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Final UIGEA rules unveiled by Treasury Fed
WASHINGTON (11/13/08)-- The U.S. Department of the Treasury and the Federal Reserve Board Wednesday announced the release of a joint final rule to implement the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. UIGEA prohibits gambling businesses from knowingly accepting payments in connection with unlawful Internet gambling, including payments made through credit cards, electronic funds transfers, and checks. Under the Internet gambling law, financial institutions must establish and implement policies and procedures to identify and block restricted transactions, or rely on those established by the payments system. According to an agency release, the final rule provides “non-exclusive examples of such policies and procedures and sets out the regulatory enforcement framework.” Compliance with the rule is required by Dec. 1, 2009. Earlier this week, House Financial Services Committee Chairman Barney Frank (D-Mass.) wrote to Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke to urge them to delay implementation of what he called "deeply flawed" UIGEA rules. (News Now Nov. 11) The Credit Union National Association (CUNA) has voiced concerns, both to the implementing agencies and to Congress, that provisions of the law could swamp credit unions and other financial institutions with compliance burdens. CUNA opposed the agencies' draft implementation of the law, saying it lacked clarity and sufficient definition of terms. “While we have not had an opportunity to review the full 66-page document in detail, the agencies have stated in their explanation to the final regulation that the federal government will not establish a list of businesses known to be involved in unlawful Internet gambling,” noted Kathy Thompson, CUNA’s SVP for Compliance. Thompason added that, in fact, the Fed and the Treasury Department "go to great length" to explain why it’s not possible for them to determine what entities are engaged in unlawful Internet gambling. “Without an ‘OFAC-type’ list where the government -- not private businesses -- ascertains who is engaging in unlawful activities, I do not see how credit unions and other financial institutions can reasonably be expected to develop a cost-effective compliance program. “With everything else going on in the financial world today, this doesn’t seem the time to burden credit unions with implementation of a law of questionable value,” Thompson said.


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