Starting a check cashing business in Florida is a process that requires several steps that must be planned before applying for the license and risking losing money and time.
The check cashing business in Florida is profitable but at the same time it is a risky business that should be minimized by adopting special measures and procedures.
It is important to get the right advice from experienced and qualified professionals to avoid expense and delay in obtaining a check cashing license.
Obtaining a Florida check cashing license, also known as an FT3 license, requires several steps:
The first step is to register with the federal government as a money services business (MSB). This process is done electronically, and in order to submit such registration any new applicant must open an account with the United States Department of Treasury’s Financial Crimes Enforcement Network, commonly known as FinCEN. Registration is done through the FinCEN 107 form.
Registration with FinCEN places the company under the laws and regulations of the Bank Secrecy Act (BSA). These standards impose several requirements on the company. One of those requirements is to develop and implement an anti-money laundering (AML) program that must contain policies and procedures that the business will implement as part of its check cashing operation. Some companies tend to use the currency of AML programs for other types of financial services, such as the sale of money orders or money transfer services. However, those programs are inadequate for check cashing and do not meet the BSA requirements for a check cashing operation. Another requirement is the appointment of a compliance officer. This person is responsible for ensuring that the AML program is fully implemented. There are other BSA requirements that must be met and therefore the compliance officer and company employees must be aware of those regulations.
Once FinCEN registration has been confirmed, an application must be filed with the Florida Department of Financial Services, Office of Financial Regulation (OFR). This application consists of several parts and must be submitted electronically. As with the FinCEN registration, the applicant must set up an account with the OFR Real System for this purpose. It is extremely important that all requested information is provided completely and accurately to avoid delays in the process. In our experience, the vast majority of delays in obtaining such a license are due to errors in the original application form. Several documents must be attached to the request, including the anti-money laundering program, which must be previously drawn up. Another form that must be submitted is a fingerprint card for each of the individuals included in the application, which will be used for a background check conducted by the Federal Bureau of Investigation.
Once licensed, it is important to keep in mind that the State of Florida has multiple requirements that check cashers must meet. In addition, the kosher check is subject to audit reviews to verify that the business is operating within the parameters of Chapter 560, Florida Statutes.
There are other important aspects that need to be planned and executed on time. Some of them are obtaining the proper county and city permits to operate the business, ensuring the location has all the necessary security measures in place to protect employees and customers, obtaining the proper software for the check cashing operation, as well as obtaining a qualified bank account to be able to operate the business. The application process for a qualified MSB bank account has a number of elements that should be considered before applying for the account. Also, the check casher should be aware that not all banks offer check cashing accounts, and some of the banks that offer these types of accounts have additional fees and even collateral requirements. It is very important to demonstrate to the bank you are applying for that your check cashing business is operating in a safe and sound manner.