Right at 9 am, in the Cash Room of the Treasury Building last Tuesday, January 13th,, 100+ attendees gathered to participate in the Roundtable.

The agenda presented at the entrance is here:

9:00 AM Welcome and Opening Remarks
Treasury Office of Terrorism and Financial Intelligence
Under Secretary David S. Cohen
Department of Justice, Criminal Division
Assistant Attorney General Leslie R. Caldwell

 9:30 AM Moderated Panel 1: U.S. Treasury Views on Financial Access and MSBs
              Moderator: Jean Pesme (World Bank)
Office of Domestic Finance: Deputy Assistant Secretary Melissa Koide
Office of International Affairs: Deputy Assistant. Secretary Alexia Latortue
Office of Terrorism and Financial Intelligence: Deputy Assistant Secretary Jennifer Fowler
Questions and Answers

10:15 AM Moderated Panel 2: Regulatory Expectations and MSBs

Moderator: Jamal El-Hindi (FinCEN)
Financial Crimes Enforcement Network: Acting Deputy Director, Jamal El-Hindi
Office of the Comptroller of the Currency: Deputy Comptroller, Grovetta Gardineer
Conference of State Bank Supervisors: President/CEO John Ryan
Questions and Answers

11:15 AM Coffee Break
11:30 AM Moderated Panel 3: Discussion with Industry
Moderator: Sarah Runge (Treasury)
1:00 PM Acknowledgment and Thank You

Under Sec Cohen opened the meeting with a well-crafted statement of the importance of this meeting for the Dept. of Treasury, the Dept. of Justice, OCC, the Conference of StateBank Supervisors and other US regulators. The intention, was established from the beginning: it was an effort of regulators to understand the Bank Discontinuance problem that MSBs are facing but also a way to explain what is the US regulator’s procedures, agenda and position with regards to MSBs.

The Wall Street Journal headline reads: “Officials at a U.S. Department of Treasury roundtable on financial access for money-service businesses stressed the importance of including them in the global financial system, despite perceived risks by banks swiftly exiting the line of business.” http://on.wsj.com/1wcjH4e

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He then introduced from the Criminal Division of the Department of Justice, the Assistant Attorney General Leslie Caldwell (http://1.usa.gov/1syxozf) who went on to point out that the DOJ is not out to get MSBs but only those that were intentionally and deliberately not following the law. She said; “Financial institutions often are our first line of defense against fraud, money laundering, terrorism financing and violations of sanctions laws.  Financial institutions that have money services businesses as customers have a particular responsibility to be attuned to the risks involved and not turn a blind eye to suspicious conduct”. She highlighted two cases, the 2012 case against MoneyGram (http://1.usa.gov/1ygwCI6) and the 2013 case against Belair (http://1.usa.gov/1Af0iSG) , which she explained in some detail. She concluded by saying that even if MSBs were high-risk businesses, the great majority were compliant and were making the right efforts to shield the US from criminal element’s needs to launder their proceeds or use the financial system for illegal activities. A copy of the posted statement by Ms. Cadwelll is here: http://1.usa.gov/1KJwGFp


The first panel moderated by Jean Pesme (http://bit.ly/1IK7LOa) from the WorldBank, was an interesting presentation of what the three divisions in Treasury care for, in relation to MSBs and why the issue of Bank Discontinuance was important to each one of them. Ms. Melissa Koide (http://linkd.in/1FVVk5L) gave a portrait of two consumers, one a young student paying her way with partime jobs, with a bank account but using MSBs for most of her financial needs and a Nigerian woman, using MSBs to send money home as well as her other needs. I guess the intention was for all participants to understand the need for MSBs and its importance to the fabric of American life. Ms. Alexia Latortue (http://linkd.in/1CkPB3F) was brilliant I thought. She was able to clearly articulate the importance of money transmitters globally with facts and examples that gave the MTOs present the feeling that there was someone in Treasury that had a good grasp of the work the industry performs and its challenges. Ms. Jennifer Fowler (http://linkd.in/1yjs426) was also engaging in explaining the work the department is pursuing. She insisted that the wholesale derisking and shutting out of MSBs by banks is not the intention but what they want to see is a risk-based approach that makes banks look and evaluate MSBs in a one to one basis.

The floor was open to questions and comments and David Landsman (http://bit.ly/1C0FL8x) from the NMTA, Paul Dwyer from Viamericas (http://linkd.in/1IwCakS), Isak Ahmed (http://linkd.in/1KJD6Ex) from Dahabshil and others gave their points of view. Ideas on revisiting the risk-based approach, on the problem of not seeing MSBs as partners of banks, on the problem of regulators expecting banks to know the customer’s customers – something that was denied by regulators repeatedly, the case for the need of transparency and the fear of money moving underground.


