In FIN 2008-R011, the FinCEN (Financial Crimes Enforcement Network) ruled whether a company that engages in microfinance is a money services business. According to the ruling, FinCEN:
- Defines money services businesses to include check cashers; currency dealers and exchangers; issuers, sellers, and redeemers of traveler's checks, money orders, or stored value; and money transmitters.
- Defines the term "money transmitter" to include "any person... who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution... or... [a]ny other person engaged as a business in the transfer of funds."
- Provides through its regulations that "[g]enerally, the acceptance and transmission of funds as an integral part of the execution and settlement of a transaction other than the funds transmission itself ... will not cause a person to be a money transmitter.
The company in this case was found not to be a money transmitter.
Posted by Min Young Choi, Associate Editor, Wealth Strategies Journal.
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