In a press release this morning titled "FinCEN Statement on Providing Banking Services to Money Services Businesses", FinCEN has reiterated " expectations regarding banking institutions’ obligations under the Bank Secrecy Act for money services businesses."
Noting industry concerns that banks are indiscriminately terminating the accounts of all MSBs, or refusing to open accounts for any MSBs, FinCEN commented:
FinCEN does not support the wholesale termination of MSB accounts without regard to the risks presented or the bank’s ability to manage the risk. As noted, MSBs present varying degrees of risk, and not all money services businesses are high-risk. Therefore, when deciding whether to provide services to an MSB customer, financial institutions should assess the risks associated with that particular MSB customer. A financial institution’s risk assessment should include considering whether customer risks can be managed appropriately and the financial institution should maintain levels of controls commensurate with the customer risks presented. Banks that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to MSB customers, regardless of any MSB’s specific business model.
FinCEN importantly also noted: "However, the Bank Secrecy Act does not require, and neither does FinCEN expect, banking institutions to serve as the de facto regulator of the money services business industry any more than of any other industry. FinCEN recognizes that, as a practical matter, it is not possible for a bank to detect and report all potentially illicit transactions that flow through an institution."
In closing, FinCEN noted: "FinCEN and its regulatory colleagues will continue to monitor trends with respect to the provision of banking services to MSBs and are committed to taking steps to address the wholesale de-banking of an important part of the financial system."d