The Electronic Transactions Association (ETA); INFiN, a Financial Services Alliance; the Money Services Business Association (MSBA); and The Money Services Round Table (TMSRT) announced the release of Best Practices for U.S. Money Services Businesses: Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Compliance Programs. The members of these industry associations represent the full range of Money Services Businesses (MSBs), from large firms offering a wide variety of services around the globe to small firms offering remittance services in niche corridors, industry incumbents, and fintechs. The Best Practices reflect the MSB industry’s commitment to ensuring a safe and compliant environment for providing non-bank financial services amid rapidly evolving threats to the U.S. financial system.
Initiated by MSB industry members, this comprehensive set of Best Practices for MSBs is the culmination of an extensive, cross-sector effort with two goals. The first, to refine MSB AML/CFT compliance standards to safeguard the financial system, and the second, to address the challenge of forced de-risking (the cancellation of banking services to entire business lines, rather than on a case-by-case basis).
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“The industry effort to identify and distribute Best Practices for U.S. Money Services Businesses: Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Compliance Programs marks a significant advancement in efforts to combat de-risking. [The Conference of State Bank Supervisors] (CSBS) commends the trade associations for taking this step and encourages continued dialogue surrounding this issue.”
—John W. Ryan, President & CEO, CSBS
To advance MSB compliance standards, MSB industry members received feedback from regulators, law enforcement agencies, banks, and policymakers to create a set of guidelines representing the MSB industry’s views on prudent approaches to MSB AML/CFT compliance. These guidelines recognize that an MSB’s compliance obligations should be viewed and applied according to the risk associated with its respective size, services, products offered, geographic footprint, and business model.
All MSBs depend on access to banking services. To address forced de-risking of MSBs, the authors believe banks will be encouraged to provide services to MSBs that adhere to these Best Practices. In fact, banks and banking associations played an integral role in drafting the MSB Best Practices.
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Further, MSBs continue to grow, reflecting the rising demand from consumers and businesses for essential, beneficial, and innovative products and services in the U.S. and globally. According to CSBS, state licensed MSBs conduct more than $1.8 trillion in transactions annually1 and are an essential part of the financial services industry, for banks, commercial customers, and consumers. Accordingly, the trade associations involved in crafting the MSB Best Practices are committed to their ongoing review, updating, and implementation to meet the evolving needs of the marketplace and broader financial system.
ETA, INFiN, MSBA, and TMSRT acknowledge the regulatory and law enforcement agencies, financial institutions, money services businesses, trade organizations, banks, public policy bodies, and numerous individuals that provided feedback on this document and help the industry-driven effort to improve compliance with AML/CFT regulations. Discussions and collaboration among Bank Secrecy Act Advisory Group (BSAAG) members were instrumental, and informed the development of these Best Practices through cross-sector discussions. The importance of codes of conduct, best practices, and educational initiatives were recently noted in the Government Accounting Office (GAO) report as an area that could lead to improvements in risk management regarding AML/CFT and sanctions issues.
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