The Business of Check Cashing
Most states have registration and licensing requirements
for check cashing. If your business is presently licensed
or registered under the laws of your state (or should be
licensed based on its activities), it is clearly
operating in the business of check cashing for purposes
of compliance with the Bank Secrecy Act.
Some states have thresholds below which businesses are
not required to register or obtain a license; it is
possible that a business may not be required to obtain a
registration or license with its state and yet still fall
under the federal definition of an MSB. If your business
cashes checks and is not required to register or obtain a
license at the state level, do not presume that it does
not fall within the definition of MSB due to check
cashing at the federal level.
Generally, an entity engaged in the business of check
cashing:
-
Determines which checks to cash for customers;
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Clears checks through their own bank accounts;
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Bears the risk of loss if checks do not clear;
-
Pays for the cash that is provided to customers;
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Maintains a customer service relationship with customers wishing to cash checks; and,
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Charges a fee.