The Independent Community Bankers of America said the Internet Gambling Prohibition and Enforcement Act (H.R. 4411) as passed by the House of Representatives could greatly over-burden the nation\’s payment system and monitoring payments made to gambling interests may be impossible.
“ICBA recognizes the concerns that some of your colleagues have raised about Internet gambling,” ICBA wrote in a letter to Senate Banking Committee Chairman Richard Shelby (R-Ala.) and Senate Judiciary Chairman Arlen Specter (R-Penn.). “We urge Congress to recognize that the nation\’s banks have already taken on major responsibilities to help detect and prevent terrorist financing and illegal money laundering. Attempting to monitor and block gambling transactions, particularly given the limits of the current payment technology, could detract from those efforts.”
ICBA also noted additional concerns with the legislation, including:
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The bill creates an impossible compliance burden for “uncoded” transactions. Unlike credit card transactions, which include a code that identifies the type of business receiving payment, uncoded transactions (electronic payments and personal checks) don\’t provide this information. While it\’s possible to monitor and block certain types of credit card transactions, a bank cannot do so with uncoded transactions.
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The bill threatens to subject banks and electronic processors to potential criminal liability for routine processing of financial transactions – their core business operation.
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The bill could subject banks to inconsistent state and national standards.
ICBA has been working to ensure that community banks – which through the USA Patriot Act and Bank Secrecy Act must confirm the identity of bank customers while documenting and reporting suspicious transactions – can continue to focus their resources where risks to national safety and financial soundness are greatest. The burden of regulation and compliance created by H.R. 4411 is substantial, and if enacted, would require banks to identify and block transactions between bank customers and Internet gaming companies on a system not designed for this purpose.
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