The MSB's Duty to Cooperate: Responding to Law Enforcement Requests and Subpoenas the Right Way

Operating a Money Services Business (MSB) means more than just processing transactions and serving your customers—it also means complying with state and federal laws that demand transparency, accountability, and a readiness to cooperate with law enforcement. One of the most critical but often overlooked aspects of MSB compliance is understanding how to properly respond to subpoenas, law enforcement requests, and inquiries from regulatory agencies.

Whether you're running a check cashing store in Florida or managing a multi-state MSB operation, your ability to respond promptly and accurately to these requests is not just a matter of good business—it's essential for staying compliant and maintaining your license.

In this post, we’ll walk through what MSB owners and compliance officers need to know about law enforcement inquiries, why strong Customer Due Diligence (CDD) and transactional recordkeeping is key, and how to prepare your business so you can respond confidently and correctly when the time comes.

Why Law Enforcement Contacts MSBs

MSBs are considered financial institutions under the Bank Secrecy Act (BSA), which means they are required to assist in preventing money laundering, terrorist financing, and other financial crimes. As a result, law enforcement agencies—local, state, and federal—frequently issue requests for information, especially when investigating potentially suspicious activity.

In most cases, these inquiries are tied to ongoing criminal investigations, evidence gathering following the filing of a Suspicious Activity Report (SAR), efforts to track the proceeds of illicit activity, or requests stemming from regulatory exams or audits.

For example, if your business has filed a SAR due to unusual structuring behavior, law enforcement may follow up with a subpoena or request for further records. How you respond to these requests can directly impact your business’s reputation, compliance rating, and even your ability to keep banking relationships.

Subpoenas vs. Informal Requests: What’s the Difference?

Not all law enforcement communications are created equal. Understanding what type of request you’re dealing with is essential.

Subpoenas are formal legal demands for records. They may come from federal agencies (such as the IRS, FBI, or DEA) or state and local authorities. Subpoenas often carry legal deadlines and must be reviewed carefully to ensure compliance without disclosing too much.

Informal requests, on the other hand, can come via email, phone call, or in-person visits. While these are not legally binding in the same way as a subpoena, it is often in the MSB’s best interest to cooperate where appropriate, especially if it does not compromise customer confidentiality or exceed regulatory boundaries.

Regardless of the format, knowing how to evaluate and respond to these inquiries is a fundamental piece of your MSB's compliance program.

Why a Timely, Accurate Response Matters

When law enforcement contacts your business, the clock starts ticking. A delayed or inaccurate response can signal poor internal controls, insufficient recordkeeping, or even willful noncompliance. On the other hand, timely and accurate responses show that your MSB takes AML compliance seriously and is doing its part to prevent criminal activity.

Some potential consequences of failing to respond properly include regulatory penalties, negative marks on audit findings, revocation of state licenses, the loss of banking relationships, or increased scrutiny in future reviews.

Moreover, showing a pattern of poor cooperation can elevate your MSB’s risk profile with regulators and law enforcement agencies alike. Being able to respond quickly and confidently helps maintain your credibility and reduces the risk of further investigation or enforcement action.

The Role of CDD and Transaction Records in Law Enforcement Cooperation

This is where the quality of your Customer Due Diligence (CDD) and transaction monitoring systems comes into play.

When law enforcement asks for records, they typically want to know who initiated the transaction, when and where it took place, what type of check or payment instrument was involved, and whether the transaction was part of a larger pattern of activity.

If your files are incomplete, outdated, or poorly organized, your business may be unable to respond accurately. Worse yet, you may inadvertently provide incorrect information—which can raise even more red flags.

Having a robust recordkeeping system makes all the difference. Your MSB should be able to easily retrieve customer identification documents, corporate file contents for business clients, check images and transaction details, filed SARs and CTRs, and any communication logs or compliance notes related to the customer in question.

The easier it is for you to retrieve this information, the more confident you can be when responding to an inquiry—and the more likely law enforcement will trust and rely on your institution in the future.

Best Practices for Handling Law Enforcement Requests

You don’t need to become a lawyer to handle subpoenas and inquiries effectively—but you do need a plan. At a minimum, your business should designate a compliance contact to receive and process law enforcement inquiries, maintain a log of all received requests, verify the validity of the request before releasing records, and follow up in writing with a clear response.

Protecting customer privacy is also a core obligation. Even when cooperating, MSBs must avoid over-disclosing sensitive information. For example, never confirm or deny the filing of a Suspicious Activity Report to anyone—including law enforcement—unless it falls under the narrow exceptions outlined by FinCEN.

With proper training and well-documented procedures, your MSB can handle these requests with confidence while avoiding common legal and compliance pitfalls.

