Agency cites need to boost money services for poor
WASHINGTON — Some check cashers and money transmitters — often relied upon by the poor and immigrants for financial transactions — might still be having problems getting the banking services that they need to stay in business, a Treasury Department agency said Wednesday.
The problems may be continuing despite steps taken by federal regulators aimed at trying to prevent legitimate money-services businesses from being cut off.
Against that backdrop, the Treasury Department’s Financial Crimes Enforcement Network announced Wednesday that it is launching a proceeding to collect updated information on the matter and to explore whether additional regulatory guidance or regulatory action is needed.
“Money-services businesses play an important role in America’s economy by providing valuable financial services to many Americans who do not, or cannot yet, take advantage of typical savings or checking accounts,” said newly installed FinCen Director Robert Werner. “It is critical for the health and safety of the U.S. financial system that (money-services businesses) obtain and maintain banking services and not be driven underground.”
Some banks have closed the accounts of money-services businesses out of fear they might run afoul of regulations designed to catch money launderers and terrorist financiers. Banks as well as money-services businesses asked federal regulators last year for help.
Even after some regulatory guidance was provided last year on the issue, banks “remain wary of dealing with money-services businesses and … money-services businesses continue to experience difficulties in obtaining and maintaining bank accounts and other banking services,” according to FinCen’s document on the new proceeding.
The industry and the public will be given an opportunity to weigh in on the matter.
Banks are required to take steps to safeguard their institutions from being abused by money launderers, terrorist financiers and other criminals. In general, money-services businesses are subject to a range of provisions to thwart such abuses.