If you're attempting to get a bank account for your money services business aka MSB, you've probably realized it's no easy thing to do. If you do internet research on banks offering banking to money services business you've probably found a lot of the larger national chain banks such as Bank of America, Wells Fargo, US Bank, and Fifth-Third among others.
Most of these larger banks are very concerned about their image and reputation and just don't seem willing to take a chance on an MSB. Despite paying lipservice and saying they offer MSB accounts most money services businesses will find they are turned down for one reason or another. Something many MSB's run into is a bank saying they aren't satisfied with an AML or Compliance audit. Though it may be tempting to run out and get another audit hoping to get a bank account, audits are not cheap. You're probably looking at a few thousand dollars from a smaller company or attourney and as much as $20,000 if you go with one of the big three firms.
You may want to think long and hard before hopping on this rollercoaster ride of getting audits from numerous different places hoping the banks will be satisfied with one. Many money services business find they'll get 2-3 audits, shell out tens of thousands of dollars and still hear the same thing from banks.
For this reason you may want to seek out smaller banks where they are more hungry for business, as well as where people in the bank such as a bank manager or business account manager may actually take a serious look at your business and may actually have some power in terms of deciding whether to or whether not to open up an account for your business. I've found when it goes up to some compliance department in the sky you never hear anything good back. Personally I'd rather sit down face to face and talk to the decision maker in that bank which is why I would suggest going to smaller to midsize banks. These could be single location banks, or you may have better luck going after a bank with say 4-6 branches. They are small enough to retain some decision making power on the branch level which is what is going to give you your best bet at getting a banking relationship.
If you've tried all the major national banks and have been shutdown time after time, try calling some smaller local community banks and credit unions. There's no gurantee you will get an account, however you will probably at least leave your meeting feeling they took you seriously, attempted to understand your business and are at least giving you a shot, where as the national branches basically will pay you lip service, waste your time and then deny you.
Wednesday, February 18, 2015
Currency Exchanges, Check Cashers, Foreign Currency Sellers - Look To Bitcoin Businesses For Advice
If you own a business which is a currency exchange, prepaid value card seller, foreign currency sellers, or other MSB activities you know how difficult it can be to find a MSB friendly bank or a bank who will accept as a client a money services business.
If you've already called around to all your local banks and still have not had any luck you'll then want to start looking out of state. This will be tough as most banks will only deal with people or businesses in their immediate footprint, meaning nearby them. This sometimes is not the case for check cashers as some of the check cashing services and technologies rolled out in the past few years has made this unnecessary. That said most other MSB's will find it difficult trying to find banks outside their geographical area.
MSB business owners may want to look to Bitcoin businesses and how and where they are getting their banking relationhips. Until the recently small Bitcoin businesses were thriving. Most banks didn't even know what Bitcoins were. Bitcoins were not considered Money Transmitters, Bitcoin businesses were not considered to be money services businesses. Heck, most banks probably not only didn't even know what Bitcoins were, but if they did probably viewed them as some type of online novelty currency and wouldn't give a second thought to opening up a bank account for a Bitcoin business.
With all the media attention Bitcoin got, as well as recently being named as being a Money Transmission activity pretty much all banks have ceased conducting business with Bitcoin businesses. If you thought traditional MSB's or money services businesses had it rough, Bitcoin has it even harder.
If you want to start doing a bit of digging into what Bitcoin businesses are doing for their banking relationships simply do a Google search for "Bitcoin friendly banks thread", "bitcoin hostile banks thread", "bitcoin msb thread". I like to throw in thread at the tail end of all searches as it will typically bring up discussions and responses on forums where you will actually find this info, as opposed to not doing this you will more likely be pulling up Forbes articles talking about Bitcoin businesses but with vague info about banking. In the thread discussions on forums people will share first hand experience what banks have shut them down, which banks they have had luck with, etc.
There is a lot of Bitcoin entrepreneurs and invididuals online discussing how and where they are developing banking relationships.
