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Treasury Report Reminds CUs of Needed MSB Vigilance
Thursday, June 4, 2015 6:40 AM

A U.S. Treasury report cited in Tuesday's Wall Street Journal can serve to remind credit unions to maintain vigilance when it comes to serving money services businesses (MSBs). The report does not make any allegation against a credit union, but it does cite the possibility of a small number of credit unions (less than 1 percent) being vulnerable to money launderers due to relationships with MSBs.

CUNA has requested a copy of the report from Treasury's Financial Crimes Enforcement Network.

“There’s no question that there are risks in money services businesses, but many of these companies provide valuable services to unbanked and underbanked people,” said CUNA Chief Policy Officer Bill Hampel Wednesday. “Credit unions take their mission to serve these needs seriously and work hard to be selective as to which companies they do business with. They mitigate risk and comply with the law; they’re not just doing business with everyone in the market.”

CUNA provides a number of services and resources to help credit unions understand how to comply with the Bank Secrecy Act and other laws they are subject to.

“It is likely that regulatory filings by credit unions when complying with BSA rules have led to increased reporting of potentially suspicious activity,” Hampel said.

As a whole, the credit union movement offers a number of services designed to reach unbanked or underserved consumers and to provide an alternative to potentially predatory lending entities.

Just one example are the payday alternative loans, or PALs, offered at many federal credit unions contain a number of consumer protections, including limits on annual percentage rate of interest and the number of loans a consumer can take out in a set amount of time.