Government Update, a bi-weekly electronic publication that highlights legislative, regulatory, and litigation issues that affect the network branded prepaid card business, is now an exclusive benefit of NBPCA membership. To request a sample issue, please contact us.

FInCen Issues Ruling Which Impacts Merchants and Owners of ATMs That Participate in Prepaid Card Reload Programs
May 20, 2008
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Bills to Redefine "Monetary Instrument" Introduced in House/Senate
September 28, 2007

As the NBPCA has been predicting, movement is underway to include “stored value” under the definition of “monetary instrument.” Although modification is proposed in the 210-page “Violent Crime Control Act of 2007.” The bills are: S. 1860 and H.R. 3156 (section 338/page 80).

Both bills are sponsored by members of the Judiciary Committees (HR 3156 is sponsored by Congressman Lamar Smith (R-TX), Ranking Member of the House Judiciary Committee, and S. 1860 is sponsored by Senators John Cornyn (R-TX) and Jon Kyl (R-AZ)). HR 3156 also has been referred to the Ways & Means, Energy & Commerce, and Financial Services committees. It is not clear which committees will seek referral on the Senate bill.

The following is the amendment provided in the HOUSE/SENATE version:

SEC. 338. STORED VALUE CARDS.

Section 5312(a)(3) of title 31, United States Code, is amended by--

(1) striking `and' at the end of subparagraph (B);

(2) striking the period and inserting `; and' before the period at the end of subparagraph (C); and

(3) inserting the following thereafter:

(D) As the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, stored value cards or other similar devices including funds or monetary value represented in digital electronics format (whether or not specially encrypted) and stored or capable of storage on electronic media in such a way as to be retrievable and transferable electronically.'

For background information on the issues associated with including stored value/prepaid cards in the definition of “monetary instrument,” please refer to: http://www.nbpca.com/members/docs/Issues Keep Prepaid Lawyer Awake.pdf. Also, if you are a Paybefore subscriber, please refer to the September 2007 issue (Volume 1, Issue 10) article, “Why Prepaid Cards Should Not be Classified as ‘Monetary Instruments’.”

The House and Senate bills are posted in on www.nbpca.com in the Communications/Of Interest section.

Revised Bank Secrecy Act/Anti-money Laundering Examination Manual
(August 24, 2007)

The Federal Financial Institutions Examination Council (FFIEC) released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual on August 24, 2007.

According the cover information provided with the new manual, the revised document “reflects the ongoing commitment of the federal banking agencies and FinCEN to provide current and consistent guidance on risk-based policies, procedures, and processes for banking organizations to comply with the BSA and safeguard operations from money laundering and terrorist financing. The new version clarifies supervisory expectations, incorporates regulatory changes since the manual’s 2006 release, and reflects banking industry and examination staff feedback.

The revised manual can be accessed from the FFIEC BSA/AML InfoBase at: http://www.ffiec.gov/bsa_aml_infobase/default.htm.