Check Casher
A check casher is a FinCEN money services business category: a person who cashes checks for more than $1,000 for any one person on any day. Federal registration as an MSB and a state check-cashing licence are separate requirements, and neither covers money transmission.
Also called: check cashing
The federal definition is in 31 CFR 1010.100(ff)(2). A check casher is a person who accepts checks, as defined in the Uniform Commercial Code, or other monetary instruments in return for currency or a combination of currency and other instruments, in an amount greater than $1,000 for any person on any day in one or more transactions. The threshold is per person per day and aggregates across transactions, so it cannot be avoided by splitting a single customer’s business into smaller pieces — that is structuring territory.
Crossing the threshold makes the business an MSB, which brings FinCEN registration, a written AML programme, recordkeeping, and suspicious activity and currency transaction reporting. Certain persons are outside the MSB definition altogether under 31 CFR 1010.100(ff)(8), including banks and a natural person acting infrequently and not for gain.
Separately — and this is where operators most often come unstuck — most states licence check cashing in their own right, frequently with fee caps, bonding, premises requirements and their own examinations. Those regimes are state law and are administered by state regulators; the federal registration says nothing about them.
In practice
Registering with FinCEN as a check casher does not authorise money transmission, and holding a money transmitter licence does not authorise check cashing. They are different MSB categories federally and usually different licences at state level. A business doing both has to address both, in every state where it operates.
Example
A retail store cashes payroll checks for a fee. Once it exceeds $1,000 for a single customer in a day it is a check casher federally, must register with FinCEN and must run an AML programme — and in most states it also needed a check-cashing licence before it opened the counter.
Commonly confused with
| Term | How it differs |
|---|---|
| Money Transmitter License | Money transmission is accepting funds from one person and sending them to another. Cashing a check exchanges an instrument for currency in one place and is a distinct activity. |
| Dealer in Foreign Exchange | A different MSB category, for exchanging one country's currency for another's. Also a $1,000 per person per day threshold, also separate from transmission. |
| Money Services Business | MSB is the umbrella. Check casher is one of the categories inside it, and each category carries its own threshold and its own state licensing position. |
See also
- Money Services BusinessA money services business is a category in US federal law under the Bank Secrecy Act, covering seven capacities: dealer in foreign exchange, check casher, issuer or seller of money orders or traveler’s checks, provider of prepaid access, seller of prepaid access, money transmitter, and the US Postal Service.
- FinCEN RegistrationThe federal filing a money services business makes with FinCEN, on Form 107, to put itself on the Treasury’s MSB register. It must be renewed every two years. It is a notification that the business exists, not an approval of it.
- Dealer in Foreign ExchangeA dealer in foreign exchange is a FinCEN money services business category: a person who exchanges the currency of one country for that of another in an amount greater than $1,000 for any other person on any day. Exchanging currency and transmitting money are different activities with different consequences.
- Prepaid AccessPrepaid access is a FinCEN money services business category covering stored value that can be reached electronically. It splits into two roles with different duties: the provider of prepaid access, which is the programme's principal, and the seller of prepaid access, which sells it at the counter.
- Money Transmitter LicenseA money transmitter license is permission granted by a US state for a company to receive money from the public in that state and pay it, or its value, to someone else. Each state licenses separately.
- AML ProgramAn AML program is the documented set of controls a regulated firm must maintain to detect and deter money laundering. In the United States it is conventionally described as four pillars: written policies and procedures, a designated compliance officer, staff training, and independent review. Other regimes frame the same components differently.