Minutes 

The Meeting of the FDIC Advisory Committee on Economic Inclusion 

of the 

Federal Deposit Insurance Corporation 

Held in the Board Room 

Federal Deposit Insurance Corporation Building 

Washington, D.C. 

Open to Public Observation 

October 24, 2007 - 8:53 A. M. 

The meeting of the FDIC Advisory Committee on Economic 

Inclusion ("ComE-IN" or "CommitteeN) was called to order by ComE-In 

Chairman Diana L. Taylor. 

F The members of ComE-IN present at the meeting were: Diana L. 

Taylor, ComE-IN Chairman and immediate past New York State 

Superintendent of Banks; Ted Beck, President and Chief Executive 

Officer, National Endowment for Financial Education; Martin 

Eakes, Chief Executive Officer, Self-Help/Center for Responsible 

Lending; Ester R. Fuchs, Professor, School of International and 

Public Affairs, Columbia University; Ronald Grzywinski, Chairman, 

ShoreBank Corporation of Chicago; Frederic S. Mishkin, Governor, 

Federal Reserve System; Manuel Orozco, Senior Associate at the 

Inter-American Dialogue, and Senior Researcher, Institute for the 

Study of International Migration, Georgetown University; Maria 

Otero, President and Chief Executive Officer, ACCION 

International; Peter Tufano, Sylvan C. Coleman Professor of 

Financial Management, Harvard Business School, and Senior 

Associate Dean and Director of Faculty Development; and Elizabeth 

Warren, Leo Gottlieb Professor of Law, Harvard University. 

Committee member Rev. Dr. Floyd H. Flake, Senior Pastor, Greater 

Allen AME Cathedral of New York, participated by telephone. 

Erica F. Bovenzi, Designated Federal Officer for the Committee 

and Deputy General Counsel of the Federal Deposit Insurance 

Corporation ("Corporation" or "FDIC"), was also present at the 

meeting. Committee members Lawrence K. Fish, Chairman and Chief 

Executive Officer, Citizens Financial Group, Inc.; Wade 

Henderson, President and Chief Executive Officer, Leadership 

Conference on Civil Rights, and Counselor to the Leadership 

Conference on Civil Rights Education Fund; Alden J. McDonald, 
r Jr., President and Chief Executive Officer, Liberty Bank and 

Trust Company, New Orleans, LA;John W. Ryan, Executive Vice 

President, Conference of State Bank Supervisors; Robert K. Steel, 

Under Secretary of the Treasury for Domestic Finance, U.S. 

Department of Treasury; and Deborah C. Wright, Chairman and CEO, 

Carver Bancorp, Inc., were absent from the meeting. 

Members of the Corporation's Board of Directors present at 

the meeting were Thomas J. Curry, Director (Appointive) and, for 

the afternoon session, Martin J. Gruenberg, Vice Chairman. 

Corporation staff that also attended the meeting included Alice 

C. Goodman, Robert W. Mooney, Barbara A. Ryan, Lisa K. Roy, 

William A. Rowe, 111, Jesse 0. Villarreal, Janice Butler, Sara A. 

Kelsey, Andrew S. Gray, David M. Barr, Robert E. Feldman, Lisa D. 

Arquette, Mindy West, Andrew B. Stirling, Jr., Rae-Ann Miller, 

Joan S. VanBerg, Andrea J. Winkler, Carl J. Gold, Leneta G. 

Gregorie, Thomas E. Nixon, Kathryn A. Samolyk, Susan E. Burhouse, 

Michael J. DeLoose, Sally J. Kearney, Christine M. Davis, Vincent 

P. Moore, Phillip D. Telford, Douglas K. Wallace, Joshua L. 

Hofflinger, and Pat D. Murphy. 

Patricia J. Cirillo, Ph.D., President, Cypress Research 

Group; Joseph Coleman, President, Rite Check Financial Service 

Centers, and Chairman, Joint Industry Committee; Paul Dwyer, cop founder and Chief Executive Officer, Viarnericas Corporation; 

Jamal El -Hindi, Associate Director for Regulatory policy and 

Programs, Financial Crimes Enforcement Network; Thomas E. Haider, 

Senior Vice President, Government Affairs, and Compliance 

Officer, MoneyGram International, Inc.; Terence Keenan, Senior 

Vice President, Corus Bank, N.A., Chicago, Illinois; Michael J. 

