MSB Registration with FinCEN

Question: We were criticized by our examiner because we did not register a money service business customer with FinCEN. I understood the requirement to be that the MSB should register and that the bank does not have this responsibility. We do monitor the account and file CTRs as appropriate.

Answer: Your interpretation is correct. The MSBs are getting a lot of attention. The pressure is being put on them to become and stay compliant. Registration is, of course, the first step. Your examiner has probably picked up on the concerns about MSBs but then taken it a bit over the top. That being said, it should be a part of your due diligence to make sure that MSB customers have registered with FinCEN.

Registration with FinCEN has several goals. The first goal is to create an information source on MSBs. No-one knows for sure just how many are out there. Registration lays the basis for some sort of count. The other thing accomplished by registration is that it puts the MSB in direct communication with FinCEN. While arguably having banks register MSB customers would contribute to the first goal, it would not contribute to the second.

Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 11, 10/04