CFSC Chicagoland Check-Cashing Companiescfsctraining.com/CFSCComplianceManual.pdf · CFSC...

CFSC Chicagoland

Check-Cashing Companies

COMPLIANCE PROGRAM FOR ANTI-MONEY LAUNDERING, PROTECTION OF CONSUMER

PRIVACY, AND OFFICE OF FOREIGN ASSETS CONTROL REGULATIONS AND REQUIREMENTS

CORPORATECOMPLIANCE MANUAL

CFSC Chicagoland Check-Cashing Companies

Federal Compliance Program

Compliance Manual

Version 5 Created 11/14

Revised 04/15, 08/15, 06/16, & 07/16

SECTION 1 Introduction

Introduction

Compliance Policy Statement

Corporate Resolution

Designation of Compliance Personnel

Customer Identification Program Procedures

Anti-Money Laundering Compliance Program Risk Assessment

Anti-Money Laundering Compliance Program Procedures

Anti-Money Laundering Compliance Program Documents / Forms

Anti-Money Laundering Compliance Program Documentation Organization Charts

Protection of Consumer Privacy Compliance Program Procedures

Red Flags Rule Compliance Program Procedures

Office of Foreign Assets Control Requirements Compliance Program Procedures

Compliance Training Procedures

Employee Federal Compliance Handbook

Contact Information

1.1

Revised on: 07-20-16 Printed on: 07-20-16

INTRODUCTION The “CFSC Chicagoland Check-Cashing Companies Federal Compliance Program” (hereafter, the “Program”) outlined in this “CFSC Chicagoland Check-Cashing Companies Federal Compliance Manual” (hereafter, the “Manual”) applies to: • 147th & Cicero Currency Exchange, Inc.

14655 S. Cicero Ave. Midlothian, IL 60445

• 147th & Pulaski Currency Exchange, Inc. 14755 S. Pulaski Ave. Midlothian, IL 60445

• 159th & Kedzie Currency Exchange, Inc. 3200 W. 159th St. Markham, IL 60426

• 31st & Morgan Check Cashers, Inc. 906 W. 31st St. Chicago, IL 60608

• 31st & Wallace Currency Exchange, Inc. 3101 S. Wallace Chicago, IL 60616

• 47th & Halsted Check Cashers, Inc. 4651 S. Halsted St. Chicago, IL 60609

• 63rd & Kedzie Currency Exchange, Inc. 3148 W. 63rd St. Chicago, IL 60629

• 67th & Stony Check Cashers, Inc. 6714 S. Stony Island Ave. Chicago, IL 60649

• 69th & Halsted Check Cashers, Inc. 6903 S. Halsted St. Chicago, IL 60621

• 71st & Wentworth Currency Exchange, Inc. 7057 S. Wentworth Ave. Chicago, IL 60621

• 75th & Exchange Check Cashers, Inc. 2640 E. 75th St. Chicago, IL 60649

• 75th & Stony Island Currency Exchange, Inc. 1611 E. 75th St. Chicago, IL 60649

• Belvidere Greenbay Currency Exchange, Inc. 2856 Belvidere Rd. Waukegan, IL 60085

• Chicago Heights Check Cashers, Inc. 82 Illinois St. Chicago Heights, IL 60411

• Harlem & Milwaukee Currency Exchange, Inc. 7519 N. Milwaukee Ave. Niles, IL 60714

• Kimball & North Currency Exchange, Inc. 3401 W. North Ave. Chicago, IL 60647

• Lincoln Avenue Check Cashers, Inc. 4101 N. Lincoln Ave. Chicago, IL 60618

• Lincolnway Check Cashers, Inc. 403 W. Lincoln Hwy. Chicago Heights, IL 60411

• Madison Harlem Currency Exchange, Inc. 1147 W. Madison St. Oak Park, IL 60304

• Montrose Kimball Check Cashers, Inc. 3354 W. Montrose Ave. Chicago, IL 60618

• New 75th & Cottage Currency Exchange, Inc. 801 E. 75th St. Chicago, IL 60619

• New Arlington Heights Currency Exchange, Inc. 118 E. Wing St. Arlington Heights, IL 60004

• New Blue Island Currency Exchange, Inc. 12956 S. Western Ave. Blue Island, IL 60406

• New Chicago State Currency Exchange, Inc. 8 S. State St. Elgin, IL 60123

• New Fox Lake Currency Exchange, Inc. 14 E. Grand Ave. Fox Lake, IL 60020

• New Grand & Greenbay Currency Exchange, Inc. 3200 Grand Ave. Waukegan, IL 60085

• New Granville Broadway Currency Exchange, Inc. 6165 N. Broadway St. Chicago, IL 60660

• New McHenry Currency Exchange, Inc. 4405 W. Elm St. McHenry, IL 60050

• New North & Austin Currency Exchange, Inc. 6008 W. North Ave. Chicago, IL 60639

• New Olympia Plaza Currency Exchange, Inc. 157 W. Joe Orr Rd. Chicago Heights, IL 60411

• Northbrook Check Cashers, Inc. 2750 Dundee Rd. Northbrook, IL 60062

• Rockford's Best Currency Exchange, Inc. 4215 E. State St. Rockford, IL 61108

• Rolling Meadows Currency Exchange, Inc. 3340 Kirchoff Rd. Rolling Meadows, IL 60008

• Speedy Check Cashers, Inc. 425 Huehl Rd. Bldg. 3 Northbrook, IL 60062

1.2


• Washington-Lewis Currency Exchange, Inc. 1815 Washington St. Waukegan, IL 60085

• Western & Lake Check Cashers LLC 149 N. Western Ave. Chicago, Illinois 60612

• Wilson Broadway Currency Exchange, Inc. 4559 N. Broadway Chicago, IL 60640

• Woodstock Currency Exchange No. 2, Inc. 108 N. Eastwood Dr. Woodstock, IL 60098

Although no legal entity by such a name exists, CFSC Chicagoland Check-Cashing Companies is the term used to refer to the above-listed Illinois and Indiana entities collectively. R. & L. Management Co., Inc. (hereafter, “R&L”) is the management company that facilitates the operation of the Illinois entities. Due to legal precedent in Illinois, owners of check-cashing companies licensed under the Illinois Currency Exchange Act often establish their locations (stores) as separate entities. For instance, an owner that operates thirty-eight (38), licensed locations, in this state, would operate thirty-eight (38), separate entities. In all other states, such an owner would typically have one (1) entity with thirty-eight (38) branches. Operators in Illinois have created management companies – like R&L – to operate commonly-owned entities in a similar manner. Compliance programs developed for Illinois operators often provide policies and procedures to cover multiple entities, similar to compliance programs in other states that cover multiple branches under one entity. The R&L name, at times, and by various parties, is used to include commonly-owned entities outside of Illinois. Speedy Check Cashers, Inc. (hereafter, “SCC”) is an Indiana company with eight (8) branches. The terms “CFSC Chicagoland Check-Cashing Companies”, “Company”, “we”, “us”, and “our” are used, throughout the Manual (and related, Program documentation), to describe the above-referenced list of entities collectively. Because the Company provides check-cashing services, sells monetary instruments (specifically, money orders), and offers funds-transfer (also known as money-transfer or wire-transfer) services as an agent of Western Union Financial Services, Inc. (Western Union) and MoneyGram International, Inc. (MoneyGram), it is defined as a money services business1

(MSB) – a category of non-bank financial institution (NBFI) subject to, among other laws and regulations, the Bank Secrecy Act (BSA).

Each above-referenced entity issues its own money orders. This activity (further) subjects the Company to BSA requirements, including the filing of Suspicious Activity Reports (SARs) based on review of cleared items. None of the entities have any agents, and, as such, no agent due-diligence is necessary. Compliance policies and procedures for this activity are incorporated throughout this manual. The Company sells Green Dot Corp. and Netspend (Total Systems Services, Inc.) prepaid debit cards. The Company (re)loads and unloads various network-branded prepaid cards. Due to the Company’s limited control over the prepaid programs in which it participates, the Company believes it is exempt from being defined as a provider of prepaid access. Additionally, due to providers’/issuing banks’ load limitations and customer-identification requirements, the Company believes it is exempt from being defined as a seller of prepaid access. Consequently, the Company has concluded it is not subject to BSA requirements concerning prepaid access. For further explanation, please see the “Anti-Money Laundering Compliance Program Procedures” section of this Manual. 1 as defined in 31 CFR 1010.100(ff)

1.3


The Company provides (domestic) bill payment services. The Company is an agent of CheckFreePay (Fiserv, Inc.) and FirsTech (First Busey Bank Corporation), companies that have contracts with various merchants to whom the Company’s customers owe money. Because the Company processes payments only for those merchants with whom the principals have contracts, and only on those merchants’ behalves, the Financial Crimes Enforcement Network (FinCEN) does not consider the Company a money transmitter2 based on the facilitation of these transactions.3

Consequently, the Company has concluded it is not a money transmitter because of its bill payment services.

The Company buys foreign currency. The Company is an agent of The Currency Exchanger, Inc. It is Company policy to limit foreign exchange transactions to $999.99 or less, for any one (1) person, on any one (1) calendar day. Consequently, the Company has concluded it is not subject to BSA requirements concerning foreign exchange. The Company offers customers the ability to utilize automated teller machines (ATMs) at all Company locations. ATMs are owned by CFSC Holdings LLC, DHB ATM Holdings LLC, SBS ATM Holdings LLC, or Speedy ATM Holdings LLC, depending on ownership of the entity of the store in which the ATM is housed. Each entity maintains and loads (with currency from the entity’s vault) the ATM at its store. Customers are restricted to checking account balances and withdrawing funds (only). Withdrawals are limited based on the restrictions in place by the various debit card issuers. The Company believes that, given the withdrawal limitations, the due diligence performed on the customers by the debit card issuers, and the due diligence performed on the Company by the Company’s bank, accountant, and other independent parties, this service presents low risk for money laundering. None-the-less, the Company has developed ATM policies and procedures. Additional details about this service are provided within that document. All aforementioned services subject the Company to Gramm Leach Bliley Act requirements (specifically, protection of consumer/customer privacy). SCC provides short-term-loan services. These services subject SCC to the Red Flags Rule requirements. R&L, however, takes the position that it is not subject to Red Flags Rule requirements because it does not maintain “covered accounts”. As with all entities formed in the United States of America, the Company is subject to Office of Foreign Assets Control (OFAC) requirements, which prohibit transactions with “persons” (as defined by OFAC) listed on the Specially Designated Nationals (SDN) list. For additional details about Company’s products, services, and transactions, please reference the risk-assessment section of the Manual. The Gramm Leach Bliley Act and corresponding regulations make important distinctions in the definitions of “consumer” and “customer”. The “Protection of Consumer Privacy Compliance Program Procedures” section of this Manual uses those terms in accordance with the definitions provided by those statutes and regulations. Elsewhere throughout this Manual, however, the term “customer” is used in a generic sense to simply describe a person who uses our services. The Manual addresses key elements of a comprehensive compliance program (as described in 31 CFR 1022.210 and 16 CFR 314.4) including:

2 as defined in 31 CFR 1010.100(ff)(5) 3 FinCEN Ruling 2008-R006

1.4


• designation of a Compliance Officer

• policies and procedures regarding anti-money laundering, protection of customer privacy, Office of Foreign Assets Control, and Red Flags Rule regulations/requirements

• policies and procedures regarding employee training

• description of the independent review function The compliance program outlined in the Manual shall apply to any new entities/locations owned or operated by R&L or SCC, in the states of Illinois or Indiana, to the extent management sees fit, subsequent to the Program’s implementation.

SECTION 2 Compliance Policy

Statement

2.1


COMPLIANCE POLICY STATEMENT This Compliance Policy Statement establishes the guidelines to be used to develop specific operating procedures for Company. Compliance with all Regulations and Laws It shall be the policy of Company to be in compliance with all federal, state, and local laws, regulations, and statutes that apply to Company, including, but not limited to, all anti-money laundering (AML), protection of customer privacy, Office of Foreign Assets Control (OFAC), and Red Flags Rule regulations and requirements. It shall further be the policy of Company to fully cooperate with proper regulatory authorities, with respect to any audit, examination, or investigation, to assist such authorities in the lawful completion of their tasks. Appointment of the Compliance Officer It shall be the policy of Company to appoint a well-qualified Compliance Officer who is knowledgeable of AML, protection of consumer/customer privacy, and OFAC, and Red Flags Rule regulations and requirements that apply to Company. The responsibilities of the Compliance Officer shall include:

• Designate subordinate compliance personnel as needed.

• Identify relevant laws and regulations which apply to Company. • Establish procedures for the completion, review, and storage of all reports required to be filed and

records required to be maintained under AML laws and regulations.

• Establish procedures whereby employees refer suspicious transactions to management, who will investigate and report such transactions appropriately.

• Establish procedures for the collection, use and storage of customers’ nonpublic personal

information.

• Establish procedures for reconciling customers’ names against the OFAC Specially Designated Nationals (SDN) list.

• Establish procedures for identifying, detecting, and responding to potential “red flags” (potential

incidences of identity theft).

• Establish an employee training function to ensure appropriate personnel are adequately trained with respect to compliance requirements.

• Establish an independent review function to ensure the Program is compliant with legislative

requirements and documented procedures.

2.2


• Receive and comply with all government subpoenas, summons, or other government requests relating to compliance issues.

o Employees should immediately refer all government inquiries or contacts regarding compliance issues to the Compliance Officer.

o The Compliance Officer shall ensure that all documents requested by government

subpoena or summons are produced, in accordance with the advice of counsel.

o The Compliance Officer shall coordinate any activities with counsel.

• Develop, maintain and use relationships with regulatory agencies, legal counsel, trade associations, and other parties to assist in the aforementioned duties.

It is hereby acknowledged by Company that the Compliance Officer may not have the resources or background to be able to maintain a sufficient degree of expertise in all areas requiring compliance. As such, the Company hereby directs the Compliance Officer to enlist the use of outside consultants, legal counsel, and other experts, in the completion of all relevant duties. Specifically, the Compliance Officer shall, when appropriate, enlist the use of industry trade associations and compliance consultants to create manuals and policies useful to the compliance efforts of the Company. The Compliance Officer shall review any such policies and procedures for appropriateness to the Company, and adopt any such policies upon approval by the Company.

SECTION 3 Corporate Resolution

CORPORATE RESOLUTION OF

AFFILIATES OF R. & L. MANAGEMENT CO., INC.

WHEREAS, the directors, members, managers, or partners, as the case may be, of each of the entities shown on the attached Schedule A (hereafter, the “Affiliates”), all of which entities are affiliates of each other and are affiliated with R. & L. Management Co., Inc. (“R&L”), on behalf of the Affiliates, at a special meeting called for that purpose, did vote upon and approve and adopt the within Resolutions for each such Affiliate, as follows: RESOLVED, each Affiliate, having duly reviewed its internal policies and procedures concerning compliance with all anti-money laundering, protection of consumer privacy, Office of Foreign Assets Control, and Red Flags Rule regulations promulgated pursuant thereto, and wishing to memorialize such policies and procedures, hereby adopts the formal compliance policies, procedures, and controls (hereafter, the “Program”) as set forth in the “CFSC Chicagoland Check Cashing Companies Federal Compliance Manual” (hereafter, the “Manual”), and it is further RESOLVED, that the position of Compliance Officer shall be filled by a qualified person, designated by R&L, with such duties and responsibilities as described in the Manual. RESOLVED, that in furtherance of the Program, each Affiliate hereby designates R&L as Compliance Consultant to the Affiliates, to assist with daily responsibilities of the Program, at the discretion of the Compliance Officer. IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of this _______ day of _______________________, 20____. Each Affiliate listed on Schedule A By: ______________________________ Authorized Representative

______________________________ Name Attest: ______________________________ Witness

______________________________ Name

______________________________ Title

SCHEDULE A R. & L. MANAGEMENT CO., INC. AFFILIATES

147th & Cicero Currency Exchange, Inc. 147th & Pulaski Currency Exchange, Inc. 159th & Kedzie Currency Exchange, Inc. 31st & Morgan Check Cashers, Inc. 31st & Wallace Currency Exchange, Inc. 47th & Halsted Check Cashers, Inc. 63rd & Kedzie Currency Exchange, Inc. 67th & Stony Check Cashers, Inc. 69th & Halsted Check Cashers, Inc. 71st & Wentworth Currency Exchange, Inc. 75th & Exchange Check Cashers, Inc. 75th & Stony Island Currency Exchange, Inc. Belvidere Greenbay Currency Exchange, Inc. Chicago Heights Check Cashers, Inc. Harlem & Milwaukee Currency Exchange, Inc. Kimball & North Currency Exchange, Inc. Lincoln Avenue Check Cashers, Inc. Lincolnway Check Cashers, Inc. Madison Harlem Currency Exchange, Inc. Montrose Kimball Check Cashers, Inc. New 75th & Cottage Currency Exchange, Inc. New Arlington Heights Currency Exchange, Inc. New Blue Island Currency Exchange, Inc. New Chicago State Currency Exchange, Inc. New Fox Lake Currency Exchange, Inc. New Grand & Greenbay Currency Exchange, Inc. New Granville Broadway Currency Exchange, Inc. New McHenry Currency Exchange, Inc. New North & Austin Currency Exchange, Inc. New Olympia Plaza Currency Exchange, Inc. Northbrook Check Cashers, Inc. Rockford's Best Currency Exchange, Inc. Rolling Meadows Currency Exchange, Inc. Speedy Check Cashers, Inc. Western & Lake Check Cashers LLC Washington-Lewis Currency Exchange, Inc. Wilson Broadway Currency Exchange, Inc. Woodstock Currency Exchange No. 2, Inc.

SECTION 4 Designation of Compliance Officer

DESIGNATION OF COMPLIANCE OFFICER FOR

AFFILIATES OF R. & L. MANAGEMENT CO., INC. The undersigned authorized representative of R. & L. MANAGEMENT CO., INC. (hereafter, “R&L”), on behalf of each of the affiliates listed on Schedule A (hereafter, the “Affiliates”), hereby designates the following named person as Compliance Officer for each of the Affiliates:

Compliance Officer: Adam Lichtenfeld 425 Huehl Rd. Bldg. 6A Northbrook, IL 60062 219-741-4303 (mobile) 866-682-5344 (fax)

These appointments are effective immediately, and shall be continuing until rescinded by R&L, or upon the resignation of the above person of such position. Executed as of this _______ day of _______________________, 20____. R. & L. MANAGEMENT CO., INC. _______________________________ _______________________________ Authorized Representative Compliance Officer _______________________________ Name _______________________________ Title

SCHEDULE A R. & L. MANAGEMENT CO., INC. AFFILIATES

147th & Cicero Currency Exchange, Inc. 147th & Pulaski Currency Exchange, Inc. 159th & Kedzie Currency Exchange, Inc. 31st & Morgan Check Cashers, Inc. 31st & Wallace Currency Exchange, Inc. 47th & Halsted Check Cashers, Inc. 63rd & Kedzie Currency Exchange, Inc. 67th & Stony Check Cashers, Inc. 69th & Halsted Check Cashers, Inc. 71st & Wentworth Currency Exchange, Inc. 75th & Exchange Check Cashers, Inc. 75th & Stony Island Currency Exchange, Inc. Belvidere Greenbay Currency Exchange, Inc. Chicago Heights Check Cashers, Inc. Harlem & Milwaukee Currency Exchange, Inc. Kimball & North Currency Exchange, Inc. Lincoln Avenue Check Cashers, Inc. Lincolnway Check Cashers, Inc. Madison Harlem Currency Exchange, Inc. Montrose Kimball Check Cashers, Inc. New 75th & Cottage Currency Exchange, Inc. New Arlington Heights Currency Exchange, Inc. New Blue Island Currency Exchange, Inc. New Chicago State Currency Exchange, Inc. New Fox Lake Currency Exchange, Inc. New Grand & Greenbay Currency Exchange, Inc. New Granville Broadway Currency Exchange, Inc. New McHenry Currency Exchange, Inc. New North & Austin Currency Exchange, Inc. New Olympia Plaza Currency Exchange, Inc. Northbrook Check Cashers, Inc. Rockford's Best Currency Exchange, Inc. Rolling Meadows Currency Exchange, Inc. Speedy Check Cashers, Inc. Western & Lake Check Cashers LLC Washington-Lewis Currency Exchange, Inc. Wilson Broadway Currency Exchange, Inc. Woodstock Currency Exchange No. 2, Inc.

