A Brief ‘Prepaid Access’ Update

I recently sat down to review the ‘prepaid access’ issue and look for any new developments. Here are a few notes on what I found…

On June 29^th The House Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled The Future of Money: Where Do Mobile Payments Fit In the Current Regulatory Structure? The Witnesses included FinCENs Director Mr Jim Freis.

I made the mistake of watching the entire webcast video… 48min & 58sec of my life that I’ll never get back. If you would like to subject yourself to the same torture, the link to the video is on this page. If you’d rather spend 48min & 58sec doing something else, here are some brief notes.

Amusing…

• House Subcommittee on Financial Institutions and Consumer Credit = Clueless

• Ranking member from NY, Carolyn B. Maloney’s repetitive insistence that “Someone has to be in charge here.”

A bit more seriously…

• FinCEN’s Director Jim Freis = Smartest man in the room.

• Direct quote from Mr Freis’s testimony “I would like to make the distinction between mobile banking and mobile payments. …mobile payments essentially involves the direction of funds outside of a bank account to effect payment through other transfers… Recognizing that payment systems evolve rapidly, FinCEN took a comprehensive approach in this area revising its regulations one year ago specifically to cover mobile payments and other innovations.“

FinCEN released this PDF copy of Mr Freis statement to the House committee.

FinCEN’s new prepaid access rules (here are PDFs of the Final Rule and FAQ’s), took effect in March this year.

I have yet to hear any stories about ‘Prepaid Access’ rules enforcement in the DGC industry. Extensive searches on Google, and both FinCEN’s and the CFPB’s websites also found no mention of enforcement. If anyone has heard differently, please let me know.

I will continue to keep an eye on this issue, and post news as I come across it.

 

• Category: News
• Tag: FinCEN, Legal