Payroll Services

Recently, state regulators issued consent orders to several payroll companies for failing to register as an MSB in that state.  It is now clear that Payrolls are money service businesses in several states and fall within the ambit of BSA and must comply with all the regulation’s requirements.

The challenge for payroll companies as money services business is enormous; they must now comply with 50 state licensing requirements.

FBO (For Benefit Of) Accounts are potential solution to payroll as MSB.  Banks by their structure are exempt from individual state Money Transmitter License (MTL) requirements.  It is possible to utilize an FBO account structure whereby the bank “owns” the account utilized for payroll-funds impounds and payroll and tax disbursements.  By this account structure a payroll company is removed from having dominion or control over the client funds and thus maintains it outside of the definition of a Money Services Business.

Contact us for comprehensive analysis of your payroll situation so together we can device suitable approach to solving this issue.  We have deep connections with banks that can assist in setting up FBO accounts for your Payroll business.