SECTION 5 Customer Identification Program

Procedures

5.1


CUSTOMER IDENTIFICATION PROGRAM PROCEDURES

As previously stated, Company is a money services business (MSB), offering predominately check-cashing, monetary instrument (money order) sales, money-transfer, and prepaid-card services. This section addresses customer identification program (CIP) procedures, in effect, at Company locations, for these types of transactions. Check-Cashing Transactions As described in the introduction, the Company cashes checks. The Company cashes predominately payroll and government-benefits checks. On limited occasion, Company also cashes “commercial” (business) checks. On extremely rare occasion, Company may cash a personal check for a well-established customer. For additional details about check-cashing activity, please reference the risk-assessment section of the Manual. Company utilizes SigCard – point-of-sale system software created and distributed by Digital Currency Systems (DCS). The system’s CIP functionality includes the ability to “register” customers (create customer “files”) by entering their identification information. The following procedures are conducted for the vast majority of check-cashing transactions. On extremely rare occasion, a teller may make an exception based on management approval (explicit or implicit). Examples include cashing a small-dollar (e.g. $50) check under a “house account” or accepting a verified, employer ID in place of a driver’s license. Exceptions are never made for check-cashing transactions requiring the filing of Currency Transaction Reports. Upon the initial check-cashing transaction a customer conducts at a Company store, the customer is registered in the point-of-sale system. The following identification information is collected and entered into the system:

1. name 2. address 3. phone number 4. date of birth (DOB) 5. identification document type 6. identification document number 7. Social Security number (SSN) or customer account number assigned by Company

As such, the customer must present one (1) of the following forms of identification1

1. driver’s license or identification document (ID) issued by a state or outlying possession of the United States

:

2. ID issued by a federal, state or local government agency or entity 3. U.S. passport (or passport card) 4. foreign passport 5. U.S. military / military dependent’s ID 6. U.S. visa (including green card) 7. Mexican Consular Identification (Matricula) Card 8. other ID in conjunction with signed Social Security card

1 document must contain a photograph or detailed information about physical appearance such as gender, height, eye color, and date of birth; name and (current) residential address – excluding P.O. box – must also be present

5.2


9. other ID (with management approval) The Company employee confirms (i) the customer present matches the photo and (ii) the name on the ID matches the name verbally provided and the name of the payee listed on the negotiable instrument. Company employees are instructed to receive approval, from management, to cash checks:

1. above an amount typical of the type of customer – individual or business – and type of check – payroll, government-issue, etc. – for (i) first-time customers and/or (ii) first-time makers. Company employees may voluntarily contact management, to receive approval to cash other checks, at their discretion; or

2. dated thirty (30) or more days prior to the date negotiated. Company employees may request approval, from management, to cash other checks at their discretion. Money Order Transactions As described in the introduction, each Company entity sells its own money orders. As mentioned above, Company utilizes SigCard and, specifically, Money Order Printing System (MOPS) software for the sale of money orders. As required by the BSA, Company records identification information any time a person purchases $3,000 or more in monetary instruments. Please reference the BSA record-keeping procedures section, in this manual, for further information. Employees may voluntarily elect to conduct a money order transaction under the appropriate, registered-customer file in the POS system. Money Transfer Transactions As described in the introduction, the Company provides money transfer services as an agent of Western Union and MoneyGram. Western Union and MoneyGram have implemented extensive due diligence requirements; all customer identification information must be entered into “Western Union Point of Sale System” (WUPOS) or MoneyGram’s “DeltaWorks” point-of-sale system. Western Union Transactions The following customer identification information is required for all send transactions:

1. name 2. address 3. phone number

Name is required for all receive transactions. Additionally, Western Union imposes mandatory identification requirement thresholds for all (send and receive) transactions with a principal amount of $1,000.00 or more. The following identification information is required for those transactions:

1. name

5.3


2. address 3. phone number 4. date of birth (DOB) 5. identification document type 6. identification document number

As required by the BSA, Company employees record identification information any time a person sends or receives $3,000.00 or more. Please reference the BSA record-keeping procedures section, in this manual, for further information. MoneyGram Transactions The following customer identification information is required for all send transactions:

1. name 2. address 3. phone number

Additionally, MoneyGram imposes mandatory identification requirement thresholds for all receive transactions. The following identification information is required for those transactions:

1. name 2. address 3. phone number 4. date of birth (DOB) 5. country of birth (COB) 6. identification document type 7. identification document number

As required by the BSA, Company employees record identification information any time a person sends or receives $3,000.00 or more. Please reference the BSA record-keeping procedures section, in this manual, for further information. Prepaid Card Transactions Company sells Green Dot Corp. (formerly International Cash Exchange, LLC) prepaid cards. Additionally, the Company (re)loads and unloads various network-branded prepaid cards. Each customer purchasing a reloadable prepaid card must complete the appropriate application form. Upon submission of the form, to an employee, said employee verifies customer identity by means of one (1) of the following forms of photo identification:

1. driver’s license or ID issued by a state or outlying possession of the United States 2. ID issued by a federal, state or local government agency or entity 3. U.S. passport (or passport card) 4. foreign passport 5. U.S. military / military dependent’s ID 6. U.S. visa (including green card) 7. Mexican Consular Identification (Matricula) Card

5.4


The Company employee confirms (i) the customer present matches the photo and (ii) the name on the ID matches the name verbally provided and the name on the form. Short-Term-Loan Transactions (Speedy Check Cashers, Inc.) Each SCC customer applying for a loan must present/provide access to the following documentation/information:

1. a current (non-expired), identification document containing a picture of the customer, such as a driver’s license or state ID

2. the most recent bank statement – with at least thirty (30) days activity – that has been mailed to his/her current address

3. a current paycheck stub, confirmation of direct deposit on the most recent (customer) bank statement, or verbal confirmation of employment with the customer’s employer (as confirmed by the employer’s human resources department or employee’s supervisor)

4. Social Security card or other document containing the customer’s Social Security number or printed verification of the customer’s Social Security number via a reputable identification verification provider such as LexisNexis or TransUnion

Company employee confirms the customer present matches the photo ID and the name on the ID matches the name on the loan application and requested documentation. The Company employee enters identification information into the eCash Software Solutions POS system, and the loan is processed accordingly.

INDIANA CONSUMER LENDER SMALL LOAN AGREEMENT Agreement # Sequence #

In this Consumer Small Loan (the “loan agreement”) Agreement the words “you” and “your” mean each and all who have signed it. The words “we”, “us” and “our” mean the Le nder shown on this contract.

Borrower’s Name(s): Loan Date:

Borrower’s Address: Payment Due Date:

Borrower’s Identification Number: Transaction Authorization Number:

ANNUAL PERCENTAGE RATE The cost of your credit as a yearly rate.

FINANCE CHARGE The dollar amount the credit will

cost you.

AMOUNT FINANCED The amount of credit provided to

you or on your behalf

TOTAL OF PAYMENTS The amount you will have paid after you have made all payments as scheduled

Payment Schedule: Total of Payments is due on Payment Due Dates shown above. Security: Your check or an authorization to debit your account is security for this loan. Prepayment: If you prepay to us the Amount Financed, no later than the end of business day immediately following the day on which this Loan Agreement was made, we will rebate and refund to you the Finance charge we have earned. If you pay off this loan anytime after the end of the business day immediately following the day on which this Loan Agreement was made, you will not be entitled to a refund of part of the Finance Charge. See the rest of this loan agreement for any additional information about nonpayment, default, and any required repayment in full before the scheduled date and prepayment refunds and penalties.

Itemization of the Amount Financed of: 1. Amount Paid Directly to You: _ WARNING: A small loan is not intended to meet long term financial needs. A small loan should be used only to meet long term financial needs. The cost of your small loan may be higher than loans offered by other lending institutions. Small loans are regulated by the State of Indiana Department of Financial Institutions. A borrower may rescind a small loan without cost by paying the cash amount of the principal of the small loan to the lender no later than the end of the business day immediately following the day on which the small loan was made. On your default, we may seek only the following remedies: (1) Recovery of: (a)the contracted principal amount of the loan; and (b) the loan finance charge; (2) Collection of a fee for: (a) a returned check, negotiable order of withdrawal, or share draft; or (b)a dishonored authorization to debit the borrower’s account; if contracted for under IC 24‐4.05‐7‐202; (3) Collection of post judgment interest, if awarded by a court; and (4) Collection of court costs, if awarded by a court. We may not seek any of the following damages or remedies on your default: (1)Payment of our attorney’s fees; (2)Treble damages; (3) Prejudgment interest; (4) Damages allowed for dishonored checks under any statute other than IC 24‐4.5‐7 et seq.; (5) Any damages or remedies not set forth above. You promise to pay to us the Total of Payments and other permitted charges, according to the terms of this loan agreement. You acknowledge and agree that you are indebted to us in the amount of the Amount Financed, that you have agreed to pay the Finance Charge and that the amounts set forth in this loan agreement are not in dispute and that you do not have any defense to the payment of such amounts. On the Payment Due Date you will pay us, at the address indicated above, or at such other address as we direct you in writing, the Total of Payments. Authorization For Electronic Funds Transfer Payments: I hereby authorize to initiate debit/credit entries to my account for all payments due including any returned unpaid item fees due regarding the subject of this agreement and the Financial Institution at which my account is held to debit/credit same to such account This authority is to remaining full force and effect until and the subject Financial Institution have received written notification from me of its termination in such time and in such manner as to afford and the Financial Institution a reasonable opportunity to act on it. I understand that I may cancel this authorization by providing written notice to at least three (3) business days prior to the payment due date. I further understand that canceling my authorization does not relieve me of the responsibility of paying all amounts due in full. I certify under penalty of perjury that I am not active duty in the United States military or a dependent of someone who is active duty in the United States military. I further certify that I am not active duty of the National Guard or Reserves and I am not a dependent of someone who is active duty in the National Guard or Reserves. _ (initials) (initials) I acknowledge that I have received a copy of the “Indiana Small Loan Law Borrower Rights and Responsibilities” pamphlet. By signing this loan agreement you acknowledge that it was filled in before you signed and that you have received a completed copy. You further acknowledge that you have read it, understand it and that you agree to all of its terms. DISHONORED ITEM FEE: If your Bank-for any reason-dishonors your check or an electronic debit entry in the amount of your check then you must pay us a dishonored item fee in the amount of $25.

X X Borrower’s Signature Date Lender’s Authorized Representative’s Signature Date

INDIANA SMALL LOAN LAW

BORROWER RIGHTS AND RESPONSIBILITIES

Please take the time to carefully review the information contained in this pamphlet. It is designed to advise you of your rights and responsibilities in connection with obtaining a small loan in Indiana pursuant to Indiana Code 24-4.5-7-101 et seq. If you have any questions about small loans or want additional information, you may contact the State of Indiana Department of Financial Institutions toll free at (800) 382-4880 or on the Internet at http://www.in.gov/dfi/.

In General: You are responsible for evaluating whether a small loan is right for you. Alternatives may include, among other things, less expensive short-term financing from another financial institution, family, or friends, a cash advance on a credit card, an account with overdraft protection, or a loan repayable over several months.

Notice from Lender: The lender is required to provide you with a clear and conspicuous printed notice advising you that, among other things, a small loan is not intended to meet long-term financial needs and that you should use a small loan only to meet short-term cash needs.

Limitations on Security Interest: The lender cannot require you to provide more than one check or authorization to debit your account as security for any small loan. The check or authorization to debit may not exceed the amount advanced to or on behalf of the borrower plus loan finance charges contracted for and permitted. A small loan may not be secured by personal property of any type other than a check or electronic debit authorization. You are not required to provide your Personal Identification Number to the lender.

$605 Maximum/Fourteen Day Minimum Term: A lender cannot have loans (either single or in the aggregate) outstanding with you at any one time if the aggregate principal amount/amount financed exceeds $605. A lender cannot make a small loan to a borrower who has two or more small loans outstanding, regardless of the total value of the small loan. By law, the due date of your loan must be at least fourteen days after the date that money is advanced to you.

Loan Amount, Charges, etc.: The lender is prohibited from making a small loan to you that exceeds 20% of your monthly gross income. Finance charges on the first $250 of a small loan are limited to 15% of the principal (i.e. $30 on a $200 advance). Finance charges on a small loan greater than $250 and less than or equal to $400 are limited to 13% of the amount over $250 and less than or equal to $400 (i.e. $44 on a $300 advance). Finance charges on the amount of the small loan greater than $400 and not more than $550 are limited to 10% of the amount over $400 and not more than $605 (i.e. $62 on a $450 advance). Other than the specific fees and costs discussed in the section of this pamphlet entitled “Failure to Repay” (see below), no additional amounts may be directly or indirectly charged, contracted for, collected, received, or recovered by the lender. You may receive your loan proceeds in the form of a check from the lender. The lender cannot charge you a fee for cashing their check. Similarly, a check casher affiliated with the lender cannot charge you a fee for cashing the lender’s check.

Written Agreement: The lender must provide you with a written loan agreement, which must be signed by both you and an authorized representative of the lender. The loan agreement is a binding, legal document which requires you to repay the loan. Make sure you read the entire loan agreement carefully before signing and dating it. The lender must provide you with a duplicate of the original loan agreement at the time of your loan transaction.

Right to Cancel: You have the right to cancel your small loan at any time prior to the close of business on the next day the lender is open following the date your small loan is made by paying the lender the amount advanced to you in cash, certified check, authorized account debit, cashier’s check, money order or, if the lender is equipped to handle such payments, by using a credit or debit card.

http://www.in.gov/dfi/

Partial Payments: You have the right to make partial payments in any amount on your small loan at any time before the due date without charge. You have the right to receive signed, dated receipts for each payment made showing the amount paid and the balance due on the small loan.

No Renewals: The lender cannot renew, repay, refinance, or consolidate your small loan with the proceeds of another small loan made to you by the lender. On the due date of your loan you may pay the lender in full by cash, or the lender may deposit the personal check they are holding or they may debit your account if you signed a debit authorization.

Consecutive Small Loans: After an initial loan and three subsequent consecutive small loans, the lender is required to offer you an extended payment plan (EPP) at the time you enter the fourth small loan agreement if you are not in default on your existing loan. The EPP can be entered into at any time after the fourth loan. No additional fees may be added to this payment plan. You should review all disclosures and contractual materials presented to you to determine if you want to enter into such an agreement. Once you have entered into an extended payment plan, you will not be able to enter into another small loan transaction with any small loan lender until the extended payment plan is paid in full and the seven day waiting period has expired. A seven day cooling-off period applies after you have had a total of six loans (an initial loan followed by five consecutive loans) with any one lender.

Failure to Repay: Pay back your loan! Know when your payment is due and be sure to repay your loan on time and in full. You are responsible for having sufficient funds in your checking account on the due date of your loan so that your check does not bounce if the lender deposits it in his account. If you cannot or do not repay the loan, then the lender is permitted to recover from you a charge, not to exceed $25, for each returned check, dishonored check, etc. This charge may be assessed only one time regardless of how many times a check or authorization to debit your account is dishonored. The lender is prohibited from threatening or beginning criminal proceedings against you if a check you provide to the lender is returned unpaid from your depository institution.

Debt Management and Credit Counseling Services: Debt management companies can provide assistance to consumers who need help reorganizing their debts. In addition, consumer credit counseling services can provide valuable financial education and budgeting advice. They can work with consumers and their creditors to coordinate repayment agreements and to help make their finances more manageable. To obtain a list of such companies, consult the business section of your phone book. The use of a credit counseling service will most likely result in charges to be paid by the consumer; therefore, when seeking help from a credit counselor, the consumer should ask for a full disclosure of the total cost, the benefits to be provided, and all other related information. Many organizations offer this service at charges much less than their competitors, so the consumer should always compare costs.

Complaints and Contacting the Department of Financial Institutions. For assistance with any complaints you may have against a small loan lender, please contact the Indiana Department of Financial Institutions toll- free at (800) 382-4880 or on the Internet at http://www.in.gov/dfi/.

Speedy Check Cashers, INC.

1030 E Ridge Rd. Griffith, IN 46319 219-923-0900

http://www.in.gov/dfi/

TEXT MESSAGING POLICY

By opting-in you are providing consent to use personal information to provide the services you requested, including services that display customized content and advertising. Your cellular provider’s Msg & Data Rates may apply to our confirmation and all subsequent SMS messages. You may opt- out and remove your SMS approval for additional messages by sending “STOP”, “END”, “CANCEL”, “UNSUBSCRIBE” or “QUIT” to the SMS text message you have received. If you remove your SMS approval from our database, your number will no longer be used for secondary purposes, disclosed to third parties and used by us for third parties to send promotional correspondence to you. Data obtained from you in connection with this SMS service may include your name, address, cell phone

number, your provider’s name, the date & time, and content of your messages. We will not be liable for any delays in the receipt of any SMS messages, as delivery is subject to effective transmission from your network operator. SMS message services are provided on an AS IS basis. To view our Terms & Conditions visit http://www.cfsc.com/IN/ or call our Toll-free 24-hour SMS information line 866-248-4947. Opt-in

Sign agreements and any addendum's to opt-in for SMS courtesy text services. When applicable, a confirmation message is sent to verify you are in possession of the device for the cell number you provided, inform of applicable Msg & Data Rates and frequency for all subsequent SMS or MMS. Opt-out To cancel SMS courtesy text message services, simply reply STOP to the message received to opt-out of respective text message services. Text STOP to the message you receive! Help or Support For help or additional information regarding our texting services email us at [email protected] or reply “HELP” anytime from your mobile device to the message you receive.

http://www.cfsc.com/IN/

mailto:[email protected]

Extended Payment Plan Disclosure *applies to customers on 3rd, 4th, & 5th consecutive loans

Borrower

Lender

Transaction Number

Loan Date

For the small loan identified by the transaction number listed above, the borrower is entitled to request repayment of the small loan pursuant to an extended payment plan, as provided in IC 24-4.5-7-401(3).

The Borrower request for the extended payment plan will be honored if the borrower is not in default on the loan.

If the borrower requests repayment under an extended payment plan:

x The borrower will be permitted to repay the small loan in at least four (4) equal installments over a period of not less than sixty (60) days

x The lender may not assess any fee or charge on a borrower for entering into an extended payment plan

x The plan must be acknowledged in writing by both the borrower and the lender x A borrower may not enter into another small loan transaction while engaged in an

extended payment plan x An extended payment plan is an extension of the outstanding small loan and may not be

considered a new loan

By signing below the borrower acknowledges receiving a copy of this disclosure

Borrowers Signature Date

Lenders Signature Date Extended Payment Plan: By signing below the borrower and lender agree that the outstanding small loan will be paid under the terms of the extended payment plan

Borrowers Signature Date

Lenders Signature Date

Extended Payment Plan Schedule

SECTION 6 Anti-Money Laundering

Compliance Program Risk Assessment

5.1


ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM RISK ASSESSMENT

By government definition, we are a non-bank financial institution, and, more specifically, a Money Services Business (MSB). We provide customers with a number of financial products and services at our location. People Customers

The Company offers services to customers of varied socioeconomic status, ethnicity, and age. While one customer may visit us once and never return, another may frequent a Company store bi-weekly. Our business practices work hand-in-hand with the anti-money laundering and Office of Foreign Assets Control compliance procedures (detailed in this Manual) to assure the Company conducts transactions with legitimate, law-abiding individuals and prevents criminals from using our facilities in pursuit of money laundering or other types of illegal activity.

Employees

Because it is in the best interest of the Company, candidates for employment partake in a stringent hiring process. This process is intended to prevent individuals with the potential to commit criminal activity from acquiring employment, and serves as a tool to foil money laundering from within the Company.

Transactions The Company sells money orders, provides wire transfer services, and cashes checks. Money Order Sales

Typical money order transactions range from a few dollars to a few hundred dollars. Less frequently, customers may: - purchase money orders to make mortgage, car, or other payments - purchase money orders on behalf of a business - request the proceeds of a check-cashing transaction be disbursed in money orders In these and other circumstances, it is not unusual to sell money orders totaling several thousand dollars. Money Transfer Typical money transfer transactions range from a few dollars to a few hundred dollars. Less frequently, customers may:

5.2


- send money to make mortgage, car, or other payments - send or receive money on behalf of a business - send the proceeds of check-cashing transactions In these and other circumstances, it is not unusual to send a wire transfer for several thousand dollars. Check-Cashing Typical check-cashing transactions range from a few dollars to a few hundred dollars. Less frequently, customers may: - cash tax-refund checks - cash checks issued by insurance companies - cash checks related to the disbursement of proceeds from retirement accounts - cash a check on behalf of a business In these and other circumstances, it is not unusual to cash a check for several thousand dollars. Foreign Exchange Typical foreign (currency) exchange transactions range from a few dollars to a few hundred dollars. Less frequently, customers may:

- return from a trip abroad with an unanticipated abundance of foreign currency - receive an abundance of foreign currency as part of a business transaction In these circumstances, it is not unusual to exchange currency in amounts up to $1,000. Prepaid Access Typical prepaid card transactions range from one hundred dollars to one thousand dollars. Less frequently, customers may: - load the proceeds of a payroll, tax refund, insurance, or annuity check onto a prepaid card - purchase a prepaid card for business use In these circumstances, it is not unusual to load a card for several thousand dollars. Our prepaid card issuers limit (cap) the per-load amount, daily load amount, and/or total load amount dependent on circumstances set by the issuer.

