FORT LAUDERDALE, Fla. (11/19/15)--The Bank Secrecy Act (BSA) expects credit unions, not federal regulators, to manage risks associated with serving money services businesses (MSBs), according to the National Credit Union Association’s Judy Graham. Graham spoke at the CUNA/National Association of State Credit Union Supervisors BSA Conference this week, highlighting how credit unions can effectively serve MSBs.
MSBs are defined as: issuers or sellers of money orders or traveler’s checks; check cashers; or dealers foreign exchange that conduct more than $1,000 in activities with the same person on the same day. It can also be entities that provide money transfer services in any amount or are providers or seller of prepaid access.
A diverse product and customer base, as well as limited recordkeeping, frequent currency transactions and constant changes in products and locations can make these businesses risky for credit unions.
According to Graham, a lack of understanding of risks, identification of MSB accounts and account monitoring are all common factors credit unions doing business with MSBs.
Graham said NCUA examiners look for the following in credit unions that serve MSBs:
The NCUA issued a letter to credit unions (14-CU-10) in December 2014 on identifying and mitigating these risks.
Editor’s note: For more coverage of CUNA’s BSA Compliance Conference, see the following stories in today’s issue: BSA Conference: Bitcoin daily usage comparable with Discover, Western Union; BSA Conference: 4th Corner CU talks challenges of serving legal pot biz; BSA Conference: Attendees hear the latest from NCUA, FinCEN, OFAC; and BSA Conference: Expert gives a glimpse into cyber black market)