What is Required by the Bank?

Usually the standard requirements to open an MSB account are:

• Business ownership documents
• Custom Anti-Money Laundering (AML) Program
• Federal and state licenses
• Permits
• Registrations

What Things Work in Your Favor?

Experience is what works most for a bank applicant. The more an applicant knows and the more prepared an applicant is, the better.

The last thing banks want are applicants who don’t have a clue what they are doing or worse, an applicant that has been doing MSB activity for years, don’t have written policies and procedures and never registered for the proper licenses.

A custom Anti-Money Laundering Program is a document that puts policies and procedures onto paper. Having a comprehensive program proves that you know your business well enough to have the essential policies and procedures in place to combat fraud and money laundering.

Now that you have your AML program, you and your employees need to have training. Certifying your employees means that they know the policies and procedures that are outlined within the AML program.

The cherry on top of proving experience, is to go one step further and get a Third Party Independent Review.

This review is to be performed by a qualified third party and is an in-depth audit of your AML Program.  A CAMS certified representative is best suited to comb through your written policies and procedures because they know the MSB industry.

This will point out any deficiencies and gives you the opportunity to address those. Correcting deficiencies demonstrates that you are willing to fix issues, proactive and flexible.

What Things Might Make a Bank Decide Not to Open an Account?

Many factors are involved and reasons are mostly at the bank’s discretion.

However, there are automatic red flags where applicants can be declined automatically.  Some of these red flags are applicants who have a criminal history, applicants dealing with or is a OFAC/SDN related individual, or being an agent of a company that the bank does not want a working a relationship with.

A Risk Assessment from a third party provides insight into the level of risk associated with the MSB (low, medium or high). This assessment looks into the aforementioned, plus; geographic location, demographics of customers and much more.

Additionally, a Third Party Independent Review is the best way to uncover any deficiencies and/or red flags. If any deficiencies are revealed within your AML program, you will be presented with a plan to address any of those deficiencies.

What are the Most Common Updates or Fixes a Bank will Request to Improve a Mutual Client’s Application?

In my experience, bank representatives always have concerns with the AML program.

It is imperative that the AML program is customized to ALL the activity within the MSB. Most of the time the AML program, of a respective merchant, is either obsolete or does not reflect all the MSB activity being conducted.

For instance, when Capital Compliance Experts is putting together an AML program for a client, we send out a detailed questionnaire that covers the scope of the MSB offerings.

With this information, we can make the necessary updates or in many cases, write a new AML program that will not only cover the 4 pillars, but will also include all the policies, procedures, and MSB activity being conducted.

Another common concern that most banks have is the Independent Review not being detailed enough. You need to get someone who knows the industry. CAMS certified specialists know BSA requirements inside and out and are trained to pin-point any red flags/deficiencies within the AML program.

What Advice Would you Give Potential Clients Going Through an Audit?

The best thing a client can do is to seek help, disclose everything regarding their MSB activities and be honest.

We are seasoned professionals in this business and I can safely say that it is never a good idea to hide any information from a financial institution or a government audit.  The bank will always find out.

In fact, finding deficiencies in an AML program may be a good thing as long as they are addressed and corrected to everyone’s satisfaction.

I’ve come across many clients who give me their documentation prior to hiring us and they inform us that everything is perfect and there shouldn’t be any deficiencies.  Most of the time, I find that not all of their MSB activity is disclosed and that is a huge red flag.

Therefore, be honest, disclose everything, and don’t be afraid to discover deficiencies so they can be addressed and corrected.