Banking 101: Understanding how banks view MSBs

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Banking 101 Understanding how banks view MSBs

• Carol Ann Killian
• Senior Vice President
• Middle Market Lending - NYC
• October 1-3, 2010

Confidential
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How to present your MSB as an ideal customer

• Financials, Financials, Financials
• Strong financial position
• The business should be well capitalized
• Net income rather than losses
• Three years of losses is an automatic workout for
  Cap One
• Manage your accounts no overdrafts!
• Clean up your line of credit weekly!

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Once you have the good story, how do you tell it?

• Clear, Concise, Complete financial package
• Accountant prepared financial statements
• Provide the following
• audited financial statements (a good review is
  also acceptable compilations can be provided if
  the audit is not required)
• business tax returns
• banking department report (If not required, a
  report detailing check volumes processed should
  be part of your financial statements)
• .

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Once you have the good story, how do you tell it?

• Clear, Concise, Complete financial package
• Interim financials if more than six months after
  FYE and/or if you are requesting a loan greater
  than 1MM.
• Personal financial statement and personal tax
  returns are required
• Insurance coverages
• Timely and complete information help us to
  provide accurate information to regulators and
  mitigate risks associates with banking MSBs.

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How regulators view your MSB - Compliance

• Perceived inherent risk with MSBs our portfolios
  receive extra scrutiny
• Who is your bank regulated by externally?
• OCC
• FDIC
• Who is your bank regulated by internally?
• Credit Risk Management
• Operations
• BSA
• Internal Compliance Department
• Loan Review
• CRA

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Compliance Programs - Requirements

• Your Compliance Program is REQUIRED include the
  following
• A designated Compliance Officer
• Internal Policies, Procedures and Controls (not
  just a MoneyGram or Western Union binder)
• Ongoing training for all employees
• Independent testing and review

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Bank Relationship

• Underwriters, Treasury Management and Branch
  staff work very hard for this relationship
• Back office and Compliance staff touch the
  account as well
• My contact information
• Carol Ann Killian
• 212-764-8321
• Carolann.killian_at_capitalonebank.com