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#1259158 - 09/30/09 02:57 PM Re: Reg GG DeeQ
Lele Offline
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Appreciate it!
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Operations Compliance
#1259631 - 09/30/09 08:06 PM Re: Reg GG bsarockstar
Compliance4521 Offline
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Washington
I am looking for thoughts on what would be acceptable due diligence to determine the risk of a commercial customer engaging in a Internet gambling business.

At account opening we would ask the commercial customer if the business engages in an Internet gambling business. If they are, we will not open account.

Do you think this would be sufficent evidence of due diligence?

Lori

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#1260467 - 10/01/09 09:33 PM Re: Reg GG bsarockstar
Doug Hendrickson Offline
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I'm questioning the need to develop a separate POLICY with regards Regulation GG. I'll admit that I'm fairly new to the game, but I was going to rely on our general compliance policy, which says that we will abide by all applicable rules and regulations of the supervisory agencies. We do have separte policies for some items, but those are usually the 'biggies' such as BSA/AML, CIP, etc. I'm averse to creating a policy that seems like it would be a one-pager at best.

However, we will develop a procedure for complying with Reg GG, basically stating the requirements and how we have complied with them (e.g., notification to existing commerical customers, revision of account agreement, procedures to follow when advised of unlawful transactions by a service provider, etc.).

How extensive is any one else's 'policy'?
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#1260474 - 10/01/09 09:36 PM Re: Reg GG Compliance4521
Doug Hendrickson Offline
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I believe there is some guidance in the regulation that if the customer is in the business of Internet Gambling that you have to get some form of 'legitimacy' from the customer, such as a license. I presume it's also each of our call as to whether or not to open an account at all if the customer indicates that they are in the business of IG.
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#1260506 - 10/01/09 10:16 PM Re: Reg GG Doug Hendrickson
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My head hurts from this. I've written a policy based on a sample of one I received, but now my boss wants me to add sections on Employee Training, Internal Compliance Audit & Record Retention. Is it me, or shouldn't this be in the procedures, especially record retention. There are no guidelines on how we need to train employees.
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#1260508 - 10/01/09 10:22 PM Re: Reg GG RedRaven
Doug Hendrickson Offline
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I would agree that these are the types of things that should be in the procedures, not the policy. And I can't see writing a policy specific to Reg GG because at most the policy would say that we will comply by implementing the procedures defined in the procedures document.

Could you share your policy or the one you received with us?

Thanks.
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#1260511 - 10/01/09 10:42 PM Re: Reg GG Doug Hendrickson
Lele Offline
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I used the one I found here http://www.bankersonline.com/tools/uigea2009.pdf
and modified it to fit our bank. It was enough to use for our procedures as well.
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#1260627 - 10/02/09 01:18 PM Re: Reg GG Lele
ahkcompliance Offline
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What kind of monitoring is going to need to be done. We have incorporated IG into our new account opening to screen for this. It really won't affect us in our area. Are there reports that will need to be monitored? Is everyone's core processor doing anything? We have not heard anything that our core processor will be doing.

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#1260789 - 10/02/09 02:51 PM Re: Reg GG ahkcompliance
RedRaven Offline
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Doug - I used the same one as Lele.
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#1260933 - 10/02/09 04:28 PM Re: Reg GG RedRaven
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The reg calls for notification to existing customers, but it doesn't specify what type of method the notification has to be in. Is it sufficient that we send out a Reg GG brochure, like one that's being offered on bankstuffers.com?

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#1261472 - 10/05/09 12:20 PM Re: Reg GG Ngoc
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#1261529 - 10/05/09 02:07 PM Re: Reg GG P*Q
Burgess Offline
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See ABA newsbytes - Rep Frank want Fed to postpone implimentation of Reg GG for one year.
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#1261542 - 10/05/09 02:17 PM Re: Reg GG Burgess
Elwood P. Dowd Offline
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The legislation to delay UIEGA's effective date for one year, HR 2266, was proposed several months ago; it is not a recent development. Last week Congressman Frank and 16 other legislators wrote a letter to the Secretary of the Treasury asking him to delay the effective date, something he is probably not even empowered to do.

