Prompted by signs that criminals are increasingly exploiting prepaid cards, federal and state investigators are turning to a handful of recent legal decisions to justify reading the value held on the instruments, sources say.
A congressionally-mandated plan to require U.S. border crossers to declare funds held on prepaid cards remains stalled at the White House more than a year after its submission for final review.
The theft of $45 million by cybercriminals exploiting and manipulating stolen prepaid card data highlights weaknesses in how financial institutions monitor the use of stored value products, say security experts.
Lobbying by the world's largest stored value payment facilitator has indefinitely delayed, and perhaps permanently blocked, a plan to give customs officials the ability to read prepaid cards, say sources.
American officials will begin field-testing prepaid card readers at U.S. border stops next month as part of the lead-up to the Treasury Department regulations governing their cross-border transport, say officials.
Disputes and confusion over which companies will be responsible for anti-money laundering rules on stored value products has delayed federal registration and oversight of the sector, say industry representatives.
The U.S. Treasury Department's proposals to better regulate prepaid access products fail to outline how the new rules will be implemented and enforced, according to a governmental watchdog group.
Banks will receive fewer law enforcement data requests during the early stages of financial crime investigations as the result of new rules on cross-border transaction reporting, according to the head of the U.S. Treasury Department's financial intelligence unit.
Proposed regulations by the U.S. Treasury Department on the prepaid card industry are raising questions and concerns among anti-money laundering compliance consultants on how the rules can be implemented and enforced.
The U.S. Treasury Department proposed Monday to place non-bank providers of prepaid access products into a distinct category of money service businesses in an effort to impose Bank Secrecy Act regulations on the prepaid card industry.
Money services businesses and sellers of stored value cards will know this summer whether final rules by the U.S. Treasury Department will increase their anti-money laundering compliance duties and costs.
Concerns about drug cartel money smuggling could shape expected U.S. Treasury Department compliance rules on how companies should treat stored value cards, according to investigators.
The U.S. Treasury Department will miss a Feb. 22 deadline set by Congress to implement rules subjecting stored value cards to the Bank Secrecy Act, according to consultants and bank lobbyists.
The U.S. Treasury Department remains on schedule to issue regulations early next year that will bring stored-value cards under the purview of the Bank Secrecy Act, according to a government official.
Money services businesses do not need to keep separate bank accounts for their different business lines to comply with the Bank Secrecy Act, according to a U.S. Treasury Department ruling.
The European Union proposed rules Tuesday on how electronic money might be issued, a step meant to further expand the market for prepaid and stored value payment products.
U.S. Senator Charles Grassley, who last year proposed a bill that would expand the power of prosecutors to include money laundering charges in a criminal case, will amend the proposal to account for "new and emerging trends," in stored value and prepaid cards and other issues.
Financial institutions introducing the popular programs should review the hiring practices and other due diligence procedures of the employers seeking to participate in the programs, compliance professionals say.
Because AML regulation for cards is "unclear," they "provide an ideal laundering instrument to anonymously move monies associated with all types of illicit activity, without fear of documentation, identification, law enforcement suspicion, or seizure," according to a federal government report.