Locations The Company operates forty-six (46) stores in the greater Chicago metropolitan area. Consequently, we are located in a High Intensity Financial Crimes Area (HIFCA) and a High Intensity Drug Trafficking Area (HIDTA).

5.3


At the request of the United States Department of the Treasury (or other governmental authority), the Company may be subject to Geographical Targeting Orders (GTOs). The Company will remain informed of such orders, to the best of its ability, and follow such orders accordingly. Risk Matrix The following page contains a risk matrix assessing the Company’s inherent vulnerability to money laundering schemes. As this risk assessment is the foundation for Company AML/BSA policies and procedures, it does not reflect the diminished level of risk attained through implementation of said procedures. Management addressed four risk categories, assigning the appropriate score (numeric value) to and providing a detailed explanation for each. All (four) scores were aggregated to produce a total score; the total score indicates risk as described on the matrix. Management assigned a score of 9.0 (out of 12) to its overall risk exposure; this number results in a rating at the high end of the “Medium” risk level. Factors that contribute to the high Medium rating include: (i) being located in HIFCA and HIDTA areas and (ii) the existence of a high ethnic concentration. Given the high Medium rating, this Program includes strict policies and procedures and a comprehensive employee handbook to enhance the training of employees. Additionally, OFAC-checking capabilities have been implemented at all forty-one (41) locations. The policies and procedures outlined in this manual will help assure risk is minimized. The policies and procedures outlined in this manual, including extensive monitoring of transaction activity, will help us assure we are conducting business lawfully, hindering illegal activity.

6.1MRevised on: 07-20-16Printed on: 07-20-16

Score

Criteria

Actual

Criteria

Actual

Criteria

Actual

CFSC Chicagoland Check Cashing CompaniesAnti-Money Laundering Compliance Program

Risk Matrix

Located in a HIFCA and HIDTA; multiple locations in a

national (more than three-state) or international market; high

concentration of high-risk ethnic populations; high

concentration of mobile (transient) population; high

concentration of high density rental properties or mobile

trailer parks.

High concentration of transient consumer customers;

significant level of commercial customers.

Risk RatingAssessment Factors

Ris

k C

ateg

orie

s

2.5

Not located in a HIFCA or HIDTA; single or few locations in

a local market; low levels of high-risk ethnic populations;

stable population base; housing consisting of mostly 1-4 unit

buildings.

Low

Predominantly local, repeat consumer customers; few

transient consumer customers; no or few commercial

customers.

A Point of Sale (“POS”) software system is used; customer

files are established and IDs obtained and recorded at the

time of a new customer’s first transaction; customer

transaction history’s are maintained by POS system; POS

system identifies transactions that require reporting or

recording under the BSA, prompts teller to obtain required

information, will not allow the transaction to be completed

without the required information, and maintains a log of such

transactions; low or no thresholds for ID verification; use of

third party verification systems to confirm customer IDs;

OFAC checks performed, by POS system, automatically on a

transaction basis; customer typically identified on each

transaction, regardless of transaction type or amount.

HighMedium

Location(s)

Located in a HIFCA or HIDTA; multiple locations in a

regional (no more than three-state) market; normal

population distribution; mixture of stable and mobile

(transient) population base; housing units include moderate

levels of high-density rental properties.

Company operates forty-six (46) locations in the greater Chicago metropolitan area (northeastern Illinois and northwestern Indiana); these stores operate in a HIFCA and HIDTA; housing units are a mixture of single-family and multiple unit properties typical of major U.S. cities.

Mostly repeat consumer customers, but some transient

consumer customers; limited commercial customers.

Customer Base

2.25

Customer Identification Program

2

Company provides services to predominately repeat customers cashing payroll and other recurring checks (revenue from this source constitutes 80% of fee income); a normal volume of “walk-in” type transient customers exist, which customers typically purchase small denomination money orders or money transfers, or cash one-time special use checks (such as insurance settlements, proceeds of a home or auto sale, etc.); many locations are in neighborhoods with high numbers of individuals born in foreign countries who send money abroad; commercial transactions consitute less than 2% of business by volume.

A POS software system is used; customer files are typically

established and IDs obtained and recorded for new customers

at time of first check-cashing transaction; POS system

provides features that identify and record transactions that

require recording or reporting under the BSA, but system can

be circumvented by conducting transactions on a “walk-in”

basis; OFAC checks require teller initiation, rather than

performed by system automatically.

Company uses DCS software system that provides: (i) controls on BSA-related money order transactions,(ii) customer histories, and (iii) semi-automated OFAC SDN List checking capabilities; policies and procedures are adequate; tellers have discretion to conduct transactions on a “walk-in” basis, and approximately 20% of transactions are so-conducted (predominately money order sales, however, small-dollar checks may be cashed using this method as well); Company verifies customer information at the time of establishing a file for the customer by requesting government and/or school issued ID and verifying the information through Accurint.

No POS system in place; a manual card system may be used

to “sign-up” customers, but references thereto are spotty and

haphazard; weak or non-existent policies and procedures;

weak implementation of policies and procedures; manual

OFAC checks on large transactions only, or no OFAC checks.

6.2MRevised on: 07-20-16Printed on: 07-20-16

Score

Risk RatingAssessment Factors

Low HighMedium

Criteria

# checks cashed: 1,944Avg. check amt.: $466.58# commercial checks cashed: 2Avg. commercial check amt.: $1,500.00# MOs sold: 1,938Avg. MO amt.: $436.63# MT send trans.: 616Avg. MT send amt.: $229.18# MT rec. trans.: 236 Avg. MT rec. amt.: $201.75# prepaid load trans.: 189 Avg. prepaid load amt.: $247.40# debit unload trans.: $43.00Avg. debit unload amt.: $221.51Avg. ATM withdrawal amt.: $200.00Avg. ATM load amt.: $8,000.00Avg. cash order: $25,000

Total 9.25

Score:Less than 6: Low Risk6 - 9: Medium RiskGreater than 9: High Risk

Approved By: ______________________________________________________(print)

______________________________________________________(sign)

Title of ApprovingOfficial: ______________________________________________________

Date: _________________

Ris

k C

ateg

orie

s

Products, Services and Transactions

2.5

Actual

Multiple services offered from multiple locations; transactions

typically in small amounts, but volume could be high; some

transactions may be large or sent to high-risk destinations or

involve third-party endorsements; more than 500 items

deposited per month; $200M in cash ordered per month; 400

money orders/checks sold/cleared per month; and 500 money

transfers per month and $200M in money transfer transaction

volume per store/month. Less than 15 commercial checks

($150M) deposited per month; avg. check size and money

transfer amount less than $500/ transaction.

One or two services; transactions are conducted in small

amounts and/or low volume; less than 500 items deposited

per month/store; less than $200M in cash ordered per

store/month; less than 400 money orders/checks sold/cleared

per store/month; less than 500 money transfers per

store/month and $200M in money transfer transaction

volume per store/month.; little or no commercial check

cashing.

Company offers multiple services including check-cashing services, money order sales, money transfer services, utility bill payment services, and others; volumes vary from store–to-store, but transaction amounts are common at all locations; commercial activity is limited, and is not offered at all locations; activity data on a per store, per month basis (unless otherwise indicated) is as follows:

Single or multiple products with large transaction amounts

(average >$1,000 per) and low volume or multiple products

with medium transaction amounts (average between $500 and

$1,000) and high volume; high percentage of commercial

check cashing activity; preponderance of money transfer

activity to or from high-risk destinations; more that 15

commercial checks ($150M) deposited per month/store; high

percentage of transactions going to suspicious countries.

SECTION 7 Anti-Money Laundering

Compliance Program Procedures

7.1


ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM PROCEDURES

These Anti-Money Laundering Compliance Program Procedures establish the guidelines to be followed with respect to AML-related matters. Because records of certain business transactions are required to be kept under the Bank Secrecy Act (BSA), related documents (and the means to store them) are titled accordingly. The term “file” (e.g. “BSA CTR File” or “BSA Monitoring File”) is a generic term given to the manner in which BSA documentation is maintained (whether digitally or in paper format). This section includes procedures for:

• Registering as a Money Services Business (MSB)

• Recording a BSA-Related Money Order Transaction

• Recording a BSA-Related Money Transfer Transaction

• Conducting a Prepaid Card Transaction

• Filing a Currency Transaction Report (CTR)

• Filing a Suspicious Activity Report (SAR) • Monitoring

• Conducting an Independent Review

All documentation described in these procedures shall be maintained for a period of five (5) years.

7.2


Registering as a Money Services Business (MSB) As per 31 CFR 1022.380, we are required to register, with the Financial Crimes Enforcement Network (FinCEN), as a Money Services Business (MSB). As of July 1, 2012, FinCEN mandated electronic filing of all Registration of Money Services Business (RMSB) forms. On or before December 31st of the second calendar year after Company’s most recent filing, the Compliance Consultant shall:

1. Log in to the FinCEN BSA E-Filing system via the following website: http://bsaefiling.fincen.treas.gov/

2. Complete a (digital) Registration of Money Services Business (RMSB).

3. Review the completed RMSB for accuracy.

4. Sign (using a digital signature assigned by FinCEN) the RMSB.

5. Submit the RMSB to the Financial Crimes Enforcement Network (FinCEN).

6. Retain the copy in the MSB Registration File. The Compliance Consultant shall retain copies of executed registration forms for not less than the prescribed period of five (5) years. As of December 2011, FinCEN discontinued mailing confirmation of registration documents. As of January 2012, MSBs can confirm registration only by means of the MSB registration website: http://www.fincen.gov/financial_institutions/msb/msbstateselector.html Consequently, the Compliance Consultant shall retain confirmation of registration documents, received prior to December 2011, for not less than the prescribed period of five (5) years. The Compliance Consultant shall retain the Document Control Number (DCN) / MSB Registration Number, assigned to each registration (corresponding with each form filed by the Compliance Consultant), in the manner in which the Compliance Consultant sees fit, for not less than the prescribed period of five (5) years.

http://bsaefiling.fincen.treas.gov/�

http://www.fincen.gov/financial_institutions/msb/msbstateselector.html�

7.3


Recording a BSA-Related Money Order Transaction As per 31 CFR 1010.415, we are required to record identification and transaction information for any transaction involving the purchase of a single or multiple money orders of $3,000.00 or more using currency between $3,000.00 and $10,000.00 (inclusive). We are also required to record identification and transaction information for multiple transactions, conducted by, or on behalf of, the same person (which can be an individual, company, organization, etc.), during the same business day, if the sum of the transactions totals $3,000.00 or more. To assure compliance with the law, we will record identification and transaction information whenever a money order transaction, involving the purchase of a single or multiple money orders, of $3,000.00 or more is conducted, regardless of payment type or amount. To assist with recording such transactions, Company employees shall utilize the “Federal Report” function within the Automated Teller System (ATS) / Money Order Printing System (MOPS). This system prompts the teller to input customer identification information for single or multiple money order purchases, conducted as a single transaction, totaling $3,000 or more. When this occurs, Company employees shall do the following:

1. Obtain all information that is required when entering the transaction in the point-of-sale system: Identification Information1

Individual

(if multiple individuals, collect information for all)

o name (first, middle initial, and last) o address o country (if other than U.S.) o date of birth o identification document issuer o identification document type o identification document number o taxpayer identification number (U.S. or foreign), such as Social Security number

(SSN) or Individual Taxpayer Identification Number (ITIN), or, if none, notation reflecting as such

Business/Organization/Other Entity (when applicable) (if multiple businesses/organizations/other entities, collect information for all)

o name (complete) o address o country (if other than U.S.) o taxpayer identification number, such as Employer Identification Number (EIN)

or Social Security number (SSN) (if sole proprietor without employees) o type/description

1 If identification information was collected during a prior transaction, (verbally) confirm its accuracy with the consumer.

7.4


Transaction Information (automatically retained by the POS system)

o transaction date o money order number(s) o money order amount(s)

2. Record identification information in the point-of-sale system.

3. If the transaction involves additional recordable and/or reportable activity, follow the

appropriate procedures accordingly.

To the best of their ability, tellers shall identify and record multiple money order transactions, conducted by or on behalf of the same person, during the same business day. If such activity is detected, during the course of the current/active transaction, the teller shall:

1. Open the “Maintenance” menu within the ATS/MOPS counsel.

2. Select “Federal Report”, clicking on “Add Federal Report” in the sub-menu

3. Add all customer identification information in the first (of three) tab(s)

4. If necessary, add additional customer identification information (for a second customer) or business identification information in the second tab

5. Select the money order (or money orders) associated with the transaction by clicking on “Add” and typing in the appropriate money order number

6. If the transaction involves additional recordable and/or reportable activity, follow the appropriate procedures accordingly.

7.5


Recording a BSA-Related Money Transfer Transaction As per 31 CFR 1010.410(e), we are required to record identification and transaction information for any (single) send or receive money transfer transaction of $3,000.00 or more, regardless of payment type. In the event that a single money transfer transaction of $3,000.00 or more takes place, all information required to be maintained under the Bank Secrecy Act is collected and entered into the money-transfer-company computer. Consequently, procedures for recording money transfer transactions of $3,000.00 or more are synonymous with those required by our principal money transmitters. Additionally, Western Union completes, files, and maintains CTRs for single or multiple money transfer transactions resulting in cash-in or cash-out of the business exceeding $10,000.00. Consequently, procedures for reporting money transfer transactions of $10,000.00 or more are synonymous with those required by Western Union. All such records and forms are available via our principal money transmitters, and Company policy is to rely on our principal money transmitters to produce said records and forms in the event of IRS Title 31 examination and/or official request. Consequently, Company employees shall focus on completing a BSA Worksheet whenever a money transfer is (or multiple money transfers are) i) all of a transaction of $10,000.00 or more (MoneyGram locations) ii) part of a transaction – involving multiple products/services – of $10,000.00 or more (all locations), or iii) whenever a money transfer is (or multiple money transfers are) involved in potentially-suspicious activity (all locations). Please see the Filing a Currency Transaction Report and Filing a Suspicious Activity Reports sub-sections later in this chapter for CTR and SAR procedures.

7.6


Conducting a Prepaid Card Transaction As described in Section 1 (Introduction) of the Manual, due to the Company’s limited control over the prepaid program in which it participates, the Company’s position is that it is exempt from being defined as a provider of prepaid access. Although the Company sells, loads, and unloads open-loop, prepaid cards, it takes the position that it is not a “seller of prepaid access” as it meets the exceptions for being defined as such stated in 31 CFR 1010.100(ff)(7):

1. the Company does not sell prepaid access (in excess of $1,000.00) prior to verifying the identity of the customer

2. the company has written procedures in place to prevent the sale/load of more than $10,000, for any one person, on any one day

It shall be the Company’s policy to follow the procedures of its prepaid card provider(s) and issuing bank(s); such procedures will prevent purchase/load transactions in excess of $10,000, for any one (1) person, on any one (1) day. Additionally, when a Company teller is knowledgeable of a customer attempting to load multiple cards on the same day, to the best of his or her ability, said teller shall prevent such loads from exceeding $10,000.00. Consequently, the Company’s position is that it is not subject to registration as a MSB due to the prepaid access services it provides, nor is it obligated to follow BSA requirements for providers or sellers of prepaid access. Although the reloadable prepaid cards the Company sells have daily maximum load amounts below $10,000.00, if a prepaid transaction is part of a transaction involving currency received, or currency disbursed by the business in excess of $10,000.00, the Company files Currency Transaction Reports. (See “Filing a Currency Transaction Report” for appropriate procedures.) Additionally, the Company voluntarily investigates potentially-suspicious activity, regardless of transaction type or amount. (See “Filing a Suspicious Activity Report” for appropriate procedures.)

7.7


Filing a Currency Transaction Report (CTR) As per 31 CFR 1010.311, we are required to file a Currency Transaction Report whenever a transaction involving currency coming in to or going out of the business exceeds $10,000.00. A CTR is also required to be filed if multiple transactions, involving currency coming in to or going out of the business, are conducted by or on behalf of the same person, during the same business day, that, when summed, exceed $10,000.00. In the best interest of the Company, and to assure compliance with the law, we will record identification and transaction information whenever a transaction (or multiple transactions on the same day) of $10,000.00 or more is conducted, regardless of whether the cash-in or cash-out totals $10,000.00 or more. With respect to any transaction of $10,000.00 or more, Company employees shall do the following:

1. Obtain all information that is required when filling out a BSA Worksheet: Identification Information1

Individual

(if multiple individuals, collect information for all)



o occupation Business/Organization/Other Entity (when applicable) (if multiple businesses/organizations/other entities, collect information for all)



Transaction Information

o transaction date

1 If identification information was collected during a prior transaction, (verbally) confirm its accuracy with the consumer.

7.8


o check amount(s) o money order amount(s) o money order number(s) o money transfer amount(s) o money transfer number(s) o prepaid card sale/load/unload amounts o amount of cash received from the consumer o amount of cash returned to the consumer o other transactional information as warranted

2. If the transaction involves suspicious activity, make copies of all documents involved in the

transaction, including:

o identification document(s): driver’s license(s), state/military/school identification card(s), passport(s), etc.

o transaction document(s): check(s), money order(s), money transfer form(s), prepaid card(s) / form(s), etc.

3. Log in to the Online BSA Worksheet System:

www.bsaworksheet.cfsc.com

4. Select “Submit a New BSA Worksheet”.

5. Follow all instructions appropriately.

6. Complete the worksheet.

7. Click “Submit”.

8. If the transaction involves recordable activity and/or additional reportable activity, follow the appropriate procedures.

On not less than a weekly basis, the Compliance Consultant shall download all BSA Worksheet data submitted since the previous download. The Compliance Consultant shall review all such data to determine which submissions require CTR filing. With respect to transactions involving money transfer activity: Effective December 1, 2006, Western Union assumed full responsibility for the filing of all CTRs related to single or multiple money transfer transactions, conducted by or on behalf of the same person, during the same business day, that total more than $10,000. The Compliance Consultant shall follow CTR filing procedures, for money transfer transactions involving cash in or out in excess of $10,000, for all MoneyGram locations. Additionally, the Compliance Consultant shall follow CTR filing procedures if the money transfer transaction is (or transactions are) part of multiple transactions, of differing types (e.g. the purchase of a money order in addition to the sending of a money transfer or the cashing of a

http://www.bsaworksheet.cfsc.com/�

7.9


check in addition to the receiving of a money transfer), that result in cash in or out in excess of $10,000.

With respect to transactions that do not involve currency in excess of $10,000.00: The Compliance Consultant shall retain BSA Worksheet data as proof the cash (in or out) amount did not exceed $10,000. If the Compliance Consultant suspects or has reason to believe the customer was intentionally circumventing CTR filing requirements, he/she shall follow SAR filing procedures accordingly. With respect to transactions that do involve currency in excess of $10,000.00: Within fifteen (15) days of the transaction date, the Compliance Consultant shall do the following:

1. Log in to the FinCEN, BSA E-Filing system via the following website:

http://bsaefiling.fincen.treas.gov/

2. Complete a CTR.

3. Review the completed CTR for accuracy.

4. Sign – using a personal identification number (PIN) assigned by FinCEN – the CTR.

5. Submit the CTR to FinCEN.

6. Generate a (digital) copy of the confirmation of submission.

7. Place the CTR and confirmation in the BSA CTR File.

If the transaction involved suspicious activity, the Compliance Consultant shall follow SAR filing procedures accordingly.


7.10


Filing a Suspicious Activity Report (SAR) As per 31 CFR 1022.320, we are required to file a Suspicious Activity Report whenever a consumer completes a transaction which i) we deem suspicious and ii) exceeds $2,000.001 or, if detected from the review of cleared money orders, $5,0002

.

In the best interest of the company, and to uphold the spirit of the law, we shall investigate all potentially suspicious activity, regardless of dollar amount or type, and regardless of whether the transaction was completed or terminated. When potentially suspicious activity occurs at a Company store, Company employees shall do the following:

1. Terminate the transaction if the following identification information can not be obtained:

Identification Information Individual (if multiple individuals, collect information for all)



Business/Organization/Other Entity (when applicable) (if multiple businesses/organizations/other entities, collect information for all)



2. Complete the transaction if all appropriate identification information is obtained.

3. Make copies of all documents involved in the transaction, including:

o identification document(s): driver’s license(s), state/military/school identification

card(s), passport(s), etc.

1 31 CFR 1022.320(a)(2) 2 31 CFR 1022.320(a)(3)

7.11


o transaction document(s): check(s), money order(s), money transfer form(s), prepaid card(s) / form(s), etc.

