Financial institutions may need to update anti-money laundering controls, due diligence and screening associated with their third-party payment processor customers, particularly those based internationally, according to U.S. Treasury guidance issued Monday.
Faced with raised compliance expectations, many large financial institutions are expanding the types of corporate clients they ask to implement anti-money laundering controls to include import-export businesses, payroll companies and payday lending firms.
Finding themselves locked out of some large U.S. banks because of compliance concerns, third-party payment processors are increasingly turning to small- and mid-sized institutions for financial services, say consultants.
A federal warning about the compliance risks of payment processors tied to telemarketers will mean closer scrutiny of the companies but not a wholesale dropping of the accounts, say consultants.
The European Union proposed rules Tuesday on how electronic money might be issued, a step meant to further expand the market for prepaid and stored value payment products.
Wachovia Bank will pay up to $125 million to compensate victims of a telemarketing fraud conducted through accounts at the bank and a $10 million civil penalty under agreements reached with the Office of the Comptroller of the Currency.
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