Lynch, Vice President and Manager, Money Services Division, Banco 

Popular North America; Regina Stone, Deputy Superintendent, New 

York State Banking Department; and Keith Ward, President and 

Chief Executive Officer, United Central Bank, Garland, Texas, 

also attended the meeting. 

Committee Chairman Taylor opened and presided at the 

meeting. 

On behalf of FDIC Chairman Sheila C. Bair and Vice Chairman 

Gruenberg, Director Curry welcomed ComE-IN members and guest 

speakers and provided updates on the small dollar loan pilot 

study recommended for approval by the Committee at its inaugural 

meeting in March 2007, and recent legislative developments 

arising from the subprime mortgage crisis. Director Curry then 

indicated that the purpose of the meeting was to discuss the 

nature of money service businesses ("MSBs"); where they intersect 

r""' with current regulatory requirements, particularly the Bank 

October 24, 2007 
F Secrecy Act ("BSA" ) ; and the role they can play in encouraging 

greater access of the underbanked to the banking system. 

Jamal El-Hindi, Associate Director for Regulatory Policy and 

Programs, Financial Crimes Enforcement Network ("F~~CEN"), then 

discussed the impact of BSA on MSBs. He explained that because 

not all MSBs are required to register with FinCEN, there has been 

some difficulty in accurately identifying the number of MSBs; the 

extent to which MSBs have encountered a loss of banking services; 

and the extent to which any such loss of banking services is 

attributable to BSA, as opposed to other market forces. 

Mr. El-Hindi then identified some of FinCEN1s more recent 

activities relative to BSA compliance, including its April 2005 

advisory, entitled "Guidance to Money Services Business on 

Obtaining and Maintaining Banking Services"; its April 2005 joint 

issuance with the FDIC and other federal banking regulators, 

entitled "Interagency Interpretive Guidance on Providing Banking 

Services to Money Services Businesses Operating in the United 

States"; and its March 25, 2006, advance notice of proposed 

rulemaking ("ANPR") to solicit updated facts and recommendations 

on the issue of access to banking services by MSBs. 

Mr. El-Hindi discussed some of the steps taken to address F concerns highlighted in response to the ANPR. He advised that 

the Federal Financial Institutions Examination Council had 

revised its Bank Secrecy ~ct/Anti-~oney Laundering ("AML") 

Examination Manual to specifically incorporate the earlier 

guidance and to include a discussion of various risk mitigants as 

a corollary to the discussion of risks. He also advised that 

FinCEN had recently issued guidance to MSBs addressing common 

mistakes in filing Suspicious Activity Reports ("SARSn) and is 

collaborating with the Internal Revenue Service ("IRS"), federal 

banking agencies, and state regulators to share information, 

coordinate their anti-money laundering efforts, and develop MSB 

examination materials. Mr. El-Hindi addressed the reasons for 

the limited factual information regarding the actual number of 

MSBs and the problems they encounter in accessing banking 

services; the steps and costs associated with BSA compliance; and 

the reasons for ongoing discontinuance of banking services for 

MSBs in light of recent regulatory efforts to clarify BSA 

requirements as they relate to providing such services to MSBs. 

Regina Stone, Deputy Superintendent, New York State Banking 

Department, then discussed the licensing, supervision, and 

examination of MSBs in New York. Ms. Stone provided a general 

overview of state licensing and supervision of MSBs, advising 

that 46 states and territories have some MSB licensing and F registration requirements; and that, through the efforts of the 

October 24, 2007 
r Money Transmitters and Regulators Association ( 'MTRAt1 ) . approximately 40 states have executed cooperative agreements for 

information sharing and unification of their examination 

procedures. She then provided a brief history and overview of 

New York's regulation of money transmitters and check cashers and 

a current snapshot of the industry, noting that money 

transmitters and check cashers together were responsible for 

transactions in the amounts of $104 billion and $17 billion, 

respectively. 