The fact that the letter was even written suggests that Congressman Frank does not think he can get HR 2266 passed prior to December 1.

Banks that have been waiting for this issue to go away need to start moving.
Last edited by Ken_Pegasus; 10/05/09 03:54 PM.
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#1261553 - 10/05/09 02:29 PM Re: Reg GG Elwood P. Dowd
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Am I understanding this correctly...banks just need to rely on proecdures set in place by the payment system (VISA or core processor). Banks will need to develop due dilligence at account opening to detect unlawful activity.

From what I get out of this is banks are to catch it at account opening but then rely on the payment systems to catch and then we will need to respond to that notice.

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#1261575 - 10/05/09 02:51 PM Re: Reg GG ahkcompliance
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I concur ahk and think this is one of the lesser burdensome things we've had to comply with so I have no issue with the 12/1 deadline.

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#1261584 - 10/05/09 02:59 PM Re: Reg GG P*Q
ahkcompliance Offline
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It worries me that I am missing something. I have not heard from our core processor to determine if any reports will be available from them.

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#1261597 - 10/05/09 03:08 PM Re: Reg GG ahkcompliance
Elwood P. Dowd Offline
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Your core processor is not really involved.
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#1261621 - 10/05/09 03:36 PM Re: Reg GG Elwood P. Dowd
ahkcompliance Offline
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Ok---I was thinking they would provide reports especially for ACH items. So we would only be required to act if we have "actual knowledge" our customer is engaging in unlawful gambling? So there is not much monitoring requirements?

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#1261634 - 10/05/09 03:49 PM Re: Reg GG ahkcompliance
Elwood P. Dowd Offline
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There are no specific monitoring requirements relating to the check, wire, and ACH systems. ACH codes are not specific enough to identify gambling related activity, only the type of transaction.

The ability to identify a gambling related transaction "in process" only exists within the card system and it only exists there when the codes are used correctly.
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#1261695 - 10/05/09 04:31 PM Re: Reg GG Elwood P. Dowd
BrendaC Offline
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It's not as easy as it may sound to monitor gambling transactions even for credit cards. The suspect gambling transactions I have seen come over as Merchant codes for "personal services" from places like St. Kitts. They know that a gambling code will not be authorized, so they use some other type of code.

All we can really do at this point, IMHO, is work with the card processor to reject known gambling codes (which is pretty routine now and has been in place for some time) and monitor those accounts that have recurring codes that appear suspicious.
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#1262155 - 10/06/09 02:24 PM Re: Reg GG BrendaC
ahkcompliance Offline
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Has any developed procedures for dealing with a notice received from a payment system. Typically, if we receive notice from a payment system about our client we will block their access to the system and close their account. Our area is rural and our business are locally owned so we know their business is legit so in a response will will close the account. I didn't know if it needed to be more detailed than that.

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#1263449 - 10/08/09 11:55 AM Re: Reg GG ahkcompliance
M&M Offline
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Has anyone received anything outlining what the networks, e.g. MC, Visa, Discover, etc., will do to block these before they get to us?

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#1267905 - 10/16/09 02:50 PM Re: Reg GG M&M
DD Regs Offline
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Originally Posted By: M&M
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!



Where is BOLs Q&A for Reg GG located?
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#1268287 - 10/16/09 07:17 PM Re: Reg GG DD Regs
BetsyS Offline
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Visa published an article in their 04/22/09 Visa Business News summarizing their existing Operating regulations and programs in place for the Unlawful Internet Gambling Act. You should be able to access it through VisaOnline in their news archives. They offer an optional Issuer Stand-in Processing service that can be used to block restricted transactions. Unfortunately,I do not work with other card assocaitions.

I'd recommend that you check both with your card association representative and card processor to see what's available and what may already be in place on your card programs. We checked with our card processors, and found that that had automatically enrolled us in Visa's service.
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#1268502 - 10/16/09 09:05 PM Re: Reg GG BetsyS
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I'm presuming, but want to confirm, that the regulation applies both to credit AND debit cards. Our debit cards have the MasterCard logo and can be used at ATM/POS; however, our bank does not issue credit cards. It is my understanding that the Operating regulations and programs from Visa and MasterCard cover both credit and debit cards.
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