One tough thing about being an MSB is that there are not a lot of us out there. Probably in large part due to how difficult banks and the government make it to operate a business in this sphere. That means it's tough finding information and resources online. Bitcoin has been good in that it has spurred a lot of discussion online regarding where to get bank accounts for a MSB, and more specifically where to get an MSB bank account for a Bitcoin business.
As a traditional MSB owner you want to seek out this information. If a bank will give a bank account and is willing to work with a Bitcoin business it means they are very openminded towards MSB's and are likely to take your brick and mortar MSB business. It's probably safe to say Bitcoins are probably viewed as more high risk than say a check casher for example, so if a bank is willing to take on a Bitcoin business chances are they will take on your MSB.
Something you will probably find however is that many Bitcoin businesses are taking their businesses offshore and doing banking in offshore banks where they are more friendly towards Bitcoin and not as crazy about MSB's as here in the US. Countries which seem to be popular for Bitcoin busineses to bank in are Poland, Jersey, Slovenia, Seychelles, Malta, and even Italy.
It can be daunting trying to find an offshore bank. There are so many offshore incorporating services out there who charge high fees for what you could do yourself. Also, a good majority of these seem to have some complaints online with ripoff report type sites. Ever since the introduction of FACTA, most foreign banks are weary about dealing with US citizens and the few banks you will find oftentimes require a visit to a country like the Czech Republic for example.
Offshore banks may not be a bad route to go but you will definatley want to consult an attourney as well as an accountant before venturing into offshore banking for your MSB business.
If you've already called around to all your local banks and still have not had any luck you'll then want to start looking out of state. This will be tough as most banks will only deal with people or businesses in their immediate footprint, meaning nearby them. This sometimes is not the case for check cashers as some of the check cashing services and technologies rolled out in the past few years has made this unnecessary. That said most other MSB's will find it difficult trying to find banks outside their geographical area.
 |
| Money Services Businesses May Want To Look To Bitcoin Business For Banking Advice |
With all the media attention Bitcoin got, as well as recently being named as being a Money Transmission activity pretty much all banks have ceased conducting business with Bitcoin businesses. If you thought traditional MSB's or money services businesses had it rough, Bitcoin has it even harder.
If you want to start doing a bit of digging into what Bitcoin businesses are doing for their banking relationships simply do a Google search for "Bitcoin friendly banks thread", "bitcoin hostile banks thread", "bitcoin msb thread". I like to throw in thread at the tail end of all searches as it will typically bring up discussions and responses on forums where you will actually find this info, as opposed to not doing this you will more likely be pulling up Forbes articles talking about Bitcoin businesses but with vague info about banking. In the thread discussions on forums people will share first hand experience what banks have shut them down, which banks they have had luck with, etc.
There is a lot of Bitcoin entrepreneurs and invididuals online discussing how and where they are developing banking relationships.
One tough thing about being an MSB is that there are not a lot of us out there. Probably in large part due to how difficult banks and the government make it to operate a business in this sphere. That means it's tough finding information and resources online. Bitcoin has been good in that it has spurred a lot of discussion online regarding where to get bank accounts for a MSB, and more specifically where to get an MSB bank account for a Bitcoin business.
As a traditional MSB owner you want to seek out this information. If a bank will give a bank account and is willing to work with a Bitcoin business it means they are very openminded towards MSB's and are likely to take your brick and mortar MSB business. It's probably safe to say Bitcoins are probably viewed as more high risk than say a check casher for example, so if a bank is willing to take on a Bitcoin business chances are they will take on your MSB.
Something you will probably find however is that many Bitcoin businesses are taking their businesses offshore and doing banking in offshore banks where they are more friendly towards Bitcoin and not as crazy about MSB's as here in the US. Countries which seem to be popular for Bitcoin busineses to bank in are Poland, Jersey, Slovenia, Seychelles, Malta, and even Italy.
It can be daunting trying to find an offshore bank. There are so many offshore incorporating services out there who charge high fees for what you could do yourself. Also, a good majority of these seem to have some complaints online with ripoff report type sites. Ever since the introduction of FACTA, most foreign banks are weary about dealing with US citizens and the few banks you will find oftentimes require a visit to a country like the Czech Republic for example.
