Treasury, FinCEN Seek Balance between Doing Business and Compliance (Nov. 11, 2014)
The U.S. Treasury and FinCen are addressing the importance of money services businesses (MSBs) to the financial system in the wake of reports that banks are refusing to do business with categories of companies, such as remittance companies and check cashers, because of the perceived risk of doing business with them following government agencies’ aggressive efforts in fighting money laundering.
“MSBs play an important role in a transparent financial system, particularly because they often provide financial services to people less likely to use traditional banking services and because of their prominent role in providing remittance services,” FinCEN said in a statement issued yesterday. “FinCEN believes it is important to reiterate the fact that banking organizations can serve the MSB industry while meeting their Bank Secrecy Act obligations.”
Treasury Under Secretary David Cohen echoed FinCEN’s sentiments during remarks given yesterday at the ABA Money Laundering Enforcement Conference in National Harbor, Md., saying that money transmitters provide important financial services, particularly to the unbanked and underbanked. He also said money transmitters play a significant role in global economic development, citing The World Bank estimates that in 2014, remittance payments worldwide will total $436 billion.
“To reach our objective of having compliant money transmitters with access to the regulated financial system, we need to strike the right balance between the complementary goals of financial inclusion and financial transparency,” Cohen said. To this end, he outlined Treasury’s four-part strategy, which includes clarifying Treasury’s expectations for banks that are or are considering doing business with MSBs; deepening Treasury’s engagement with the industry on strengthening controls and compliance for money transmitters; enhancing Treasury’s oversight of money transmitters; and remaining in contact with money transmitters, the communities they serve and the banks that provide them access to the regulated financial system.
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