A non-bank financial institution (NBFI) is one that provides financial services such as check cashing, currency exchanges, or check purchasing for individuals. In order to assist law enforcement in the battle against terrorist financing and money laundering, financial institutions must identify any of its customers that meet specific criteria determined by the Financial Crimes Enforcement Network (FinCEN).
A NBFI is a Money Service Business (MSB) and must register with FinCEN if it provides one or more of the following money transfer services in any amount, or conducts certain transactions greater than $1,000 with one person in the same business day:
If a financial institution determines it has an MSB customer, its minimum due-diligence requirements, defined by FinCEN, are to:
Additionally, FinCEN states that financial institutions are not expected to serve as regulators of MSBs and are not expected to educate MSBs about BSA requirements that apply to the industry.
If your organization has questions about MSBs or our financial institution advisory services, contact the expert listed below at PYA, (800) 270-9629.