WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) said it is concerned that traditional banks and other providers are taking steps that are hurting so-called money services businesses (MSB), which include check cashers, and as a result hurting certain consumers.
Saying it is reiterating expectations regarding banking institutions’ obligations under the Bank Secrecy Act for money services businesses, FinCEN said many money services businesses 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.
FinCEN said it was making the statement to remind traditional banks and banking organizations of its concerns, as any reduction in money services businesses, such as check-cashers, has a negative effect on underbanked and unbanked consumers.
“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,” FinCEN said. “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.”
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