Next, Ms. Stone explained New York's licensing review and 

examination process. Referring to participants in the MSB 

industry as "partners," Ms. Stone stated that among the partners 

are the customers who need the financial services provided by 

MSBs; the MSBs themselves; the banks which provide banking 

services to the MSBs; MSB and bank regulators and federal and 

state regulators which, she suggested, need to become more 

familiar with each other's operations; and law enforcement 

personnel, who are helpful in identifying illegal or unlicensed 

street-level MSB activity. 

Ms. Stone identified as challenges the need to evaluate the 

MSB definition to ensure consistency; convergence of regulatory 

standards via information sharing and education; concentration of F MSB account servicing within the banking industry; communication 

between and education of the banking and MSB industries, 

including regulators and law enforcement; and consumer education. 

She underscored the importance of consumer access to financial 

services, whether through MSBs or the banking industry, and the 

need for continued communication between the banking and MSB 

industries. 

The ensuing discussion among Committee members and Ms. Stone 

touched on the improving nature of communication between MSB 

regulators and state and federal bank regulators due, in part to 

the outreach efforts of the MTRA and the Conference of State Bank 

Supervisors; and concerns about the potential for interruption of 

services to consumers arising from de-banking events when MSB 

banking services are concentrated in only a few financial 

institutions. Ms. Fuchs inquired about the types of penalties 

imposed for unlicensed or noncompliant activity, in response to 

which Ms. Stone advised that noncompliance with BSA or other 

regulatory requirements could result in significant fines and/or 

license suspension or revocation and that unlicensed activity 

could result in asset forfeiture and/or imprisonment. 

Committee Chairman Taylor announced that the meeting would 

recess briefly. Accordingly, at 10:35 a.m., the meeting stood in 

recess. 

October 24, 2007 
The meeting reconvened at 10:41 a.m. that same day, 

whereupon Committee member, Manuel Orozco, Senior Associate at 

the Inter-American Dialogue, and Senior Researcher, Institute for 

the Study of International Migration, Georgetown University, 

discussed issues associated with remittances and the 

opportunities they create for banks. He observed that two major 

developments are responsible for the dramatic increase in 

remittances: integration of the labor market into a global 

economy, with mobility of foreign neighbors into different 

countries, and resulting transnational economic activities, with 

outbound remittances from the United States, primarily to Latin 

American and Asian countries, nearing $100 billion. He then 

provided a profile of remittance customers and observed that 

there has been an increase in the number of migrant remitters 

using banks. Mr. Orozco identified usability and openness as 

factors impacting the access of immigrants to financial services, 

and lack of interest in the migrant market and lack of knowledge 

of the demand for financial services, including remittances, in 

the migrant community as reasons that more banks are not 

providing such services. 

f@@- Mr. Orozco concluded his remarks by offering the following 

recommendations for linking the demand for financial services in 

the migrant community to banks: (1) development of targeted goals 

and standards to the different cohorts in the migrant community; 

(2) development of methodologies, such as offering affordable 

small dollar loans, to accelerate banking rates; (3) development 

of partnerships between money transfer operators and depository 

institutions such as the one that exists between MoneyGram and 

U.S. Bank; and (4) education efforts to enhance the financial 

literacy of the migrant population. 

Committee members and Mr. Orozco explored in more detail the 

significant savings rate among migrants who save and where 

unbanked savers keep their savings, as well as the extent to 

which expansion of banking services to meet the check-cashing, 

short-term loan, and remittance needs of the migrant community 

would expand their security and safety. In response to a 

question from Mr. Tufano as to whether pricing of banking 

services acts as a deterrent to migrants, Mr. Orozco explained 

that the issue is more one of financial literacy, but from a 

marketing as opposed to an academic standpoint. 

Lisa D. Arquette, Associate Director, Anti-Money Laundering 

Section, FDIC Division of Supervision and Consumer Protection, 

moderated a panel composed of Joseph Coleman, President, Rite 

October 24, 2007 
(C. Check Financial Service Centers, and Chairman, Joint Industry 

Committee, Financial Service Centers of America (FiSCA); Patricia 

J. Cirillo, Ph.D., President, Cypress Research Group; Paul Dwyer, 

co-founder and Chief Executive Officer, Viamericas Corporation; 

and Thomas E. Haider, Senior Vice President, Government Affairs, 

and Compliance Officer, MoneyGram International, Inc. 