The next panel was moderated by Jamal El-Hindi (http://1.usa.gov/1CkNuwA), well chosen for this role. He went on to share FinCEN’s concern over the bank access problem, on what the agency is doing on this front and even deliberating on the unintended consequences of discussing risks that MSB present, in creating an environment that it was not conducting to the need of all working together: government, banks, MSBs. Loretta Gardineer (http://1.usa.gov/1u4dTzC) for OCC went on to explain the agency’s role in the examination of banks insisting that they didn’t have zero tolerance and that their examiners were being trained to understand the MSB industry and were applying this knowledge when reviewing Banks who had MSB clients. I do think most of the MSB audience felt that there is a disconnect in OCC, from what the examiners are doing in the field and what the head office wants, or says it wants, as it was commented by attendees publicly. She also mentioned several times that banks go through a cost-benefit analysis of banking MSBs given the additional risks and resources attendant to MSBs.. John Ryan (http://prn.to/1DFMhnh) went on to explain the efforts states are doing to work together, alleviate the burden on money transmitters that are licensed in a good number of states (with central depository of information, multi-state examinations, central MTO-agent-information, etc.) I do feel MTOs recognize the efforts of the Conference of State Bank Supervisors and the MTRA and even it was mentioned that there should be a way for Banks to access State’s information on MTOs as a way to help in MTO “Bankability” rating. The current states accepting the NMLS is relation with Money Transmitters is here. You can access more information here: http://bit.ly/1DFOvmA.

The floor was opened and there were several very interesting comments by attendees. I must mention Tim Daly (http://linkd.in/17HIvgd), SVP, Global Public Policy at Western Union on the disconnect between the field examiners and Washington and Les Joseph (http://linkd.in/1C6UFYO) from Wells Fargo, practically the only large commercial bank banking MSBs on how banks have no credit nor incentives for banking MSB, only the downside. Also Francois Dolmetsch (http://linkd.in/1wceR72), Chairman of Titan, a Colombian MTO, on the impossibility of foreign MSBs opening accounts in the US and even getting banks to bank them in their own country because local banks are “bullied” by US banks on cancelling correspondent accounts if they bank MSBs.


After the Coffee Break, Sarah Runge (http://linkd.in/1AQ9b7Y) from US Treasury opened the floor to hear from bank and the industry on specific issues, ideas and situations. Although there were excellent comments and statements by very knowledgeable individuals, it was clear Ms. Runge’s frustration on the lack of openness of the attendees and desire to come forward and speak freely. I know the feeling when I try to have panels at IMTC and need panelists from the industry to speak up. The fear of raising the head and getting it chopped is very real in this environment. The fear of being signaled also places an important role, especially in front of authorities; trust is essential and there is not much around. Connie Fenchel (http://bit.ly/1x0FcXd) was very direct in mentioning why the few smaller banks banking MSBs would probably – maybe – sit with FinCEN and Treasury in a private meeting but would not speak openly in a roundtable as the one we were part of. I valued Laybaa Hernandez (http://bit.ly/14A7rE0) from Dolex, the MTO who owns the largest network of company-owned branches in the US, who passionately explained the issues the company but most of all its agents and correspondents abroad were facing with getting bank accounts.

Ms. Runge also asked about – and focused on – what are the drivers that make the banking environment for MSBs more difficult or less difficult than before. It was clear from comments, that, among other things, the following were the primary drivers: a) the cost-benefit analysis banks conduct to determine if it is worth devoting resources to, and incurring the risks of, banking MSBs; b) the enforcement orders against many banks that make them less prone to incur the potential risks of banking MSBs; and c) the perceived concerns by examiners from their bosses or examiner interpretations of their directives, that they must come down hard on reviewing MSB accounts, or the customers of MSB customers.

I also have to mention the comments by Ed D’Alessio (http://linkd.in/1yjOEYm) from FISCA on the difficulties the Check Casher industry has faced, especially with the massive closure of MSB accounts by Capital One (http://bit.ly/1wcfptP) after it was subpoenaed by the New York District Attorney’s Office (http://bloom.bg/1Cl7oHY). If there is an association that certainly works in the MSB space is definitely FISCA.

Christine Carnavos (http://linkd.in/14WBLd3), who in her career in banking, FinCEN and Western Union has certainly be in all sides of the issue, was on point on thanking treasury for holding the meeting and expressing her views – shared by all – that this effort should be just a  first step and that the complexity and seriousness of the matter needed a plan going forward. Several attendees mentioned the idea of creating a Task Force with banks, MSBs and regulators to work the issues in a practical and active manner.

