Thursday, November 10, 2011
FinCEN issues prepaid access rule FAQs
In response to prepaid card providers seeking clarification on the new anti-money laundering provisions imposed on the industry, the Financial Crimes Enforcement Network (FinCEN) issued Frequently Asked Questions (FAQs) in regard to the Prepaid Access Final Rule, which was issued in July 2011.
FinCEN redefined the business of the prepaid card industry as offering "prepaid access" – an umbrella term the agency deemed necessary to foster to take into account future developments in the industry, such as new products and technology.
The Prepaid Access Rule updates and integrates prepaid products and services into the regulatory framework of the Bank Secrecy Act of 1970. FinCEN said the rule directs providers and sellers of prepaid access to file suspicious activity reports; collect and retain customer and transaction data; and maintain anti-money laundering programs.
The FAQs answer:
- What types of prepaid cards are covered under the rule
- What constitutes a provider and a seller of prepaid access
- How can providers "reasonably adapt" programs to prevent cardholders from reaching the $10,000 daily load limit
- How are reload networks covered
- What additional non-bank functions trigger compliancy actions with the rule
- What circumstances trigger closed-loop card programs being covered
The FAQs, entitled Final Rule – Definitions and Other Regulations Relating to Prepaid Access, can be accessed at www.fincen.gov/news_room/nr/html/20111102.html .
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