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UIGEA Bank deadline set for Dec 1 2009
The US Department of Treasury and Federal Reserve have announced a joint rule to implement and enforce UIGEA. The rule will mandate financial institutions to perform due diligence on customers to ensure that they are not processing any transaction related to online gambling.
American financial institutions have been given until the 1st December 2009 to comply with these regulations, which will include all credit card transactions as well as electronic fund transfers and cheque payments.
The Treasury Department issued a statement saying:
"For purposes of the rule, unlawful Internet gambling generally would cover the making of a bet or wager that involves use of the Internet and that is unlawful under any applicable federal or state law in the jurisdiction where the bet or wager is initiated, received, or otherwise made."
American Financial Institutions have used the consultation period to argue that the proposed rule would create an undue burden, and that policing UIGEA will result in compliance costs greater than any social benefits which would occur. Worries are that, because of this extra burden, UIGEA will have a negative effects on the competitiveness of the U.S. payments systems.
The Treasury Department says the comments were taken into consideration, but says it believes "that flexible, risk-based due diligence procedures at account opening, such as those set out in the final rule, present the best option for balancing these two interests."
Thursday 13th November 2008
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