Offshore banks may not be a bad route to go but you will definatley want to consult an attourney as well as an accountant before venturing into offshore banking for your MSB business.
Tuesday, February 17, 2015
Fincen Does Not Support Termination Of Money Services Business Accounts MSB's
Whether your involved in the banking industry or the MSB or Money Services Business industry it probably won't come as a surprise to you that MSB's or money services businesses have essentially been blackballed and shut out of the banking system, not based on any infraction or anything a particular business has done, but because regulators have been so heavy handed, vague and threatening they scare banks away from even entertaining the idea of housing MSB's or money services businesses.
Recently back in 2014, Fincen issued a statement acknowledging what difficulty money services businesses were having and basically acknowledging it is a problem as well as sort of telling banks they should consider MSB's on a case by case basis and not blackball the entire industry.
That is all well and good, however simply stating this but not providing any incentive for banks to do so, or even clear guidance for banks on how to proceed, most likely not much is going to change. You can read the guidance HERE.
Money services businesses (“MSBs”),1 including money
transmitters important to the global flow of remittances, are losing
access to banking services, which may in part be a result of concerns
about regulatory scrutiny, the perceived risks presented by money
services business accounts, and the costs and burdens associated with
maintaining such accounts.
MSBs play an important role in a transparent financial system, particularly because they often provide financial services to people less likely to use traditional banking services and because of their prominent role in providing remittance services. FinCEN believes it is important to reiterate the fact that banking organizations can serve the MSB industry while meeting their Bank Secrecy Act obligations.2
Currently, there is concern that banks are indiscriminately terminating the accounts of all MSBs, or refusing to open accounts for any MSBs, thereby eliminating them as a category of customers. Such a wholesale approach runs counter to the expectation that financial institutions can and should assess the risks of customers on a case-by-case basis. Similarly, a blanket direction by U.S. banks to their foreign correspondents not to process fund transfers of any foreign MSBs, simply because they are MSBs, also runs counter to the risk-based approach. Refusing financial services to an entire segment of the industry can lead to an overall reduction in financial sector transparency that is critical to making the sector resistant to the efforts of illicit actors. This is particularly important with MSB remittance operations.
FinCEN, the IRS, and state regulators have all taken steps to increase the effectiveness of their oversight of MSB Bank Secrecy Act compliance. In 2005, FinCEN issued guidance to MSBs to explain their Bank Secrecy Act regulatory obligations and to notify them of the type of information that they may be expected to produce to a bank in the course of opening or maintaining an account. In 2008, FinCEN, working with the Internal Revenue Service and the states, issued an examination manual for MSB examiners to strengthen the examination process and make it more consistent nationally. In 2010, the Federal Financial Institution Examination Council BSA/AML Examination Manual provided updated information in connection with the examination of banks for, among other things, providing services to money services businesses.3 In addition, state efforts to coordinate supervision and examination practices have increased. States have expanded their use of the Nationwide Multistate Licensing System and Registry (NMLS) for collecting and storing information on MSBs.4 FinCEN and the IRS will continue to work with state regulators, consistent with the Money Remittances Improvement Act of 2014, to strengthen examination and oversight of the MSB industry with respect to Bank Secrecy Act compliance by leveraging appropriate state efforts.
FinCEN does not support the wholesale termination of MSB accounts without regard to the risks presented or the bank’s ability to manage the risk. As noted, MSBs present varying degrees of risk, and not all money services businesses are high-risk. Therefore, when deciding whether to provide services to an MSB customer, financial institutions should assess the risks associated with that particular MSB customer. A financial institution’s risk assessment should include considering whether customer risks can be managed appropriately and the financial institution should maintain levels of controls commensurate with the customer risks presented. Banks that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to MSB customers, regardless of any MSB’s specific business model.