4. Regardless of whether the transaction was completed or terminated, log in to the Online BSA Worksheet System: www.bsaworksheet.cfsc.com


6. Follow all instructions appropriately.

7. Complete the worksheet.


9. Print the BSA Worksheet using the “Modify/Lookup an Existing BSA Worksheet” function to locate the worksheet you just submitted.

10. Fax the printed BSA Worksheet and all supporting documentation corresponding to the reportable activity to the Compliance Consultant:

Compliance Help Desk: 866-828-3285

11. Place the BSA Worksheet and all supporting documentation in the BSA Suspicious

Activity Report File.

12. If the transaction involves recordable activity and/or additional reportable activity, follow the appropriate procedures.

The store shall retain hard (paper) copies of BSA Worksheets and supporting documentation for no less than five (5) years. The Compliance Consultant shall, on not less than a weekly basis, download all BSA Worksheet data submitted since the previous download. The Compliance Consultant shall review all such data to determine which submissions require SAR filing. Additionally, the Compliance Consultant may receive activity deemed worthy of investigation based off review of transaction sales and/or (money order) clearings activity on the back end. The Compliance Consultant shall conduct an investigation, to the extent necessary based on the information provided, to determine if SAR filing is necessary. If the transaction does not appear suspicious, the Compliance Consultant shall do one (1) or more of the following:

1. “Stamp” – using a digital signature – the BSA Worksheet, indicating review of the worksheet and the Compliance Consultant’s determination that the activity was deemed not suspicious.

http://www.bsaworksheet.cfsc.com/�

7.12


2. Create a comment on the BSA Worksheet, transaction report, or other documentation created by or forwarded to the Compliance Consultant with notes about the investigation process and why the activity was deemed not suspicious.

3. Complete the “CFSC Chicagoland Check-Cashing Companies Suspicious Activity Memorandum”, to be placed with all supporting documentation in the BSA SAR File, which shall include the following:

o a summary of the transaction o facts that made the transaction appear suspicious o pertinent facts from each memorandum prepared by employees and/or

managers concerning the transaction or consumer o the scope of the investigation o the results of the investigation o the reason(s) for not filing

If the transaction involved currency in excess of $10,000.00, the Compliance Consultant shall follow CTR filing procedures accordingly. If the transaction does appear suspicious, within thirty (30) days of the date of detection of suspicious activity, the Compliance Consultant shall do the following:

1. Log in to the FinCEN BSA E-Filing system via the following website:

http://bsaefiling.fincen.treas.gov/

2. Complete a SAR.

3. Review the completed SAR for accuracy.

4. Sign – using a personal identification number (PIN) assigned by FinCEN – the SAR.

5. Submit the SAR to FinCEN.

6. Generate a (digital) copy of the confirmation of submission.

7. Place the SAR and confirmation in the BSA SAR File.

If the transaction involved currency in excess of $10,000.00, the Compliance Consultant shall follow CTR filing procedures accordingly.


7.13


Monitoring Money Order Transactions Sales On a monthly basis, the Compliance Consultant shall download money order transactions conducted (at Company stores) during the previous month. The Compliance Consultant shall log in to an online system created by DCS. The Compliance Consultant shall download a file containing all money orders sold for a given month. The aforementioned file will be uploaded into a database. Numerous reports will be run to detect potentially recordable and/or reportable activity. The Compliance Consultant shall confirm the Federal Report and/or BSA Worksheets were completed for all such transactions and filings (or, for suspicious activity, if deemed not suspicious, memorandums) were completed/submitted when appropriate. Clearings On a monthly basis, the Compliance Consultant shall review cleared money orders. Although all money orders that clear will receive cursory review, via the CD MB Financial Bank mails to Company headquarters, on screen (only), money orders in amounts between $900-$999.99 and $2,900-$2,999.99 and those deemed suspicious from the cursory review will be printed. Then, the Compliance Consultant shall review the images to detect similar remitters, payees, and/or handwriting. The Compliance Consultant shall complete the “CFSC Chicagoland Check-Cashing Companies Cleared Money Order Monitoring Log”, documenting proof of completion of the aforementioned procedures. If no suspicious activity is detected, the Compliance Consultant shall retain copies of all money orders printed, together with the signed log indicating review of each agent location, in the Cleared Money Order Monitoring File. If suspicious activity is detected, the Compliance Consultant shall follow procedures for investigating/reporting suspicious activity. Additionally, the Compliance Consultant shall retain copies of all money orders printed, together with the signed log indicating review of each Company location, in the Cleared Money Order Monitoring File. Money Transfer Transactions Western Union Locations: On a weekly basis, the Compliance Consultant shall download all money transfer transactions, conducted at Company stores during the previous week, from the Western Union website: https://www.wuagentlink.com/ The aforementioned downloads will be uploaded into a database.

7.14


Because the database shall house all transaction and identification information (ID type and number, Social Security number, date of birth, occupation, etc.) for money transfers in excess of $3,000.00, and because Western Union files all CTRs for transactions in excess of $10,000.00 (see CTR filing procedures), the Compliance Consultant shall focus on detecting suspicious activity. Numerous reports will be run to detect potentially-suspicious transactions; these, and related transactions will be reviewed, and SARs will be filed or notations will be documented as to why the activity does not warrant SAR filing. A report log, documenting reports generated in the database, shall be maintained. MoneyGram Locations: On a monthly basis, the Compliance Consultant shall download all money transfer transactions, conducted at Company stores during the previous month, from the MoneyGram website: https://business.moneygram.com/agentportal/login.do The aforementioned downloads will be uploaded into a database. Because tellers must enter all transaction and identification information (ID type and number, Social Security number, date of birth, occupation, etc.), for money transfers in excess of $3,000.00, into the MoneyGram computer, at the time of the transaction, and because MoneyGram makes that information available in case of Title 31 examination, downloads will be reviewed for transactions of $10,000 or more and suspicious activity. A report will be run to detect transactions of $10,000.00 or more. Findings will be compared against BSA Worksheets/CTRs on hand, and discrepancies will be remedied appropriately. The Compliance Consultant shall investigate suspicious activity detected from review of the report and follow SAR filing procedures accordingly. Numerous reports will be run to detect potentially-suspicious transactions; these, and related transactions will be reviewed, and SARs will be filed or notations will be documented as to why the activity does not warrant SAR filing. A report log, documenting reports generated in the database, shall be maintained. Check-Cashing Transactions On a weekly basis, the Compliance Consultant shall log in to an online system created by DCS. The Compliance Consultant shall download a file containing all checks cashed for the previous week. The aforementioned file will be uploaded into a database. A report will be run to detect potentially reportable activity. The Compliance Consultant shall confirm BSA Worksheets were completed for all such transactions and filings were completed/submitted when appropriate.

7.15


Conducting an Independent Review An integral part of these AML procedures is establishing an independent review function. It shall be the policy of the Company to engage an individual independent of the Program, to conduct a review of all AML procedures, no less than once every eighteen (18) months. The independent review shall be conducted by a qualified individual, independent of the Program (the individual shall not be the Compliance Officer nor any individual who reports to the Compliance Officer), and shall include (but not be limited to) the following:

• review of MSB registrations

o Determine if initial / renewal registration forms and corresponding confirmations are available.

• review of the compliance manual

o Determine that the manual is in compliance with the law.

o Determine that the procedures in the manual are being followed.

• review of training files

o Determine that all employees hired during the audit period have received mandatory compliance training.

o Determine that all continuing employees have received mandatory refresher training.

• review of independent review and audit reports from outside parties (e.g. the IRS, state regulators, money transmitters, banks, etc.)

o Determine if strengths were maintained, weaknesses addressed.

• review of compliance files

o Review a sample of CTR and SAR reports filed for completeness, accuracy, and timely filing.

o Trace samples of reportable money order, money transfer, and check-cashing

transactions from detailed transaction reports to the appropriate file(s).

• confirmation that all BSA-related files are maintained for five (5) years • review of employee knowledge

o Interview (a sample of) employees to determine their familiarity with BSA reporting and

recording requirements.

7.16


If deficiencies in AML procedures are discovered, the Compliance Officer shall address such deficiencies promptly, documenting all such action taken to alleviate said shortcomings. The Compliance Officer shall maintain all review documentation, with any response / follow-up documentation, in the AML Independent Review File.

SECTION 8 Anti-Money Laundering Compliance Program Documents / Forms

8.1


ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM DOCUMENTS / FORMS

The following documents are used to comply with AML-related regulations:

• CFSC Chicagoland Check-Cashing Companies BSA Worksheet

• CFSC Chicagoland Check-Cashing Companies Suspicious Activity Memorandum

• CFSC Chicagoland Check-Cashing Companies Cleared Money Order Monitoring Log

• CFSC Chicagoland Check-Cashing Companies Acknowledgement of Receipt of Compliance Training

• CFSC Chicagoland Check-Cashing Companies Federal Compliance Review Examination

• CFSC Chicagoland Check-Cashing Companies Federal Compliance Review Examination Answer Key

• Financial Crimes Enforcement Network Currency Transaction Report (CTR)

• Financial Crimes Enforcement Network Registration of Money Services Business (RMSB)

• Financial Crimes Enforcement Network Suspicious Activity Report (SAR)

CFSC Chicagoland Check-Cashing CompaniesBSA Worksheet

CONSUMER INFORMATION

Last name First name Middle initial

Address

ZIP City StateCountry United States of America

SSN None

Occupation

Date of birth ID type

ID number Issuing state Issuing country United States of America

TRANSACTION INFORMATION

Transaction Date: Check if multiple transactions (conducted at separate times throughout the day)

Type of Transaction:Cash CheckSell Money Order

Send Money Transfer and/or Receive Money TransferExchange Currency

Other

Type of Recording or Reporting Required:CTR ($10,000 or more) (one or multiple transactions)

Money Order Recording ($3,000 or more) (one or multiple transactions)Money Transfer Recording ($3,000 or more) (one transaction)

Foreign Exchange Recording ($1,000 or more) (one or multiple transactions)

SAR (any amount) (one or multiple transactions) (fill in as much information as possible)

Transaction Summary: Indicate amounts (in U.S. dollars) where applicable.

Amount of cash receivedAmount of check(s) receivedAmount of money transfer(s) receivedAmount of foreign currency received

Other

Total amount received

Amount of cash returnedAmount of money order(s) soldAmount of money transfer(s) sentAmount of fee(s) charged

Total amount disbursed

Other

Money Order Transactions: (if multiple money orders sold for same amount, enter amount, quantity, and starting number)

Individual MO Amount Quantity From MO # To MO # Total Series Amount Date (for suspicious activity only)

Money Transfer Transactions:

MT Amount MT Transaction # Date (for suspicious activity only)

Foreign or Domestic Exchange Transactions

Issuing CountryAmount

Suspicious Transactions: Describe the suspicious activity as best you can; consider number of people involved, sex, height, weight, race, age, distinguishing physical characteristics such as scars/limps/tattoos, vehicle make/model/color/age, etc.

SUBMISSION INFORMATION

Submitted by Store Submitted on 11/22/2014

Complete this form when investigating suspicious activity that does not result in a SAR filing.

Type(s) of Transaction(s): (check all that apply)

Suspicious Activity Memorandum

Cash Check

Sell Money Order

Send Wire and/or Receive Wire

Print

SUBMISSION INFORMATION

Other

Reset FormCompleted by

Completed on 6/15/16

Transaction Date: (or range)

CONSUMER / TRANSACTION INFORMATION

Exchange Currency


Title

INVESTIGATION PROCESS

Total Amount Involved in the Transactions:

Check if Multiple Stores (list in the box)

to

Transaction Description:

Person(s) Involved:

Teller(s) Involved:

Reason for Not Filing: (describe)

Follow-Up: (describe)

Store

other: (describe)

checked the SDN List for possible matches

verified the consumer(s) Social Security Number(s) via IDResponse

reviewed records of past transactions

interviewed employee(s) who conducted transaction(s)

reviewed transaction records (must be checked)


Cleared Money Order Monitoring Log

*number of occurrences/cases, not number of money orders/items 1Revised on: 11/16/2014

Printed on: 06-15-16

For Month Ending:

Items Suspicious* Items Suspicious* Total Total Time Date Employee$900-1,000 $900-1,000 $2,900-3,000 $2,900-3,000 Items Suspicious* Used Completed Initials

2 Lincolnway

3 47th & Halsted

4 31st & Wallace

5 31st & Morgan

6 Speedy 1

7 Speedy 2

8 Speedy 3

9 Speedy 4

10 Belvidere GB

11 79th & Rhodes

12 75th & Cottage

15 Arlington Hts

21 75th & Stony

22 71st & Went

26 Madison Harlem

27 New Chi State

30 McHenry

32 Wilson Broadway

33 Rolling Meadows

40 159th & Kedzie

41 Woodstock

50 Rockford

51 147th & Cicero

52 147th & Pulaski

56 New Bryn Mawr

60 Northbrook

66 Blue Island

71 New Fox Lake


Cleared Money Order Monitoring Log

*number of occurrences/cases, not number of money orders/items 2Revised on: 11/16/2014

Printed on: 06-15-16

Items Suspicious* Items Suspicious* Total Total Time Date Employee$900-1,000 $900-1,000 $2,900-3,000 $2,900-3,000 Items Suspicious* Used Completed Initials

75 North & Austin

77 Speedy 5

78 Speedy 6

79 Speedy 7

82 63rd & Kedzie

83 Olympia Plaza

84 Grand Greenbay

88 Speedy 8

89 Chicago Heights

92 Har-Mil

93 Washington Lewis

159 Kimball North

Notes:

Approved by Title

Name Date


CFSC Chicagoland Check-Cashing Companies Acknowledgement of Receipt of

Compliance Handbook The undersigned employee hereby acknowledges that he/she has received the “CFSC Chicagoland Check-Cashing

Companies Employee Compliance Handbook”.

_______________________________________ Employee Name (print) _______________________________________ Company Name _______________________________________ Store Name (if different from company name) _______________________________________ Employee Signature ______________ Date


CFSC Chicagoland Check-Cashing Companies Acknowledgement of Understanding of

Compliance Handbook The undersigned employee hereby acknowledges that he/she has reviewed the “CFSC Chicagoland Check-Cashing

Companies Employee Compliance Handbook” and understands and will comply with the laws, regulations, policies, and

procedures documented therein.

_______________________________________ Employee Name (print) _______________________________________ Company Name _______________________________________ Store Name (if different from company name) _______________________________________ Employee Signature ______________ Date

1


CFSC Chicagoland Check-Cashing Companies Federal Compliance Review Examination

Please print the following: Name: _____________________________ Company: _____________________________ Date: ____________ Score: _____________ Multiple Choice – each correct answer is worth four (4) points Circle the correct answer for each question. 1. The government’s term for a business that conducts financial activities such as cashing checks, wiring funds, and/or

selling money orders, but is not a bank:

a. cash intensive business b. pawn shop c. money services business d. currency distributor

2. The Bank Secrecy Act requires financial institutions to record and/or report certain

a. wire transfer transactions b. money order transactions c. currency exchange transactions d. check-cashing transactions e. suspicious transactions f. all of the above

3. The USA PATRIOT Act requires financial institutions to create a compliance program that includes

a. generating a business-run website where consumers can go to find out about the USA PATRIOT Act b. a computer system that tracks consumers’ transactions c. a designated Compliance Officer d. maintaining a minimum balance of $1,000,000.00 in the primary business account

4. The following act requires financial institutions to protect consumers’ non-public, personal information (Social

Security numbers, drivers’ license numbers, etc.):

a. the Fair and Accurate Credit Transactions Act b. the Gramm Leach Bliley Act c. the Bank Secrecy Act d. the Sarbanes-Oxley Act

2


5. This government agency created a list of known terrorists, drug dealers, non-cooperative countries, etc. U.S. companies are not allowed to do business with:

a. the Food and Drug Administration b. the Internal Revenue Service c. the Department of Defense d. the Office of Foreign Assets Control

6. Financial institutions can be assessed civil penalties if they do not comply with the requirements of:

a. the Bank Secrecy Act b. the Gramm Leach Bliley Act c. the Office of Foreign Assets Control d. all of the above

7. The government defines a “person” as:

a. an individual b. a business c. a non-profit organization d. an estate e. all of the above

8. The government defines “currency” as:

a. money orders b. business checks c. cash d. all of the above

9. Multiple transactions (for purposes of recording or reporting) occur when a consumer:

a. conducts two or more transactions of the same type, during the same business day b. conducts a transaction that requires both money order and wire transfer recording c. conducts a single transaction each day for five days straight d. conducts two or more transactions with an out-of-state ID

10. Intentionally ignoring the circumstances surrounding a suspicious transaction is called:

a. quid pro quo b. intentional ignorance c. willful blindness d. bait ‘n switch

11. Financial institutions must maintain all anti-money laundering compliance documentation for a period of:

a. 1 year b. 5 years c. 10 years d. 20 years

3


12. A financial institution must file a Currency Transaction Report (CTR) within:

a. 5 days after the transaction date b. 15 days after the transaction date c. 90 days after the transaction date d. 1 year after the transaction date

13. The company’s threshold for filing a CTR is:

a. any amount b. $1,000.00 or more c. $3,000.00 or more d. $10,000.00 or more

14. A husband and wife enter the store and the wife presents a check that is made out to her business. You must

collect identification and information for:

a. the husband b. the wife c. the business d. all of the above

15. The company’s threshold for filing a SAR is:


16. Prepaid cards, such as ICE or Netspend, are subject to:

a. $3,000 or more record keeping b. CTR filing c. SAR filing d. b and c

17. The company’s threshold for recording money order transactions is:


18. A customer comes in a buys a money order for $2,850.00, after a brief conversation with you, the teller, she/he

asks for another money order for $500.00. You should:

a. complete the transaction and tell the customer to have a good day b. ask for identification information, complete the transaction, and add the transaction to the Federal Report c. refuse to complete the transaction d. ask your coworker to sell the money order

4


19. One of the most common forms of suspicious activity, whereby a single consumer or multiple consumers “break up” one large transaction into several small ones, is:

a. monitoring b. funneling c. auditing d. structuring

20. Suspicious activity should be reported to:

a. the company’s Compliance Helpdesk (following company procedures) b. the consumer that conducted the suspicious transaction(s) c. both a and b d. neither a nor b

21. If a consumer purchases $4,000.00 worth of money orders on behalf of her business and provides all appropriate

identification information for herself and her company, the company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. none of the above

22. If a consumer cashes a $16,000.00 insurance claim check, requesting $4,000.00 worth of money orders and

$11,360.00 worth of cash (after fees) back, the company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. both a and c

23. As a teller, you are permitted to fill out which of the following forms:

a. Currency Transaction Report (CTR) b. Suspicious Activity Report (SAR) c. BSA Worksheet d. a and b

24. Three (3) consumers enter the store together, each proceeds to different teller window, and the first two

consumers purchase money orders totaling $2,990.00. The third employee recognizes the circumstances and asks for identification. The third consumer refuses and walks out. The company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. all of the above

5


25. The company’s Compliance Officer is:

a. Jennifer Shasky Calvery b. Adam Lichtenfeld c. Sandi Berkowitz d. Dan Hoyer

1


CFSC Chicagoland Check-Cashing Companies Federal Compliance Review Examination

ANSWER KEY Multiple Choice – each correct answer is worth four (4) points Circle the correct answer for each question. 1. The government’s term for a business that conducts financial activities such as cashing checks, wiring funds, and/or

selling money orders, but is not a bank:

a. cash intensive business b. pawn shop c. money services business d. currency distributor

2. The Bank Secrecy Act requires financial institutions to record and/or report certain

a. wire transfer transactions b. money order transactions c. currency exchange transactions d. check-cashing transactions e. suspicious transactions f. all of the above

3. The USA PATRIOT Act requires financial institutions to create a compliance program that includes

a. generating a business-run website where consumers can go to find out about the USA PATRIOT Act b. a computer system that tracks consumers’ transactions c. a designated Compliance Office d. maintaining a minimum balance of $1,000,000.00 in the primary business account

4. The following act requires financial institutions to protect consumers’ non-public, personal information (Social

Security numbers, drivers’ license numbers, etc.):

a. the Fair and Accurate Credit Transactions Act b. the Gramm Leach Bliley Act c. the Bank Secrecy Act d. the Sarbanes-Oxley Act

2


5. This government agency created a list of known terrorists, drug dealers, non-cooperative countries, etc. U.S. companies are not allowed to do business with:

a. the Food and Drug Administration b. the Internal Revenue Service c. the Department of Defense d. the Office of Foreign Assets Control

6. Financial institutions can be assessed civil penalties if they do not comply with the requirements of:

a. the Bank Secrecy Act b. the Gramm Leach Bliley Act c. the Office of Foreign Assets Control d. all of the above

7. The government defines a “person” as:

a. an individual b. a business c. a non-profit organization d. an estate e. all of the above

