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#1245768 - 09/04/09 06:56 PM
Reg GG
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Junior Member
Joined: Aug 2009
Posts: 32
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Does anyone have a definition of "commercial account"? Are you including "dba, sole proprieter, LLC etc" for the notification?
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#1245844 - 09/04/09 08:11 PM
Re: Reg GG
bsarockstar
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10K Club
Joined: Aug 2001
Posts: 21,939
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(i) Commercial customer means a person that is not a consumer and that contracts with a non-exempt participant in a designated payment system to receive, or otherwise accesses, payment transaction services through that nonexempt participant.
(j) Consumer means a natural person. While the definitions lack the precision bankers expect to find in various consumer protection laws, I would encourage you to classify a sole proprietorship as a commercial customer. Any business entity is definitely a commercial customer. “DBA” is not a synonym for a sole proprietorship; corporations, partnerships, and LLCs can register to do business under an assumed name too. As individuals do not operate under assumed names except in a business context, I again encourage you to label any customer using a DBA as a commercial customer. Finally, note that a "commercial customer" is not defined as a business customer. It is literally any customer that is not a consumer customer. That will include social organizations, chruches, etc. etc. Noting that many religious organizations are involved in gambling, that is not inappropriate. Nevertheless, it's late enough on Friday that I do kind of get a kick out of the idea that your account reps are going to be requiring the Methodists to certify that they are not involved in Internet gambling.
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#1245854 - 09/04/09 08:21 PM
Re: Reg GG
Elwood P. Dowd
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Junior Member
Joined: Aug 2009
Posts: 32
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Thanks for your clarification.
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#1250178 - 09/15/09 02:09 PM
Re: Reg GG
bsarockstar
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Diamond Poster
Joined: Oct 2002
Posts: 1,027
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So if we do not have any commercial customers that deal with gambling does that mean that we do not have to do anything with Reg. GG?
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#1253388 - 09/18/09 10:07 PM
Re: Reg GG
Carolina Blue
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100 Club
Joined: Sep 2006
Posts: 166
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As far as notifying commercial customers. We are placing in our Deposit Account Agreement - but a vendor told me that we should be mailing a notice to all our current commercial customers. We weren't planning on doing this. Is anyone else doing this? Since vendors simply want us to buy their product (a lovely statement stuffer)
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Views expressed are my own and not those of my employer.
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#1253426 - 09/19/09 11:04 AM
Re: Reg GG
ImGoinNuts
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10K Club
Joined: Aug 2001
Posts: 21,939
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There are five general requirements in GG:
* adopt a UIGEA compliance policy, * develop a due diligence process at account opening to determine whether a commercial customer presents anything more than a minimal risk of engaging in Internet gambling, * provide notice to existing commercial customers, * obtain any necessary notice of compliance from a designated payment system (cards), and * develop procedures (by payment system) for responding when your bank becomes aware of restricted transactions.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1253484 - 09/21/09 12:24 PM
Re: Reg GG
Elwood P. Dowd
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Diamond Poster
Joined: Oct 2002
Posts: 1,027
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In the latest advertisement for the BOL Reg. GG webinar the answer to the preview question states that as a paying bank we are exempt from developing policies and procedures. So I go back to my original question does this mean we do not have to do anything?
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#1253494 - 09/21/09 01:05 PM
Re: Reg GG
HR Banker
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Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Your original question was answered correctly: Yes, you must develop a compliance program.
While you may not be affected in your role as a paying bank, you are affected in your role as a depositary bank.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1253559 - 09/21/09 02:15 PM
Re: Reg GG
HR Banker
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Itacket -- You have to read the whole question and the whole answer. The question and answer, copied below, clearly apply only to the bank's role as paying bank in connection with check clearing: Q: Will we have to scan our customer's checks to block any payable to Internet casinos?
A: No. In its role as a paying bank, your institution is exempt from having to have policies and procedures to block restricted payments. I'm looking forward to going through the entire regulation and explaining in which roles a bank can be exempt from having to have in place policies and procedures reasonably designed to identify and block or otherwise prevent payments to illegal Internet gambling operations. For more information, click HERE. Your question asked if you would need to do anything if you don't have customers that operate gambling businesses. As a depositary FI, you will have to have policies and procedures in place that reasonably ensure that you can identify current and potential customers who receive or may receive restricted transactions, and that conform to the regulation's requirements with respect to handling such customers. You also have to consider your roles with respect to the other payment systems that you are part of, such as ACH, wire transfer, card transactions and money transmittal (as applicable).
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#1254776 - 09/22/09 07:10 PM
Re: Reg GG
John Burnett
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Platinum Poster
Joined: Nov 2003
Posts: 531
Midwest
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We issue credit cards to commercial and business credit cards. Our processor blocks all known MCC codes today for us. Do I need to notify our card customers who have ONLY a business or commercial credit card? Do I need to revise these card agreements? We were thinking that we did not have any to do's for these customers.
