Which of the following is NOT considered an MSB under BSA guidelines?

Traditional banks are not considered a Money Services Business (MSB) under the Bank Secrecy Act (BSA) guidelines because they are regulated as financial institutions and have different compliance obligations. MSBs typically include businesses that provide services like check cashing, money transmitting, or payment processing, which involve the movement of funds or the provision of financial services without being licensed as a bank.

In contrast, traditional banks are subject to more stringent regulation by banking authorities and have comprehensive compliance requirements related to anti-money laundering (AML) practices, capital requirements, and consumer protection. Thus, while they participate in financial services and can potentially offer similar functions to MSBs, they do so under an entirely different regulatory framework.

Understanding why traditional banks fall outside the MSB definition is essential, especially in contrasting them with entities that do perform MSB functions, like check cashers, bill payers, and money transmitters, which are all engaged in facilitating transactions or providing financial services for profit without the same level of regulatory oversight.