Magazine article American Banker

Fincen Anti-Launder Rule Addresses Diverse Issues

Magazine article American Banker

Fincen Anti-Launder Rule Addresses Diverse Issues

Article excerpt

Byline: Will Hernandez

A final rule to prevent prepaid accounts from being used to launder money attempts to balance the concerns of retailers, program providers and law enforcement agencies.

The Financial Crimes Enforcement Network said Tuesday that it had adopted a "targeted approach" to regulating sellers of prepaid products. It will focus on the sale of cards with features or high-dollar amounts that may pose money-laundering risks.

"We had to strike a balance between what law enforcement [officials] needed and, of course, what the retailers and [prepaid] providers want to deliver in terms of customer service and the ability to continue to innovate," a Fincen representative says.

The new rule amends the Bank Secrecy Act, which Congress passed in 1970 and requires financial institutions to assist government agencies with issues pertaining to money laundering. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 required changes to the law. Opponents of the proposals complain about a requirement that retailers collect identifying information when selling prepaid cards to customers. The final rule has several exemptions.

Retailers that sell open-loop prepaid cards to consumers in any amount exceeding $1,000 in a single visit must collect a name, address, and other details for law enforcement officials to access.

The exemption to this requirement applies only if consumers cannot use the cards outside the U. …

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