Reg GG
Posted by Sarah Loats
The compliance effective date for Reg GG is right around the corner (June 1). With that in mind, today we'll provide a general outline of the rule, and go through a few details tomorrow.
First, a couple of resources:
1. For NAFCU members, NAFCU has an excellent Final Regulation summary.
2. The regulation itself is a great resource, as it includes examples of policies and procedures to identify and block restricted transactions.
Compliance with the rule centers around preventing or blocking restricted transactions, which are defined to only include transactions with internet gambling businesses, and not transactions with individuals. Furthermore, in most payment systems, participants are exempt from the rule except for the participant that has the direct customer relationship with the internet gambling business. But, this doesn't mean you can ignore the rule if you don't have any internet gambling businesses as members. There are a couple of things you'll need to consider:
1. No participants are exempted from the card payment systems. Credit unions will need to have reasonable policies and procedures to prevent, reject or block restricted transactions for credit and debit card transactions. But, you can rely on the policies and procedures established by the card operators (i.e., blocking codes).
2. You should have policies and procedures in place to determine at account opening whether a commercial member will be engaging in restricted transactions (this may likely be accomplished by enhancing CIP procedures).
3. If you have actual knowledge that an existing commercial member engages in restricted transactions, you will not be an exempt participant in the payment systems and will need policies and procedures to identify and block such transactions. Â
4. You should provide notice to existing commercial members that the credit union may not be used to process restricted transactions. This can be done through revised account agreements, or a separate notice.