FinCEN Offers Guidance on Application of BSA Regulations to Daily Money Management Services and Prepaid Card Vendors


Recently, FinCEN released two Administrative Rulings, FIN-2012-R003 and FIN-2012-R004, that provide guidance on the application of Bank Secrecy Act (BSA) regulations to certain types of businesses. In the first ruling, FinCEN analyzed a prepaid access arrangement where a bank exercises primary control over the arrangement, while a bank vendor distributes and sells the prepaid access (via prepaid cards). FinCEN determined that the vendor would not be required to register as a prepaid access provider. Still, the vendor may be a seller of prepaid access—who would be required to register—in certain listed circumstances. In the second ruling, FinCEN advised that companies that offer daily money management services may be subject to FinCEN’s regulations implementing the BSA. The company that requested the ruling facilitated the payment of monthly expenses for its customers and managed customers’ day-to-day finances. FinCEN concluded that the company was a “money transmitter” under FinCEN regulations because (i) the company disbursed company checks on its customers’ behalf, (ii) the company was not engaged in core debt management services, and (iii) the disbursements were not ancillary to some other good or service.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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