Credit unions won a victory today when the House Financial Services Committee approved a legislation that would legalize internet gambling.
The bill, which was approved 41-22 mostly along party lines, requires online gambling sites to register with the government .
Credit unions hadn't taken a position on the virtues of gambling but had pushed for legislation such as this which would relieve what they see as the excessive compliance costs of existing legislation to buy licenses and comply with existing gambling laws.
Lawmakers approved an amendment that would ban people from paying for their gambling via credit cards, they can only do it by debit cards or by prepaying.
Under a 2006 law, financial institutions are required to enforce the ban on Internet gambling and credit unions contend this adds to what NAFCU wrote in a letter to the committee is a "heavy new compliance burden."
This would improve under the new law, according to a representative of CUNA.
"We can envision that under this measure a list of licensed gambling enterprises could be developed for use in identifying and blocking transactions for Internet gambling businesses that are not on the list," Discovery Federal Credit Union President/CEO Edwin Williams told the panel last week. "Such an approach would promote compliance for institutions by providing them a much greater level of certainty as to whether a transaction for a particular entity should be prevented."
House Financial Services Committee Chairman Barney Frank (D-Mass.), the bill's sponsor, framed it as a matter of individual choice not as a promotion of gambling.
"What we're doing is allowing Americans to make their own choices," Frank said. "It's a fundamental principle of freedom."
