Comment Call: Joint Proposal Implementing Unlawful Internet Gambling Enforcement Act

CUNA
November 2, 2007 | COMMENTS

The Department of the Treasury and the Federal Reserve Board (the Agencies) issued a joint proposed rule to implement the Unlawful Internet Gambling Enforcement Act (Act).

The proposal designates the following five payment systems that could be used in connection with a restricted transaction: automated clearing house systems (ACH); card systems, check collection systems, money transmitting businesses; and wire transfer systems.

Most participants from the ACH, check collection and wire transfer systems will be exempt. Participants in these systems that are not exempt are those with a customer relationship with the Internet gambling business and those that send or receive certain cross-border transactions, including credit unions if they engage in these activities.

This means that participants in card systems and within money transfer businesses would be covered by the rule, including credit unions participating in these systems.

All non-exempt participants would be required to either establish or implement policies and procedures to identify and block, prevent or prohibit restricted transactions or rely on and comply with the policies and procedures established by the payment system.

The proposal provides nonexclusive examples of policies and procedures for each designated payment system.

A safe harbor is provided to anyone that identifies and blocks a transaction if it is restricted, the participant believes it is restricted or the transaction is blocked in reliance on the policies and procedures.

This is a very confusing proposal and we don't pretend to have all the answers because the regulators certainly don't.

You may access a copy of the proposed rule here.

Comments are due to the Treasury and the Federal Reserve by December 12, 2007. Please submit your comments to CUNA by November 25, 2007 . Please feel free to fax your responses to CUNA at 202-638-7052 or e-mail them to CUNA SVP and Deputy General Counsel Mary Dunn at mdunn@cuna.com or Assistant General Counsel Lilly Thomas at LThomas@cuna.com or by telephone at 202-638-5777.

> Read the full comment call here.