Mr. Coleman began by showing a short video of various MSB 

customers and owner/operators discussing MSB services. He then 

discussed the differences between bank and financial service 

center ("FSC") business models, indicating that the former are 

account relationship based, favor low transaction, high-balance 

accounts, and based on a fiduciary relationship, whereas the 

latter are fee for service transaction based, seek high 

transaction volumes, and are based on a non-fiduciary 

relationship. He suggested that FSCs evolved to meet their 

customers' well-identified needs of liquidity, access, service, 

and fee transparency, and that the FSC business model has led to 

several innovations. 

Mr. Coleman stated that, contrary to myth, FSCs have an 

exemplary compliance record; that bank regulators, because they 

believe the myth, have exerted pressure on banks that serve the 

MSB industry; and that the resulting instances of discontinuance 

place the MSB industry in a precarious position, despite the good 

faith efforts of the federal bank regulatory agencies to address 

the problem. He highlighted the topic of small dollar loans, 

noting the demonstrated need for such products, the significant 

participation of FSCs in meeting that need, and the substantive 

issues raised by consumer advocates regarding FSC loan products. 

He suggested the creation of a task force to initiate a rational, 

fact-based dialogue regarding possible changes to the loan 

products to better meet consumer needs, while maintaining a 

sustainable product for providers. 

Next, Ms. Cirillo provided in-depth demographic information 

on FSC customers and discussed the reasons they choose FSCs to 

meet their financial service needs. She cited as perhaps most 

important the relationships they establish with FSC employees, 

who know them by name and treat them with respect. Comparing 

traditional financial service outlets such as banks and credit 

union to FSCs, she observed that the focus of traditional outlets 

is to invest heavily in technologies that are designed to get 

customers out of branches, whereas FSC innovation and 

infrastructure are designed to keep customers in the branches to 

meet their desire for in-person services. 

Mr. Dwyer briefly discussed the magnitude of family ph remittances, their direct impact on the alleviation of poverty, 

October 24, 2007 
and the role that licensed remittance companies play in providing 

those services. He then discussed Viamericasls experience with 

banking discontinuance, citing several instances in which its 

banking services had been terminated because of the perceived 

risk of MSBs and arduous compliance issues. He warned that the 

trend for large national banks to decline banking services to all 

but the largest publicly traded remittance companies impacts the 

cost of services offered by other remittance companies and 

threatens competition. Mr. Dwyer stated that licensed remittance 

companies are faster, cheaper, and better at offering money 

transfer services than banks, and that regulatory actions taken 

against banks in the AML area have, almost without exception, 

been based on internal bank misconduct or related to banking of 

unlicensed remittance operations. 

Mr. Dwyer summarized the reasons licensed remittance 

companies are uniquely qualified to serve transnational families 

and left the Committee with three calls to action: (1) the need 

to dispel the myth of extreme risk for banks offering accounts to 

licensed remittance companies; (2) the need for field examiners 

to be educated on licensed remittance companies and less hostile 

to their accounts; and (3) the need for specific incentives for 

banks to serve licensed remittance companies. 

r"" Mr. Haider provided a brief overview of the history and 

operations of MoneyGram International. He addressed compliance 

and training, transaction analysis, reporting, licensing, and 

registration which underlie the principle of security/AML, and 

the issues of pressure to lower the cost of services, enhancement 

of consumer disclosures, and expansion of the agent network which 

underlie the principle of economic inclusion; how to bring the 

two principles into better balance; and MoneyGraml

s activities in 

each of those areas. He offered the following recommendations: 

adoption of an optional federal charter to promote greater 

uniformity, consistency, and clarity in the regulation of MSBs; 

revision of the definition of MSB so that small operations do not 

have the same requirements as larger entities like MoneyGram; 

fostering greater partnerships and linkages between MSBs and 

banks; and addressing bank discontinuance, either through revised 

or additional guidance, or support of legislative action to 

reduce the regulatory burden on banks to act as de facto 

regulator of their MSB customers. 