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#1254944 - 09/22/09 08:55 PM
Re: Reg GG
M&M
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Joined: Aug 2001
Posts: 21,939
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Your credit card customers do not seem to fit in this definition:
(i) Commercial customer means a person that is not a consumer and that contracts with a non-exempt participant in a designated payment system to receive, or otherwise accesses, payment transaction services through that nonexempt participant. (Emphasis supplied)
FWIW, I agree with you.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1255076 - 09/23/09 11:02 AM
Re: Reg GG
Elwood P. Dowd
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Platinum Poster
Joined: Nov 2003
Posts: 531
Midwest
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There were several questions in the BOL Q&A from last December that seem to indicate we should still have procedures in place, even if we just state we rely on the controls in place by the operator of the card system (#6). #37 in that same Q&A indicated that we need to provide notification to all of our commercial customers. But, sounds like we don't meet that definition...
But, couldn't a business card be used to pay for internet gambling, and couldn't they get a credit posted to their card? These should be blocked by the processor, so we don't need to worry?
Thanks, Ken!
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#1256066 - 09/24/09 12:44 PM
Re: Reg GG
M&M
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Platinum Poster
Joined: Nov 2003
Posts: 531
Midwest
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BUMP...
Ken- can you help me understand why you feel our commercial/business credit card ONLY customers do not meet the definition of commercial customer?
They contracts with a us (non-exempt participant) in a card system (designated payment system) to receive, or otherwise accesses, payment transaction services through that nonexempt participant.
I don't see where payment transaction services are defined, but would that include purchases and/or credits to and from their credit card? They could use it for payments/purchases, and they could also receive credits to their credit card.
Thanks!
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#1256313 - 09/24/09 03:57 PM
Re: Reg GG
M&M
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Power Poster
Joined: Apr 2007
Posts: 2,649
The Land of Tax Free Shopping!
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I'm more concerned about the blocking restricted transactions provisions in the Reg. What about incoming ACH/Wire/Check traffic - is our FI required to preemptively block these types of transactions? If so, how?
Will there be a list similar to OFAC of identified illegal online gambling businesses or entities we can use to compare transactions against?
Or am I incorrectly interpreting the Reg?
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#1256642 - 09/24/09 07:45 PM
Re: Reg GG
bsarockstar
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New Poster
Joined: Mar 2006
Posts: 11
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Anyone knows where to find or care to share language for the initial or yearly notice. The Reg includes only the violation notice. I could write one myself but just can't tell if there is one propossed by the reg somewhere.
Thanks
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#1256839 - 09/25/09 12:17 PM
Re: Reg GG
Queen Mum
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Platinum Poster
Joined: Nov 2003
Posts: 531
Midwest
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I don't know of any annual notice requirement. I think once we notify our existing, we only have to cover new customers. However, if you have a notice in your terms/agreements, I think you would be ok.
I'm now wondering about commercial loan customers- does all of this apply to them as well?? UGH
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#1256936 - 09/25/09 02:19 PM
Re: Reg GG
M&M
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New Poster
Joined: Mar 2006
Posts: 11
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OK OK. No there is no yearly subsequent notice required, only the initial notice, before 12-1-09. Then through the account agreement. Also the ABA suggested wording here: http://www.aba.com/Compliance/UIGEA.htm
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#1257536 - 09/26/09 12:16 AM
Re: Reg GG
AJH
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Member
Joined: Aug 2007
Posts: 80
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Is this rule only applicable to commercial customers and not consumers? In some literature, it's explicit that this only applies to commercial customers and others are not so clear.
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#1257609 - 09/28/09 11:56 AM
Re: Reg GG
Ngoc
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Platinum Poster
Joined: Nov 2003
Posts: 531
Midwest
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Only business and commercial customers, yes.
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#1258039 - 09/28/09 07:12 PM
Re: Reg GG
M&M
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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Ok, I am just starting to take a look at this as I have been put in charge of it. We have several customer's who use PayPal on a daily basis. We don't know what they are purchasing or what the funds are being used for? My understanding is that we do not need to monitor every transaction?
Am I correct?
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#1258829 - 09/29/09 08:47 PM
Re: Reg GG
ahkcompliance
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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I have been researching this today and want to make sure I understand this correctly. As a bank we can rely on the card networks to block credit/debit card transactions that are unlawful. Also, we are not required to block check payments from customer accounts relating to unlawful gambling. We would only need to if we have reasaonable knowledge of the event. Are we required to block ACH and wire activity?
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#1258898 - 09/29/09 10:00 PM
Re: Reg GG
ahkcompliance
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Platinum Poster
Joined: Feb 2007
Posts: 827
In the Sun
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AJH - I scanned the site you suggested for wording for the notice - I don't see it. Could you be more specific on where it is on this site?
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#1258999 - 09/30/09 11:54 AM
Re: Reg GG
Lele
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10K Club
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
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Here's one... thanks go to corky:
"In accordance with the requirements of the Unlawful Internet Gambling Enforcement Act of 2006 and Regulation GG, this notification is to inform you that restricted transactions are prohibited from being processed through your account or relationship with our institution. Restricted transactions are transactions in which a person accepts credit, funds, instruments or other proceeds from another person in connection with unlawful Internet gambling."
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