Building Strong Law Enforcement Relationships

The relationship between MSBs and law enforcement doesn’t have to be tense or transactional—it can be built on mutual understanding and trust. When law enforcement agents reach out, it's not always because your business is in trouble. Often, it’s because your records and your insight can serve as a valuable tool in a broader investigation. MSBs are on the front lines of financial activity in their communities, and law enforcement depends on your accurate reporting and recordkeeping to identify patterns of illegal conduct that may not be visible otherwise.

Over time, responsiveness and professionalism go a long way. When law enforcement knows your business is organized, cooperative, and serious about its AML obligations, they’re more likely to treat your business with credibility and respect. Many MSBs that consistently demonstrate a willingness to assist—not just reactively but proactively when appropriate—find that law enforcement agents become allies rather than adversaries.

Participation in community meetings or industry-specific briefings can also build these bridges. MSBs who understand their own business models deeply—and can help law enforcement do the same—become invaluable sources of local insight. Law enforcement agents may not fully grasp the nuances of check cashing businesses, which makes your expertise a powerful asset when communication channels are open and professional. The long-term value of this mutual understanding can’t be overstated, especially as scrutiny of financial institutions continues to grow.

Staying Ahead: The Role of Technology

In today’s regulatory climate, having the right technology in place is more than a convenience—it’s a core requirement for sustainable compliance. MSBs that still rely on paper files, disorganized spreadsheets, or ad hoc systems are operating at a disadvantage, especially when law enforcement or regulators come calling. Delayed or inaccurate responses due to disjointed records are not only frustrating but can be interpreted as signs of systemic non-compliance.

Modern compliance platforms allow MSBs to store and retrieve customer due diligence records, transactional data, check images, and compliance logs with just a few clicks. Instead of scrambling to locate old files or recreating data manually, a well-designed system puts everything at your fingertips—ready to go when the subpoena hits your inbox or when an audit team walks through your door.

More importantly, these platforms also serve as a built-in safeguard. Automated reminders for document expiration, centralized corporate files, real-time transaction alerts, and audit trails make it exponentially easier to stay compliant and prepared. This kind of readiness not only streamlines your response capabilities but reinforces a broader culture of compliance across your entire operation.

The MSBs who invest in technology now are the ones who will be best equipped to meet tomorrow’s regulatory expectations. And given how rapidly those expectations evolve, waiting too long to modernize can leave a business exposed—both legally and operationally.

Compliance Culture Starts at the Top

Compliance is not just a department—it’s a mindset that must be modeled and enforced from the very top of an MSB. When leadership understands the importance of BSA/AML regulations and builds those priorities into daily operations, everything else falls into place more easily. On the other hand, when compliance is viewed as a burden or delegated without oversight, the cracks eventually begin to show.

Owners and executive-level staff set the tone. If they emphasize proper recordkeeping, timely SAR/CTR filings, and responsiveness to regulatory bodies, staff will follow suit. If they’re disengaged or only react during emergencies, that mindset permeates the team—and it shows when regulators or law enforcement begin asking questions.

Compliance officers, no matter how capable, cannot function effectively in a vacuum. They need organizational support, budget, access to tools, and executive buy-in to build a program that is proactive rather than reactive. That includes regular training, periodic file reviews, and candid assessments of whether current practices are sufficient in a fast-moving regulatory landscape.

Strong compliance culture is what transforms a business from one that dreads subpoenas to one that’s ready for them. It’s not about perfection—it’s about predictability, process, and pride in doing things the right way. And it starts with leadership that treats compliance not as an expense but as an investment in the business’s longevity.

How ComplyCheck Helps

At ComplyCheck, we’ve spent years immersed in the challenges that check cashing businesses and MSBs face—because we’ve been there ourselves. Our team includes former operators, ex-bankers, and seasoned compliance professionals who understand the pressure of running a regulated financial institution while also serving customers and maintaining profitability.

We don’t just teach theory. We know how critical it is to have centralized records, seamless access to transaction data, and airtight documentation when law enforcement requests come in. Whether it’s helping MSBs respond to subpoenas, prepare for examinations, or modernize their recordkeeping systems, we bring the kind of insight that only comes from deep, hands-on experience.

More importantly, we stay current with the evolving standards that MSBs are expected to meet—from changing BSA guidelines to state-level enforcement trends. We know what regulators and law enforcement look for because we’ve worked on both sides of the equation. That perspective allows us to guide MSBs not just to meet minimum requirements, but to build resilient, audit-ready compliance programs that hold up under scrutiny.

Every MSB is different—but they all need a trusted partner who understands their reality and can help them operate with confidence, especially when the stakes are high. We’re proud to be that partner for dozens of MSBs across the country.

Final Thought: A Well-Run MSB Welcomes Oversight

Responding to law enforcement is not about fear—it’s about professionalism. If you run a legitimate, compliant, and well-documented business, oversight should never scare you. In fact, it’s an opportunity to show that your MSB is doing its part to keep the financial system safe.