Is a credit union considered an MSB?

A credit union is generally not considered a Money Services Business (MSB) because it primarily functions as a member-owned financial cooperative that offers traditional banking services, including savings and checking accounts, loans, and other financial products. The definition of an MSB typically pertains to businesses that provide certain types of financial services such as currency exchange, check cashing, and money transmission, which are not the main activities conducted by credit unions.

Credit unions operate under specific regulations and laws that govern their activities, distinguishing them from entities classified as MSBs. They are primarily focused on serving their members and must adhere to the regulations set forth by agencies such as the National Credit Union Administration (NCUA). Therefore, they do not fall into the same category as businesses that are explicitly recognized as MSBs in the context of the Bank Secrecy Act (BSA).

It is important to understand that while credit unions may engage in some financial activities that could align with MSB activities under certain circumstances, their foundational structure and primary services set them apart from the MSB classification. This is why saying a credit union is not an MSB is accurate.