To what extent does this law apply to banks? Do we need to make policy and procedures regarding it? Thanks for enlightening me because I don't get it.

From the ABA:


Unlawful Internet Gambling Act

The Department of the Treasury and the Federal Reserve Board (Agencies) issued a joint final rule on December 18, 2008 to implement the Unlawful Internet Gambling Enforcement Act. The Act "prohibits any person engaged in the business of betting or wagering (as defined in the Act) from knowingly accepting payments in connection with the participation of another person in unlawful Internet gambling." The final rule requires a strengthened screening process at the time of account opening to deny commercial entities that may be acting as Internet casinos access to the payments system. It also requires that policies and procedures be implemented to prevent all debit and credit card payments to Internet casinos. It does not require that checks, ACH payments, or wire transactions related to Internet gambling be monitored or blocked.

http://www.aba.com/Compliance/UIGEA.htm

In case you aren't an ABA member:

2. What will my bank have to do to comply with the Final Rule?

In general, the Final Rule imposes certain responsibilities on banks to demonstrate through written policies and procedures that they are taking precautions when opening commercial accounts that may operate as illegal Internet gambling entities (casinos). If illegal Internet casinos are denied the opportunity to open a bank account, they will be denied the opportunity to make and receive payments. It also requires that banks have policies and procedures that would prevent credit and debit card transactions from being made to Internet casinos for unlawful Internet gambling by any of its customers, including individual, non-commercial account holders. For these card transactions, banks may rely on the policies and procedures established by the card networks and do not have to create a separate process.

On the same topic, has anyone prepared a notice/certification for existing commercial customers?

I came across a sample policy posted at Bankersonline.com/tools in the "our newest tools" section. It doesn't have a sample notice or certification, but is helpful for getting one's arms around the Act.

That was mine.

You know, JayJ, unless they are w/c regulars, your post will make no sense to them...

I have been unable to locate an example of a disclosure that we can send to our existing commercial customers. I thought I would re-ask Deekles question to see if anyone has located one in the past month.

BUMP

Has anyone seen ANY sample disclosure or notice language? Or has anyone written their own that they would be willing to share?

This is going on our commercial acct statements:

"In accordance with the requirements of the Unlawful Internet Gambling Enforcement Act of 2006 and Regulation GG, this notification is to inform you that restricted transactions are prohibited from being processed through your account or relationship with our institution. Restricted transactions are transactions in which a person accepts credit, funds, instruments or other proceeds from another person in connection with unlawful Internet gambling."

PS, thanks go to Corky...

We're doing both a statement message:

"The Unlawful Internet Gambling Act of 2006 prohibits Bank ABC from processing restricted transactions through your business account. Please see our website www.BankName.com for more information.”

And a notice on our website:

Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006
The UIGEA, signed into law in 2006, prohibits any person engaged in the business of betting or wagering (as defined in the Act) from knowingly accepting payments in connection with the participation of another person in unlawful internet gambling. The Dept of Treasury and the Federal Reserve Board have issued a joint final rule, Regulation GG, to implement this Act.

As defined in Regulation GG, unlawful Internet gambling means to “place, receive or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received or otherwise made”.

As a customer of [Bank Name], these restricted transactions are prohibited from being processed through your account or banking relationship with us. If you do engage in an Internet gambling business and open a new account with us, we will ask that you provide evidence of your legal capacity to do so.

Please see one of our Operations specialists if you would like additional information on UIGEA or Regulation GG.

Betsy, I like the website idea, thanks!

Thanks. We're trying to avoid a customer mailing, and the statement messaging didn't give enough room for a complete disclosure.

Aha... I see.

We have suspended any action on this pending the outcome of Barney Frank's bill to kill the regulation.

http://tinyurl.com/mukuv9

Retread, nothing has been done but prep, but I don't think it's gonna die.

However, it may, such is my luck...

Thanks for all the info everyone.

Is it me or is this reg. an examiner's dream come true? It should be so simple, but with the lack of sample language for the notice and acknowledgement as well as a lack of some key definitions it seems like there is a lot of room for criticism and individual examiner interpretation. I guess I just don't understand why, if they want us to notify existing customers and get signed acknowledgements on new accounts why they wouldn't issue sample language.

UIEGA is being challenged in the U.S. Third Circuit Court of Appeals. Consistent with your analysis, the challenge is based entirely on constitutional grounds and alleges that the statute is simply "void for vagueness."

It would take an act of Congress to delay the effective date and, unless that takes place before the recess, it is unlikely.

Published examination procedures would be nice...

Do I need a Board approved policy to be in compliance with UIGA?

Is anyone taking the approach that they will not open an account if the customer indicates that he/she is engaged in an internet gambling business? I realize we would still have to make the disclosures to existing and new customers, but we wouldn't have all the due diligence and subsequent monitoring to do.

There are some banks that have decided not the have MSBs as customers because they do not have the systems and processes in place. IMHO...I would place the decision to open an account that is engaged in internet gambling along the same lines.

I have noticed more and more customers bringing in checks that appear to be from some anonymous business or payroll service and when we question the customer they eventually admit that it is a payout from Internet gambling. The businesses even have websites that make it appear as though they are involved in some sort of legitimate business. It makes me wonder if their bank has any clue what they are doing.

I have been working through reading all the info out there on Reg GG. If we are an RDFI only, have no MSBs, are we just required to monitor debit card transactions? Or are we also required to monitor ACHs and checks?

We are not going to open the account if the customer indicates that they are engaged in internet gambling. We will address this in our policy.
We will also be providing a statement message to existing customers and will be tweaking our commercial account agreement.

Thank you all for your feedback on the disclosure language. It has been extremely helpful!

Does anyone have a sample form to have commercial customer sign certifying that they do not engage in internet gambling?