Money Services Businesses
I had a call from a credit union that had some questions about providing services to money services businesses (MSBs). The businesses, by their very nature, can bring additional BSA-related risk to a credit union. Are they too risky for credit unions to serve?
Not necessarily. Financial regulators, including NCUA, issued this guidance back in 2005. The guidance indicates:
By clarifying our expectations, FinCEN and the Federal Banking Agencies are confirming that banking organizations have the flexibility to provide services to a wide range of money services businesses while remaining in compliance with the Bank Secrecy Act.
The guidance goes on to indicate that credit unions must tailor their due diligence of the MSB to the risk of its operation. So the bottom line is this: credit unions may serve MSBs, but they must have the internal controls in place to properly manage the added BSA-related risk.
And here's a great website regarding MSBs. It is www.msb.gov. It is a FinCEN website dedicated to all things MSB. If your credit union has questions about MSBs, this is a great place to start.