8. The government defines “currency” as:

a. money orders b. business checks c. cash d. all of the above

9. Multiple transactions (for purposes of recording or reporting) occur when a consumer:

a. conducts two or more transactions of the same type, during the same business day b. conducts a transaction that requires both money order and wire transfer recording c. conducts a single transaction each day for five days straight d. conducts two or more transactions with an out-of-state ID

10. Intentionally ignoring the circumstances surrounding a suspicious transaction is called:

a. quid pro quo b. intentional ignorance c. willful blindness d. bait ‘n switch

11. Financial institutions must maintain all anti-money laundering compliance documentation for a period of:

a. 1 year b. 5 years c. 10 years d. 20 years

3


12. A financial institution must file a Currency Transaction Report (CTR) within:

a. 5 days after the transaction date b. 15 days after the transaction date c. 90 days after the transaction date d. 1 year after the transaction date

13. The company’s threshold for filing a CTR is:


14. A husband and wife enter the store and the wife presents a check that is made out to her business. You must

collect identification and information for:

a. the husband b. the wife c. the business d. all of the above

15. The company’s threshold for filing a SAR is:


16. Prepaid cards, such as ICE or Netspend, are subject to:

a. $3,000 or more record keeping b. CTR filing c. SAR filing d. b and c

17. The company’s threshold for recording money order transactions is:


18. A customer comes in a buys a money order for $2,850.00, after a brief conversation with you, the teller, she/he

asks for another money order for $500.00. You should:

a. complete the transaction and tell the customer to have a good day b. ask for identification information, complete the transaction, and add the transaction to the

Federal Report c. refuse to complete the transaction d. ask your coworker to sell the money order

4


19. One of the most common forms of suspicious activity, whereby a single consumer or multiple consumers “break up” one large transaction into several small ones, is:

a. monitoring b. funneling c. auditing d. structuring

20. Suspicious activity should be reported to:

a. the company’s Compliance Helpdesk (following company procedures) b. the consumer that conducted the suspicious transaction(s) c. both a and b d. neither a nor b

21. If a consumer purchases $4,000.00 worth of money orders on behalf of her business and provides all appropriate

identification information for herself and her company, the company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. none of the above

22. If a consumer cashes a $16,000.00 insurance claim check, requesting $4,000.00 worth of money orders and

$11,360.00 worth of cash (after fees) back, the company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. both a and c

23. As a teller, you are permitted to fill out which of the following forms:

a. Currency Transaction Report (CTR) b. Suspicious Activity Report (SAR) c. BSA Worksheet d. a and b

24. Three (3) consumers enter the store together, each proceeds to different teller window, and the first two

consumers purchase money orders totaling $2,990.00. The third employee recognizes the circumstances and asks for identification. The third consumer refuses and walks out. The company/employee must:

a. complete a BSA Worksheet for filing a CTR b. complete a BSA Worksheet for filing a SAR c. record the purchase of money orders in the point-of-sale system d. complete a BSA Worksheet for the exchange of currency e. all of the above

5


25. The company’s Compliance Officer is:

a. Jennifer Shasky Calvery b. Adam Lichtenfeld c. Sandi Berkowitz d. Dan Hoyer

Currency Transaction Report

WARNING: PRINTED VERSIONS OF THE BSA E-FILING FORMS ARE NOT FOR SUBMISSION AND WILL NOT BE PROCESSED BY FINCEN.

Save Validate Print

Sign with PIN

Filing Name

1.2Currency Transaction Report Version Number:

By providing my PIN, I acknowledge that I am electronically signing the BSA report submitted.

Correct/amend prior reportInitial report FinCEN directed Backfiling*1 Type of filing

OMB No. 1506-0064

Steps to Submit

1. Complete the report in its entirety with all requested or required data known to the filer.

2. Click "Validate" to ensure proper formatting and that all required fields are completed.

3. Sign with PIN.

4. Click "Save"; filers may also "Print" a paper copy for their records.

5. Click "Submit".

Prior report Document Control Number/BSA Identifier

Page 2 of 4



Part I Person Involved in Transaction of + -1 1

*2 Person conducting transaction on own behalf

Person conducting transaction for another

Person on whose behalf transaction was conducted Courier Service (private)dcb

3 Multiple transactions

a

*4 Individual's last name or entity's legal name

If entity

Unknown

Check

*5 First name Unknown

6 Middle name

7 Gender

Suffix

8 Alternate Name

9 Occupation or type of business

9a NAICS Code

Unknown *10 Address

Unknown

Unknown Unknown

Unknown

*11 City

*12 State

*14 Country

*13 ZIP/Postal Code

Unknown

Unknown

*15 TIN

*17 Date of birth

16 TIN type

18 Contact phone number Ext.

19 E-mail address

*20 Form of identification used to verify identity Unknown

Driver's license/State ID Passport Alien Registration Other

Number Issuing StateCountry

21 Cash in amount for individual or entity listed in Item 4 $

Account number -+

22 Cash out amount for individual or entity listed in Item 4 $

Account number + -

Page 3 of 4


Home


Part II Amount and Type of Transaction(s). Check all boxes that apply.

24

*23 Date of transaction

Armored car (FI Contract) ATM Mail Deposit or Shipment Night Deposit Aggregated transactions

*25 CASH IN: (in U.S. dollar equivalent)

a Deposit(s) $ .00

b Payment(s) .00

c Currency received for funds transfer(s) out .00

d Purchase of negotiable instrument (s) .00

e Currency exchange(s) .00

f Currency to prepaid access .00

g Purchases of casinos chips, tokens and other gaming instruments .00

h Currency wager(s) including money plays .00

i Bills inserted into gaming devices .00

z Other (specify):

.00

Total Cash in $ .00

*27 CASH OUT: (in U.S. dollar equivalent)

a Withdrawal(s) $ .00

b Advance(s) on credit (including markers) .00

c Currency paid from funds transfer(s) in .00

d Negotiable instrument(s) cashed .00

e Currency exchange(s) .00

f Currency from prepaid access .00

g Redemption(s) of casino chips, tokens, TITO tickets and other gaming instruments .00

h Payment(s) on wager(s) (including race and OTB or sports pool) .00

i Travel and complimentary expenses and book gaming incentives .00

j Payment for tournament, contest or other promotions .00z Other (specify):

.00

Total Cash out $ .00

26 Foreign Cash in -+Foreign Country

28 Foreign Cash out -+Foreign Country

Page 4 of 4



Part III Financial Institution Where Transaction(s) Takes Place of -+1 1

*37 Type of financial institution

Other (specify)

*29 Primary federal regulator

38 If 37a - Casino/Card Club is checked, indicate type (check only one)

State licensed casino Tribal authorized casino Card club Other

*30 Legal name of financial institution

31 Alternate name, e.g. trade name, DBA

*32 EIN

*33 Address

*35 State

*36 ZIP Code

*34 City

ID number

39 Financial institution ID type

*40 Contact office

*41 Phone number Ext.

*42 Date Filed (Date filed will be auto-populated when the form is signed.)

Registration of Money Services Business

Page 1 of 5

WARNING: PRINTED VERSIONS OF THE BSA E-FILING FORMS ARE NOT FOR SUBMISSION TO AND WILL NOT BE PROCESSED BY FINCEN.

Filing Name

1.1

Sign with PIN

Registration of Money Service Business Version Number:


SPECIAL NOTE: Please be advised that Part V of this registration may be left blank for an initial registration when the Primary Transaction Account for MSB Activities is not yet known. Registrants must file a corrected registration when the account data is known.

OMB No. 1506-0013

Steps to Submit



3. Sign with PIN.


5. Click "Submit".


Page 2 of 5


Part I Filing Information

1 Indicate the type of filing by checking a, b, or d below (Check only one). If filing a correction, check "c" and either a, b, or d.

a Initial registration b Renewal c Correct/amend a prior report d Re-registration

2 If you checked item 1 d please indicate the reason(s). Check all that apply.

a Re-registered under state law b More than 10 percent transfer of equity interest c More than 50 percent increase in agents

e Enter RMSB registration (BSA ID) number if 1b, 1c, or 1d is checked

Part II Registrant Information

*3 Individual's last name, or entity's legal name

if entity Check here

5 Middle name/initial

*4 First name

6 Alternate name, e.g., AKA - individual or DBA - entity

Suffix name

*7 Address

*10 ZIP/Postal Code

*11 Country

*9 State

*8 City

*13 TIN type

*12 TIN

14 Date of birth

15 Telephone number Ext.

16 E-mail address

17 Website address (URL)

18 Name of compliance contact person for this registered MSB

Ext.19 Compliance telephone number


Page 3 of 5


Part III Owner or Controlling Person

if entity Check here

20 Individual's last name, or entity's legal name

21 First name


Suffix name

23 Address

27 Country

26 ZIP/Postal Code

24 City

25 State

30 Date of birth

29 TIN type 28 TIN

31 E-mail address

32 Website address (URL)

Ext.33 Telephone number

Part IV Money Services and Product Information

a All States & Territories All States All Territories Foreign Location(s)b c

*34 U.S. States and/or territories where the registrant, its agents or branches are physically located and/or providing MSB activities. Note: At least one box in item 34 must be checked. Check box a, b, or c as appropriate (Check only one). If box a, b, or c does not apply, check as many state/territory boxes as appropriate. If MSB engages in activities on tribal lands, mark the box for the state, territory or district in which the tribal lands are located. In addition, check box “d” if the MSB engages in activities in foreign locations (non-U.S. and US Territories).

d

N. Mariana Isls. (MP)

Puerto Rico (PR)

Virgin Islands (VI)

American Somoa (AS)

FS of Micronesia (FM)

Guam (GU)

Marshall Islands (MH)

Palau (PW)

Kentucky (KY)

Maryland (MD)

Massachusetts (MA)

Michigan (MI)

Minnesota (MN)

Mississippi (MS)

Missouri (MO)

Montana (MT)

Nebraska (NE)

Nevada (NV)

New Hampshire (NH)

New Jersey (NJ)

New Mexico (NM)

New York (NY)

North Carolina (NC)

North Dakota (ND)

Ohio (OH)

Oklahoma (OK)

Oregon (OR)

Pennsylvania (PA)

Rhode Island (RI)

South Carolina (SC)

South Dakota (SD)

Tenessee (TN)

Texas (TX)

Utah (UT)

Vermont (VT)

Virginia (VA)

Washington (WA)

West Virginia (WV)

Wisconsin (WI)

Wyoming (WY)

Alabama (AL)

Alaska (AK)

Arizona (AZ)

Arkansas (AR)

California (CA)

Colorado (CO)

Connecticut (CT)

Delaware (DE)

District of Columbia (DC)

Florida (FL)

Georgia (GA)

Hawaii (HI)

Idaho (ID)

Illinois (IL)

Indiana (IN)

Iowa (IA)

Kansas (KS)

Louisiana (LA)

Maine (ME)


Page 4 of 5


Part IV Money Services and Product Information (Continued)

g

h

i

*36 Money services business activities of the registrant in the US. Check as many as apply. See instructions for an explanation of the terms.

35 Enter the number of US branches of the registrant. Reminder: do not separately register each branch. See instructions for an explanation of the term "branch."

Issuer of traveler's checks

Seller of traveler's checks

Issuer of money orders

Seller of money orders

Dealer in foreign exchange

Money transmitter

Check cashier (Including traveler's and money orders)

Seller of prepaid access

Provider of prepaid access

37 If you are providing financial services in addition to those checked in item 36 please briefly describe.

d

e

f

a

b

c

Prepaid Program Information If item “36i” is checked, provide the following information (items 38 to 43) to identify each prepaid program for which the registrant is the provider of prepaid access.

38 Name of prepaid program

39 IIN (BIN) of this program

40 Name of primary transaction processor

41 Name of compliance contact person for this program

Ext.42 Contact phone number

No43 Is this prepaid program usable internationally? a Yes b

44 Is any part of the registrant’s US money services business an informal value transfer system? See the explanation of "money transmitter" and “ informal value transfer system” in the instructions.

Yes No

45 Is any part of the registrant’s US money services business conducted as a mobile operation? Yes No

46 Enter the number of US agents authorized to conduct each money services business activity. Do not include US branches, or persons who are solely employees. See instructions for an explanation of the term "agent."

a Number of US agents selling traveler's check sales

b Number of US agents selling money orders

c Number of US agents involved as a dealer in foreign exchange

d Number of US agents conducting money transmission

e Number of US agents engaged in check cashing (Including traveler's checks and money orders)

f Number of US agents selling prepaid access

a b

a b


Page 5 of 5


Part V Primary Transaction Account for MSB Activities

Note: See instruction for an explanation of the term "transaction account." The registrant's primary transaction account is the account that has the greatest annual dollar amount of money services business activity. In items 47 through 56 enter information about the registrant's primary transaction account for money services business activities.

47 Name of financial institution where the primary transaction account is held

56 Type of financial institution where the primary transaction account is held

ForeignNon-depository institution Depository institution b ca

48 Depository financial institution routing number

49 Primary account number

50 Depository financial institution IBAN (if foreign)

51 Address

52 City

54 ZIP/Postal Code

55 Country

53 State

Part VI U.S. Location of Supporting documentation/Address of Agent for Service of Process

If the supporting documentation is kept at the U.S. location reported in Part II check here and continue to Part VII. If not, provide the U.S. location of where the supporting documentation is kept here in Part VI. If the MSB is located outside of the U. S., enter U.S. location of the U.S. agent for service of legal process. Do not enter a non-U.S. address.

57 Address

58 City

60 ZIP/Postal Code59 State

*61 Signature Please return to the Home tab to sign with PIN.

62 Print name

I am authorized to file this form on behalf of the money services business listed in Part II. I declare that the information provided is true, correct and complete to the best of my knowledge. I understand that the money services business listed in Part II is subject to the Bank Secrecy Act and its implementing regulations. To the best of my knowledge, the money services business listed in Part II maintains a current list of all agents, an estimate of its business volume in the coming year, and all other information required to comply with 31 U.S.C. 5330 and the regulations thereunder. The signature of the owner, controlling person, authorized corporate officer, or U.S. agent for service of legal process is mandatory.

Part VII Authorized Signature/Signature of Agent for Service of Process

63 Title

64 Date of signature (Date filed will be auto-populated when the form is signed.)

Suspicious Activity Report

Page 1 of 7

WARNING: PRINTED VERSIONS OF THE BSA E-FILING FORMS ARE NOT FOR SUBMISSION AND WILL NOT BE PROCESSED by FinCEN.

Filing name

1.1

Sign with PIN

Suspicious Activity Report Version Number:


Joint reportContinuing activity report

Correct/Amend prior reportInitial report*1 Type of filing (Check all that apply)

Prior report Document Control Number/BSA Identifier

Attachment

OMB No. 1506-0065

Steps to Submit



3. Sign with PIN.


5. Click "Submit".


Page 2 of 7


Part IV Filing Institution Contact Information


*79 Filer name (Holding company, lead financial institution, or agency, if applicable)


*81 TIN type *80 TIN

83 Type of Securities and Futures institution or individual filing this report - check box(es) for functions that apply to this report

Clearing broker-securities

CPO/CTA

Futures Commission Merchant

Holding companyIntroducing broker-commodities

Introducing broker-securities

Investment Adviser

Investment company

Retail foreign exchange dealer

SRO Futures

SRO Securities

Subsidiary of financial/bank holding companyOther

84 Financial institution identification Type

Number

*85 Address

*86 City

*87 State *88 ZIP/Postal Code *89 Country

90 Alternate name, e.g., AKA - individual or trade name, DBA - entity

92 LE contact agency

91 Internal control/file number

93 LE contact name

94 LE contact phone number (Include Area Code) Ext.

95 LE contact date

*96 Filing institution contact office

*97 Filing institution contact phone number (Include Area Code) Ext.

98 Date filed (Date filed will be auto-populated when the form is signed.)



Page 3 of 7

Part III Information about Financial Institution Where Activity Occurred of 11



49 Type of gaming institution

State licensed casino Tribal authorized casino Card club Other (specify)

50 Type of Securities and Futures institution or individual where activity occurred - check box(es) that apply to this report

Clearing broker-securities

Futures Commission Merchant

Holding company

Introducing broker-commodities

Introducing broker-securities

Investment Adviser

Investment company

Retail foreign exchange dealer

Subsidiary of financial/bank holding company

Other

Number

51 Financial institution identification Type

52 Financial institution's role in transaction Selling location Paying location Both

*53 Legal name of financial institution Unknown

54 Alternate Name, e.g., AKA - individual or trade name, DBA - entity

*55 TIN 56 TIN type Unknown

*57 Address Unknown

*58 City

59 State

Unknown

*60 ZIP/Postal Code Unknown

62 Internal control/file number

63 Loss to financial institution $

Branch where activity occurred information If no branch activity involved, check this box

*61 Country

.00

Unknown

Both Paying location Selling location 64 Branch's role in transaction

65 Address of branch or office where activity occurred

Branch Information

67 City 66 RSSD Number

69 ZIP/Postal Code 68 State *70 Country



Page 4 of 7

Part I Subject Information of 11

2 Check: if entity, if all critical* subject information is unavailable (Does not include item 24)

*3 Individual's last name or entity's legal name Unknown

*4 First name Unknown


Suffix Gender

*16 Date of birth Unknown

6 Alternate name, e.g., AKA - individual or trade name, DBA - entity

7 Occupation or type of business

7a NAICS Code

*13 TIN 14 TIN type Unknown

18 Phone number Ext. 17 Type

19 E-mail address

19a Website (URL) address

20 Corroborative statement to filer? 25 Subject's role in suspicious activity

Subject Address Information

*8 Address Unknown

*12 Country

*9 City

*11 ZIP/Postal Code *10 State

Unknown

Unknown

Unknown Unknown

*15 Form of identification for subject Unknown

Type

Country Number Issuing State

21 Relationship of the subject to an institution listed in Part III or IV (check all that apply)

Institution TIN

Accountant

Agent

Appraiser

Attorney

Borrower

Customer

Director

Employee

No relationship to institution

Officer

Owner or Controlling Shareholder

Other

22 Status of relationship 23 Action date

a b

c

d

e

f

g

h

i

j

k

l

z

*24 Financial institution TIN and account number(s) affected that are related to subject No known accounts involved

Institution TIN Non-US Financial Institution

account number Closed? Yes


Page 5 of 7


Part II Suspicious Activity Information

*26 Amount involved in this report Amount Unknown No amount involved .00

*27 Date or date range of suspicious activity for this report

$

ToFrom

28 Cumulative amount (only applicable when "Continuing activity report" is checked in Item 1) .00When completing item 29 through 38, check all that apply

$

29 Structuring

Alters transaction to avoid BSA recordkeeping requirement

Alters transaction to avoid CTR requirementCustomer cancels transaction to avoid BSA reporting and recordkeeping requirementsMultiple transactions below BSA recordkeeping threshold

Multiple transactions below CTR threshold

Suspicious inquiry by customer regarding BSA reporting or recordkeeping requirements

Other

a

b

c

d

e

f z

30 Terrorist Financing

Known or suspected terrorist/terrorist organization Otherza

31 Fraud (Type)ACH

Business loan

Check

Consumer loan

Credit/Debit card

Healthcare

Mail

Mass-marketing

Pyramid scheme

Wire

Other

a

b

c

d

e

f

g

h

i

j

z

32 Casinos

Inquiry about end of business day

Minimal gaming with large transactions

Suspicious intra-casino funds transfers

Suspicious use of counter checks or markers

Other

a

b

c

d

z

33 Money Laundering

Exchange small bills for large bills or vice versa

Suspicion concerning the physical condition of funds

Suspicion concerning the source of fundsSuspicious designation of beneficiaries, assignees or joint ownersSuspicious EFT/wire transfers

Suspicious exchange of currencies

Suspicious receipt of government payments/benefits

Suspicious use of multiple accounts

Suspicious use of noncash monetary instruments

Suspicious use of third-party transactors (straw-man)

Trade Based Money Laundering/Black Market Peso Exchange

Transaction out of pattern for customer(s)

Other

a

b

c

d e

f

g

h

i

j

k

l

z

34 Identification/Documentation

Changes spelling or arrangement of name

Multiple individuals with same or similar identities

Provided questionable or false documentation

Refused or avoided request for documentation

Single individual with multiple identities

Other

a

b

c

d

e

z

Other

Unlicensed or unregistered MSB

Unauthorized electronic intrusion

Two or more individuals working together

Transaction with no apparent economic, business, or lawful purpose

Suspicious use of multiple transaction locations

Suspicious use of informal value transfer system

k

l

m

n o p

q

r

z

Suspected public/private corruption (foreign)

Suspected public/private corruption (domestic)

Misuse of position or self-dealingMisuse of “free look”/cooling-off/right of rescission

Little or no concern for product performance penalties, fees, or tax consequences

Identity theft

Forgeries

Embezzlement/theft/disappearance of funds

Elder financial exploitation

Counterfeit instruments

Bribery or gratuitya

b

c

d

e

f

g

h i

j

Account takeover

35 Other Suspicious Activities


Page 6 of 7


36 Insurance

Excessive insurance

Excessive or unusal cash borrowing against policy/annuity

Proceeds sent to or received from unrelated third party

Suspicious life settlement sales insurance (e.g.,STOLI’s, Viaticals)

Suspicious termination of policy or contract

Unclear or no insurable interest

Other

a

b

c

d

e

f

z

37 Securities/Futures/Options

Insider trading

Market manipulation/wash trading

Misappropriation

Unauthorized pooling

Other

a

b

c

d

z

38 Mortgage Fraud

Appraisal fraud

Foreclosure fraud

Loan Modification fraud

Reverse mortgage fraud

Other

a

b

c

d

z

39 Were any of the following product type(s) involved in the suspicious activity? (Check all that apply)

Bonds/Notes

Commercial mortgage

Commercial paper

Credit card

Debit card

Forex transactions

Futures/Options on futures

Hedge fund

Home equity loan

Home equity line of credit

Insurance/Annuity products

Mutual fund

Options on securities

Penny stocks/Microcap securities

Prepaid access

Residential mortgage

Security futures products

Stocks

Swap, hybrid, or other derivatives

Other (List below)

a

b

c

d

e

f

g

h

i

j

k

l

m

n

o

p

q

r

s z

40 Were any of the following instrument type(s)/payment mechanism(s) involved in the suspicious activity? (Check all that apply)

Bank/Cashier's check

Foreign currency

Funds transfer

Gaming instruments

Government payment

Money orders

Personal/Business check

Travelers checks

U.S. Currency

Other (List below)a

b

c

d

e

f

g

h

i

z

41 Commodity type (If applicable)

42 Product/Instrument description (If needed)

43 Market where traded i

44 IP address (If available)

® 45 CUSIP number


Page 7 of 7


Part V Suspicious Activity Information - Narrative*

SECTION 9 Anti-Money Laundering Compliance Program

Documentation Organization Charts

9.1Revised on: 02-25-16Printed on: 06-15-16

- Compliance Manual / Reference Materials- AML Independent Review File*- Compliance Training File- BSA CTR File - all stores- BSA SAR File - all stores- BSA Monitoring File (SAR/SAM Activity)

- BSA Money Order File - store specific - BSA Money Order File - store specific- BSA SAR File - store specific - BSA SAR File - store specific

* File is a generic term given to the manor in which the Company keeps BSA-related documentation.

