Fall 2024 Money Services Industry Update

Changes Coming to the Call Report

Expect to see some changes when filing the Money Services Business Call Report (MSBCR) for Q3. Effective October 1, the MSBCR will be ungraded to Form Version 4 (FV4). The changes impact the Permissible Investment and State Transaction sections of the MSBCR. Review the Summary of Enhancements which provides details on the update. As a reminder, the Q3 MSBCR filing is due November 14.

For more information on the MSBCR, visit the Money Services Business Call Report page.

Permissible Investments for Virtual Currency Licensees

An additional resource is now available for virtual currency (VC) licensees to help maintain compliance. Licensees who transmit VC and hold VC on behalf of consumers at any time must maintain like-kind coverage and equal volume of the VC that is obligated to consumers. The Department requires licensees to maintain monthly reports that demonstrate adequate coverage. To assist in meeting this requirement, the Department issued a VC PI Worksheet for licensee use.

• Maintenance of permissible investments: RCW 19.230.200(1)(b) and WAC 208-690-085(4)
• Recordkeeping Requirements: RCW 19.230.170(1)(c)

Requirements for Virtual Currency Kiosks

Two reminders for virtual currency (VC) kiosk operators:

• In January, the Division of Consumer Services issued a policy statement for persons managing or operating virtual VC kiosks. A notice that warns consumers about fraudulent transactions and their irrevocability must be conspicuously displayed prior to the transaction.
• Additionally, each VC kiosk location operating under the licensee, or its authorized delegate must be reported to the Department within 30 days of the contractual relationship.

• Disclosures for Consumers: WAC 208-690-205
• Reports to be filed: RCW 19.230.150(2) and WAC 208-690-120(1)-(2)

Preparing for an Examination

Reminders for upcoming examinations:

• When submitting examination documents, please title the documents with a number that corresponds to the number in the document request list that is included with the initial entry letter. Please mark any non-applicable requests accordingly.
• Please timely provide documents or responses to examiners’ additional requests, as part of fulfilling examination duties.
• Review the Money Transmitters Pre-Examination Packet for a sample of the documents to be made available as part of the examination. Ensure all records are maintained and organized to timely provide at the request of the Department.
• Review the list of Common Examination Findings, to ensure the Company has policies and procedures to comply with the licensing requirements.
• Be familiar with state and federal regulations and laws:
  • Chapter 19.230 RCW: UNIFORM MONEY SERVICES ACT
  • Chapter 208-690 WAC
  • eCFR :: 12 CFR Part 1005 Subpart B -- Requirements for Remittance Transfers
  • eCFR :: 16 CFR Part 314 -- Standards for Safeguarding Customer Information
  • eCFR :: 31 CFR Part 1022 -- Rules for Money Services Businesses

Virtual Currency Field for the Annual Assessment Report (AAR)

With the wrap up of the 2023 AAR filing period, thank you to licensees who completed the report timely and accurately. The AAR is due annually by July 1. This year, the Department updated the AAR system to include a field for reporting the total dollar amount of virtual currency (VC) transactions conducted during the calendar year. VC stored value volume, such as custodial wallets maintained on behalf of the consumer, would be reported in this field. The “Prepaid Access Sales” field is now only applicable for fiat currency transactions. The AAR fields include:

Money Transmission

Report the total dollar amount of transactions sent domestically and internationally during the calendar year. [MSBCR ST60, Q1-Q4]

Payment Instruments

Report total dollar amount of payment instruments sold during the calendar year. [MSBCR ST80, Q1-Q4]

Prepaid Access

Report total dollar amount of fiat currency prepaid access/stored value sold/issued/loaded during the calendar year. [MSBCR ST100, Q1-Q4]

Currency Exchange

Report total U.S. dollar amount of currency exchange transactions during the calendar year. [MSBCR ST160, Q1-Q4]

Virtual Currency

The total dollar amount of virtual currency transactions for the calendar year [MSBCR ST350, Q1-Q4]. This includes:

• Total $ amount of Virtual Currency to Virtual Currency Exchange Transactions Initiated In-State [ST190]
• Total $ amount of Virtual Currency to U.S. Dollar Exchange Transactions Initiated In-State [ST210]
• Total $ amount of U.S. Dollar to Virtual Currency Exchange Transactions Initiated In-State [ST230]
• Total $ amount of Virtual Currency to Virtual Currency Facilitated Exchange Transactions Involving In-State Party [ST250]
• Total $ amount of Virtual Currency to/from U.S. Dollar Facilitated Exchange Transactions Involving In-State Party [ST290]
• Total $ amount of Virtual Currency Stored Value Transactions Initiated In-State [ST310]
• Total $ amount of Virtual Currency Transmissions Initiated In-State [ST330]