UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT (UIGEA)
GENERAL POLICY STATEMENT
Regulation GG implements the Unlawful Internet Gambling Enforcement Act (UIGEA). The Act prohibits non-consumer accounts from knowingly accepting payments in connection with unlawful Internet gambling, including payments made through credit cards, electronic funds transfers and checks. Such transactions are termed "restricted transactions." The act generally defines "unlawful Internet gambling" as placing, receiving, or otherwise knowingly transmitting a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable federal or state law in the state or tribal lands in which the bet or wager is initiated, received, or otherwise made.
CREDIT UNION OBLIGATIONS
Under UIGEA and the Regulations applicable to UIGEA, the Credit Union is not required to monitor or determine whether its member is a gambler except that it must ensure that unlawful credit and debit card transactions are blocked. It is the responsibility of the card networks to establish policies and procedures to identify and block unlawful transactions.
Our card processor, Co-op Financial Systems, has instructed us to place a network BIN blocker on ATM BIN 504471 and DBC 403512 which will block transactions meeting the following conditions:
a) Transactions coded as MCC 7995
b) Transactions that are non-face-to-face
c) Transactions that are presented as eCommerce or MOTO
The Credit Union will rely on a written notice and/or certifications from Vendors – Transaction Service
Providers (Visa/MasterCard/NACHA, etc.) stating that the policies and procedures that are in place meet the UIGEA Final Rule requirements.
The Credit Union is not required to validate said Vendors statements or certifications, but will be required to adhere to such Vendors policies and procedures. The Credit Union is not required to block ACH, wire, or check payments (payments from its members' accounts) related to unlawful Internet gambling to be in compliance with the Final Rule. However, should discovery of a restricted and unlawful gambling transaction be identified, a Suspicious Activity Report (SAR) will be filed.
The Branch Manager is responsible for ensuring that appropriate card transactions are blocked as instructed by our card processor, policies and procedures have been provided by our Transaction Service Providers and Suspicious Activity Reports are filed if required.
DESIGNATED PAYMENT SYSTEMS
The following payment systems could be used by participants in connection with, or to facilitate, a restricted transaction:
(1) Automated Clearinghouse (ACH) Systems
(2) Card Systems
(3) Check Collection Systems
(4) Money Transmitting Business solely to the extent they
(A) Engage in the transmission of funds, which does not include check cashing, currency exchange, or the issuance or redemption of money orders, traveler's checks, and other similar instruments; and
(B) Permit member/customers to initiate transmission of funds transactions remotely from a location other than a physical office of the money transmitting business
(5) Wire Transfer Systems
PROCEDURES
The following is a non-exclusive list of procedures to identify and block or otherwise prevent or prohibit restricted transactions. We may have different procedures for each business line or department that is affected by the rule. We must also notify all of our non-consumer account members, through provisions in the account or non-consumer member account agreement or otherwise, that restricted transactions are prohibited from being processed through the account or relationship.
(1) Due Diligence of Non-consumer account Member at Account Opening. We will disclose the following information to new non-consumer when first opening a non-consumer account:
“You agree that you are not engaged in unlawful internet gambling or any other illegal activity. You agree that you will not use any of your accounts, access devices or services for unlawful internet gambling or other illegal activities. We may terminate your account relationship if you engage in unlawful gambling or other illegal activities.”
If at account opening, determination regarding the risk the non-consumer account member presents of engaging in an Internet gambling business is minimal, we need not take any further action. If it cannot be immediately determined that there is "minimal risk" that the applicant does not engage in an Internet gambling business, the non-consumer should certify that they do not engage in Internet gambling business. For those that certify this, no further steps are required.
If the non-consumer account member does engage in an Internet gambling business, they must provide each of the following:
• Evidence of legal authority to engage in the Internet gambling business, such as a copy of the non-consumer account member's license that expressly authorizes the member to engage in the Internet gambling business issued by the appropriate state or tribal authority or, if the non-consumer account member does not have such a license, a reasoned legal opinion that demonstrates that the non-consumer account member's Internet gambling business does not involve restricted transactions; and
• A written commitment by the non-consumer account member to notify the participant of any changes in its legal authority to engage in its Internet gambling business.
We may also accept a third-party certification that the non-consumer account member's systems for engaging in the Internet gambling business are reasonably designed to ensure that the non-consumer member's Internet gambling business will remain within the licensed or otherwise lawful limits, including with respect to age and location verification.
(2) Notification to Existing & New Non-Consumer Members. As required by the rule, a one-time notification of the requirements under this law will be furnished to said members in a timely manner. Notice to all new non-consumer members will be made as specified in this policy.
Adopted by the Board of Directors November 29, 2018