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FinCEN Issues Final Rule on Prepaid Access

September 6, 2011

Authors

Bryan Cave

FinCEN Issues Final Rule on Prepaid Access

September 6, 2011

by: Bryan Cave

Retailers Issuing Gift Cards and/or Selling Other Companies’ Gift Card or Prepaid Cards Impacted

New anti-money laundering regulations that directly impact retail businesses that issue or sell gift cards or other prepaid cards have recently been released. These new regulations, known as the prepaid access “Final Rule,” currently effective on September 27, 2011, were issued by the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and require the collection and verification of customer information when certain prepaid cards are sold or reloaded. Retailers issuing their own closed loop gift cards, or selling and reloading other companies’ open and/or closed loop

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New "Durbin" Interchange and Routing Final Regulations Issued

July 1, 2011

Authors

Bryan Cave

New "Durbin" Interchange and Routing Final Regulations Issued

July 1, 2011

by: Bryan Cave

On June 29, 2011, the Federal Reserve Board approved its final interchange rules, entitled Regulation II, “Debit Card Interchange Fees and Routing,” setting the maximum permissible interchange fee that an issuer may receive for an electronic debit transactions made with debit cards and general use prepaid cards, codes, and other account access devices.

Under the final rules, issuers are permitted to charge a base fee of 21 cents plus 5 basis points (.05%) multiplied by the full value of the transaction, to cover fraud losses.  In addition, a 1 cent per transaction fraud prevention adjustment was also proposed, for those

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Final Interchange Rules Approved

June 30, 2011

Authors

Bryan Cave

Final Interchange Rules Approved

June 30, 2011

by: Bryan Cave

Prepaid Industry Gets Some Relief but General Purpose Reloadable Cards Face Unanticipated Restrictions

At a publicly held board meeting on June 29, 2011, the Federal Reserve Board approved its final interchange rule, entitled Regulation II, “Debit Card Interchange Fees and Routing,” setting the maximum permissible swipe fee an issuer may receive for an electronic debit transactions, adopting routing requirements and applying unanticipated new restrictions to General Purpose Reloadable (GPR) cards to take advantage of the interchange cap exemption. In addition—to the relief of the banking industry—the Fed announced that the rules on pricing requirements will go into

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China’s First Efforts at Licensing Prepaid Payment Issuers

June 15, 2011

Authors

Bryan Cave

China’s First Efforts at Licensing Prepaid Payment Issuers

June 15, 2011

by: Bryan Cave

Optimism Tempered with Caution

A version of this post also appeared in the June 2011 issue of Paybefore Legal.

The People’s Republic of China has ventured carefully in the area of payment cards. Its first step was launching its national bankcard network, UnionPay, in 2002. From that beginning, the Chinese bankcard industry has grown rapidly. According to UnionPay, by the end of 2006, there were 1.175 billion bankcards: 1.119 billion debit cards and 56 million credit cards.

In the last five years, closed-loop prepaid cards, especially store and phone cards, also have been booming in China. A recent

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Prepaid Cards That Access Lines of Credit Are "Credit Cards"

April 20, 2011

Authors

Bryan Cave

Prepaid Cards That Access Lines of Credit Are "Credit Cards"

April 20, 2011

by: Bryan Cave

On March 18, 2011, the Federal Reserve Board of Governors issued a Supplementary Information and Final Regulation and Commentary (“Supplementary Information”) which, among other things, clarified the definition of credit card. The following Client Alert focuses on how the new Supplementary Information impacts debit and prepaid cards that access a separate line of credit.

Since publication of the February 2010 and June 2010 Final Rules, the Board has become aware that clarification is needed to resolve confusion regarding how institutions must comply with particular aspects of those rules. In order to provide guidance and facilitate compliance with the final rules,

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Unlimited FDIC Insurance for Non-Interest Bearing Transaction Accounts

April 7, 2011

Authors

Bryan Cave

Unlimited FDIC Insurance for Non-Interest Bearing Transaction Accounts

April 7, 2011

by: Bryan Cave

On November 15, 2010, the Federal Deposit Insurance Corporation (FDIC) issued a final rule to implement Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). Section 343 of the Act provides for unlimited deposit insurance for “noninterest-bearing transaction accounts” through December 31, 2012.

In the months since the FDIC issued its final rule, we have observed some confusion in the banking industry as to exactly what kinds of accounts will be considered to be “noninterest-bearing transaction accounts.” It is not the case, as some seem to have believed, that the definition covers only

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Federal Reserve Board Issues Final Gift Card Rules

March 29, 2010

Authors

Bryan Cave

Federal Reserve Board Issues Final Gift Card Rules

March 29, 2010

by: Bryan Cave

On March 23, 2010, the Federal Reserve Board issued its final rule, a summary and analysis of the final rule, and the official staff interpretation of the final rule in connection with Title IV of the CARD Act (the “Final Rules” or “Rules”).  The Final Rules are comparable to the proposed rules that were issued in November 2009, and follow the gift card related provisions set forth in the CARD Act addressing fees, expiration, disclosures, and various exemptions.  Set forth in this Bryan Cave Client Alert is a brief summary of key provisions of the Rules.

The Rules set

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