Educate small-business clients about the Bank Secrecy Act.

• Author: Motley, L. Biff
• Position: Customer Satisfaction

Marketers should team up with their compliance officers to ensure that file bank develops an effective communications program in connection with implementation of the Bank Secrecy Act (BSA). This compliance program needs to be fully explained to frontline bankers and their clients, especially the small businesses that are the life blood of many community banks.

The BSA was one of the new laws passed as a result of the tragic events of 9/11. These laws are aimed at preventing terrorist activities by tracking illegal money movement. The regulations promulgated under the authority of the BSA require that all "money services businesses" (MSBs) register with a department of the U.S. Treasury called FinCEN (Financial Crimes Enforcement Network). When these businesses register, they are informed about a variety of transaction reporting requirements they must follow to identify and communicate suspicious money-related transactions.

It is important to understand the definition of an MSB. The definition is located on FinCEN's website (www.fincen.gov), and it includes not just pawn shops, check cashers and currency exchanges, but any business that sells money orders, traveler's checks, stored-value cards or cashes checks for customers in which individual transactions involve over $1,000. This is a broad definition and might well include many grocery stores, drug stores, department stores and other good local bank clients who may not even be aware of their requirements under BSA.

Banking regulators expect banks to put in place a risk-assessment-driven set of policies and procedures designed to identify these types of businesses in their markets and to monitor their transactions. MSBs must report...