A banking organization’s due diligence should be commensurate with the level of risk presented by the MSB customer as identified in the bank’s risk assessment. If a banking organization’s risk assessment indicates a heightened risk of money laundering or terrorist financing, then the organization should conduct further due diligence in a manner commensurate with the heightened risk. A bank needs to know and understand its MSB customer. To do so, it should understand the MSB’s business model and the general nature of the MSB’s own customer base, but it does not need to know the MSB’s individual customers to comply with the Bank Secrecy Act. This is no different from requirements applicable to any other business customer.
Banking organizations are expected to manage the risk associated with all accounts, including MSB accounts. However, the Bank Secrecy Act does not require, and neither does FinCEN expect, banking institutions to serve as the de facto regulator of the money services business industry any more than of any other industry. FinCEN recognizes that, as a practical matter, it is not possible for a bank to detect and report all potentially illicit transactions that flow through an institution.5 But where an institution follows existing guidance and establishes and maintains an appropriate risk-based program, the institution will be well-positioned to appropriately manage such accounts, while generally detecting and deterring illicit transactions.
In summary, FinCEN, as the agency primarily responsible for administering the Bank Secrecy Act, expects banking organizations that open and maintain accounts for MSBs to apply the requirements of the Bank Secrecy Act, as they do with all accountholders, based on risk. Banking organizations must have appropriately designed policies and procedures to assess an MSB’s money laundering and terrorist financing risks. As with any category of accountholder, the levels of risk will vary; therefore, MSBs should be treated on a case-by-case basis. FinCEN and its regulatory colleagues will continue to monitor trends with respect to the provision of banking services to MSBs and are committed to taking steps to address the wholesale de-banking of an important part of the financial system.
Recently back in 2014, Fincen issued a statement acknowledging what difficulty money services businesses were having and basically acknowledging it is a problem as well as sort of telling banks they should consider MSB's on a case by case basis and not blackball the entire industry.
That is all well and good, however simply stating this but not providing any incentive for banks to do so, or even clear guidance for banks on how to proceed, most likely not much is going to change. You can read the guidance HERE.
Statement
FinCEN Statement on Providing Banking Services to Money Services Businesses
FinCEN Statement on Providing Banking Services to Money Services Businesses
The Financial Crimes Enforcement Network (“FinCEN”), as the agency
primarily responsible for administering the Bank Secrecy Act, is issuing
this Statement to reiterate expectations regarding banking
institutions’ obligations under the Bank Secrecy Act for money services
businesses.
MSBs play an important role in a transparent financial system, particularly because they often provide financial services to people less likely to use traditional banking services and because of their prominent role in providing remittance services. FinCEN believes it is important to reiterate the fact that banking organizations can serve the MSB industry while meeting their Bank Secrecy Act obligations.2
Currently, there is concern that banks are indiscriminately terminating the accounts of all MSBs, or refusing to open accounts for any MSBs, thereby eliminating them as a category of customers. Such a wholesale approach runs counter to the expectation that financial institutions can and should assess the risks of customers on a case-by-case basis. Similarly, a blanket direction by U.S. banks to their foreign correspondents not to process fund transfers of any foreign MSBs, simply because they are MSBs, also runs counter to the risk-based approach. Refusing financial services to an entire segment of the industry can lead to an overall reduction in financial sector transparency that is critical to making the sector resistant to the efforts of illicit actors. This is particularly important with MSB remittance operations.
FinCEN, the IRS, and state regulators have all taken steps to increase the effectiveness of their oversight of MSB Bank Secrecy Act compliance. In 2005, FinCEN issued guidance to MSBs to explain their Bank Secrecy Act regulatory obligations and to notify them of the type of information that they may be expected to produce to a bank in the course of opening or maintaining an account. In 2008, FinCEN, working with the Internal Revenue Service and the states, issued an examination manual for MSB examiners to strengthen the examination process and make it more consistent nationally. In 2010, the Federal Financial Institution Examination Council BSA/AML Examination Manual provided updated information in connection with the examination of banks for, among other things, providing services to money services businesses.3 In addition, state efforts to coordinate supervision and examination practices have increased. States have expanded their use of the Nationwide Multistate Licensing System and Registry (NMLS) for collecting and storing information on MSBs.4 FinCEN and the IRS will continue to work with state regulators, consistent with the Money Remittances Improvement Act of 2014, to strengthen examination and oversight of the MSB industry with respect to Bank Secrecy Act compliance by leveraging appropriate state efforts.