I took the microphone to explain – as I have done in past conference presentations – on how the bank access problem for MTO agents and very small MTOs was hurting the transparency of the US financial system by making them drop “transfers”, “envios, “exchange”, “giros” out of the company name in order to get a bank account. And at the same time, as a survival mechanism, they were also opening large number of paper companies with names that included “holding”, “investment”, “management”, in order to open bank accounts and continue surviving until some of these accounts got eventually closed, and the cycle continues; or ends. I had to explain to a colleague afterwards that I don’t advise in my consulting work for any company to do that; I was making a point that the Bank Discontinuance problem was creating all sorts of “unintended behaviors by MSBs” that were mudding the financial ecosystem. Such behaviors may also be illegal and therefore are discouraged.

Perianne Boring (http://linkd.in/1IwPdTk) from the Chamber of Digital Commerce and Carol Van Cleef (http://bit.ly/1u4qz9L) presented the banking problems that Virtual Currency Companies are facing – even blockchain related companies with nothing to do with exchanging or moving value. British money transfer expert Leon Isaacs (http://bit.ly/14WCyLi) mentioned the international efforts being made on this issue and the extreme banking situations being faced in the UK and Australia by Money Transmitters. Long-time industry consultant Jorge Guerrero (http://linkd.in/1yc97kX) also spoke making reference on how this problem has been getting worse since 2005 when the first large bank account closures started. The “safe harbor” provision for banks to provide services to MSBs, which has been discussed extensively in the past (see the US Congress hearing on 2012 – Safe and Fair Supervision of MSBs – http://1.usa.gov/14WGXxM) was floated around but quickly dismissed by the regulators present.


There were more comments made but I don’t want to extend this account of the roundtable much more. I just want to end with my own personal opinions of the PROS and CONS of the meeting; I welcome, publicly in LinkedIn or privately, any comments that you might have.


  • Most of us felt that it was a genuine effort from Treasury to bring together MSBs and regulators and discuss the Bank Discontinuance issue
  • The Roundtable tried to include the views from MSB companies, representative organizations and banks, insisting on attendees coming forward and expressing their views.
  • Most – if not all – the panel participants were very clear to express their role and their views from different angles in order to paint a picture to MSBs on the importance of their role in the whole financial system.
  • As a first step, the meeting can be considered successful. That is my opinion. If this is it, I understand the feeling of frustration by a number of industry attendees.


  • I feel that the agenda should have been published – or sent to the attendees beforehand, and that the format would have been better known; this way we all could have made an effort to bring more industry participation.
  • Lack of Industry participation. MTOs that have serious bank account problems were not there voicing their despair. One reason, we all know, is because if any MTO mentions publicly that it has bank access problems, its “compliance strength” will be immediately put into question.
  • Lack of participation by key ethnic MTOs from the major migrant groups in the US. Their experience is unique. I do understand that most feel that if a US MTO, owned by US nationals or Investment Firms can’t get bank accounts, their chances are close to zero. So, if they still are holding for dear life with a bank account, they probably should lay low.
  • Lack of Bank participation. Some of the panelists were “preaching to the choir” and even if that is good, in the sense of self-affirmation, it gives us the sense that most banks don’t care.

NEW: JANUARY 29, 2015

The FDIC, Federal Deposit Insurance Corporation, issued a Statement on Providing Banking Services on Wednesday, January 28. In its summary the FDIC says: “The FDIC is issuing this statement to encourage institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers.” Read the Statement here: http://bit.ly/imtcfdic1.  The Statement doesn’t mention the Money Transfer Industry, or MSBs in particular, nor any specific industry.

The Statement opens with ; “The FDIC encourages insured depository institutions to serve their communities and recognizes the importance of the services they provide. Individual customers within broader customer categories present varying degrees of risk. Accordingly, the FDIC encourages institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers, without regard to the risks  resented by an individual customer or the financial institution’s ability to manage the risk. Financial institutions that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to any category of customer accounts or individual customer operating in compliance with applicable state and federal law“.

Will it make a difference? Not in practical, immediate ways, especially not with larger banks, but it might encourage medium and smaller banks and credit unions to take a second look at licensed money transmitters. But the problem now is that “MSB friendly banks” are being told by regulators that they are managing too much risk… which is understandable since few banks are banking the industry! What is your opinion?

Hugo Cuevas-Mohr –  Mohr World Consulting