Employee Handbook Employee HandbookEmployee Handbook Employee Handbook Employee Handbook Employee Handbook

CFSC Chicagoland Check-Cashing CompaniesAnti-Money Laundering Compliance Program

Employee A2Employee A1 Employee A3

Documentation Organization Chart - Overview

Store A Store B

This chart depicts the overall organizational structure of the Program with regards to AML compliance documentation. The following sheet describes, in further detail,

records kept at each location.

Employee B2

Compliance Officer

Employee B1 Employee B3

Headquarters / Monitoring Location

Compliance Consultant

9.2Revised on: 02-25-16Printed on: 06-15-16

Headquarters / Monitoring Location Store

Compliance Officer Store Manager

Compliance Consultant BSA Money Order File (store specific)Federal Report

Compliance ManualIntroduction BSA SAR File (store specific)Compliance Policy Statement BSA WorksheetsCorporate Resolution Supporting documentationDesignation of Compliance PersonnelCustomer Identification Program Procedures

AML Compliance Program Risk AssesmentAML Compliance Program ProceduresAML Compliance Program Documents / FormsAML Compliance Program Documentation Organization ChartsProtection of Consumer Privacy Compliance Program ProceduresRed Flags Rule Compliance Program Procedures

Office of Foreign Assets Control Compliance Program ProceduresCompliance Training ProceduresEmployee Compliance HandbookContact Information

AML Independent Review FileIndependent review reportsCorrespondence / memos pertaining to results

BSA Monitoring FileMoney order monitoring reportsMoney transfer monitoring reportsCheck cashing monitoring reportsAdditional monitoring documentation

BSA CTR File (all stores)BSA WorksheetsCurrency Transaction Reports (filed)

BSA SAR File (all stores)BSA WorksheetsSuspicious Activity Memorandums

Suspicious Activity Reports (filed)Supporting documentation

Compliance Training FileEmployee test resultsAdditional training documentation

* File is a generic term given to the manor in which the Company keeps BSA-related documentation.

Documentation Organization Chart - Detail

CFSC Chicagoland Check-Cashing CompaniesAnti-Money Laundering Compliance Program

SECTION 10 Protection of Consumer Privacy


10.1


PROTECTION OF CONSUMER / CUSTOMER PRIVACY COMPLIANCE PROGRAM PROCEDURES

Collecting Nonpublic Personal Information for Other than Borrowers Because Company conducts business with persons defined as “consumers”, not “customers”, and disclosures to non-affiliated third parties are only made as permitted by law (under Sections 313.14 and 313.15 of the Privacy Rule), a privacy notice is not necessary. Consumers’ nonpublic personal information (“NPI”) may be collected, during a transaction, as part of business procedures; it is always collected (or verified) in correlation with transactions requiring recording or reporting under the Bank Secrecy Act. Collecting Nonpublic Personal Information for Borrowers Because Company conducts business with customers during a loan transaction, a privacy notice is necessary. Customers’ NPI may be collected, during the processing of a loan transaction, as part of business procedures. Company’s privacy policy disclosure is printed on all loan agreements (see Appendix A of Section 5). Each customer executes each agreement, which includes the Privacy Policy Disclosure section, indicating the borrower has received and read and agrees to Company’s privacy policy. Verifying, Releasing and/or Sharing Nonpublic Personal Information It shall be Company policy to gather customers’ nonpublic personal information for Company use only. Disclosures to affiliated parties are only used for purposes of conducting business with a particular customer. Disclosures to non-affiliated third parties are only made as permitted by law under Sections 313.14 and 313.15 of the Privacy Rule. Customers’ nonpublic personal information is not, in any way, sold for marketing or other purposes. Maintaining Nonpublic Personal Information

Paper Records

• All paper records containing customers’ non-public personal information shall be retained in an entirely enclosed and secure area inaccessible to unauthorized persons.

10.2


Digital Records

• All computer records shall be maintained on a computer protected from unauthorized access through a variety of means including:

o employee passwords

o anti-virus software

o operating system firewall

Discarding/Destroying Nonpublic Personal Information In the event that a customer’s nonpublic personal information is no longer to be maintained, designated management personnel shall do the following:

• Destroy all paper record(s) from any Company storage housing such record(s) by means of shredding or similar, irreversible destruction.

• Delete all electronic record(s) from any Company computer housing such record(s); if the company relinquishes a computer, designated management shall utilize a shredding program, reformat or physically destroy the hard drive.

Third Party Vendors It shall be Company policy to verify that all third party vendors who authenticate, store or have access to customers’ nonpublic personal information have established Gramm Leach Bliley Act policies and procedures. Company shall maintain, on file, for each vendor, confirmation such policies and procedures exist.

SECTION 11 Red Flags Rule


11.1


RED FLAGS RULE COMPLIANCE PROGRAM PROCEDURES

As per 16 CFR 681, Speedy Check Cashers, Inc. (hereafter, “SCC”) is not defined as a “financial institution” (as described below), but it is defined as a “creditor”, and, consequently, maintains “covered accounts”. As such, the Red Flags Rule applies to SCC. Definitions

1. financial institution – a state or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in Section 461(b) of Title 12) belonging to a consumer

2. credit and creditor – any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit

3. covered account – (i) an account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, such as a credit card account, mortgage loan, automobile loan, margin account, cell phone account, utility account, checking account, or savings account; and (ii) any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks

Identifying Potential “Red Flags” Red Flags are “a pattern, practice, or specific activity that indicates the possible existence of identity theft” in connection with a covered account. In identifying the pertinent Red Flags, SCC has considered certain risk factors, including:

1. the types of covered accounts it offers or maintains 2. the methods it provides to open its covered accounts 3. the methods it provides to access its covered accounts 4. its previous experiences with identity theft

SCC considers its single-payment (“payday”) loans covered accounts. Although loan applications may, on limited occasion, be started over the phone, SCC process loans, for customers, in person, via a brick-and-mortar storefront only. Consequently, all loans are made face-to-face. At the time of the transaction, employees collect/verify identification information by various means as described in the “Customer Identification Program Procedures” section of the Manual. All loan agreements are stored in a secured area within each location. The following is a list of potential “red flags”:

- physical break-in: damage to locks, broken glass, physical items misplaced/destroyed - robbery: loan documents or digital information stolen - irregular computer activity: computer controlled remotely, multiple, failed log-in attempts

11.2


Detecting Potential “Red Flags” SCC follows industry-standard procedures for verification of a customer’s identity on all credit applications. The customer’s name and other identifying information are entered into SCC’s point-of-sale systems, which are used to verify customer identification and maintain accurate computer records of all covered transactions with each customer. All new and existing covered accounts will be monitored for potential fraud and identity theft. With respect to existing covered accounts, SCC will, upon default on a loan, make efforts to contact the customer at the address(es) and number(s) provided to determine the cause for the default. All other SCC policies relative to such defaults will be observed. If the customer cannot be contacted, and it is believed that a fraud or identity theft has occurred, the Compliance Officer shall contact law enforcement or take such other action as may be necessary in accordance with SCC policies and procedures. Responding to Potential “Red Flags” Upon detection of a Red Flag, SCC will respond in a manner consistent with the objectives of Program. These responses range from monitoring an account to contacting law enforcement. The type of response is based on the type of Red Flag triggered and the level of risk involved. Below is a table that identifies relevant “Red Flags” and SCC’s proposed responses. Category Red Flags Identified Responses to Red

Flags 1. Alerts, Notifications

or Other Warnings from a Consumer Reporting Agency or Service Providers

• A recent and significant increase in the volume of inquiries.

• A material change in the use of credit, especially with respect to recently established credit relationships.

• Refuse to open account.

• Close existing account.

• Contact law enforcement, if appropriate.

11.3


2. Presentation of Suspicious Documents

• Documents that seem to be forged or manipulated.

• The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identifying information.

• Other information on the identification is not consistent with readily accessible information that is on file, such as a previously signed note or a recent check.

• Refuse to open an account.

• Contact law enforcement if appropriate.

3. Suspicious Personal Identifying Information

• Personal identifying information that is inconsistent with external sources used (e.g., SSN has not been issued, or is listed on the Social Security Administration’s Death Master File).

• Personal identifying information provided by customer is inconsistent with other personal identifying information provided by customer or on file (e.g., lack of correlation between SSN range and date of birth)

• Personal identifying

• Refuse to open an account.

• Contact customer with request for satisfactory explanation and/or additional identifying information.

• Contact law enforcement if appropriate.

11.4


information provided is associated with known fraudulent activity as indicated by internal or third-party sources.

• The SSN provided is the same as that submitted by other persons opening an account or other customers.

4. The Unusual Use of, or Suspicious Activity Related to a Covered Account

• A covered account is used in a manner that is not consistent with established patterns of activity on the account (e.g., non-payment when there is no history of late or missed payments).

• Mail sent to the customer is returned repeatedly as undeliverable, although transactions continue to be conducted with the customer’s covered account.

• Monitor account.

• Contact customer.

• Close existing account

• Refuse to open a new account.

5. Notice from Customers, Victims of Identity Theft, Law Enforcement or Other Authorities re: Possible Identify Theft in Connection with Covered Accounts

• Notification by customer, a victim of identity theft, a law enforcement authority or any other person that it has opened a fraudulent account for a person engaged in identity theft.

• Close existing account.

• Contact law enforcement, if appropriate.

The Red Flags Rule also may be applicable in connection with the SCC’s engagement of service providers if the service providers perform an activity that is deemed to involve one or more covered accounts. SCC

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will take appropriate steps to ensure that the activity of service providers is conducted in accordance with reasonable policies and procedures designed to detect, prevent, and mitigate the risk of identity theft. Updating the Red Flags Identity Theft Prevention Program SCC recognizes that identity theft risks change over time. As such, SCC will update the Program periodically to reflect appropriate changes in risk to customers or to the safety and soundness of SCC from identity theft. Factors to be considered in updating the Program include:

• The experiences of the financial institution or creditor with identity theft. • Changes in methods of identity theft. • Changes in methods to detect, prevent, and mitigate identity theft. • Changes in the types of accounts that the financial institution or creditor offers or maintains. • Changes in the business arrangements of the financial institution or creditor, including mergers,

acquisitions, alliances, joint ventures, and service provider arrangements. In the event that there are significant incidents of identity theft, the Compliance Officer will investigate the facts and circumstances causing the Red Flags to be triggered and will document his/her findings to the Board of Directors with recommendations. The Board of Directors will subsequently adopt additional policies and procedures, as necessary, based on the recommendations of the Compliance Officer.

11.6


RED FLAGS PROGRAM IDENTITY THEFT INCIDENT REPORT

The purpose of this Incident Report is to document possible incidents of identity theft involving covered accounts as defined in the Red Flags Rule. Employees are required to complete this form whenever a “Red Flag” is detected. The form should be completed on the date of the incident. This report will assist the Compliance Officer and senior management in evaluating the overall effectiveness of Program and will be considered in improving the SCC’s response to future incidents of identity theft.

1. What type of covered account was involved? ________________________________________________________________________ ________________________________________________________________________

2. Identify which Red Flags were triggered.

________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

3. Describe how the potential identity theft was detected.

________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

4. How did you respond to the possible incident of identity theft? (Check all that apply.)

Closed Account Refused to Open Account Contacted Customer for Additional Information Requested Additional Documentation from Customer Contacted Law Enforcement Referred to the Compliance Officer/Reds Flags Manager No Response Warranted Other ___________________________

Provide a narrative description of how the SCC responded to the possible incident of identity theft. (If law enforcement was contacted, please indicate the agency contacted and the name and contact information (including telephone number) for the person with whom you spoke). ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________

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Name of Person Making Report: _____________________________ Date Completed: ___________ Title/Position:_____________________________________________ Signature: _______________________________________________ Name of Compliance Officer: ___________________________ Date Reviewed: __________________________ Signature: __________________________________________

SECTION 12 Office of Foreign Assets Control

Requirements Compliance Program Procedures

12.1


OFFICE OF FOREIGN ASSETS CONTROL COMPLIANCE PROGRAM PROCEDURES

The Office of Foreign Assets Control is responsible for administering and enforcing economic and trade sanctions against targeted foreign countries, terrorists, drug traffickers, and those engaged in the proliferation of weapons of mass destruction. It prohibits conducting transactions with any person whose name appears on a list of known terrorists and criminals maintained by OFAC and other entities. This list is known as the Specially Designated Nationals (SDN) list. The SDN list can be found via the OFAC website: http://www.treas.gov/offices/enforcement/ofac/sdn/ Transactions Conducted Under a Registered Customer Upon the initial check-cashing transaction a customer conducts at a Company store, and upon other types of transactions management determines Company employees should register customers for, Company employees shall enter all required identification information into the point-of-sale system. Employees shall check the SDN list (updated, automatically, daily) by clicking the appropriate button. The system notifies the employee of a possible match. In the event that the name is not found on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. In the event that the name is found on the SDN list, the employee shall call the Compliance Consultant, and work with the Compliance Consultant to resolve the issue. If, upon reasonable investigation, it is determined that the consumer attempting to conduct the transaction is not the individual listed on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. If, upon reasonable investigation, it can not be determined that the consumer attempting to conduct the transaction is not the individual listed on the SDN list, the employee shall terminate the transaction. The employee shall refund the consumer all monies and relinquish all documents collected during the transaction. The Compliance Consultant shall then contact the Compliance Officer to determine whether contacting OFAC to report the attempted transaction is necessary; regardless of the outcome, the Compliance Consultant shall document the occurrence fully. If, upon reasonable investigation, the consumer’s information matches the information provided in the SDN list, the employee shall terminate the transaction. Provided safety is not in jeopardy, the employee shall retain all monies and documentation collected during the transaction. If necessary, the Compliance Consultant shall contact local law enforcement. The Compliance Consultant shall contact the Compliance Officer to discuss the matter. The Compliance Officer shall contact OFAC to report the attempted transaction, following instruction appropriately. If necessary, the Compliance Officer shall seek legal counsel to determine the appropriate course(s) of action, including how to hold the consumer’s assets (if applicable). Finally, the Compliance Officer shall document the occurrence fully.

http://www.treas.gov/offices/enforcement/ofac/sdn/�

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Money Transfer Transactions Because money transfer transactions are checked against the SDN list by our money transmitting company, procedures for checking consumers against this list shall be synonymous with those issued by our money transmitting company. Suspicious Activity It shall be Company policy to verify any consumer information obtained against the SDN list whenever an employee feels a transaction (either completed or terminated) is or was suspicious. Employees shall follow suspicious activity procedures outlined in the anti-money laundering section of this manual. The Compliance Consultant shall then verify consumer information against the SDN list by means of an online, commercial service providing such capability. If the individual being investigated matches the individual on the SDN list, the Compliance Consultant shall contact the Compliance Officer to discuss the matter. If the Compliance Officer determines it appropriate, the he/she shall contact OFAC immediately and follow direction appropriately (communicating with legal counsel if necessary); otherwise, the Compliance Consultant shall note the “hit” within the Suspicious Activity Report narrative or suspicious activity memorandum. If the individual being investigated does not match an individual on the SDN list, the Compliance Consultant shall note the as such within the Suspicious Activity Report narrative or suspicious activity memorandum. The Compliance Officer (with the aid of outside consultants) shall remain knowledgeable of current interpretations and rulings with regards to such matters, and, if necessary, shall seek legal counsel for further clarification, and effect appropriate changes to these OFAC Compliance Policy Procedures. Loan Transactions (Speedy Check Cashers, Inc.) Upon the initial loan transaction a customer conducts at a SCC store, Company employees shall enter all required identification information into the point-of-sale system. The point-of-sale system automatically checks the SDN list (updated by our software provider) whenever our employee conducts a transaction under a registered customer. The system notifies the employee of a possible match. In the event that the name is not found on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. In the event that the name is found on the SDN list, the employee shall call the Compliance Consultant, and work with the Compliance Consultant to resolve the issue. If, upon reasonable investigation, it is determined that the consumer attempting to conduct the transaction is not the individual listed on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. If, upon reasonable investigation, it can not be determined that the consumer attempting to conduct the transaction is not the individual listed on the SDN list, the employee shall terminate the transaction. The employee shall refund the consumer all monies and relinquish all documents collected during the transaction. The Compliance Consultant shall then contact the Compliance Officer to determine whether contacting OFAC to report the attempted

12.3


transaction is necessary; regardless of the outcome, the Compliance Consultant shall document the occurrence fully. If, upon reasonable investigation, the consumer’s information matches the information provided in the SDN list, the employee shall terminate the transaction. Provided safety is not in jeopardy, the employee shall retain all monies and documentation collected during the transaction. If necessary, the Compliance Consultant shall contact local law enforcement. The Compliance Consultant shall contact the Compliance Officer to discuss the matter. The Compliance Officer shall contact OFAC to report the attempted transaction, following instruction appropriately. If necessary, the Compliance Officer shall seek legal counsel to determine the appropriate course(s) of action, including how to hold the consumer’s assets (if applicable). Finally, the Compliance Officer shall document the occurrence fully.

SECTION 13 Compliance Training Procedures

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COMPLIANCE TRAINING PROCEDURES Company management recognizes that employee training is crucial to the success of the Program. It shall be Company policy to train employees upon hire and no less than every eighteen (18) months thereafter. New Hire

Within sixty (60) days of the hiring of an employee, a designee of the Compliance Officer shall distribute a “CFSC Chicagoland Check-Cashing Companies Employee Compliance Handbook” (the “Compliance Handbook”) to the trainee, distribute a “CFSC Chicagoland Check-Cashing Companies Acknowledgement of Receipt of Compliance Handbook”, request the employee execute said document, and collect it. Within six (6) months of distribution of the handbook or before the newly-hired employee is permitted to conduct transactions without his/her trainer’s supervision (whichever comes first), the designee will distribute a “CFSC Chicagoland Check-Cashing Companies Acknowledgement of Understanding of Compliance Handbook”, request the employee execute said document, and collect it.

Within one (1) month of execution of the “CFSC Chicagoland Check-Cashing Companies Acknowledgement of Understanding of Compliance Handbook”, the employee will complete an online training course. Said course will include review of BSA/AML and OFAC laws, regulations, and requirements. Upon completion of the course, the employee will participate in the online examination. If the employee passes (80% or higher), the employee will receive a certification of achievement documented his/her score. If the employee fails (lower than 80%), the employee will retake the course until he/she receives a passing grade. If the employee fails (lower than 80%) more than three (3) times, the Compliance Officer will review incorrect answers with the employee and determine if the employee is permitted to conduct high-dollar (BSA-related) transactions.

