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Daniel P. Stipano Authored a Currents Article, "Banks Can Provide Services to MSBs While Meeting BSA Requirements"

FiSCA Currents

Daniel P. Stipano

In recent years, "de-risking" – the categorical termination of customer accounts – has resulted in the loss of access to the banking system for scores of businesses. But none have been harder hit than money services businesses (MSBs). Check cashers, payday lenders, money transmitters, and other MSBs have all had accounts terminated, and difficulty establishing and maintaining new accounts. While this most recent round of terminations has received a great deal of attention in Government and media circles, de-risking is not a new phenomenon: more than a decade ago, MSBs were experiencing similar difficulty gaining access to the banking system. Then, as now, one of the main causes of the terminations was the perception that MSBs posed heightened risk for money laundering, and the costs of managing that risk made the relationships economically unattractive.

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