WASHINGTON (3/21/16)--Recent guidance involving money services businesses (MSBs) does not directly affect credit unions, but a strong understanding of MSB accounts’ compliance responsibilities will reflect positively on your level of due diligence, according to Credit Union National Association (CUNA) compliance staff. CUNA’s CompBlog examined the recent guidance issued by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), and what it means for credit unions.
MSBs are defined as businesses that transmit or convert money. FinCEN’s guidance reiterates and provides clarity for MSBs to comply with their own specific anti-money laundering (AML) requirements. Credit unions and MSBs are required to establish and maintain effective written AML programs to prevent financial institutions from being used to facilitate money laundering and finance terrorist activities.
The National Credit Union Administration (NCUA) has reiterated in recent years that field staff have been directed to closely scrutinize credit unions’ relationship with MSBs to ensure that credit unions are in compliance with all Bank Secrecy Act (BSA) requirements.
The FinCEN guidance clarifies the MSB’s requirements to include agent monitoring policies and procedures sufficient to allow the principal (the MSB) to understand and appropriately account for the risks associated with their agents.
According to a 2005 advisory from the NCUA and other federal regulators, the lack of such monitoring is an indicator of a higher-risk account.
NCUA recommends that credit unions identifying an MSB account as higher-risk should, among other things:
CUNA’s BSA Compliance Guide also features information on credit union BSA compliance responsibilities related to MSB accounts.
For the latest information on compliance, CUNA’s Compliance Community features CompBlog, as well as a number of other resources to help compliance professionals around the country access information on top compliance issues facing the industry.