FinCEN does not support the wholesale termination of MSB accounts without regard to the risks presented or the bank’s ability to manage the risk. As noted, MSBs present varying degrees of risk, and not all money services businesses are high-risk. Therefore, when deciding whether to provide services to an MSB customer, financial institutions should assess the risks associated with that particular MSB customer. A financial institution’s risk assessment should include considering whether customer risks can be managed appropriately and the financial institution should maintain levels of controls commensurate with the customer risks presented. Banks that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to MSB customers, regardless of any MSB’s specific business model.
A banking organization’s due diligence should be commensurate with the level of risk presented by the MSB customer as identified in the bank’s risk assessment. If a banking organization’s risk assessment indicates a heightened risk of money laundering or terrorist financing, then the organization should conduct further due diligence in a manner commensurate with the heightened risk. A bank needs to know and understand its MSB customer. To do so, it should understand the MSB’s business model and the general nature of the MSB’s own customer base, but it does not need to know the MSB’s individual customers to comply with the Bank Secrecy Act. This is no different from requirements applicable to any other business customer.
Banking organizations are expected to manage the risk associated with all accounts, including MSB accounts. However, the Bank Secrecy Act does not require, and neither does FinCEN expect, banking institutions to serve as the de facto regulator of the money services business industry any more than of any other industry. FinCEN recognizes that, as a practical matter, it is not possible for a bank to detect and report all potentially illicit transactions that flow through an institution.5 But where an institution follows existing guidance and establishes and maintains an appropriate risk-based program, the institution will be well-positioned to appropriately manage such accounts, while generally detecting and deterring illicit transactions.
In summary, FinCEN, as the agency primarily responsible for administering the Bank Secrecy Act, expects banking organizations that open and maintain accounts for MSBs to apply the requirements of the Bank Secrecy Act, as they do with all accountholders, based on risk. Banking organizations must have appropriately designed policies and procedures to assess an MSB’s money laundering and terrorist financing risks. As with any category of accountholder, the levels of risk will vary; therefore, MSBs should be treated on a case-by-case basis. FinCEN and its regulatory colleagues will continue to monitor trends with respect to the provision of banking services to MSBs and are committed to taking steps to address the wholesale de-banking of an important part of the financial system.
Attention Banks: Money Services Businesses Can Make Great Clients
Whether you work in banking or whether you own a money services business, no doubt you know what a challenge it can be for banks to provide banking relationships to MSB's as well as for an MSB to obtain a banking relationship. This post is meant to highlight a few of the reasons banks should not put a blanket ban on MSB's and why banks should consider all MSB's who apply. If a bank is not comfortable with an MSB or if a MSB is not up to par on it's compliance policies by all means deny them, but a properly run MSB is low risk and can make a great customer.
 |
| 3 Reasons MSB's Can Make Great Clients For Banks |
3 Reasons Money Services Business Make Great Banking Clients
1. Higher Account Maintenance Fees- some banks view MSB's as an asset instead of a risk. Most MSB's or money services businesses are so desperate for banking they are willing to pay whatever fees are offered. This is not by any means to suggest banks should price gouge MSB's on account fees, however MSB's understand it costs more money, time and resources to take on a MSB account and will not quibble over fees.
2. Most MSB's are on top of their compliance requirements. Banks seem to pretty readily take on grocery stores and liquor stores who offer check cashing services but will not accept currency exchanges and more traditional MSB's. Granted check cashing is not a grocery stores bread and butter or primary business activity but even more reason to be hesitant of them. Who would you trust more to be on top of compliance, an MSB who deals strictly in the MSB industry or a minimum wage grocery store teller who maybe cashes a few checks a month? I'd go with the MSB.
3. MSB's are heavily regulated. This doesn't mean a bank shouldn't excercise KYC policices but an MSB has so many eyes on them as it is, they are not going to want to do anything to mess up their businesses reputation or run afoul of Fincen guidelines.
