Requirements for Money Service Business

Bank Secrecy Act(BSA)

Requirements for MSBs

  1. Registration
    • must register by the end of the 180day period beginning on the day after the date it was established
    • renewal : registration every two years by Dec. 31 at the end of the two-calendar year period following their initial registration
    • penalty : civil & criminal penalty is up to $5,000 if failed the registration or renewal
  2. SAR
    • aggregates funds or other assets of $2,000 or more ($5,000 or more if identified by issures from a review of clearance records)
    • NOT required for the only check cashing or stored value services
    • within 30day of detection the activity
    • Suspicious activity
      “Structuring” : break a large transaction, broken transactions by two or more people
      “Red flags” : fake ID, use similar IDs, use two or more MSB locations or cashiers on the same day, etc.
  3. AML compliance program
    • all MSBs are required
  4. CTR
    • cash in or cash out transactions of more than $10,000, with the same customer in a day
    • within 15days of detection the activity
  5. Record keeping
    • Money orders or Traveler’s check : $3,000 – $10,000 & the same customer in a day
    • Money Tranfer : $3,000 or more(regardless of the method of payment) & the same customer in a day
    • Currency exchange : more than $1,000 in either domestic or foreign & the same customer in a day
  6. Record retention
    • five years
  7. Penalties : fail to report & record keeping
    • negligent violation : civil penalities of up to $500
    • willful violation : the greater of the amount involved in the transaction (up to $100,000) or $25,000
    • criminal employees : up to $500,000 or a term of imprisonment of up to 10years, or both
  8. Training employees