be aggregated. Debits must be added to debits, and credits must be added to credits. If cash debit or credit totals exceed $10,000 in a business day, a CTR is required. . . . Multiple transactions in currency must be treated as a single transaction if the financial institution ‘has knowledge that they are by or on behalf of any person and result in either cash in or cash out totaling more than $10,000 during any one business day.’”)

FinCEN Regulations, 31 CFR 1020.315 (“(a) No bank is required to file a report otherwise required by § 1010.311 with respect to any transaction in currency between an exempt person and such bank . . . . (b) For purposes of this section, an exempt person is: . . . (4) Any entity, other than a bank, whose common stock or analogous equity interests are listed on the New York Stock Exchange . . . provided that, for purposes of this paragraph (b)(4), a person that is a financial institution, other than a bank, is an exempt person only to the extent of its domestic operations; . . .”)