It's a scenario that federal regulators have long warned against: use a privately-owned automated teller machine and you might unwittingly walk away with the proceeds of crime in your pocket. Increasingly, regulatory examiners have asked the financial institutions they oversee to detail how they've vetted the independent sales organizations (ISOs) that sell or manage ATMs not operating under bank brands, according to compliance officers and consultants. The questions have centered on the possibility that corrupt ISOs could be exploiting the machines to circumvent anti-money laundering (AML) controls. "There is a lot of work that goes into identifying ISOs, and examiners...
Merchants and automatic teller machines that help customers reload stored value cards do not necessarily qualify as money services businesses subject to anti-money laundering regulations, the U.S. Treasury Department said.
Nonbank owner-operators of limited-use ATMs, which are not required to maintain anti-money laundering programs, pose some limited money laundering risks for the banks that service them, compliance consultants say.
In guidance issued Monday, FinCEN said nonbank owner-operators of ATMs that allow customers to check balances and withdraw funds, but do not allow them to make deposits, are not money services business as defined by the Bank Secrecy Act.
Software firm MindArk, creators of Entropia Universe, is on the verge of releasing automated teller machine-style cards that allow players to access real dollars from their virtual world accounts, something consultants say will make them an attractive venue for criminals to launder illicit funds.