Topic: Money Services Businesses (MSBs)
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We have a business customer that operates a gas station/convenience store. The customer cashes checks for its customers and is required to register as a money services business with FinCEN, which it has. Does this customer also need to register with the State of Illinois as a check casher? If so, where do I look to see if they are already registered?
The principal law in Illinois regulating check cashing performed by non-financial institutions is the Illinois Currency Exchange Act (CEA). However, a money services business (MSB) is not automatically required to register as a currency exchange under the CEA. Based on your stated facts, we think it unlikely that this customer would be required to become…
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Should our grocery store customer be registered as a money services business (MSB) or obtain an Illinois license as a currency exchange if it is cashing checks over $1,000 per day per customer? The grocery store is not acting as an agent for another MSB.
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…
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Can we bank a customer that is operating like an MSB (providing check-cashing services) that does not have an MSB license? Why would a larger bank refuse to bank such a customer, and tell them to try a smaller bank for obtaining banking services?
The question of whether you should bank a company that is providing check cashing services is a business decision based on the risks involved and your institution’s ability to manage those risks. The Bank Secrecy Act requirements for money services businesses (MSBs) and your anti-money laundering responsibilities do not depend on the size of your…
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If we have a business customer that cashes payroll checks for its employees, should we consider the customer to be a money services business (MSB)?
The FinCEN FAQs state that an employer cashing only its own payroll checks would not be considered a check casher (and therefore would not be considered to be a money services business) for purposes of FinCEN’s MSB requirements, even if the amounts of checks cashed would exceed $1,000. FinCEN recently codified this exclusion. A July…