MSB Banking Services for Check Cashers

January 13, 2017

MSB banking services include offering real MSB bank accounts and the supported MSB services that keep your check cashing business up and running. This article evaluates the MSB industry, MSB compliance, and financial regulation- and presents the solution for your MSB banking services needs.

The MSB Industry

The money service business industry provides alternative financial services to individuals and businesses who either do not have access to a check account through a big bank or who choose not to use a bank for their financial needs. Why would someone choose an MSB over a bank? MSBs provide transparency around fees and rapid turnaround on funds. For someone who needs the cash from a paycheck immediately, a traditional bank account is not an option. An MSB, however, can provide cash immediately for a flat fee or percentage of the transaction.
The general public holds misconceptions about the MSB industry, viewing check cashers as fee sharks. In most cases, check cashers are a financial bridge for their community- a way to pay bills or employees on time. Customers like the fact that there are no unexpected fees, like a bank overdraft charge, with an MSB. In addition to transparent pricing, MSBs offer convenience and a one on one relationship with their customers.
Money service businesses offer a wide range of alternative services. You are an MSB if you offer one of the following services: check cashing, prepaid debit cards, currency exchange, traveler’s checks, money transfers, or money orders.  MSBs can be stand alone businesses, like a check cashing outlet, or retail business locations offering check cashing services.

MSB Bank Accounts & MSB Compliance

In order to operate, MSBs need real MSB bank accounts. For a check casher, a bank account is essential for cashing checks and facilitating financial transactions. Securing a reliable bank account is becoming an increasingly difficult feat for MSBs. Most big banks have completely eliminated their MSB banking departments and small banks are following suit. As federal regulators take a closer look at banks across the nation, the pressure to stay compliant is increasing.
Big banks are opting to terminate MSB bank accounts, rather than implement stronger compliance programs. In order to comply with federal regulation, banks must operate in accordance with the Bank Secrecy Act (BSA). The BSA was passed in 1970 and states that financial institutions must work with government agencies, regulators, and law enforcement to help prevent, investigate, and prosecute financial crimes. The BSA is aimed at stopping money laundering through anti-money laundering (AML) efforts.
Specifically, the BSA requires financial institutions to keep the following records:

  1. Currency Transaction Report (CTR)
  2. Monetary Instrument Log (MIL)
  3. Suspicious Activity Reporting (SARs)

A CTR reports cash transactions in excess of $10,000 during the same business day. The minimum amount can be hit with one transaction or through multiple transactions. The CTR is then electronically filed with FinCEN.
The MIL keeps track of cash purchases of monetary instruments like money orders, cashier’s checks and traveler’s checks. The MIL must be kept by a financial institution for 5 years. The log is kept at the financial institution itself, but must be easily produced for examiners or auditors.
The SARs is a report on any activity deemed suspicious and potentially related to money laundering, tax fraud, or other criminal activity. The bank does not let the customer know the SAR is being filed, but sends the report directly to FinCEN.
Money service businesses have their own set of rules under FinCEN regulation. MSBs need to register with FinCEN, keep a detailed agent list, establish a written anti-money laundering program, and keep specific sets of records as a part of their MSB compliance program.
Since banks have the option to refrain from doing business with certain market segments, they are opting out of maintaining these detailed records and reports. Rather than comply with the BSA, banks are shutting down MSB bank accounts. As a result, it is increasingly difficult for money service businesses to obtain (and keep) MSB banking services.

MSB Banking Services

MSB banking services extend beyond your MSB bank account. Supported MSB services include POS technology systems, compliance programs, rotation of working capital, cash delivery, and financial institutions to facilitate your alternative financial services. These MSB banking services work together to keep your MSB compliant. As a result, you are able to reduce fraudulent transactions and focus on growing your business.
National Check and Currency provides reliable MSB bank accounts for clients. Your bank account is secured through NCC’s network of financial partners. What does this mean? Specifically, NCC has multiple banking partners and can keep you banked, even if one bank decides it’s time to derisk. Your advanced POS technology system from NCC makes communication of reports and records a breeze and allows your financial institution to monitor activity. This compliant and transparent communication gives your bank peace of mind.
Our MSB banking services are backed by NCC’s team of check cashing experts. With former federal agents and check cashers on their team, NCC can solve any problem that comes your way. Support is available 24/7 and you can rest assured that NCC will work to resolve issues quickly and efficiently. In the face of derisking and an ever-increasing regulatory burden, NCC keeps you up and running.

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