Banks accelerate MSB account closing
NEW YORK – Bank termination of money service business (MSB) accounts has accelerated despite regulatory guidance advising banks to the contrary, according to congressional testimony by MSBs, regulators and the American Bankers Association (ABA).
MSBs, including cheque cashers and money transmitters, have been classified as "high-risk" areas as regulators adopt a zero-tolerance stance on money laundering and terrorist financing.
FinCEN and banking regulators issued guidance regarding MSBs in 2005, stressing the policy that insured banks were "not expected to act as the de facto regulators of the MSB industry". However, that guidance has had no effect as banks continue to either close existing MSB accounts or refuse to open new ones.
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