The Office of the Comptroller of the Currency (OCC) has released a significant statement providing clarity to national banks and other financial institutions regarding the management of risks associated with Money Services Businesses (MSBs). This announcement is crucial for banks offering services to MSBs and for the MSB sector itself, as it addresses supervisory expectations and promotes a balanced approach to risk assessment.
In essence, the OCC’s statement emphasizes that it does not instruct banks to automatically close or deny accounts to MSBs as a category. Instead, the agency underscores the importance of individual risk assessment. Banks are expected to evaluate the risks presented by each MSB customer on a case-by-case basis. This tailored approach allows banks to serve MSBs while implementing appropriate risk management controls, aligning with regulatory expectations and ensuring fair access to financial services.
A key highlight of the OCC’s guidance is the recognition that Money Services Businesses are not monolithic; they present varying degrees of risk. This nuanced perspective moves away from a blanket categorization of MSBs as inherently high-risk. The OCC stresses that banks should avoid broad-brush de-risking of entire categories of customers. Instead, they should focus on understanding the specific risk profile of each MSB they serve, considering the services offered and the individual circumstances of the business.
This clarification is set against the backdrop of the Bank Secrecy Act (BSA), which requires banks to manage risks across all customer accounts. The OCC reiterates that BSA compliance should be risk-based, taking into account the specific products, services, and customer profiles. Robust risk management systems are essential to prevent illicit activities like money laundering and terrorist financing. However, these systems should be applied judiciously, allowing banks to serve diverse customer segments, including MSBs, while effectively mitigating potential risks.
For banks seeking further information or clarification on these supervisory expectations, the OCC has provided a point of contact. Grovetta N. Gardineer, Deputy Comptroller for Compliance Operations and Policy, is available to address inquiries, ensuring that banks have the resources needed to implement these guidelines effectively. This statement from the OCC serves as important news for the money services business sector, promoting a risk-sensitive yet inclusive approach to banking relationships.
