The banks ‘derisking’ approach to Money Services Businesses, particularly third party cheque cashers, continues to be an area of concern. Over the years we have seen the number of banks willing to work with cheque cashers decrease. It is now virtually impossible for new customers to open this type of account and existing accounts have either been closed or are continuously under ‘threat of closure’ putting an enormous pressure on businesses.
The closing down of a bank account puts any business at risk, and with other banks not willing to open new accounts it can be a commercial death sentence. We know that this has led to a number of our Members having to withdraw from the market or find other ways of operating.
Banks claim that this type of business is too ‘risky’ from a money laundering perspective and as a result they appear to have adopted a fixed approach to managing this ‘risk’ by refusing to do any business with Money Service Businesses (MSB’s). This is known as ‘derisking’.
Over the last few years BCCA has been working on raising concerns and highlighting this problem. We continuously promote our message to those who will listen amongst regulators, government and parliamentarians, and we support our members through these difficult times and as always, keep our members informed on how this is progressing.