FinCEN Issues Statement on Providing Banking Services to Money Services Businesses

FinCEN issued a cautionary statement to banks about their efforts to comply with Bank Secrecy Act obligations. FinCEN warned banks not to be over aggressive on MSB accounts.

FinCEN stated its "concern" that banks are "indiscriminately terminating" and refusing to open accounts for money service business ("MSB") clients because of the risks that are sometimes associated with businesses that facilitate wire transfers or remit money overseas. FinCEN warned banks in no uncertain terms that painting with such a broad brush was unacceptable. Indeed, FinCEN criticized banks for taking an aggressive stand on MSB accounts, noting that, by failing to make risk-based decisions on a customer-by-customer basis, banks were abrogating their responsibilities under the Bank Secrecy Act rather than complying with them. FinCEN noted that refusing financial services to MSBs in general could make things more difficult for law enforcement because the transparency of the financial activities of an entire industry segment would be reduced overall. FinCEN reiterated its stance that know-your-customer due diligence remains paramount to a bank's AML responsibilities. However, FinCEN also stated that a bank "need not know the MSB's individual customers to comply with the Bank Secrecy Act."