WASHINGTON — Financial institutions could begin carrying more of the load with regard to blocking "bad" transactions, according to one NAFCU attorney.
NAFCU Associate Director of Regulatory Affairs Pamela Yu said credit unions likely will not feel much of the burden from the Internet gambling bill recently signed into law, recalling a recent luncheon hosted by Women in Housing and Finance that she attended. "Most analysts are expecting that compliance is going to take place mostly on the payment system level, probably won't filter down to individual financial institutions," she said. MasterCard and Visa will probably just block transactions coded with the Internet code and the gaming code.
"We'll have to see whether the Fed and Treasury will carve out exceptions for other payment systems," she added. "There's some discussion about how difficult it would be for ACH, checks, wire transactions, that type of thing to really block that information. Those types of transactions don't carry as much information as credit cards."
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Yu emphasized, "One of the interesting things that was also discussed was also the potential implications for further enforcement responsibilities for the financial services industry. We're already seeing with BSA that credit unions and banks are already being expected to help enforce against money laundering…It's interesting to think about whether or not Congress might rely on financial institutions to block other types of 'bad' or immoral transactions."
Federal regulators have 270 days from enactment of the Internet gambling law to promulgate rules.
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