If a credit union cashes checks for non-members, how is it classified for BSA purposes?

When evaluating how a credit union cashes checks for non-members within the context of the Bank Secrecy Act (BSA), it is important to understand the nature of regular banking activities in relation to BSA compliance requirements. Cashing checks for non-members can be classified as a regular banking activity because it falls under the general services that financial institutions offer to the public. This activity does not automatically make the credit union a money services business (MSB), since MSBs have specific definitions and typically include businesses that engage in activities such as currency exchange, money transferring, or issuing traveler's checks.

Under the BSA, while credit unions and other financial institutions must adhere to compliance requirements, the act of cashing checks itself is part of their routine operations, provided that they continue to comply with applicable regulations, such as verifying the identity of the individuals involved and monitoring for suspicious activities. Therefore, the classification of cashing checks for non-members as a regular banking activity accurately reflects the nature of the transaction in terms of compliance obligations.

Options reflecting unauthorized transactions or MSB classifications do not accurately represent the nature of cashing checks as a service provided by credit unions, thus distinguishing them from routine banking functions.