Circular
Interagency Interpretive Guidance on the Provision of Banking Services to Money Services Businesses Operating in the United States
April 29, 2005
Circular No. 11701

To All Depository Institutions and Others  
    Concerned in the Second Federal Reserve District:

In a supervisory letter (SR-05-8) dated April 26, 2005, the federal bank, thrift regulatory bodies and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) have issued the interagency interpretive guidance for banking organizations to clarify the requirements of the Bank Secrecy Act and anti-money laundering regulations in relation to the provision of banking services to money services businesses (MSBs) operating in the United States.

The interagency guidance is a follow up to the joint statement issued on March 30, 2005, and will be incorporated into the interagency BSA/AML examination procedures that are scheduled for release on June 30, 2005. In addition to the issuance of the interagency interpretive guidance, FinCEN has issued related guidance to the MSB industry on BSA compliance.

The interagency guidance seeks to clarify existing requirements rather than to create new requirements or impose additional burdens on banking organizations. Given that MSBs vary widely in their operations and the levels of risks presented, the guidance addresses the need for banking organizations to assess risks associated with their different MSB accounts, and provides examples of potential indicators of low and high risk MSB accounts. The guidance outlines regulators' expectations for minimum due diligence on all MSB accounts and describes enhanced due diligence that may be appropriate for accounts identified as higher risk. The guidance also addresses the issues of filing Suspicious Activity Reports and account closure.

SR letter (SR 05-8) OFFSITE 
Interagency interpretive guidance OFFSITE PDF
FinCEN  guidance OFFSITE PDF
SR-letter (SR 05-7) OFFSITE 

Contact:
Robert A. Otero
Examining Officer
Legal and Compliance Risk Department
robert.otero@ny.frb.org

William L. Rutledge
Executive Vice President