Mr. Coleman then concluded the panel presentations by 

offering the following 10 FiSCA recommendations: (1) include 

FiSCA as a partner on the Committee to initiate the dialogue to 

address services to low and moderate income consumers; (2) 

encourage use of the FSC network as a ready-made channel to reach 

low and moderate income consumers; (3) provide banks the 

October 24, 2007 
?- direction, incentive, and motivation to make banking services 

available to FSCs; (4) actively support the bank discontinuance 

bill when it is introduced and otherwise work to end bank 

discontinuance; (5) dispel the myths about the compliance burdens 

and risks posed by MSBs and replace them with facts; (6) expand 

access to credit by endorsing use by banks of alternative credit 

scores, such as those developed by Payment Reporting Builds 

Credit; (7) promote expansion of savings programs such as FiSCAts 

NetSpend Program to encourage low and moderate and income 

consumers to take advantage of such opportunities; (8) promote 

expansion of partnerships and alliances between banks, credit 

unions, and FSCs; (9) promote financial education programs that 

reflect demonstrated needs and preferences of low and moderate 

consumers who use FSCs; and (10) form a small loan task force 

comprised of regulators, consumer advocates, and FSC providers to 

foster dialogue about the best ways to ensure availability of 

such products and other forms of credit, while ensuring consumer 

protections from lending abuses. 

Committee members and panelists briefly explored reasons for 

the concentration of FSCs in African-American and Hispanic 

communities; and engaged in more in-depth discussion of the 

reasons MSBs have a negative image and are perceived as 

inherently risky, and what actions could be taken to improve 

P.4 their image. Mr. Coleman suggested that MSBs are viewed as 

predatory simply because they make a profit on low-income 

customers; Mr. Eakes suggested that payday lending is the issue 

that most tarnishes the reputation of MSBs; and Mr. Haider 

suggested that the perception of risk arises from the cashintensive nature of the business and the lack of traditional 

account relationships. Ms. Fuchs agreed with the earlier 

statements of panelists regarding the need to clarify the 

definition of MSB to differentiate between various segments of 

the industry, pointing out that the existing definition 

contributes nothing to advancing the debate and developing a 

rational MSB policy; and Committee Chairman Taylor suggested that 

the MSB industry needs to work more closely with regulators to 

improve their reputation. Mr. Orozco recommended that bank 

regulators look at the internal processes of compliance platforms 

and security models to determine how the systems can be used to 

improve risk avoidance; and Committee Chairman Taylor suggested 

that rather than pushing for one federal MSB regulator, MSBs 

instead need one uniform system of regulation, whether 

administered at the federal or state level. 

Committee Chairman Taylor announced that the meeting would 

recess for lunch. Accordingly, at 1:27 p.m., the meeting stood 

r"* in recess. 

October 24, 2007 
The meeting was reconvened at 2:24 p.m. that same day at 

which time Committee Chairman Taylor introduced Keith Ward, 

President and Chief Executive Officer, United Central Bank, 

Garland, Texas; Terence Keenan, Senior Vice President, Corus 

Bank, N.A., Chicago, Illinois; and Michael J. Lynch, Vice 

President and Manager, Money Services Division, Banco Popular 

North America, to discuss bankers1 perspectives on access of MSBs 

to the banking system. 

Mr. Ward provided a brief history and profile of United 

Central Bank, focusing on its establishment to fill the financial 

services void for the Asian-American population in the DallasFort Worth area and its development of a unique set of products 

to meet the needs of its customer base. He then explained that 

the bank's decision to continue to service MSBs, at a time when 

many banks elected to discontinue such services, was based on 

risk and profitability analyses and the bank's highly rated 

BSA/AML program. He suggested that, in light of the 

overabundance of SAR and currency transaction report ("CTR") 

filings, the BSA/AML program could be enhanced by increasing the 

threshold for filing CTRs; and that other possible enhancements 

could include government-imposed limitations on services for ? MSBS, such as a dollar limit on checks that can be cashed by an 

MSB and a limit on the number and dollar amount of checks that 

can be cashed by any one person on any one day. 

