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The group says cutting off access to basic banking services is making it difficult for the businesses to remain viable and offer transaction fees that are often lower than those charged by traditional banks.

“Without risk of money laundering or reputational damage, we can only assume that the decision to close these accounts relates to the competition that they represent,” association co-chairs Michael Smith and Carinta Mannarelli wrote in the letter to OSFI.

“Our experience and data shows that this de-banking phenomenon is industry wide.”

There are more than 800 registered money services businesses in Canada. Their operations include foreign exchange dealing, money transferring, and cashing or selling money orders and travellers’ cheques, among other services.

The letter to OSFI, which was also shown to the Financial Post, says there has been a widespread “withdrawal of service” by the Bank of Nova Scotia and other financial services institutions — terminating decades-long relationships in some cases.

Rick Roth, a spokesperson for Scotia, said the bank recently reviewed the global money service businesses industry and adopted a new set of guidelines for opening and maintaining accounts in the segment to ensure the bank remains in line with its risk management practices.

The overhaul included “exiting some relationships and closing accounts,” he said.

Canada’s big banks have made anti-money-laundering efforts and related risk management a priority in recent years, both financially and operationally, to comply with strict international and domestic rules. Failures can lead to fines and cause problems with regulators in Canada and internationally.