These are just a few of the many reasons banks should not just close their doors to this sector of the economy which is already pretty much locked out of banking. Reading articles online you'd assume the entire MSB industry if filled with money launderers. Nothing could be further from the truth. Granted these businesses do operate in the non-bank financial services industry but majority of MSB's are good apples. Don't be scared off by outdated guidelines scaring banks away from banking MSB's.
Does Your Money Services Business MSB Do Any Non-MSB Activities? May Make Getting A Bank Account Easier
There are all types of money services businesses. A MSB could be anything from a currency exchange, a check casher, a seller of prepaid cards, a foreign currency dealer, or any number of other businesses.
Oftentimes MSB's may be businesses you wouldn't even think of or consider an MSB. Something like a grocery store for example. Many small grocery stores and liquor stores offer a check cashing service.
Now that is hardly the bulk of their business, their primary business activity is a retail activity of selling groceries. The fact that they cash checks however makes them a MSB or a money services business.
A business like the one described above is going to have a much easier time getting a business banking relationship than say a full scale currency exchange. Why is this? First off, a lot of grocery stores probably won't even tell their bank they are check cashiers and will just fly under the radar. Thta said even if they did tell the bank they cashed checks and were registered as a money services business they would still have a much easier time getting a banking relationship than a full scale currency exchange. Why is this?
Basically because their business is diversified. Banks realize that a grocery store cashing checks is probably doing 95% of their business selling groceries and the remainder cashing checks. Sure they make some money but it's a very small part of their business. This would be the same for a corner store that offered Western Union or MoneyGram.
What does this teach us? Well nothing is gurnateed but potentially by diversifying your business activities banks will not view you solely as an MSB or will not view you as being as high a risk. Does this mean you should run out and open a grocery store just because your a check casher? Well no not necessarily, however if you can diversify your business activity so you can tell a bank only 60% of your business activity is MSB activity you may have an easier time opening a bank account. This could mean getting into selling coins or bullion or other similar items which is not a regulated MSB activity. You can then tell banks that a percentage of your business deals in non-MSB activities.
Oftentimes MSB's may be businesses you wouldn't even think of or consider an MSB. Something like a grocery store for example. Many small grocery stores and liquor stores offer a check cashing service.
Now that is hardly the bulk of their business, their primary business activity is a retail activity of selling groceries. The fact that they cash checks however makes them a MSB or a money services business.
 |
| Did You Know Many Grocery Store Are Money Services Business |
Basically because their business is diversified. Banks realize that a grocery store cashing checks is probably doing 95% of their business selling groceries and the remainder cashing checks. Sure they make some money but it's a very small part of their business. This would be the same for a corner store that offered Western Union or MoneyGram.
What does this teach us? Well nothing is gurnateed but potentially by diversifying your business activities banks will not view you solely as an MSB or will not view you as being as high a risk. Does this mean you should run out and open a grocery store just because your a check casher? Well no not necessarily, however if you can diversify your business activity so you can tell a bank only 60% of your business activity is MSB activity you may have an easier time opening a bank account. This could mean getting into selling coins or bullion or other similar items which is not a regulated MSB activity. You can then tell banks that a percentage of your business deals in non-MSB activities.
Do MSB Business Checking Accounts Exist? How Do Money Service Business Bank Accounts Differ From A Traditional Bank Account If At All
Do MSB business checking accounts actually exist? Is there any such thing as a Money Services Business bank account? No
One thing you'll learn talking to lawyers, bankers, compliance experts, and anyone else in the MSB or money services business industry is that nobody will ever give you the same answer as someone else. Every lawyer will interpret laws differently, every compliance expert will answer questions differently and typically bankers will give you different answers as well.
One thing we have learned after talking to countless bankers is that there is no such thing as an actual MSB business checking account. Money Services Business (MSB's) have the same business checking accounts as a candy store or any other business, it's just that banks are supposed to excercise added due diligence in monitoring MSB bank accounts.
