The $300,000 fine came with a warning from federal officials that risky money services business customers are flocking to smaller financial institutions because big banks have increased scrutiny.

"When a small institution opens its doors to the world, takes on greater risks than it can manage, and puts profits before AML controls, bad actors are bound to take advantage," FinCEN Director Jennifer Shasky Calvery said in a press release announcing the penalty.

Federally chartered credit unions are required to designate a person responsible for ensuring day-to-day compliance with BSA requirements, but North Dade failed to designate a person responsible to oversee BSA compliance, and no staff member was assigned or technically competent to oversee ongoing compliance efforts, FinCEN said.

"North Dade's five-person staff did not have sufficient resources or technical expertise to administer a program capable of ensuring compliance with the BSA," FinCEN said.

"These MSBs were located outside of its geographic field of membership and were engaged in high-risk activities, such as wiring millions of dollars per month to high-risk foreign jurisdictions," the FinCEN document said.

A 2009 contract enabled the third-party vendor, which was itself an MSB, to provide financial services to other MSBs, including check-cashing stores and currency exchangers, FinCEN said.

"North Dade agreed to become the depository institution for the vendor's MSB clients, providing sub-accounts for each MSB to conduct deposits and transfer funds," the agency said. "Under the contract, the vendor was North Dade's member and customer and the vendor's MSB clients were not. However, in practice, 56 of the Vendor's MSBs sub-accounts could receive financial services directly from North Dade."

North Dade neglected AML compliance responsibilities and lacked sufficient staff expertise and technical infrastructure to sufficiently monitor the vendor's contract, the agency said.

Read more: $3.6M CU processed $1 billion in outgoing wires in 2013 …

Greed seemed to be a factor, according to federal officials.

"The substantial revenue generated by the vendor's program appeared to outweigh any consideration by North Dade of associated risks and appropriate compliance measures," FinCEN said.

In 2013, the total transaction volume through North Dade by MSBs included $54.8 million in cash orders, $1.01 billion in outgoing wires, $5.3 million in returned checks, and $984.4 million in remote deposit capture, FinCEN said.

The MSB activity constituted 90% of North Dade's annual revenue in 2013, the agency said.

"This was not the expected business behavior of a small credit union like North Dade and led to substantial BSA compliance failures and violations," the agency said.

Calvery cautioned the banking industry to take note of the large penalty.

"This case raises pretty obvious questions that no one seems to have asked: Why would MSBs located all over the world choose a small Florida credit union to conduct close to $2 billion in transactions?," she said in the press release. "Credit unions pride themselves on close and low-risk relationships with known neighborhood customers.  However, North Dade welcomed customers far beyond its field of membership, without adequate policies and procedures to ensure AML compliance."

Calvery also expressed concern about North Dade's failure to comply with FinCEN's 314(a) program.

"It is of great concern that North Dade failed to even review the 314(a) requests it received," she said. "These are time sensitive requests that, by their very nature, are intended to further criminal investigations into significant money laundering and terrorist financing activities." 

Even though independent audits in 2012 identified money laundering and terrorist financing risks at North Dade, the cooperative did not perform a risk assessment until November 2013, FinCEN said.

"When NCUA examiners requested a copy of North Dade's risk assessment for its Dec. 31, 2011 exam, they were provided with an outdated template from the 2006 Federal Financial Institutions Examination Council Manual, rather than an assessment of North Dade's particular risks," the agency's penalty assessment said.

Without knowing or understanding its customers or risks, North Dade was unable to adequately monitor, detect or report significant suspicious transactions and other activities, FinCEN said.

When the credit union did file suspicious activity reports, the reports were often late and insufficient, the agency said.

In 2008, the credit union had been applauded by county commissioners for its role in incorporating Miami Gardens in 2003.

Just two years later, NCUA instructed the credit union to ensure all MSB members met FOM requirements, but the cooperative failed to establish an adequate customer identification program, FinCEN said.

Despite acknowledging that it had anti-money laundering compliance responsibilities for the high-risk accounts, North Dade relied on the vendor to conduct all related due diligence and suspicious activity monitoring without conducting any independent verification or inspection, FinCEN said.

In recent months, money-laundering experts and law enforcement officials have cautioned the credit union industry to beware of MSBs seeking to move illicit money to smaller community financial institutions. For example, a Federal Bureau of Investigation official reportedly told attendees at a recent anti-money laundering conference that the agency has seen a surge in illicit activity at smaller community banks and credit unions, according to The Wall Street Journal.

During the Association of Certified Anti-Money Laundering Specialists conference in Vegas, a compliance officer at a leading holding company also cautioned credit unions to use caution when banking MSBs, the Wall Street Journal said.