Which banks are willing to open accounts for licensed money services businesses considered high-risk?
Banking
Asked by Question Bot09/Mar/20161 answer
1 Answer
F
Faisal Khan
Answered 09/Mar/2016
Being able to find banking is going to be extremely difficult, especially if your friend's MSB business deals with cash + cross-border.
This entire de-risking exercise is happening due to something called Operation Chokepoint (Wikipedia: Operation Choke Point).
You would be hard-pressed to find a bank that would accept an MSB now, and if someone does find a bank chances are people would not be providing names (as referral fees in this business for finding an MSB friendly bank is high).
I literally know of 100+ cases where MSBs have essentially gone out of business as they cannot get access to banking. They are holding on to their licenses, but that is about it.
As a very good friend in the industry puts it: It is Strangulation by Regulation!
The most likely place where you might end up getting banking are small community banks or credit unions, however it is going to be a tough search.
Access to banking for MSBs, which ironically are one of the most regulated entities, is a major issue and there seems to be no end in sight to this problem.
Additional Reading:
This entire de-risking exercise is happening due to something called Operation Chokepoint (Wikipedia: Operation Choke Point).
You would be hard-pressed to find a bank that would accept an MSB now, and if someone does find a bank chances are people would not be providing names (as referral fees in this business for finding an MSB friendly bank is high).
I literally know of 100+ cases where MSBs have essentially gone out of business as they cannot get access to banking. They are holding on to their licenses, but that is about it.
As a very good friend in the industry puts it: It is Strangulation by Regulation!
The most likely place where you might end up getting banking are small community banks or credit unions, however it is going to be a tough search.
Access to banking for MSBs, which ironically are one of the most regulated entities, is a major issue and there seems to be no end in sight to this problem.
Additional Reading: