MSB

Money Services Business

A term used by the Financial Crimes Enforcement Network (FinCEN) to describe certain non-bank financial institutions that provide money-related services to customers. MSBs are subject to the Bank Secrecy Act (BSA) and must comply with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations.

Businesses that are considered MSBs include:

1. Money transmitters: Businesses that transfer funds electronically, such as wire transfers or electronic funds transfers.
2. Currency dealers or exchangers: Businesses that exchange one currency for another, such as foreign currency exchange offices.
3. Check cashers: Businesses that cash checks for customers, typically for a fee.
4. Issuers, sellers, or redeemers of traveler’s checks, money orders, or stored value: Businesses that issue, sell, or redeem instruments that can be used as a form of payment.
5. U.S. Postal Service: The U.S. Postal Service (USPS) is considered an MSB when it sells money orders.
6. Prepaid access providers: Businesses that provide prepaid access to funds, such as prepaid debit cards.

MSBs must register with FinCEN, maintain records of certain transactions, and file reports, such as Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs), when necessary. They must also implement risk-based AML and CFT programs to detect and prevent money laundering and terrorist financing.

Failure to comply with these requirements can result in civil and criminal penalties, including fines and imprisonment. MSBS need to understand and adhere to their regulatory obligations to help prevent financial crimes and maintain the integrity of the financial system.