Ruling on Whether a Money Services Business Must Maintain Separate Deposit Accounts for Check Cashing and Money Transmission Lines

Ruling
FIN-2008-R012
Issued: December 11, 2008
Subject: Whether a Money Services Business Must Establish and Maintain Separate Deposit Accounts for its Separate Check Cashing and Money Transmission Lines of Business Dear [ ]:
I am writing in response to your letter of May 7, 2008 to the Financial Crimes Enforcement Network (“FinCEN”) requesting an administrative ruling as to whether a money services business (“MSB”) must establish and maintain separate deposit accounts for its separate check cashing and money transmission lines of business in order to comply with the Bank Secrecy Act (“BSA”) and its implementing regulations.1 As explained below, the BSA regulations do not contain any requirement that MSBs maintain separate deposit accounts for separate check cashing and money transmission lines of business. You represent that your client, [ ] (“Client”), is an MSB operating as a money transmitter in Florida, Georgia, and South Carolina, and as a check casher in Florida.2

Client’s bank, [ ] (“the Bank”), has questioned whether Client may maintain a single deposit account to hold funds from both its money transmitter and check cashing lines of business and has requested that Client obtain written permission from a regulatory authority to maintain a single account for both business lines. Your letter references the Bank’s concern that Client might “commingle” funds derived from both the money transmitter and check cashing business lines. The BSA regulations do not require an MSB to maintain separate bank accounts for different lines of business, and there is therefore no BSA regulatory requirement prohibiting Client from mixing funds derived from various legitimate business activities in a single deposit account. FinCEN notes, however, that the BSA does not prohibit a financial institution such as the Bank from choosing to adopt policies that address issues not addressed in BSA regulations, at the financial institution’s discretion. In addition, while FinCEN has been delegated the authority to administer the BSA,3 it does not have

1 See 31 U.S.C. § 5311 et seq., 12 U.S.C. § 1829(b), and 18 U.S.C. §§ 1951-59 (Bank Secrecy Act). See also 31 C.F.R. Part 103 (regulations implementing the Bank Secrecy Act). [ ] 2 See 31 C.F.R. § 103.11(uu)(2), (5) (defining “money services business” to include check cashers and money transmitters). 3 The Secretary of the Treasury has delegated his authority to administer the BSA and its implementing regulations to FinCEN. Treas. Dep’t Order No. 180-01 (Sept. 26, 2002).

the authority to administer or enforce any other federal statute. As a result, this guidance is not intended to be a statement on the existence or applicability of any other laws or regulations.

This ruling is provided in accordance with the procedures set forth at 31 C.F.R. § 103.81. In arriving at our conclusions, we have relied upon the accuracy and completeness of the representations made in your letter. Nothing precludes FinCEN from arriving at a different conclusion or from taking other action should circumstances change, or if any of the information you have provided proves inaccurate or incomplete. We reserve the right, after redacting your name and address, to publish this letter as guidance in accordance with our regulations. Please inform us within fourteen (14) days from the date of this letter of any other information that you believe should be redacted from this letter and the legal basis for redaction. If you have any questions regarding this administrative ruling, please contact [FinCEN’s regulatory helpline at (800) 949-2732]. Sincerely, // signed // Jamal El-Hindi Associate Director Regulatory Policy and Programs Division