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An online platform through which money services businesses can share data on agents whose contracts they have ended for engaging in money laundering and other illicit activity is nearing completion, according to a compliance executive involved in the effort.

Cherie Axelrod, deputy chief compliance officer for Western Union said the new forum has been developed in conjunction with the Transaction Record Analysis Center, or TRAC, a 5-year-old Arizona-based partnership through which Western Union and government agencies review transfers near the U.S. border with Mexico in real time.

At least eight MSBs, including Moneygram, Barri Financial Group and Ria, are now considering participating in the new platform alongside Western Union, Axelrod told ACAMS moneylaundering.com reporter Valentina Pasquali in an interview.

What follows is an edited transcript of their conversation.

What initially prompted this effort?

It was prompted several years ago by a prosecutor in the Arizona Attorney General’s Office, the late Kip Holmes, as well as other law enforcement officials.

To take Western Union as an example, they noticed that Western Union may terminate an agent for bad behavior and that agent would then go to another MSB and sign up. And unless that MSB initiated a Patriot Act 314(b) information-sharing request to Western Union, it would not know that Western Union had terminated that agent for complicity.

It was a very time-consuming, inefficient process.

How did Holmes envision fixing this problem?

Kip’s vision was that the industry would come together in a consortium under the protection of the Treasury Department’s Financial Crimes Enforcement Network [FinCEN] and develop a database of individuals who meet certain criteria for termination, including fraud, money laundering, money-order kiting, stealing … I mean, bad people doing bad things.

The information would be housed in the database so that other industry players would have access to it as they onboard new agents.

What kind of behavior may or may not trigger the inclusion of an agent into the database?

We worked with the industry, we had a series of teleconference calls with multiple players, and we worked with Susan Smith, who is our AML [anti-money laundering] counsel here at Western Union and has had a long career at the Justice Department, to narrow the agent termination codes for inclusion.

If we have a credible referral or inquiry from law enforcement that we can validate then we will put that on the list. If we have known complicity at the agent location for, say, facilitating fraud, then we will send that into the database. But there are exclusions. If we find an agent that has not kept up with front-line associate training that would not go on the list.

We did give guidelines around these termination codes but this will probably be an ongoing discussion, as participants sign up, as the board of directors is formed, as there are questions about is this in or is this out.

What type of identifiers for terminated agents will be listed in the database?

It will be name, address, date of birth, identification documents like a driver’s license number and similar information. What we don’t want is to have a database that says ‘John Smith’ with no identifying information, because that wouldn’t be helpful to anyone.

What exact shape will the system take?

We are working in collaboration with the Transaction Record Analysis Center, or TRAC, in Arizona, which has been building a database that’s like an API [Application Programming Interface]. You can query it, by name, phone number, and it will return potential hits. Basically TRAC is the administrator of the database, which, in this case, is not to be shared with law enforcement.

Can you tell us more about the role of TRAC?

TRAC is an entity out of Arizona, with whom we started working on transactions near the Southwest border. They receive a lot of information and run a database that’s separate from this, which they share with law enforcement.

Because they have this ability to query data and because this idea of a consortium came out of the Arizona Attorney General’s Office, they came to us and said ‘we believe we can do this for you.’ So we’ve been working with them for a couple of years.

At what stage is the initiative right now?

We now have the legal framework in place. We have the membership agreement, the bylaws for the consortium, which is called the Money Transmitter Alliance. That’s what we are rolling out now and asking people to sign up for. The next step is who wants to be considered for member of the board, so we can get the board elected and up and running.

Concurrently we will begin working with individual companies and their IT teams and global agent onboarding teams, and discuss how to populate the database.

What is the timeline for completion?

It’s going to be up to the consortium and the participating MSBs. TRAC has said that they would keep this in pilot mode, which contains dummy information so one can demo it, until mid-next year so that we can encourage participation. Eventually there will have to be some sort of dues or participation fees, but we are trying to keep it very open and inclusive during the launch phase.

Do you have any participants already signed up?

We do have a series of MSBs who are working with us. It’s MoneyGram, the MSB Association, which is the firm that represents a large number of smaller MSBs, Viamericas, Ria, DolEx Dollar Express, Sigue, Barri Financial Group, Servicio UniTeller and Western Union.

These are all MSBs that have participated the last several months with reviewing documents, the consortium agreement, the bylaws.

I don’t know which of these participants will be ready to sign up today, they have all said they are interested but some have said they are going through final legal review.