This is an interesting point to note. If you are cold calling banks looking for a bank who will accept a MSB or money services business as a client, don't call asking if they offer MSB accounts, most will probably think its some type of special savings account. Banks typically don't have a MSB account, they may however have MSB customers.
When calling around to banks it's best to inquire about opening up a business checking account and then follow up by asking if their bank accepts MSB's as customers. Many bankers will probably seem confused, you may need to explain what your business does, explain to them the services you offer and you may even have to come up with comparable businesses to compare yourself to. Not all MSB's are currency exchanges but many times this is all banks understand so you may have to say, "we fall into the same category as a currency exchange."
Some MSB's have reported that though they would never lie about their activities or what they do, that simply walking into a bank like any other business owner, saying you want to open an account, and answer their questions upfront and honestly, many banks or personal bankers won't even make a big deal about the businesse's activities and will just open up an account. This may be good in that it gets your business a bank account but what happens if when evaluating their accounts they realize what you do and immediately close your account? What are you going to do then? You will be scrambling to get a difficult to obtain checking account for your MSB. For this reason we feel it's better to be upfront.
One thing you'll learn talking to lawyers, bankers, compliance experts, and anyone else in the MSB or money services business industry is that nobody will ever give you the same answer as someone else. Every lawyer will interpret laws differently, every compliance expert will answer questions differently and typically bankers will give you different answers as well.
One thing we have learned after talking to countless bankers is that there is no such thing as an actual MSB business checking account. Money Services Business (MSB's) have the same business checking accounts as a candy store or any other business, it's just that banks are supposed to excercise added due diligence in monitoring MSB bank accounts.
 |
| Do MSB Bank Accounts Exist? |
When calling around to banks it's best to inquire about opening up a business checking account and then follow up by asking if their bank accepts MSB's as customers. Many bankers will probably seem confused, you may need to explain what your business does, explain to them the services you offer and you may even have to come up with comparable businesses to compare yourself to. Not all MSB's are currency exchanges but many times this is all banks understand so you may have to say, "we fall into the same category as a currency exchange."
Some MSB's have reported that though they would never lie about their activities or what they do, that simply walking into a bank like any other business owner, saying you want to open an account, and answer their questions upfront and honestly, many banks or personal bankers won't even make a big deal about the businesse's activities and will just open up an account. This may be good in that it gets your business a bank account but what happens if when evaluating their accounts they realize what you do and immediately close your account? What are you going to do then? You will be scrambling to get a difficult to obtain checking account for your MSB. For this reason we feel it's better to be upfront.
Monday, February 16, 2015
MSB Bank Accounts: 3 Things You Must Bring When Applying For Bank Account For Your Money Services Business
If you own and operate a money services business you probably already know what a challenge it can be to find a bank who accepts MSB's or will take the money services business as clients. One thing you need to learn if you plan on being in this business is getting bank accounts is not going to be easy. You are going to have to prove yourself and sell yourself to a bank.
Banks are deathly afraid of taking on a money services business. If you want to convince. Many banks will have a blanket policy of not accepting MSB's. Some banks will pay lip service to the fact they do, but basically turn down anyone who applies. Lastly there are a small number of banks will will legitimately review and consider taking on your MSB as a client.
There are 3 things you will absolutely need to have before going to your meeting with a bank.
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| Bring These 3 Things To Your AML Bank Meeting |
There are 3 things you will absolutely need to have before going to your meeting with a bank.
3 Things You Must Bring To Your MSB Bank Appointment
1. Anti-Money Launder Policy (AML) Policy
2. Audit Report of your AML Policy
3. Articles of Incorporation
These three things are at a minimum what you must bring to an appointment with a bank if you are seeking a MSB or money services business bank account. As we mentioned earlier in this article, it's your job to convince the bank to give you an account. For this reason you should bring in as much ammunition as possible. This could include things like multiple reviews or audits of your policy, a business plan, a description of what your banking activities will be. Maybe even some articles or statements from Fincen stating that banks shouldn't blanket ban MSB's from having banking relationships with them. The more stuff you have to show you are proactive, knowledgeable, and a good risk the better off you are.
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