Secure an MSB Bank

December 09, 2016

The money service business industry is facing its biggest obstacle yet: the closure of MSB bank accounts. A variety of factors are influencing banks, from federal regulation to the cost of compliance. As a result, MSBs are receiving written notifications out of the blue notifying them that their MSB bank accounts are terminated. Learn more about this trend and what you can do to stay ahead of the curve – and keep your check cashing MSB business up and running.

MSB Bank Accounts are Disappearing

Loch Raven Check Cashing in Townson, MD experienced indiscriminate derisking just over a year ago. Owner, Katherine, knew she was in big trouble when her bank of 7 years sent her a letter notifying her that her MSB bank account would close right before the holidays. Katherine was devastated because she serves many families within her community who rely on her services, especially during the holiday season. Her steady banking relationship and compliant operations did not matter.
Katherine was even more surprised when her account representative knew no details about her MSB account closure. What did she do next? She googled “msb bank account” and found National Check and Currency. It was 10 or 11pm at night, but Katherine remembers that Andy Benjamin answered the phone immediately. Katherine notes that “finding NCC was hugely encouraging for [my] business.” NCC helped Loch Raven Check Cashing secure an MSB bank and swiftly solved the problem. This quick action kept Loch Raven open for business during their busiest time of the year.
Katherine’s story is all too common in recent years. Banks are shutting down MSB accounts and finding a reliable MSB bank is nearly impossible. How did we get to this point? Operation Choke Point certainly did not do the MSB industry any favors. Their list of “risky businesses,” published in 2013, put MSBs in the spotlight (and not in a good way). The Financial Crimes Enforcement Network (FinCEN) later retracted the list, but the damage was done.
MSB banks are growing few and far between for a few other reasons as well. MSB banks are subject to federal regulation, including anti-money laundering laws and other rules aimed to prevent financial crime. Regulators seek to prevent a wide range of crimes: money laundering, tax fraud, terrorist financing, and more. Bank and MSB compliance departments work to comply with each rule and to maintain profitable and safe banking relationships.  For some banks, however, it is easier to simply shut down their “risky” accounts – and money service businesses like Loch Raven are bearing the brunt of these bank decisions.

Securing an MSB Bank

There is no singular method for securing an MSB bank for your check cashing business. As a check casher, you are juggling competition from big box stores and from banks that are entering the check cashing industry. Finding and keeping an MSB bank is one more thing for you to worry about. That said, there are several ways you can make your MSB attractive to an MSB bank:

  1. If required, register your MSB with state and federal officials
  2. Comply with all regulations
  3. Keep detailed records
  4. Report suspicious activity
  5. Implement a robust compliance program
  6. Always operate within the law

It is important to note that not all check cashers are required to register for a license. Unlicensed check cashers are those cashing less than $1,000 per customer per day. Licensed check cashers, those who need to register, are MSBs cashing more than $1,000 per customer per day. For banks working with both unlicensed and licensed money service businesses, transparency is key. As a check casher, you can work to maintain clear communication with your financial institution. Implementing your own compliance program is one way to show a bank that you intend to operate within the law.
Anything you can do to demonstrate your commitment to regulation will help you out when securing an MSB bank. In the current climate, it is harder than ever before to secure an MSB bank account, even when you take the steps outlined above. This is where National Check and Currency comes into play.

MSB Bank Services & Solutions

National Check and Currency offers a real MSB banking solution for check cashers and money service businesses. NCC’s team of experts works tirelessly to help you operate compliantly, efficiently, and profitably. How do they do it? First, NCC provides you with a real MSB bank account. Your account is backed by a reliable and redundant network of MSB banks. This network keeps you banked, even as many large financial institutions shed risk.
Second, NCC helps you create a robust compliance program. The NCC team includes former federal agents and experienced regulators who know the MSB industry inside and out. They help you stay ahead of new regulatory requirements and move fast to help you adapt the latest technology at each of your MSB locations.
Third, NCC provides state of the art POS technology for your MSB locations. This means that all of your transactions are recorded, communicated to your bank, and that they are all searchable. You can view the transactions of any of your locations from your office.  Your POS technology is another layer in your compliant and efficient MSB operations.
Finally, NCC provides supported MSB banking services for your business. Quick deposit turnaround, later deposit cut-offs on the weekends, armored cash transportation, and wire transfer capabilities are all benefits enjoyed by NCC clients. These services keep you competitive and allow you to focus on serving your clients. In order to compete with banks and other outlets, many check cashers are focused on diversifying and expanding their businesses. NCC’s supported MSB services give you the tools you need to do just that.
All of NCC’s expertise is backed by 24/7 customer service. If you are ready to open an MSB bank account, fill out a form or call us today!

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