In response to questions by Committee Chairman Taylor 

regarding the proportion of MSB applications disapproved by 

United Central Bank and the profit margin on the bank's MSB 

accounts versus its profit margin on other accounts, Mr. Ward 

advised that MSBs apply with FinCEN and the bank merely monitors 

the documentation process; that, therefore, it does not 

necessarily disapprove applications; and that very few of the 

MSBs the bank services have had their accounts terminated. With 

respect to profit margins, he advised that the fee income from 

MSBs has been significant. 

Mr. Keenan presented a brief profile of Corus Bank and 

indicated that it also services check cashers, a business it 

entered into via acquisition of a subsidiary, and that the bank, 

together with Banco Popular, services approximately 95 percent of 

the MSB check cashers in Chicago. He stated that the bank is 

very committed to servicing the highly regulated check cashing 

community, with such servicing generating a significant portion 

of the bank's fee income. 

r""" 

October 24, 2007 
Mr. Lynch advised that Banco Popular is one of the largest 

providers of bank services to check cashers in the United States 

and that the bank has found them to be excellent clients. He 

explained that MSB check cashers are far safer than many other 

businesses and they are very easy to monitor and regulate because 

they are registered with FinCEN; undergo Title 31 examinations; 

undergo very extensive licensing processes, at least in the 

states the bank services; and are subject to annual audits once 

licensed. Reporting that the average size check cashed is just 

over $400 and that the average money order sold is about $190, 

Mr. Lynch observed that these are not good vehicles for money 

laundering or tax evasion. 

Committee members, panelists, and FDIC staff then explored 

why banks are discontinuing services to MSBs; the loss experience 

of panelists' banks with check cashing operations; panelists' 

lack of interest in doing business with money transmitters and 

their experiences with financing payday lenders; and whether 

panelists would continue due diligence if a safe harbor was 

established for licensed check cashers. Mr. Ward speculated that 

discontinuance occurs because banks have the perception that 

regulations applicable to MSBs are onerous and they are deterred 

by the large fines that have been levied against a few banks for 

BSA/AML violations. Regarding loss experience with check cashing ? operations, the panelists all agreed they were negligible or 

nonexistent because check cashers are generally good credit 

risks, their credit lines are collateralized, and many check 

cashers are third or fourth generation businesses. As for doing 

business with money transmitters, the reasons given for lack of 

interest were that such businesses are not as lucrative for 

banks, they are not easy to monitor, and MSBs typically use other 

services for money transmission. With respect to financing 

payday lenders, Messrs. Ward and Keenan indicated their 

institutions do not finance payday lenders because they had never 

been approached to do so. Mr. Lynch, however, advised that Banco 

Popular does finance payday lenders, but only those which follow 

industry best practices. Each of the panelists indicated their 

institutions would continue their current level of due diligence 

even if a safe harbor was established for licensed check cashers, 

with Messrs. Ward and Keenan explaining that banks must consider 

credit risk in addition to compliance risk. 

Next, Mr. Tufano asked panelists what incentives they 

thought would create more competition in providing banking 

services to MSBs; Mr. Grzywinski asked their opinions regarding 

what recommendations by the Committee would promote economic 

inclusion; and Committee Chairman Taylor asked why banks are not 

r meeting the needs served by MSBs. In response to Mr. Tufano, Mr. 

Lynch suggested that competition is restricted by the significant 

October 24, 2007 
regulatory penalties to which banks are exposed; the onerous 

burden of banks having to act as de facto regulators of MSBs; 

FinCENts definitions of high-risk and lower risk MSBs, which 

defines all check cashers as high-risk; and the lack of 

specialized expertise available to banks to monitor MSB accounts. 

