Compliance Requirements

MSB's must construct, implement, and/or maintain a unique compliance program, fitted to the company, to assist with satisfying legal requirements. A compliance manual and the training of your employees customarily addresses compliance with three federal compliance topics: anti-money laundering, protection of consumer privacy, and Office of Foreign Assets Control.  Independent audits focus on compliance with anti-money laundering regulations.  MSB's are obligated to adhere to all federal and/or state requirements.

 

Anti-Money Laundering / Bank Secrecy Act / USA PATRIOT Act

The Compliance Manual

Neither auditors nor banks will accept anything less than a thorough, tailored manual containing detailed procedures for conducting Bank Secrecy Act (BSA) related transactions, training employees, providing for independent audits, monitoring the compliance program, and retaining BSA related documentation.

Adopting the compliance program including and not limited to corporate resolutions an accurate record retention system must be managed, maintained and available.

Employee Training

A fully-tailored Employee Compliance Handbook must contain not only background information on the Bank Secrecy Act, USA PATRIOT Act, Money Laundering Control Act, and other anti-money laundering laws and regulations, but also, and more importantly, how the MSB's employees are going to help the company and remain in compliance with those laws and regulations. MSB's must document proof of a training and must create an in-house training program that is effective and customized solution to meet the individual MSB's training needs.

Audited Compliance Programs conducted by Independent auditors, who are not involved with the day-to-day operations of the compliance program and knowledgeable regarding the latest anti-money laundering requirements. 

Maintaining a Compliance Program

The Compliance Officer is responsible for making sure the day-to-day work is completed.

This maintenance includes any, or all of, the following:

• filing Currency Transaction Reports (CTRs)
• filing Suspicious Activity Reports (SARs)
• [re]filing Money Services Business (MSB) registrations
• monitoring money order activity
• monitoring wire transfer activity
• monitoring check-cashing activity
• current and customized compliance manuals
• Internal Revenue Service (IRS) correspondence
• wire transfer company log compliance 
  
• money order company log compliance
• appropriate bank correspondence
• general assistance (customer support) to store employees
• third party on-site visits

 

 

Protection of Consumer Privacy / Gramm Leach Bliley Act

The Compliance Manual

The Gramm Leah Bliley Act (GLBA) requires institutions that collect non-public personal information to retain that information in a secure fashion. Additionally, privacy notices must be distributed in the event that consumers' information is released or sold (except as permitted by law). Similar to anti-money laundering requirements, a Compliance Officer must be designated and procedures for complying with this act must be documented.  If the GLBA topic is not included in the same manual as anti-money laundering, the Office of Foreign Assets Control compliance procedures require a free-standing document focusing solely on protecting the privacy of  the MSB's consumers.

Employee Training

MSB's must protect the privacy of the consumer with the help of their employees. Employees must know what to do (and, perhaps more importantly, what not to do) with the information they collect.

Documentation regarding training on this topic along with anti-money laundering training is a requirement of the Office of Foreign Assets Control.

Current Auditing and Compliance Programs

MSB's must designate a Compliance Officer in place who administers sound procedures, and provide a written report of findings that, among other things, offers suggestions for improvement.

 

 

Office of Foreign Assets Control

The Compliance Manual

After the September 11th, 2001 terrorist attacks, the Office of Foreign Assets Control (OFAC) issued a statement saying "MSBs can no longer ignore their OFAC compliance responsibilities". As a financial institution in the United States, MSB's are not allowed to complete a transaction with a consumer that appears on OFAC's Specially Designated Nationals (SDN) list, regardless of the type or amount. Consequently, MSB's must have procedures in place to confirm that this requirement was not violated.

Traditionally, this topic is addressed in the same manual as anti-money laundering and protection of consumer privacy compliance procedures; if this is not the case, a free-standing document focusing solely on meeting OFAC requirements must be available and current.

Training Employees

To comply with OFAC requirements, the transaction(s) must be terminated before completion. MSB employees are the only ones capable of determining that a consumer utilizing your services is on the SDN list and terminating the transaction before it is completed. Consequently, they must be trained on OFAC requirements, when and how to screen consumers, and what to do if there's a match.