WASHINGTON—The World Council of Credit Unions has sent a comment letter to the Financial Action Task Force urging the FATF to set clearer rules for when U.S. CUs are able to serve money service businesses (MSBs).
The letter, responding to the FATF’s technical questions request on correspondent banking and money or value transfer service (MVTS) operators, asks the FATF to clarify “de-risking” rules as they affect credit unions as service providers.
De-risking occurs when financial institutions are not willing to provide services to MSBs due to compliance risks and costs, enforcement risks and reputational risks that are associated with the customers of credit unions, the letter stated.
In the letter signed by VP and General Counsel Michael Edwards, WOCCU explained that de-risking makes it difficult for credit unions to establish or maintain bank accounts that they need to facilitate domestic or cross-border payment activities. “A lack of fair access to banking and payments will limit credit unions’ ability to provide financial services . . . so we would urge the FATF to provide more detailed guidance on recommendations that would assist credit unions in the fight against de-risking in the context of credit unions providing financial services to money service businesses.”
For the full letter, available in CUToday.info’s The Gov section, click here.