April 26, 2005
Implementation of Bank Secrecy Act in the Context of Money Services Businesses
WASHINGTON — In testimony before the Senate Banking Committee today, acting Comptroller of the Currency Julie L. Williams discussed the implementation of the Bank Secrecy Act as it applies to Money Services Businesses.
"While most MSBs have never been tainted by money laundering, some have been conduits for illicit activity. We have even seen cases in which money launderers established MSBs to disburse and effectively launder their excess cash to unsuspecting customers," she said in testimony before the Senate Banking Committee.
The OCC expects national banks that have relationships with MSBs to take a number of steps to mitigate those risks, she said. At a minimum, they should apply their customer identification program requirements; confirm that the MSB has registered with FinCEN and complied with state and local licensing requirements; confirm the MSB's agency status and conduct a basic assessment to determine the level of risk associated with the account and the level of diligence that must therefore be applied to the relationship.
Ms. Williams stressed that the OCC does not expect banks to serve as de facto supervisors of MSB customers. Instead, their job is to develop systems and controls that effectively identify suspicious transactions.
In addition, Ms. Williams said, the OCC does not expect banks to close the accounts of MSBs or other customers except in very unusual cases, generally involving an enforcement matter.
Ms. Williams added that the OCC expects banks that service MSBs to apply the requirements of the Bank Secrecy Act on a risk-adjusted basis, just as they are expected to do for other customers.
The acting Comptroller noted that the banking agencies and FinCEN issued joint guidance today that should clarify key issues involving MSBs.
The OCC, she said, is continually striving to improve the quality of its BSA supervision.
"Our track record of BSA enforcement actions reflects judicious use of our enforcement authority," she said. "We absolutely do not have a "zero tolerance" approach where any and every BSA deficiency warrants a formal enforcement action, but we absolutely will take action where action is warranted."