U.S. Credit Unions Support Online Gambling Regulation

by Elizabeth Nguyen, News Staff Writer

December 17, 2007

It looks as if U.S. citizens will still be able to gamble online (at least to the current extent), without impending restrictions caused by the Unlawful Internet Gambling Enforcement. Apparently, the drafters of the UIGEA have tasked the U.S. Treasury and Federal Reserve to enforce the banning protocols of the UIGEA, which in turn, would essentially be handed down to U.S. Credit Unions. The Credit Unions, however, have spoken on the issue, which doesn't look very good for the UIGEA. In fact, if anything, it's a boost to Congressman Barney Frank's Internet Gambling Regulation and Enforcement Act (IGREA).

Representing 90% of U.S. credit unions, the highly influential Credit Union National Association (CUNA) wrote a letter this week to the bill's drafters, stating that the proposals within the UIGEA specifically calling for credit unions to implement compliance requirements for blocking transactions with online casinos are unrealistic. While they commended the bill for attempting to meet timing requirements, they said that it would be virtually impossible for credit unions to enforce what should essentially be a police function, namely the Financial Crimes Enforcement Network.

Rather than just leave it at that, the CUNA went even further by making some recommendations of their own. In a very eloquent manner, CUNA's letter stated that the current legislation brings up a number of problems, and recommends an approach should be taken up that involves Congress and does not force undue hardships on the financial institution sector. In other words, CUNA supports House Resolution 2046, otherwise known as the Internet Gambling Regulation Enforcement Act (IGREA).

CUNA specifically cites the HR 2046 as a viable alternative, which would require online casino sites to be licensed under the Financial Enforcement Crimes Network. This would, in turn, provide a reference list for credit unions to use in blocking transactions with unapproved online gambling sites. Until such a list is in place, CUNA says credit unions have no mechanism to identify these types of transactions.

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