Refresher

Not less than every eighteen (18) months, the Compliance Officer shall determine the best method of refresher training for all employees capable of conducting transactions at Company stores. Methods may include distribution of employee compliance handbooks and testing, administration of an online training course and testing, distribution of compliance-related materials/articles (whereby employees will sign and date said materials/articles indicating they have read and understood the information therein), etc. Refresher training shall be documented, at minimal, containing employee name and date completed.

Each employee shall have at least one (1) completed examination (or equivalent), containing employee name, date, and score, showing said employee passed such an exam, on record, completed no less than once every three (3) years.

SECTION 14 Employee Federal Compliance Handbook

COMPLIANCE PROGRAM FOR ANTI-MONEY LAUNDERING, PROTECTION OF CONSUMER PRIVACY, AND OFFICE OF FOREIGN ASSETS CONTROL REGULATIONS AND REQUIREMENTS

EMPLOYEE COMPLIANCE HANDBOOK

NAME:

CFSC ChicagolandCheck-Cashing Companies


Federal Compliance Program

Employee Compliance Handbook

Version 9 Created 08/15

Revised 02/16 & 06/16


Employee Handbook

Table of Contents

SECTION 1: Introduction ............................................................................................. 2

SECTION 2: Laws and Regulations .............................................................................. 5

Bank Secrecy Act ........................................................................................................................ 5

Money Laundering Control Act .................................................................................................. 6

USA PATRIOT Act ..................................................................................................................... 6

Gramm Leach Bliley Act ............................................................................................................. 7

Office of Foreign Assets Control Requirements ........................................................................ 7

Penalties for Non-Compliance: Civil and Criminal Sanctions .................................................... 7

SECTION 3: Bank Secrecy Act Record-Keeping and Reporting ................................ 9

Money Order Transactions ........................................................................................................ 9

Money Transfer Transactions ................................................................................................... 13

Prepaid Card Transactions ....................................................................................................... 15

Online BSA Worksheet System ................................................................................................ 16

Getting Started ...................................................................................................................... 17 Submit a New BSA Worksheet ............................................................................................ 19 Modify/Lookup an Existing BSA Worksheet ........................................................................ 24

Currency Transaction Reports (CTRs) .................................................................................... 28

Suspicious Activity Reports (SARs) .......................................................................................... 31

SECTION 4: Gramm Leach Bliley Act Requirements .............................................. 34

SECTION 5: Office of Foreign Assets Control Requirements ................................. 36

SECTION 6: Conclusions ............................................................................................ 37

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SECTION 1: Introduction

This “CFSC Chicagoland Check-Cashing Companies Employee Federal Compliance Handbook” (hereafter, “Handbook”) is written for you, an employee of a CFSC check-cashing company. CFSC Chicagoland Check-Cashing Companies refers to the following entities:

• 147th & Cicero Currency Exchange, Inc. • 147th & Pulaski Currency Exchange, Inc. • 159th & Kedzie Currency Exchange • 31st & Morgan Check Cashers, Inc. • 31st & Wallace Currency Exchange, Inc. • 47th & Halsted Check Cashers, Inc. • 63rd & Kedzie Currency Exchange, Inc. • 67th & Stony Check Cashers, Inc. • 69th & Halsted Check Cashers, Inc. • 71st & Wentworth Currency Exchange, Inc. • 75th & Stony Island Currency Exchange, Inc. • Belvidere Greenbay Currency Exchange, Inc. • Chicago Heights Check Cashers, Inc. • Harlem & Milwaukee Currency Exchange, Inc. • Kimball & North Currency Exchange, Inc. • Lincoln Avenue Check Cashers, Inc. • Lincolnway Check Cashers, Inc. • Madison Harlem Currency Exchange, Inc. • Montrose Kimball Check Cashers, Inc.

• New 75th & Cottage Currency Exchange, Inc. • New Arlington Heights Currency Exchange, Inc. • New Blue Island Currency Exchange, Inc. • New Chicago State Currency Exchange, Inc. • New Fox Lake Currency Exchange, Inc. • New Grand & Greenbay Currency Exchange, Inc. • New Granville Broadway Currency Exchange, Inc. • New McHenry Currency Exchange, Inc. • New North & Austin Currency Exchange, Inc. • New Olympia Plaza Currency Exchange, Inc. • Northbrook Check Cashers, Inc. • Rockford's Best Currency Exchange, Inc. • Rolling Meadows Currency Exchange, Inc. • Speedy Check Cashers, Inc. • Washington-Lewis Currency Exchange, Inc. • Western & Lake Check Cashers LLC • Wilson Broadway Currency Exchange, Inc. • Woodstock Currency Exchange No. 2, Inc.

CFSC Chicagoland Check-Cashing Companies is simply a term management uses to provide uniformity among commonly-owned entities throughout the United States. All such related entities shall be referred to as the “Company”. As used throughout the Handbook, references to “we”, “us”, and “our” refer to the Company and its employees. Additionally, this Handbook shall be utilized to train employees of any new companies / locations owned or operated by the Company subsequent to the creation of this handbook. This handbook will help you understand federal regulations designed to prevent money laundering, protect consumer privacy and block terrorists and other criminals from gaining access to our financial system. It will explain what you need to do, as an employee, to meet government expectations as you handle customers’ transactions. After you have read and understood this Handbook, you should be able to answer the following questions:

• Who’s the Compliance Officer?

• How do I amend a previously-submitted BSA Worksheet?

• Do I have to submit a worksheet for money order transactions $3,000 or more?

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• Do I have to record money transfers of $3,000 or more even though I have to put all the customer’s information into the money transfer company computer?

• Do I have to follow any compliance requirements concerning prepaid cards?

• What is the Gramm Leach Bliley Act (GLBA), and what steps should you take to protect consumers’ privacy?

• Why do we have to be aware of Office of Foreign Assets Control (OFAC) requirements?

If you have additional questions regarding compliance after this training session, contact your store manager, the CFSC Compliance Help Desk, or the Compliance Officer, Adam Lichtenfeld.

Compliance Officer: Adam Lichtenfeld 425 Huehl Rd. Bldg. 6A Northbrook, IL 60062 219-741-4303 (mobile) 866-682-5344 (fax)

CFSC Compliance Help Desk: (847) 509-6683 (phone) (866) 828-3285 (fax)

[email protected] (e-mail)

If you have received notice of a BSA/AML audit (IRS, vendor, or bank), it is very important that you forward the information to us as soon as possible (ASAP)! Fax the information to Adam Lichtenfeld (866-682-5344) AND the CFSC Compliance Help Desk (866-828-3285).

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Government (Bank Secrecy Act) Requirements, Company Requirements and Responsibilities as an Agent Throughout Section 3 (“Bank Secrecy Act Requirements”), we will talk about “thresholds”. Thresholds are dollar amounts above, or a range between, which a certain action is required. There are different thresholds for different types of transactions, as you will learn later in this Handbook. For example, the government’s threshold for obtaining and recording information pertaining to sending and receiving money transfers is $3,000.00. Whenever a customer sends or receives a money transfer of $3,000.00 or more, we must obtain certain information and keep record of it. Although the government’s threshold is $3,000 or more, the Company may establish a different threshold as long as that threshold falls within the law’s requirements. Both Western Union and MoneyGram established different thresholds to comply. As an agent of either Western Union or MoneyGram, Company stores are responsible for following Western Union or MoneyGram procedures. While the government’s threshold for information on customers sending or receiving money transfers is $3,000, Western Union requires identification for any transaction with a principal amount of $1,000 or more. At $3,000, Western Union requires additional information, and at $7,500, you are required to contact a Western Union representative to discuss the money transfer. MoneyGram requires customer information at $900. It is important that you follow the law, Company policy and Western Union or MoneyGram policy. This Handbook will discuss these requirements as they relate to the Bank Secrecy Act. Why this Handbook is Important We can expect the government to look closely at our operations to ensure that we have implemented the programs required for compliance with the laws. The government has demonstrated the ability and willingness to assess civil and criminal penalties against financial institutions that violate the law. This Handbook is a part of the Company’s Compliance Program. As an employee of the Company, it is your responsibility to study this Handbook and become familiar with the basic reporting requirements of the Bank Secrecy Act as well as your obligation to protect customers’ privacy and assure transactions conducted at your store are with legitimate, law-abiding customers. It will help you understand government expectations as you handle customers’ transactions.

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SECTION 2: Laws and Regulations

Bank Secrecy Act In 1970, Congress passed what has now become known as the Bank Secrecy Act (BSA) to combat money laundering activities of drug dealers. More recently, the laws have been strengthened to assist in the identification and seizure of terrorist funds, including provisions that directly impact money services businesses (MSBs).

What Is Money Laundering The Bank Secrecy Act regulations help prevent money laundering. Understanding how people launder money will help you realize why following BSA regulations can help prevent it, and recognize money laundering if it should occur. There are many definitions of money laundering, but one of the most widely accepted definitions is also the most simple, and most complete: Money laundering is the attempt to conceal or disguise the nature, location, source, ownership, or control of money. Notice that this definition covers more than just cash transactions. Laundering can involve any type of money. Money transfers, money orders, personal or business checks, or traveler’s checks; they can all be instruments used for laundering money. Traditionally, when we think of money laundering, drug dealers or mobsters come to mind. Generally, the proceeds being laundered are acquired illegally, and the money launderers are attempting to make them appear legitimate. More recently, as a result of the September 11, 2001 terrorist attacks, there has been a greater focus on another type of financial crime – the illegal use of foreign money to finance terrorist activity in the United States. This type of activity is unique in that it can be legally acquired funds used for illegal purposes. There are three stages to money laundering:

1. Placement – Illegal funds enter the financial system. 2. Layering – Illegal funds are “washed” through several transactions using different monetary

instruments, wiring funds in and out of the country, etc. 3. Integration – Illegal funds now seem legitimate and are used to purchase assets.

Money services businesses include check cashers, money transmitters, sellers or issuers of monetary instruments, and currency dealers or exchangers.

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Record-Keeping and Reporting Requirements The Bank Secrecy Act regulations require MSBs to record certain money order, money transfer and currency exchange transactions. The act also mandates MSBs to report certain large currency transactions on a Currency Transaction Report (CTR) (form) and report suspicious transactions suspected of involving money laundering or other financial crimes by means of a Suspicious Activity Report (SAR) (form).

Money Laundering Control Act The Money Laundering Control Act of 1986 makes it illegal for you to conduct financial transactions under any circumstances knowing that the funds used in the transaction were attained illegally. The phrase “financial transactions” covers any type of transaction you would conduct in a check cashing business. The subsequent regulations officially classified money laundering as a federal crime. What does knowledge mean? If you conduct the transaction to promote any unlawful activity, or knowing that the transaction is meant to conceal some type of unlawful activity, you may be in violation of the law.

For this reason, if you are at all hesitant about a transaction, you should immediately discuss the transaction with your manager before you complete the transaction. Suspicious activity will be discussed (in greater detail) later in the handbook.

USA PATRIOT Act Under the USA PATRIOT Act of 2001, all MSBs must implement a formal anti-money laundering compliance program in order to ensure that the Bank Secrecy Act requirements are being followed.

All records required under this act must be maintained for a period of five (5) years.

You cannot choose to ignore the circumstances surrounding a transaction and then claim that you did not know anything about the transaction. If you intentionally fail to inquire about a transaction that makes you suspicious, the government may claim that you knew the transaction involved unlawful activity. This is known as willful blindness.

The Bank Secrecy Act defines a person as an individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities recognizable as legal personalities.

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Key elements of a comprehensive anti-money laundering compliance program (as outlined in Section 352 of the USA PATRIOT Act) include:

• Detailed policies and procedures regarding transactions related to anti-money laundering regulations

• Designation of a Compliance Officer • Outline of new-hire and refresher training with respect to anti-money laundering

requirements • Description of both monitoring and auditing functions

The training conducted using this handbook is part of the company’s compliance program.

Gramm Leach Bliley Act As a result of the growing concern for the protection of personal information, Congress passed the Gramm Leach Bliley Act. The two rules stemming from this act, the Financial Privacy Rule and the Safeguards Rule, require financial institutions (this category includes MSBs) to disclose certain information to customers, and retain their “nonpublic personal information” (i.e. Social Security number, driver’s license number, etc.) in a certain manor. A privacy notice is not necessary because we conduct business with consumers not defined as customers, and we share consumers’ information only as permitted/required by law. Additionally, we are required to implement certain safeguards and follow certain procedures when collecting, retaining and relinquishing consumers’ information.

Office of Foreign Assets Control Requirements The Office of Foreign Assets Control (OFAC) is responsible for administering and enforcing economic and trade sanctions against targeted foreign countries, terrorists, drug traffickers, and those engaged in the proliferation of weapons of mass destruction. It requires MSBs to compare the names of customers who conduct certain transactions against a list of known terrorists and criminals maintained by OFAC and other entities. These requirements originated from executive powers enacted after the September 11th, 2001 terrorist attacks.

Penalties for Non-Compliance: Civil and Criminal Sanctions We can expect the government to look closely at our operations to ensure that we have implemented the programs required for compliance with the laws. The government has demonstrated the ability and willingness to assess civil and criminal penalties against financial institutions that violate the law. The following page contains a table of certain penalties for committing Bank Secrecy Act violations. Remember – the government can fine us for violating any of the aforementioned laws/requirements, not only those related to the Bank Secrecy Act.

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Civil Penalties

Violation Penalties

Negligence Up to $500.00 per violation

Pattern of Negligence Up to $50,000.00 in addition to any other penalties

Willful Violation of Structuring Statute

An amount not to exceed the amount of currency involved in the transaction, less any amount already forfeited

Willful Violation of Reporting Requirements

An amount up to the greater of the amount (not to exceed $100,000.00) involved in the transaction, or $25,000.00. The maximum penalty under this provision is $100,000.00 per count, and the minimum penalty is $25,000.00 per count.

Criminal Penalties

Violation Penalties

Structuring, Failure to Report, Failure to File, and Filing False Reports

Minimum sentence is probation to imprisonment for 6 months (assuming no prior history). The court can increase the sentence substantially, depending on the amount of funds involved. For instance, if the amount of funds involved in the violation totaled $50,000.00, the Court could increase the base sentence range to between 8-14 months. For $600,000.00, the range increases to between 21-27 months. In addition to the sentence enhancement caused by the amount of money involved, if the defendant knew or believed the funds were proceeds of unlawful activity, the Court can increase the sentence two more levels, which could add 12 or more months to the sentence. Under sentencing guidelines, a person serves the full term of the sentence. Probation is not allowed.

Willful Violations of Reporting Requirements

Fine of up to $250,000.00 per violation and/or prison sentence of up to 5 years

Willful Violation of Reporting Requirements In Furtherance of a Violation of Other Laws


Willful Violation of Reporting Requirements As a Part of a Pattern of Violations


Making False, Fictitious Or Fraudulent Statements


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Multiple money order transactions occur when a person conducts two or more money order transactions by or on behalf of the same person during the same business day. None of the transactions are $3,000.00 or more individually, however, collectively they add up to $3,000.00 or more. Consequently, appropriate information needs to be recorded.

SECTION 3: Bank Secrecy Act Record-Keeping and Reporting

Money Order Transactions When to Obtain Information for Certain Money Order Transactions Please recall the difference between government requirements and Company requirements.

In order to know whether or not you need to record or confirm identification and record transaction information when you sell money orders, simply answer the following questions:

1. Does the transaction involve the sale of money orders? (If so, go on to the next question)

2. Does the transaction involve the sale of money orders totaling $3,000.00 or more?

3. Is the purchase of money orders one of several purchases by or on behalf of the same person, during the same day, when added together total $3,000.00 or more?

If your answers to 1 and either 2 or 3 are yes, you must record identification and transaction information.

Information Required for Certain Money Order Transactions The Company requires the following identification information be recorded for all money order transactions of $3,000 or more:

Individual

o name (first, middle initial, and last) o address o country (if other than U.S.) o date of birth o identification document issuer o identification document type o identification document number o taxpayer identification number, such as Social Security number (SSN) or

Individual Taxpayer Identification Number (ITIN)

The government requires the Company to record information for any money order transaction between $3,000.00 and $10,000.00 [inclusive]. The Company requires employees to record information for any money order transaction of $3,000 or more.

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Note: The government requires that you obtain a valid drivers license, military identification card, passport, State issued identification card, non-resident alien identification card, or other form of acceptable identification showing name, address and, if other than the U.S., country of origin. Please check with your manager if you are unsure about acceptable forms of identification documentation. Note: If two or more people are conducting the transaction, you need to obtain the same information for those persons as well. Business/Organization/Other Entity (when applicable)

o name (complete) o address o country (if other than U.S.) o taxpayer identification number, such as Employer Identification Number (EIN) or Social

Security number (SSN) (if sole proprietor without employees) o type/description

The Company requires the following transaction information be recorded for all money order transactions of $3,000.00 or more:

o money order numbers o money order amounts o transaction date

Procedures for Recording Certain Money Order Transactions It is important that you enter all, related, money-order purchases, into the point-of-sale (POS) system, as one transaction. (e.g. The customer requests eight (8) $500 money orders.) Additionally, it is equally as important to be aware (to the extent possible) of customers purchasing money orders at different times. (e.g. A customer purchases $2,000 worth of money orders and, two hours later, returns to purchase $2,000 more.) Single Transactions

1. If the customer purchases a single money order in an amount of $3,000 or more, or multiple money orders that, when added together, total $3,000 or more, enter all identification information into POS system “Federal Report”. (The system will automatically prompt you for information.)

2. If the transaction involves suspicious activity, make copies of all documents involved in the transaction, including:

a. identification document(s): driver’s license(s), state/military/school identification card(s), passport(s), etc.

b. transaction document(s): check(s), money order(s), money transfer form(s), etc.

3. If the transaction involved additional recordable activity and/or reportable activity, follow the appropriate procedures.

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Multiple Transactions To the best of their ability, we shall identify and record multiple money order transactions, conducted by or on behalf of the same person, during the same business day. If such activity is detected, during the course of the current/active transaction, you should:

1. Open the “Maintenance” menu within the MOPS counsel.

2. Select “Federal Report”, clicking on “Add Federal Report” in the sub-menu

3. Add all customer identification information in the first (of three) tab(s)

4. If necessary, add additional customer identification information (for a second customer) or business identification information in the second tab

5. Select the money order (or money orders) associated with the transaction by clicking on “Add” and typing in the appropriate money order number

6. If the transaction involves additional recordable or reportable activity, follow the appropriate procedures accordingly.

Additionally, in the event that an entry on the Federal Report was missed, and any information is available, follow the procedures for multiple transactions.

OR

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Money Transfer Transactions When to Obtain Identification for Certain Money Transfer Transactions Please recall the difference between agent requirements and Company requirements.

Western Union or MoneyGram, however, requires you to collect information at various thresholds. As an agent of Western Union or MoneyGram, you must follow their procedures. Information Required for Certain Money Transfer Transactions The Company requires the following identification information be recorded for all money transfer transactions of $3,000.00 or more:

Individual


Individual Taxpayer Identification Number (ITIN) Note: The government requires that you obtain a valid drivers license, military identification card, passport, State issued identification card, non-resident alien identification card, or other form of acceptable identification showing name, address and, if other than the U.S., country of origin. Please check with your manager if you are unsure about acceptable forms of identification documentation. Note: If two or more people are conducting the transaction, you need to obtain the same information for those persons as well. Business/Organization/Other Entity (when applicable)



The government requires the Company to record information for any money transfer transaction of $3,000.00 or more. Company requirements and government requirements are the same.

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The Company requires the following transaction information be recorded for all money transfer transactions of $3,000.00 or more:

o money transfer identification number(s) o money transfer amount(s) o transaction date

Procedures for Recording Certain Money Transfer Transactions In the event that a single money transfer transaction of $3,000 or more takes place, all information required to be maintained under the Bank Secrecy Act is collected and entered into the money transfer company computer. Said information is available via the money transfer company. Consequently, Company employees shall focus on completing a BSA Worksheet whenever a money transfer may require a CTR and/or SAR filing. Whenever a money transfer (or multiple money transfers) is part of a transaction of $10,000.00 or more, or whenever a money transfer (or multiple money transfers) is involved in suspicious activity (regardless of dollar amount), Company employees shall complete a BSA Worksheet. Please see the Currency Transaction Reports and Suspicious Activity Reports sections later in this handbook for appropriate CTR and SAR procedures. Finally, if the transaction involved additional recordable activity, follow the appropriate procedures.

