MSB Exam Manual
By Amy Kudlacek
On December 9, 2008, FinCEN released the Bank Secrecy Act/Anti-Money Laundering Examination Manual for Money Service Businesses. I quickly scanned the 153 page manual and came to two conclusions:
- The mom and pop bar down the street that cashes checks as a convenience for their customers does not want to be an MSB! For instance, they should implement check cashing limits to avoid being classified as an MSB; and
- This manual is an excellent resource. You may want to make sure your MSB customers are aware it.
While this manual was designed for examiners (FinCEN announced that they would give the IRS the pleasure of examining MSBs), it clearly outlines the MSB's requirements. There are also sample forms in the Appendices to assist the MSB in developing their risk assessment, etc. This manual is very similar to the BSA Exam Manual used by banks. Thus, it makes it easy for banks to help guide their MSB customers in the right direction. For example, MSBs must have a written BSA/AML program, must comply with the "4 program pillars" (internal controls, designate a BSA compliance officer, independent review, and training) and must maintain adequate records.
Some other interesting facts I noted:
- A MSB acting solely as a check cashing business is not subject to Suspicious Activity Reporting requirements. However, if the MSB redeems (cashes) money orders/travelers checks or participates in any other type of MSB activity, they are required to report suspicious activity.
- The suspicious activity dollar threshold is $2,000 for MSBs. For money order/travelers check issuers, if suspicious activity is detected from clearance reports or other records, the threshold is $5,000. A SAR-MSB may be filed voluntarily for transactions under these thresholds.
It was recently brought to my attention that the IRS and FinCEN will be presenting a free national conference call on this manual on January 27th. You may want to sign up; however, you will need to act quickly. The registration deadline is today, January 20th.
Keeping you informed!