As a Money Services Business (MSB), it is becoming extremely difficult to find an MSB Friendly Bank. One wonders how those in business, are still in business? Who are they banking with? How did they find an MSB friendly bank to work with?

The answer to all these questions is not that difficult. While it is true that a significant majority of the banks have derisked themselves from the MSB industry, there are still a few banks who continue to provide banking to various MSBs. How? The answer is compliance.

Most banks are not equipped to handle and spend a lot of time (months?) on evaluating the compliance program of an MSB and then finding the gaps and correcting them. This is why these banks rely on working with select compliance companies who are able to deliver a compliance report – that the banks is comfortable and acclimatized with.  Think about it, as a small bank, do you really want to start fresh with 20 banks, or would you rather than these 20 banks adhere to a single template and you read that report to which you are accustomed to?

So a good starting point is to go to a known-name compliance company and get your compliance audit done. This will take 1-3 months and can definitely be worth your while for the money to pay. Banks, state examiners, partners, etc. all value a compliance report. Once you are armed with a compliance report, it is relatively easier to speak to those banks that are MSB Friendly Banks. Yes, it is still tough finding such banks, but it is doable.

I have started drawing a list of banks (that I do share with the public) that I know are MSB Friendly Banks: