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#1245768 - 09/04/09 06:56 PM Reg GG
bsarockstar Offline
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Does anyone have a definition of "commercial account"? Are you including "dba, sole proprieter, LLC etc" for the notification?

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#1245844 - 09/04/09 08:11 PM Re: Reg GG bsarockstar
Elwood P. Dowd Offline
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(i) Commercial customer means a person that is not a consumer and that contracts with a non-exempt participant in a designated payment system to receive, or otherwise accesses, payment transaction services through that nonexempt participant.

(j) Consumer means a natural person.


While the definitions lack the precision bankers expect to find in various consumer protection laws, I would encourage you to classify a sole proprietorship as a commercial customer. Any business entity is definitely a commercial customer.

“DBA” is not a synonym for a sole proprietorship; corporations, partnerships, and LLCs can register to do business under an assumed name too. As individuals do not operate under assumed names except in a business context, I again encourage you to label any customer using a DBA as a commercial customer.

Finally, note that a "commercial customer" is not defined as a business customer. It is literally any customer that is not a consumer customer. That will include social organizations, chruches, etc. etc. Noting that many religious organizations are involved in gambling, that is not inappropriate.

Nevertheless, it's late enough on Friday that I do kind of get a kick out of the idea that your account reps are going to be requiring the Methodists to certify that they are not involved in Internet gambling. grin
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#1245854 - 09/04/09 08:21 PM Re: Reg GG Elwood P. Dowd
bsarockstar Offline
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Thanks for your clarification.

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#1250178 - 09/15/09 02:09 PM Re: Reg GG bsarockstar
HR Banker Offline
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So if we do not have any commercial customers that deal with gambling does that mean that we do not have to do anything with Reg. GG?

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#1250573 - 09/15/09 09:21 PM Re: Reg GG HR Banker
Carolina Blue Online
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Lost in a regulatory fog
You still need policy and procedures to show that you have controls to prevent any illegal gambling commercial customers from opening an account (think CIP). Also, need to notify all commercial customers of the new law (e.g. notice in Deposit Account Agreement) and have procedures to address what you will do if you have a gambling commercial customer or a payment system notifies you of an illegal payment.

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#1253388 - 09/18/09 10:07 PM Re: Reg GG Carolina Blue
ImGoinNuts Offline
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As far as notifying commercial customers. We are placing in our Deposit Account Agreement - but a vendor told me that we should be mailing a notice to all our current commercial customers. We weren't planning on doing this. Is anyone else doing this? Since vendors simply want us to buy their product (a lovely statement stuffer)
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#1253426 - 09/19/09 11:04 AM Re: Reg GG ImGoinNuts
Elwood P. Dowd Offline
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There are five general requirements in GG:

* adopt a UIGEA compliance policy,
* develop a due diligence process at account opening to determine whether a commercial customer presents anything more than a minimal risk of engaging in Internet gambling,
* provide notice to existing commercial customers,
* obtain any necessary notice of compliance from a designated payment system (cards), and
* develop procedures (by payment system) for responding when your bank becomes aware of restricted transactions.
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#1253484 - 09/21/09 12:24 PM Re: Reg GG Elwood P. Dowd
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In the latest advertisement for the BOL Reg. GG webinar the answer to the preview question states that as a paying bank we are exempt from developing policies and procedures. So I go back to my original question does this mean we do not have to do anything?

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#1253494 - 09/21/09 01:05 PM Re: Reg GG HR Banker
Elwood P. Dowd Offline
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Your original question was answered correctly: Yes, you must develop a compliance program.

While you may not be affected in your role as a paying bank, you are affected in your role as a depositary bank.
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#1253559 - 09/21/09 02:15 PM Re: Reg GG HR Banker
John Burnett Offline
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Itacket -- You have to read the whole question and the whole answer. The question and answer, copied below, clearly apply only to the bank's role as paying bank in connection with check clearing:

Q: Will we have to scan our customer's checks to block any payable to Internet casinos?

A: No. In its role as a paying bank, your institution is exempt from having to have policies and procedures to block restricted payments.


I'm looking forward to going through the entire regulation and explaining in which roles a bank can be exempt from having to have in place policies and procedures reasonably designed to identify and block or otherwise prevent payments to illegal Internet gambling operations. For more information, click HERE.

Your question asked if you would need to do anything if you don't have customers that operate gambling businesses. As a depositary FI, you will have to have policies and procedures in place that reasonably ensure that you can identify current and potential customers who receive or may receive restricted transactions, and that conform to the regulation's requirements with respect to handling such customers.

You also have to consider your roles with respect to the other payment systems that you are part of, such as ACH, wire transfer, card transactions and money transmittal (as applicable).
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#1254776 - 09/22/09 07:10 PM Re: Reg GG John Burnett
M&M Offline
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We issue credit cards to commercial and business credit cards. Our processor blocks all known MCC codes today for us. Do I need to notify our card customers who have ONLY a business or commercial credit card? Do I need to revise these card agreements? We were thinking that we did not have any to do's for these customers.

