Noting reports from some independent ATM owners and operators about difficulty getting banking services, Treasury’s financial crimes enforcement unit issued a statement Wednesday seeking to provide clarity to banks on how to apply a risk-based approach to conducting customer due diligence (CDD) on these providers.
In an email announcement with its statement, the Financial Crimes Enforcement Network (FinCEN) said difficulty accessing banking services by such providers “jeopardizes the important financial services they provide, including to persons in underserved markets.”
“FinCEN is issuing this statement to remind banks that not all independent ATM owner or operator customers pose the same level of money laundering, terrorist financing, or other illicit financial activity risk, and not all independent ATM owner or operator customers are automatically higher risk,” the agency said. “Further, banks that operate in compliance with applicable Bank Secrecy Act/anti-money laundering regulatory requirements and reasonably manage and mitigate risks related to the unique characteristics of customer relationships are neither prohibited nor discouraged from providing banking services to independent ATM owner or operator customers, including those that are Independent Sales Organizations.”
The statement issued Wednesday provides a fuller discussion of CDD requirements and some considerations in formulating a risk-based approach to CDD.
The statement notes that while the CDD rule issued by FinCEN does not specifically require the collection of the following customer information, such data “may be useful for banks in making determinations on the ML/TF [money laundering/terrorist financing] risk profile” of independent ATM owner or operator customers:
- Organizational structure, including key principals and management.
- Information pertaining to the operating policies, procedures, and internal controls of the ATM owner or operator.
- ATM currency servicing arrangements, contracts, and responsibilities (e.g., cash vault services, third-party providers, and self-service).
- Information regarding the source of funds if the bank account is not used to replenish the ATM. Sources of cash may include proceeds generated by the core retail business of the owner, proceeds from a loan or revolving credit line, or cash originating from an account maintained at another bank.
- Location where the independent ATM owner or operator customer is organized, and where they maintain their places of business, including locations of owned or operated ATMs.
- Description of expected and actual ATM activity levels, including currency transactions.
- Information to better understand whether ATM operations are generally ancillary to other retail operations or the primary business of the independent ATM owner or operator customer.