Anti-Money Laundering for Check Cashers

June 30, 2017

Anti-money laundering (AML) efforts are the cornerstone of every financial compliance program. Check cashers rely on AML experts to successfully manage and avoid the risk for financial crime. Money laundering is one of the top fraudulent activities that check cashers must be able to detect and prevent. A comprehensive compliance plan, including expert AML guidance, is the solution for check cashers running licensed money service businesses.

AML Expertise for Check Cashers

Since AML regulation continues to evolve, check cashing businesses rely on AML experts to keep their compliance programs up to date. The threat of financial fraud may extend beyond current regulation based on location, the services offered, and other business-specific factors. An AML expert can take all of these variables into account and advise you on how to craft a comprehensive compliance program to keep fraudulent behavior out of your business.
For professionals, the Certified Anti-Money Laundering Specialist (CAMS) certification is the gold standard. The training and designation is provided by ACAMS, an international organization committed to supporting the knowledge, skills, and expertise of AML professionals. This member-based network created the CAMS to standardize how we test those who are entrusted with the detection and prevention of money laundering.
Money service businesses like check cashers particularly benefit from compliance consulting and legal advice since maintaining a bank account is paramount to their business model. Financial institutions are only willing to work with fully compliant check cashers, if they are willing to work with them at all. The trend of derisking makes finding and holding a real MSB bank account even more challenging than ever before.

AML Regulation & Trends

The threat of derisking refers to the phenomenon of banks closing down accounts for specific industries, rather than assessing the risk on an account by account basis. Industries that are deemed “risky” by Operation Choke Point include money service businesses, firearms dealers, lottery sales, coin dealers, and credit repair services. The list was retracted formally by FinCEN in early 2015, but the damage to the reputations of these industries was done.
Banks eager to lower risk and shed compliance cost are still opting to terminate the bank accounts of check cashers, money transmitters, and money service businesses as a whole. As financial institutions work to balance their own AML risk, cutting out accounts they deem “risky” is the favored approach of big banks. If the bank and the money service business have an AML expert on their team, they can work together to forge a compliant and profitable relationship.
We know that derisking is a major threat, but let’s take a look at how a few other current AML trends are affecting check cashers. According to Lexology, regulators are cracking down on the so-called “internal controls” for AML. This includes the measures taken to identify and report suspicious activity in a timely manner.  Between March 2016 and June 2017, regulators brought 40 enforcement cases with penalties totaling $1 billion against financial institutions.
The majority of these cases targeted AML programs that were either absent or insufficient. These gaps led to a failure to file the necessary paperwork for Suspicious Activity Reports (SARs) and Currency Transaction Reports. Both of these reports are designed to aid in the detection and prevention of money laundering.
FinCEN recently added a fifth pillar to its BSA requirements: enhanced customer due diligence. This new pillar requires check cashers to verify the identify of all new customers as well as their purpose for opening a new account. Check cashers rely on their POS check cashing technology to collect the data needed to comply with Know Your Customer (KYC) requirements.
Now, BSA programs will encompass the following pillars:

  1. Internal policies
  2. Procedures and controls to prevent money laundering
  3. A qualified BSA Officer
  4. Ongoing employee AML training
  5. Independent audit function to test the BSA program

As regulations change, many check cashers are forced into a cycle of playing “catch up.” The most efficient and compliant check cashers employ experts to help them stay ahead of the curve. By adopting federal regulations before they become official mandates, your check cashing business can avoid penalties and fines. Staying on top of your compliance also frees up your time so that you can focus on expanding your reach in the community and nurturing your existing customer base.

NCC’s Commitment to AML Compliance Efforts

NCC works to keep both financial institutions and the check cashers they serve compliant. To do this, NCC facilitates transparent and efficient relationships through cutting edge POS technology to keep everyone on the same page. At any point in time, the financial institution can see what is happening at the money service business. The MSB owner can manage multiple locations and toggle between a birds eye view and specific data points. When banks and check cashers stay compliant, they are able to divert their attention to growing their business.
In order to honor this unwavering commitment to check cashing compliance, NCC works with experienced federal agents with investigative and regulatory experience. NCC’s Director of Banking Mark Ochab is a former federal agent with hands-on experience fighting financial crime.
As the alternative financial services industry evolves, NCC will stay ahead of the curve. This forward-facing mindset is the motivation behind NCC’s cutting edge POS technology and high caliber team. NCC serves the check cashing industry with reliable MSB bank accounts and strategic MSB services.
These services are the icing on the cake for check cashing clients. NCC’s supported MSB services include Remote Deposit Capture (RDC), Automated Clearing House (ACH) deposits, wire transfer, armored cash delivery, advanced POS technology, and more. Together, these services give check cashers all of the tools they need to run a compliant and successful money service business.

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