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?
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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.
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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?
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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)?
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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…