News
Banks Heighten MSB Due Diligence, Demanding Regular Independent Reviews
By Brian Monroe
printMoney services businesses are jumping through a new hoop to prove they have adequate anti-money laundering programs: in response to demands from banks, they are turning over copies of the independent reviews of their programs meant for regulators. Over the past 18 months, banks have ratcheted up scrutiny of their money service business (MSB) relationships, although the regulations are clear that they are not the de facto regulator of MSBs, said Jeff Sklar, managing director of SHC Consulting Group in Bellmore, NY. Previously banks only sought confirmation that an MSB had an anti-money laundering (AML) program in place, as they...
TO READ THE FULL STORY
Related News
Not all money transmitters are overly vulnerable to money launderers and terrorist financiers and banks should refrain from automatically closing their accounts, U.S. Treasury Department officials said Monday.
When Robert Frimet arrived last summer at a small check cashing business in California to audit its compliance with financial crime and sanctions rules, one problem immediately stood out: the business had never heard of the U.S. Treasury Department's Office of Foreign Assets Control.
The division of investigatory and enforcement powers between two U.S. Treasury Department agencies has resulted in few monetary penalties for anti-money laundering compliance lapses by money services businesses and tension between the two agencies, say current and former government officials.
The release of the long anticipated Bank Secrecy Act/Anti-Money Laundering Examination Manual for Money Services Businesses has left many regulators, money services businesses and banks struggling to understand what it means for them. Here are some insights into implementing the manual.
The number of suspicious activity reports filed by money services businesses increased slightly in the first half of 2008 compared to the same period in 2007, according to data provided by the U.S. Treasury Department.
The U.S. Treasury's Financial Crimes Enforcement Network said in June 2007 that it was working with Internal Revenue Service and state regulators to produce an anti-money laundering exam manual for MSBs.
Several money services businesses have closed since regulators designated them as high-risk for money laundering.
U.S. regulators haven't done enough to help money services businesses repair their relationship with banks, say MSB trade groups, which blame the regulators for much of the damage.
Banks often have misconceptions about their Bank Secrecy Act-related duties when opening accounts for money services businesses, consultants and bankers say.