7 Compliance Updates Every Check Casher Should Know in 2025

1. New Beneficial Ownership Reporting Requirements

As of January 1, 2025, under the Corporate Transparency Act, many small businesses—including check cashers—must file Beneficial Ownership Information (BOI) with FinCEN. Failing to comply can result in steep penalties. Make sure your business is properly registered.

2. Enhanced KYC Verification Expectations

State regulators and auditors are increasing scrutiny around Know Your Customer (KYC) procedures. Simply copying a customer’s ID is no longer enough. Document transaction patterns, verify employment for payroll checks, and record repeat behavior anomalies.

3. SAR Filing Thresholds and Red Flags Revised

FinCEN has updated its Suspicious Activity Report (SAR) guidance. Structured transactions below $10,000, rapid check cashing from unknown sources, and repeated declined checks from the same customer may now warrant a SAR filing. Train your staff on these new triggers.

4. State-Level Licensing Renewals Are Getting Stricter

Several states, including California, Texas, and New York, have tightened licensing requirements in 2025. Common reasons for denial or delays include incomplete training logs, missing annual audit reports, or customer complaints. Stay current on your state's specific updates.

5. New Guidance on Payroll Check Fraud Liability

The FDIC has issued guidance clarifying when a check casher may be liable for fraudulent payroll checks, particularly if proper due diligence isn’t followed. Verifying the employer and check issuer is now considered a minimum best practice in fraud-prone states.

6. Digital Recordkeeping Rules Expanding

More states are mandating digital retention of check cashing logs for 3–5 years, including customer IDs, scanned checks, and transaction details. Paper logs may no longer be compliant. Consider software that automatically stores and encrypts these records.

7. IRS Scrutiny of High-Volume Cash Businesses

Businesses handling large amounts of cash, including check cashers, are under tighter review by the IRS in 2025. Deposits inconsistent with stated revenue, unreported transaction fees, or poor bookkeeping can trigger audits. Work with a CPA familiar with MSB rules.

Final Thoughts

Staying compliant is no longer optional—regulators are actively monitoring check cashers in 2025. Invest in staff training, update your documentation practices, and use fraud detection tools that support compliance. A little effort now prevents major risk later.