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#1254944 - 09/22/09 08:55 PM Re: Reg GG M&M
Elwood P. Dowd Offline
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Your credit card customers do not seem to fit in this definition:

(i) Commercial customer means a person that is not a consumer and that contracts with a non-exempt participant in a designated payment system to receive, or otherwise accesses, payment transaction services through that nonexempt participant. (Emphasis supplied)

FWIW, I agree with you.
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#1255076 - 09/23/09 11:02 AM Re: Reg GG Elwood P. Dowd
M&M Offline
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There were several questions in the BOL Q&A from last December that seem to indicate we should still have procedures in place, even if we just state we rely on the controls in place by the operator of the card system (#6). #37 in that same Q&A indicated that we need to provide notification to all of our commercial customers. But, sounds like we don't meet that definition...

But, couldn't a business card be used to pay for internet gambling, and couldn't they get a credit posted to their card? These should be blocked by the processor, so we don't need to worry?

Thanks, Ken!

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#1256066 - 09/24/09 12:44 PM Re: Reg GG M&M
M&M Offline
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Midwest
BUMP...

Ken- can you help me understand why you feel our commercial/business credit card ONLY customers do not meet the definition of commercial customer?

They contracts with a us (non-exempt participant) in a card system (designated payment system) to receive, or otherwise accesses, payment transaction services through that nonexempt participant.

I don't see where payment transaction services are defined, but would that include purchases and/or credits to and from their credit card? They could use it for payments/purchases, and they could also receive credits to their credit card.

Thanks!

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#1256313 - 09/24/09 03:57 PM Re: Reg GG M&M
FBH Offline
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I'm more concerned about the blocking restricted transactions provisions in the Reg. What about incoming ACH/Wire/Check traffic - is our FI required to preemptively block these types of transactions? If so, how?

Will there be a list similar to OFAC of identified illegal online gambling businesses or entities we can use to compare transactions against?

Or am I incorrectly interpreting the Reg?
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#1256642 - 09/24/09 07:45 PM Re: Reg GG bsarockstar
AJH Offline
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Anyone knows where to find or care to share language for the initial or yearly notice. The Reg includes only the violation notice. I could write one myself but just can't tell if there is one propossed by the reg somewhere.

Thanks

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#1256722 - 09/24/09 08:38 PM Re: Reg GG AJH
Queen Mum Offline
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OK
Annual notice??? You mean we will have to send out something annually to our commercial customers reminding them they can't do these transactions????

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#1256839 - 09/25/09 12:17 PM Re: Reg GG Queen Mum
M&M Offline
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Posts: 527
Midwest
I don't know of any annual notice requirement. I think once we notify our existing, we only have to cover new customers. However, if you have a notice in your terms/agreements, I think you would be ok.

I'm now wondering about commercial loan customers- does all of this apply to them as well?? UGH

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#1256936 - 09/25/09 02:19 PM Re: Reg GG M&M
AJH Offline
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OK OK. No there is no yearly subsequent notice required, only the initial notice, before 12-1-09. Then through the account agreement.

Also the ABA suggested wording here:

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

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#1257536 - 09/26/09 12:16 AM Re: Reg GG AJH
Ngoc Offline
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Posts: 80
Is this rule only applicable to commercial customers and not consumers? In some literature, it's explicit that this only applies to commercial customers and others are not so clear.

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#1257609 - 09/28/09 11:56 AM Re: Reg GG Ngoc
M&M Offline
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Posts: 527
Midwest
Only business and commercial customers, yes.

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#1258039 - 09/28/09 07:12 PM Re: Reg GG M&M
ahkcompliance Offline
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Ok, I am just starting to take a look at this as I have been put in charge of it. We have several customer's who use PayPal on a daily basis. We don't know what they are purchasing or what the funds are being used for? My understanding is that we do not need to monitor every transaction?

Am I correct?

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#1258829 - 09/29/09 08:47 PM Re: Reg GG ahkcompliance
ahkcompliance Offline
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I have been researching this today and want to make sure I understand this correctly. As a bank we can rely on the card networks to block credit/debit card transactions that are unlawful. Also, we are not required to block check payments from customer accounts relating to unlawful gambling. We would only need to if we have reasaonable knowledge of the event. Are we required to block ACH and wire activity?

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#1258898 - 09/29/09 10:00 PM Re: Reg GG ahkcompliance
Lele Offline
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In the Sun
AJH - I scanned the site you suggested for wording for the notice - I don't see it. Could you be more specific on where it is on this site?
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#1258999 - 09/30/09 11:54 AM Re: Reg GG Lele
DeeQ Offline
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Here's one... thanks go to corky:

"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."
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