MSB, But Not at our Bank

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Question:

If our institution banks an entity that is registered as an MSB but, the entity does not hold their MSB account at our institution, are we still required to complete a full MSB high risk review or even have them marked as an MSB?

Answer:

An MSB is an MSB regardless of whether they appear to be running their MSB activity through your bank. Most banks that agree to bank an MSB will only do so if their entire relationship is with the bank. Otherwise, it becomes almost impossible to monitor their activity for suspicious activity. Whether to agree to accept an account from them and whether or not you treat them as high risk for review purposes is a business decision.