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Prepaid Card Transactions The Financial Crimes Enforcement Network issued guidance, in July 2011, concerning prepaid cards. Formerly called “stored value cards”, prepaid card transactions will be subject to Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) filing. Unlike money orders or money transfers, however, there is no recording threshold. These requirements should be familiar to us – it has always been company policy to create a BSA Worksheet for any transaction (or combination of transactions) of $10,000 or more, and we create a BSA Worksheet for any transaction (regardless of dollar amount or type) we think is suspicious. Consequently, you don’t need to do anything you don’t already do! For instructions on completing BSA Worksheets for CTR and SAR-related transactions, please refer to the following sections.

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Online BSA Worksheet System As you may be aware, the Company uses an online database, the “Online BSA Worksheet System”, which serves as the primary tool for submitting BSA-related reportable transactions. The Company uses the Online BSA Worksheet System for the following types of transactions: 1. transactions of $10,000 or more 2. transactions deemed suspicious The Company will not use the system to record money order or money transfer transactions of $3,000 or more (as you learned in previous sections). On the following pages, we will discuss the basics of using the system as well as tips on how to use the system more effectively.

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Getting Started First, you must open a new page in your browser. Before you can (digitally) submit a BSA Worksheet, you must log into the system using a specific username and password provided by CFSC.1

Log in information is provided for each store. If you float between stores, please make sure you use the log in information for the store you are at! If you use the user name and password for an alternate store, it will put the wrong store information at the bottom of the worksheet!

1 If you have not received or have forgotten your username and/or password, or for other help with the online system, please call the Compliance Officer.

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Once you have properly logged into the BSA Worksheet System, you will be directed to the home page where you can submit a new worksheet or modify an existing one:

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Submit a New BSA Worksheet When you are ready to submit a new BSA Worksheet, click on “Submit a New BSA Worksheet”. Once you have clicked on “Submit a New BSA Worksheet” the following screen will appear:

You must now determine whether the customer who you are completing the BSA Worksheet for has a Social Security Number (SSN) or, if on behalf of a business, an Employer Identification Number (EIN).

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If the customer has a SSN / EIN, select “Yes” and click the “Proceed to Next Step” button. Next, you must enter the customer’s SSN or EIN and click on “Proceed to Next Step” button:

If the customer has visited your store before, a radio button (or multiple buttons if he/she has conducted a transaction on behalf of one or more persons) will appear next to a description of that customer. Select the radio button next to the information you wish to use, and click the “Complete new BSA Worksheet” button:

A pre-filled BSA Worksheet, containing all customer identification information associated with the SSN/EIN entered on the previous page (entered during a previous BSA Worksheet submission) will appear.

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If the customer is new to your store, the button to continue will say “Complete new BSA Worksheet”:

Click the button, and you will come to a screen that looks like this:

Once you have entered all of the required information, click on the “Submit” button. A screen will indicate that we received your submission. Note: DO NOT print the BSA Worksheet before submitting it! Printed copies of the worksheet not printed after it is submitted look different; CFSC staff knows if worksheets were printed before submission! Note: If you do not get the “received submission” screen, call CFSC, on the CFSC Compliance Help Desk line, to confirm receipt of the worksheet! If we can not view it on our end, resubmit the worksheet.

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Note: If you are reporting suspicious activity, please print the worksheet, by looking it up (explained shortly). Please fax the worksheet, along with all supporting documentation pertaining to the suspicious activity, to the CFSC Compliance Help Desk fax (866-828-3285); then store it appropriately.

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If the customer does not have a SSN / EIN, select “No” and click the “Proceed to Next Step” button. You will be prompted with a blank BSA Worksheet containing “None” in the SSN field:

Complete the BSA Worksheet with the customer’s identification and transaction information according to Company procedures. Once you have entered all of the required information, click on the “Submit” button. A screen will indicate that we received your submission. Note: DO NOT print the BSA Worksheet before submitting it! Printed copies of the worksheet not printed after it is submitted look different; CFSC staff knows if worksheets were printed before submission! Note: If you do not get the “received submission” screen, call CFSC, on the CFSC Compliance Help Desk line, to confirm receipt of the worksheet! If we can not view it on our end, resubmit the worksheet. Note: If you are reporting suspicious activity, please print the worksheet, by looking it up (explained shortly). Please fax the worksheet, along with all supporting documentation pertaining to the suspicious activity, to the CFSC Compliance Help Desk fax (866-828-3285); then store it appropriately.

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Modify/Lookup an Existing BSA Worksheet From time to time, you may need to change a worksheet you’ve already submitted or reference it for one reason or another. You can do this by using the “Modify/Lookup an Exiting BSA Worksheet” function. After you log in, choose “Modify/Lookup an Exiting BSA Worksheet”. You will come to a screen like this:

You may enter any information that you know to look up the particular worksheet. Note: You must enter (at minimum) “Transaction Period” – both from and to – or “Submission Period” – both from and to. If you leave the remaining fields/boxes blank/unchecked and click “View Transaction”, the database will return all BSA Worksheets, submitted for your store, during that time frame. As that number may be quite a lot, and it will take a long time to load the results, it’s recommended you select at least one field to fill in or box to check. The database will provide results (a list of BSA Worksheets) meeting the criteria you give.

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Here is an example of a search for SAR transactions – “SAR (any amount)” box checked – on 06/04/2013 – “Transaction Period” from 06/04/2013 to 06/04/2013):

The results list will automatically display the most current versions (often times, the only versions) of BSA Worksheets. If there is a history for a BSA Worksheet (i.e. it’s been modified), the history column will contain a “Y”. You can click on that “Y” to view prior versions. Note: You can not modify prior versions; you must update the most recent version of a worksheet by means of the returned results (not modification history). Click on “View Form” to view/print the previously-submitted form. Click on “Edit Form” to edit the previously-submitted form.

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Once you’ve loaded the worksheet using the “View Form” button, the screen will look like this:

Note the “Edit Form” button; you can go to the edit screen without having to re-look up the worksheet (in case you clicked “View Form” by mistake). Click this button if you want to modify the worksheet. The “Modify Form” screen looks just like it would for a typical worksheet:

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The bottom, however, is a little different:

Note the “Modify SSN” button. Because transactions/worksheets are linked by SSN, it is very important that SSN be changed only if absolutely necessary. Once you’ve modified the fields required, click “Submit Form”. Note: DO NOT print the BSA Worksheet before submitting it! Printed copies of the worksheet not printed after it is submitted look different; CFSC staff knows if worksheets were printed before submission! Note: If you do not get the “received submission” screen, call CFSC, on the CFSC Compliance Help Desk line, to confirm receipt of the worksheet! If we can not view it on our end, resubmit the worksheet. Note: If you are reporting suspicious activity, please print the worksheet, by looking it up (explained shortly). Please fax the worksheet, along with all supporting documentation pertaining to the suspicious activity, to the CFSC Compliance Help Desk fax (866-828-3285); then store it appropriately. If you have further questions about the system, please ask your store manager, Compliance Officer, or the CFSC Compliance Help Desk.

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Currency Transaction Reports (CTRs) What is a Currency Transaction Report? A Currency Transaction Report is a report that is required to be filed, under the Bank Secrecy Act, by a financial institution (this category includes MSBs), when the amount of currency involved in a transaction exceeds $10,000.00. Please recall the differences between government requirements and company requirements.

For purposes of understanding government requirements, we will explain what currency is, what a currency transaction is, and what the terms cash-in and cash-out mean. What is Currency?

What is a Currency Transaction?

What is a Cash-In Transaction?

What is a Cash-Out Transaction?

The regulations define currency as the coin and paper money that circulates and is customarily used and accepted as a medium of exchange in the country of issuance.

A currency transaction is any transaction involving the physical transfer of currency from one person to another. Note: Remember the definition of a “person”.

“Cash-in” means, literally, that cash is coming into the business from the person. Cash-in transactions include (but are not limited to) receiving cash to send a money transfer, receiving cash to buy a money order or traveler’s checks, and receiving cash in exchange for cash of a different denomination (exchanges of currency).

“Cash-out” means, literally, that cash is going out of the business to the person. Cash-out transactions include paying a person cash for a check (cashing a check), giving a person cash in exchange for cash of a different denomination (exchanges of currency), and giving a person the proceeds of a money transfer in cash.

The government requires the Company to file a CTR for any transaction involving cash-in or cash-out exceeding $10,000.00. We will prepare a BSA Worksheet for any transaction of $10,000.00 or more, regardless of whether the cash-in or cash-out amount exceeds $10,000.00.

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When to Prepare a BSA Worksheet In order to know whether or not a BSA Worksheet needs to be prepared, simply answer the following questions:

1. Does the transaction involve $10,000.00 or more?

2. Is the transaction one of several transactions by or on behalf of the same person, during the same day, when added together amount to $10,000.00 or more?

If your answer to either 1 or 2 is yes, you must record identification and transaction information.

When Not to Prepare a BSA Worksheet You do not need to complete a BSA Worksheet for any transactions with banks (or armored car services). Information Required for a BSA Worksheet The Company requires the following identification information for all transactions of $10,000.00 or more:

Individual


Individual Taxpayer Identification Number (ITIN) Note: The government requires that you obtain a valid drivers license, military identification card, passport, State issued identification card, non-resident alien identification card, or other form of acceptable identification showing name, address and, if other than the U.S., country of

The Company must file each CTR within fifteen (15) days of the transaction date.

Multiple CTR transactions occur when a person conducts two or more transactions by or on behalf of the same person during the same business day. None of the transactions are $10,000.00 or more individually, however, collectively they add up to $10,000.00 or more. Consequently, a BSA Worksheet needs to be prepared. Note: You do not combine both “in’s” and “out’s” to determine if the transaction is $10,000.00 or more. You add all the “in’s”. If they total $10,000.00 or more, a CTR needs to be filed. You do the same for all the “out’s”.

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origin. Please check with your manager if you are unsure about acceptable forms of identification documentation. Note: If two or more people are conducting the transaction, you need to obtain the same information for those persons as well. Business/Organization/Other Entity (when applicable)



The Company requires the following transaction information for all transactions of $10,000.00 or more:

o transaction date o check amount(s) o money order number(s) o money order amount(s) o money transfer identification number(s) o money transfer amount(s) o amount of cash received from the customer o amount of cash returned to the customer o other transactional information as warranted

Procedures for Preparing a BSA Worksheet

1. Log in to the Online BSA Worksheet System:

bsaworksheet.cfsc.com


3. Select “Yes” or “No” based on whether the customer has a tax identification number (SSN/EIN).

4. Complete the worksheet appropriately.

5. Click “Submit”. Detailed procedures, including illustrations, were provided in the previous section.

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Suspicious Activity Reports (SARs) General Rule As a result of the Bank Secrecy Act and anti-money laundering regulations, you may not intentionally ignore suspicious transactions, nor may you remain ignorant of what types of transactions may be suspicious. To do so puts you and the business at risk of government prosecution. Please recall the differences between government requirements and company requirements.

When to Investigate Suspicious Activity Reporting suspicious activity is a very serious matter. If you encounter a transaction that you believe may involve financial criminal activity or other suspicious activity, first gather and record all identifying information relating to the transaction and person(s) involved, then follow the procedures for filing a SAR. Structuring One particular type of suspicious activity that is prevalent among financial institutions is structuring. Customers may try to keep their transactions just below the reporting or recordkeeping thresholds by breaking them up into small transactions. They may then conduct those transactions at the same or different times (during the same or differing business days) and at the same or different locations. Customers may also coordinate efforts, making several transactions (each under reporting thresholds) seem as though they are on behalf of separate individuals when, in actuality, they are part of one, large transaction. The intent to evade identification and/or filing requirements by taking the above steps is known as structuring. Additional Examples of Possible Suspicious Activity Transactions in which a customer changes the amount of a transaction to avoid providing an identification document, decides not to conduct a transaction after he/she is told that he/she would be required to provide an identification document, seems nervous/forgets everyday facts such as name or home address without apparent reason, or appears to be falsifying information may all be considered suspicious. If you become aware (as opposed to suspicious) of a violation of law that requires immediate attention, such as ongoing money laundering schemes or terrorist activities, you should bring the situation to the immediate attention of the Compliance Officer. The Company must file each SAR within thirty (30) days of the date of the initial detection of the suspicious activity. Subsequent filings every ninety (90) days should be made if the suspicious activity continues.

The government requires the Company to file a SAR for any money order or money transfer transaction involving activity that is deemed suspicious and exceeds $2,000.00. We will investigate any transaction involving activity that is deemed suspicious, regardless of dollar amount.

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Mandatory Nondisclosure It is illegal for you to inform any person or party involved in a suspicious transaction that your company has filed or intends to file a SAR. The obvious reason for nondisclosure is to allow law enforcement an opportunity to investigate and apprehend money launderers. You are forbidden to disclose to anyone that a SAR has or will be filed. If you violate this law, you may be subject to serious penalties and fines, including potential criminal prosecution. You may also be subject to employment termination. Safe Harbor In the event that you report a suspicious activity, you, and the company you work for, are protected from civil liability for any disclosures contained in the SAR, and for any failure to tell interested parties that a report was filed. This “Safe Harbor” provision extends to any employee or officer of your company. Procedures for Investigating Suspicious Activity

1. Terminate the transaction if the following identification information can not be obtained:

Individual

o name (first, middle initial, and last) o address o country (if other than U.S.) o date of birth o identification document issuer o identification document type o identification document number o taxpayer identification number, such as Social Security number (SSN) or Individual

Taxpayer Identification Number (ITIN)

Note: If two or more people are conducting the transaction, you need to obtain the same information for those persons as well. Business/Organization/Other Entity (when applicable)



2. Complete the transaction if all appropriate identification information is obtained.

3. Make copies of all documents involved in the transaction, including:

o identification document(s): driver’s license(s), state/military/school identification

card(s), passport(s), etc. o transaction document(s): check(s), money order(s), money transfer form(s),

prepaid card(s) / form(s), etc.

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4. Regardless of whether the transaction was completed or terminated, log in to the Online BSA Worksheet System:

bsaworksheet.cfsc.com


6. Select “Yes” or “No” based on whether the customer has a tax identification number (SSN/EIN). (If you did not acquire the customer’s SSN, choose “No”.)

7. Enter as much identification and transaction information into the appropriate fields on the BSA Worksheet (PDF form) as possible.


9. Print the BSA Worksheet using the print dialogue box.

10. Fax the printed BSA Worksheet, and all supporting documentation corresponding to the reportable activity, to the Compliance Help Desk fax:

Compliance Help Desk fax: 866-828-3285

11. Place the BSA Worksheet and all supporting documentation in the BSA Suspicious Activity

Report File.

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SECTION 4: Gramm Leach Bliley Act Requirements

Collecting Nonpublic Personal Information for Other Than Borrowers Because (except with respect to loan transactions) the Company conducts business with persons not defined as customers, and disclosures to non-affiliated third parties are only made as permitted by law (under Sections 313.14 and 313.15 of the Privacy Rule), a privacy notice is not necessary. Consumers’ nonpublic personal information (“NPI”) may be collected, during a transaction, as part of business procedures; it is always collected (or verified) in correlation with transactions requiring recording or reporting under the Bank Secrecy Act. Collecting Nonpublic Personal Information for Borrowers Customers’ NPI may be collected, during a transaction, as part of a loan transaction. Because the Company conducts business with “customers” during a loan transaction, a privacy notice is necessary. The Company’s privacy policy disclosure is printed on all loan agreements. Each customer executes each agreement, which includes the Privacy Policy Disclosure section, indicating the borrower has received and read and agrees to the Company’s privacy policy. Verifying, Releasing and/or Sharing Nonpublic Personal Information It shall be Company policy to gather customers’ nonpublic personal information for Company use only. Disclosures to affiliated parties are only used for purposes of conducting business with a particular customer. Disclosures to non-affiliated third parties are only made as permitted by law under Sections 313.14 and 313.15 of the Privacy Rule. Customers’ nonpublic personal information is not, in any way, sold for marketing or other purposes. Maintaining Nonpublic Personal Information

Paper Records

• All paper records containing customers’ non-public personal information shall be retained in an entirely enclosed and secure area inaccessible to customers.

Digital Records

• All computer records shall be maintained on a computer protected from unauthorized access through a variety of means including:

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o employee passwords

o anti-virus software

o operating system firewall

Discarding/Destroying Nonpublic Personal Information In the event that a customer’s nonpublic personal information is no longer to be maintained, designated management personnel shall do the following:

• Destroy all paper record(s) from any Company storage housing such record(s) by means of shredding or similar, irreversible destruction.

• Delete all electronic record(s) from any Company computer housing such record(s); if the company relinquishes a computer, designated management shall utilize a shredding program, reformat or physically destroy the hard drive.

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SECTION 5: Office of Foreign Assets Control Requirements

The Office of Foreign Assets Control is responsible for administering and enforcing economic and trade sanctions against targeted foreign countries, terrorists, drug traffickers, and those engaged in the proliferation of weapons of mass destruction. It requires MSBs to compare the names of customers who conduct transactions against a list of known terrorists and criminals maintained by OFAC and other entities. This list is known as the Specially Designated Nationals (SDN) list. The SDN list can be found via the OFAC website: http://www.treas.gov/offices/enforcement/ofac/sdn/ This list is available in PDF format; the SDN list shall be referenced according to the following Company procedures. Registered Customers It shall be company policy to verify customer information against the SDN list whenever a customer is registered in the point-of-sale system. In order to register a customer at a Company store, Company employees shall enter all required identification information into the POS system. Employees shall check the SDN list (updated, automatically, daily) by clicking the appropriate button. The system notifies the employee of a possible match. In the event that the name is not found on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. In the event that the name is found on the SDN list, the employee shall call the Compliance Officer, and work with the Compliance Officer to resolve the issue. If, upon reasonable investigation, it is determined that the customer attempting to conduct the transaction is not the individual listed on the SDN list, the employee shall carry out the transaction, following any additional procedures required by the company. If, upon reasonable investigation, it can not be determined that the customer attempting to conduct the transaction is not the individual listed on the SDN list or the customer’s information matches the information provided in the SDN list exactly, the employee shall terminate the transaction. The Compliance Officer shall then contact OFAC to report the attempted transaction, documenting the occurrence. Money Transfer Transactions Because money transfer transactions are checked against the SDN list by our money transmitting company, procedures for checking customers against this list shall be synonymous with those issued by our money transmitting company. Suspicious Activity It shall be company policy to verify any customer information obtained against the SDN list whenever an employee feels a transaction (either completed or terminated) is or was suspicious. Employees shall follow suspicious activity procedures outlined in the anti-money laundering section of this handbook.

http://www.treas.gov/offices/enforcement/ofac/sdn/�

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SECTION 6: Conclusions

The Bank Secrecy Act, Gramm Leach Bliley Act and Office of Foreign Assets Control regulations impose strict rules on how we must conduct our business. You, as an employee of the Company, have a duty to understand and follow those rules. This training session and the Handbook given to you are intended to help you understand and explain why those rules are important. Also important are the consequences for non-compliance. Each of you individually, as well as the Company, as a whole, can be subject to severe penalties, fines, and even criminal prosecution for failure to comply. The ultimate purpose of these requirements is to prevent money laundering, protect consumer privacy and block terrorists and other criminals from gaining access to our financial system. These are goals we should all support.

SECTION 15 Contact Information

15.1


CONTACT INFORMATION Consultant:

• R. & L. Management Co., Inc. – Compliance Operations Mailing Address 425 Huehl Road, Bldg. 6A

Northbrook, IL 60062 Phone: 847-509-6608

Fax: 866-828-3285 E-mail: [email protected] Government Agencies:

• Financial Crimes Enforcement Network (FinCEN) Phone: 866-556-3974

Web: www.fincen.gov BSA E-Filing: http://bsaefiling.fincen.treas.gov/main.html

o Money Services Businesses

Phone: 800-800-2877 Web: http://fincen.gov/financial_institutions/msb/ MSB Registration: http://fincen.gov/financial_institutions/msb/msbstateselector.html

o Precious Metals / Jewelry Industry Web: http://fincen.gov/financial_institutions/pmj/

• Internal Revenue Service (IRS)

o Title 31 (BSA) Audits

Phone: 866-270-0733 Web: http://www.irs.gov/businesses/small/article/0,,id=185491,00.html

• Federal Trade Commission (FTC)

o Protection of Consumer Privacy (Gramm Leach Bliley Act)

Web: http://business.ftc.gov/privacy-and-security/gramm-leach-bliley- act

http://www.irs.gov/businesses/small/article/0,,id=185491,00.html�

15.2


o Red Flags Rule Web: http://www.ftc.gov/bcp/edu/microsites/redflagsrule/index.shtml

• Office of Foreign Assets Control (OFAC)

Phone: 202-622-2490 Hotline: 800-540-6322 Web: http://www.treasury.gov/about/organizational-

structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx Organizations:

• Financial Service Centers of America (FiSCA)

Mailing Address: P.O. Box 647 25 Main Street Hackensack, New Jersey 07602

Phone: 201-487-0412 Fax: 201-487-3954 Web: www.fisca.org E-mail: [email protected]

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