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FinCEN plan could reduce confusion about MSBs CUNA says
WASHINGTON (9/10/09)--There is significant confusion within the financial sector and in the marketplace regarding the types of businesses and activities that fall under the Financial Crimes Enforcement Network’s (FinCEN’s) money services business (MSB) rule and the Credit Union National Association (CUNA) supports FinCEN’s attempts to minimize the confusion. FinCEN has proposed an update to its MSB regulations and definitions to reflect its past guidance, rulings, current business operations, and evolving technologies, as well as to bring certain foreign-located MSBs with a U.S. presence under the purview of the regulations. The proposal also incorporates a minor change to the stored-value product rules and seeks comments for substantive changes envisioned for a later time. In a Sept. 9 comment letter, CUNA said it generally agrees that FinCEN’s proposed amendments to the MSB definitions will improve financial institutions’ ability to determine what individuals and business activities are covered. The clarifications, CUNA added, will also help credit union and other financial institutions to manage risks involved in serving those individuals or businesses. CUNA also generally supported FinCEN’s review of a $1000 per-person, per-day threshold that is applied to certain categories of MSBs, but CUNA warned that substantially lowering the threshold could result in additional burdens for institutions. “Lowering the threshold would increase the number of businesses and individuals designated as MSBs and thus increase the risk management burden for financial institutions. In most cases, MSBs would be classified in a higher risk category than most consumers and would require a more stringent level of risk management,” the letter noted. About the stored-value rules, CUNA said that it supports the agency’s efforts to get financial institution comment, but believes the issue is more appropriately addressed in separate rulemaking. To read CUNA’s complete comments, use the resource link below.


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