Re: H.R. 4777 – Internet Gambling Prohibition Act

 

We are joining the Independent Community Bankers of America (ICBA) and the Electronic Check Clearing House (ECCHO) in support of an express exemption for “uncoded” transactions in H.R. 4777, The Internet Gambling Prohibition Act (the “Bill”).   We do not support any requirement that would place additional burden on financial institutions and the payments system in connection with the monitoring, identification and blocking of unlawful Internet gaming transactions.

 

H.R. 4777, as introduced, would criminalize the knowing acceptance of credit, electronic funds transfers or funds transmitted through a money transmitting business, checks or similar instruments.  Although the bill states that liability only attached to those involved in the business of gambling, we are concerned that liability could be attached to the banks and clearing houses that route these transactions.  The bill provides for criminal fines and imprisonment of up to 5 years and gives Federal, state and local enforcement authorities the power to seek injunctive relief to restrain or prevent any person from paying or assisting in the payment of bets or wagers.

The proposals in H.R. 4777 do not recognize that the check clearing system and the ACH network do not have the same capabilities as the credit card association networks to identify different types of transactions.  As introduced, the bill would encompass not only “coded” transactions, such as those made by credit card, but also “uncoded” transactions effected through check or “ACH” (Automated Clearing House).  The application of this proposed law to uncoded transactions would necessitate a massive overhaul of our nation’s check clearing and ACH systems while creating enormous regulatory burden requiring the deputization of financial institutions to identify and block illegal transactions. 

The added burden created by the Bill would drain finite resources currently engaged in complying with anti-terrorism and anti-money laundering regulations and in the daily operation of banks to meet the needs of customers and community.  Therefore, we request an exemption from the bill for check and ACH payments.

If you would like to discuss this matter, please contact me at 512-474-6889 or Ms. Denyette DePierro, ICBA’s Legislative Counsel, at 202-315-2459.