Examination information, frequently asked questions, and resources for Washington Money Transmitters and Currency Exchangers.
Money Transmitter and Currency Exchange licensees receive routine examinations for determining compliance with the requirements of chapter 19.230 of the Revised Code of Washington (RCW), including chapter 208-690 of the Washington Administrative Code (WAC).
Upon selection for an examination, licensees will receive an examination entry letter with a pre-examination packet which lists numerous documents to be made available as part of the examination. Sample copies of the pre-examination packet materials are provided below for reference:
Common Examination Findings
- Calculation of Average Outstanding Money Transmission Liabilities
Licensees must maintain a market value of permissible investments that is not less than the amount of the licensee’s average outstanding money transmission liability per RCW 19.230.200. Average outstanding money transmission liability means the sum of the daily amounts of a licensee's outstanding money transmissions, as computed each day of the month divided by the number of days in the month.
NOTE: RCW 19.230.010(21) defines outstanding money transmission as the value of all money transmissions reported to the licensee for which the money transmitter has received money or its equivalent value from the customer for transmission, but has not yet completed the money transmission by delivering the money or monetary value to the person designated by the customer.
- Maintenance of Permissible Investment Reports
Licensees are required to maintain monthly reports about permissible investments per RCW 19.230.170(c). These monthly reports about permissible investments must include the monthly calculation of the average daily transmission liability per WAC 208-690-085.
- Reporting of a Material Change
Licensees must report a material change to the department within thirty business days of the change, per RCW 19.230.150. According to WAC 208-690-110 such changes include but are not limited to the following:
- A change of the physical and/or mailing address;
- A change of the responsible individual, AML compliance officer, executive officers or board members, or other person in control;
- A change of the licensee's name or DBA (doing business as);
- A change in the location where the records of the licensee that are required to be retained under RCW 19.230.170 are kept;
- The obtaining, revocation or surrender of a money services license in any other jurisdiction;
- The conviction of the licensee, an executive officer, responsible individual, board director, AML compliance officer, principal, or other person in control of a misdemeanor or gross misdemeanor involving a financial transaction;
- A change in your business bank account including its closure or a change in the location or identity of the bank holding the account; and
- Other similar activities or events affecting the business or executive officers or other persons in control.
- Report of an Adverse or Disciplinary Action
Licensees must report an adverse or disciplinary action to the department within one business day after the licensee has reason to know of the occurrence as required by RCW 19.230.150(3).
- NMLS Reporting Requirement
Licensees must use NMLS as its primary reporting method to inform the department of all changes as required by the Act, including not limited to, all material changes and adverse or disciplinary actions. Additionally, changes to authorize delegates including the deletion of authorized delegates and location address or name changes must be reported quarterly as required by WAC 208-690-120 using NMLS.
- Maintenance of Financial Records
Licensees are required to keep, at a minimum, the following financial records: general ledger (posted at least monthly), and bank reconciliations as required by RCW 19.230.170, and annual audited financial statements per RCW 19.230.110(2)(a).
- Refund Policy
Licensees should ensure language on Washington receipts does not contradict the refund guidelines set by RCW 19.230.330(3). This section states in part, that “Every money transmitter licensee and its authorized delegates shall refund to the customer all moneys received for transmittal within ten days of receipt of a written request for a refund.”
- Remittance Transfer Rule
Licensees must include all elements of a pre-payment disclosure and receipt as required by 12 CFR 1005.31(b).
Licensees must have policies and procedures regarding error resolution as required by 12 CFR 1005.33.
Cancellation and Refund
Licensees must have policies and procedures for cancellation and refund of remittance transfers in place to satisfy the requirements of 12 CFR 1005.34.
Inaccurate/Incomplete Federal Currency Reports or Reports of Foreign Financial accounts
Licensees should ensure that all federal reports are completed accurately and completely in order to comply with 31 CFR 1010.306 as well as RCW 19.230.180.
- Inaccurate/Incomplete Registration of Money Services Business
Licensees should ensure that its Registration of Money Services Business is completed accurately and completely in order to comply with 31 CFR 1022.380.
- Inaccurate/Incomplete Reports of Suspicious Transactions
Licensees should ensure that all reports of suspicious of transactions are completed accurately and timely in order to comply with 31 CFR 1022.320 and RCW 19.230.180.
Frequently Asked Questions
- Where can I find a copy of the Department of Treasury’s Specially Designated Nationals (SDN) list?
A copy of the most recent list can be found on the Office of Foreign Assets Control (OFAC) website. From this site you can also sign-up to receive e-mail updates when any information changes on the SDN list.
- What are the regulatory requirements regarding conducting an independent review of our Anti-Money Laundering (AML) Program?
- As a money transmitter, I am required to have audited annual financial statements. Where can I verify if my accountant is certified and/or find a certified accountant to provide this service?
The American Institute of Certified Public Accountants provides a link to every individual State Board of Accountancy where you can go to search for a specific individual or firm in order to verify certification. Visit the AICPA website.
- What is a “risk assessment”? And am I required to have one?
A BSA/AML risk assessment evaluates all risk areas of the company, including areas such as products, services, customers, entities, volume, and geographic locations. The provisions of the Bank Secrecy Act do not require a risk assessment in writing. However, the risks associated with a company must be evaluated to ensure an adequate anti-money laundering program is in place to prevent money laundering and/or terrorist financing.
- What financial records am I required to keep?
Money transmitter licensees are required to keep a general ledger (posted at least monthly), bank reconciliations (preferably conducted monthly), and annual audited financial statements. In order to prove compliance, licensees should also maintain a database of all transactions conducted, and records proving.
- What should I expect on an examination?
DFI conducts examinations of its money transmitter licensees approximately every 6-24 months, depending on the risk posed by the business. On an examination, licensees undergo an in-depth financial analysis, where asset quality, capital adequacy, earnings performance, net worth, liquidity, and permissible investments are evaluated. In addition, the examiner will review the licensee’s transactions to ensure compliance with federal recordkeeping and reporting requirements. Management will be assessed to ensure they are not running the company in a manner that could prove to be unsafe for Washington consumers. The examiner will also review compliance with various other parts of the Uniform Money Services Act, as well as other applicable state and federal laws. The onsite examination can take anywhere from three days to several weeks, depending on the complexity of the licensee’s operations, willingness to provide requested documentation, and overall level of compliance.
Financial Examiner Supervisor