In response to Mr. Grzywinski, panelists' suggestions included 

more education for bankers and differentiation between the 

various segments of the MSB industry, with different regulations 

for each; recognition of the fact that MSBs do provide a valuable 

service acting as "banks" for their neighborhoods, accompanied by 

an effort on the part of banks and regulators to work with MSBs; 

alternative credit reporting for payment of utilities, rent, and 

insurance; and establishment of interest earning savings vehicles 

tied to check cashing operations. In answer to Committee Chairman 

Taylor's question, Mr. Lynch observed that many MSB customers are 

not comfortable with banks; that for banks that service MSB 

accounts, it is not a good business model to compete with their 

customers; and that banks simply do not have the resources to 

establish branches in all of the communities serviced by MSBs. 

Committee Chairman Taylor then announced that the meeting 

would recess briefly and that, when it reconvened, Sarah A. 

Kelsey, FDIC General Counsel, would preside at the meeting. 

Accordingly, at 3:34 p.m., the meeting stood in recess and the r following Committee members departed the meeting : Committee 

Chairman Taylor, Mr. Beck, Ms. Fuchs, Mr. Grzywinski, and Ms. 

Otero. 

The meeting was reconvened at 3:47 p.m. that same day at 

which time Ms. Kelsey led a discussion on possible solutions and 

incentives to stem bank discontinuance and for bank-based product 

offerings. Committee members were universally complimentary of 

the usefulness of the information in the meeting presentations. 

There was a general consensus on the need, because of different 

risk profiles and management levers, to better differentiate 

between various MSBs, rather than continuing to integrate them 

under one definition, with Ms. Warren suggesting that there be at 

least three categories of MSBs-remittance businesses, fee-based 

financial service providers, and payday lenders-and Ms. Kelsey 

suggesting that FinCEN, the FDIC, and other bank regulatory 

agencies could look at further differentiating the risks 

associated with the different categories of MSBs. There was also 

a general consensus on the attractiveness of using existing MSB 

infrastructure to promote savings programs, with Mr. Tufano and 

Ms. Warren supporting promotion of U.S. Savings Bonds to MSB 

customers as one savings mechanism. 

October 24, 2007 
Several committee members remarked that segments a£ the MSB 

market appear to be very efficient and that more partnerships 

should be established with banks to deliver a variety of 

financial services and products, including financial education, 

to low income consumers. Among other recommendations were a 

suggestion by Mr. Orozco that some sort of MSB compliance 

scorecard be developed to give banks mare confidence in deciding 

to do business with MSBs: a suggestion by Ms. Kelsey that state 

MSB examinations could add a public component to give banks some 

information on their level of compliance; a suggestion by 

Director Curry that there be some type a£ certification of the 

value of MSB registration with the IRS and individual state 

licensing; and a suggestion by Ms. Warren that the FDIC and 

others express support for any form of third party validation of 

remittance companies. Finally, Ms. Kelsey and Robert W. Mooney, 

Senior Advisor to the FDIC Chairman for Consumer Protection, 

discussed the FDIC exploring with the other bank regulatory 

agencies the possibility of community development credit under 

the Community Reinvestment Act ( "CRA" ) for bank relationships 

with MSBs that provide reasonably-priced services in low income 

communities, and Mr. Orozco suggested the agencies also explore 

CRR credit for banks that market savings instruments through 

MSBs . 

Ms. Kelsey closed the meeting by noting that the benefits 

and profitability of banks, check cashers, and money transmitters 

working together are enormous and that meetings such as the 

current one, where: all of the interested parties can meet each 

other and discuss the issues, constitute the beginning of an 

important process. 

There being no further business, the meeting was adjourned. 

Executive Secretary 

Federal Deposit Insurance 

Corporation 

And Committee Management Officer 

FDIC Advisory Committee on Economic 

Inclusion 

October 24, 2007 
Minutes 

of 

The Meeting of the FDIC Advisory Committee on Economic Inclusion 

of the 

Federal Deposit Insurance Corporation 

Held in the Board Room 

Federal Deposit Insurance Corporation Building 

Washington, D.C. 

Open to Public Observation 

October 24, 2007 - 8:53 A. M. 

I hereby certify that, to the best of my knowledge, the attached 

minutes are accurate and complete. 

~i%a L. Taylor 1 

Chairman 

FDIC Advisory Committee on Economic Inclusion 

Dated : January 4, 2008