MSBs – Too hot to handle?

first_img 9SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Many credit unions have become concerned recently about having money services businesses (MSBs) as members. It’s no secret that regulators are looking at MSBs through a newly enhanced risk lens.Does that mean that you should not have MSBs as members? The answer is a resounding NO! It is possible to have MSBs as members while still managing the potential risk that may be associated with these businesses.So, how do you do it? First, you will need to establish a special monitoring program for these accounts that starts at account opening. Think “enhanced due diligence” when you open these accounts. In addition to typical CIP procedures, you’ll want to gather additional information such as what type of MSB they are, what MSB activities they engage in, whether they are registered with FinCEN, whether they have a BSA/AML program and establishing what typical transactions for them will be, to name a few.Then you need to conduct a risk assessment of the MSB and their activity. Areas to include in the assessment would be typical transactions, services offered, ownership, office locations, level of revenues produced by financial activities, as well as other considerations. Be sure to include traditional BSA/AML activities in the risk assessment. The results of the risk assessment will determine whether additional due diligence is required such as a review of their AML program, conducting an on-site visit, review of their training and written procedures, etc. continue reading »last_img