ICBA News Release
FOR IMMEDIATE RELEASE
ICBA Calls for Substantial Revisions to Internet Gambling Bill
Check Cashing and ACH Systems Not Built to Identify Gambling Transactions
Washington, D.C. (April 5, 2006)—The Independent Community Bankers of America (ICBA) today called on House lawmakers to substantially revise provisions of the Internet Gambling Prohibition Act (H.R. 4777) to take into account differences in electronic transaction methods and the substantial compliance burden to community banks. ICBA also questioned how effectively the legislation would regulate criminal behavior.
"The burden of regulation and compliance created by these proposals is substantial, as a key enforcement mechanism would require banks to identify and block transactions between bank customers and Internet gaming companies," said Sam Vallandingham, vice president of First State Bank, Barboursville, W.V., testifying on behalf of ICBA before the House Judiciary Committee's Subcommittee on Crime, Terrorism and Homeland Security. "These proposals do not recognize that the check clearing system and the Automated Clearing House (ACH) network do not have the same capabilities as the credit card association networks to identify specific types of transactions."
Vallandingham commended the committee and members of the House for actively engaging in the fight against terrorism and money laundering. He noted that with the passage of the USA Patriot Act and Bank Secrecy Act, community banks are already tasked with confirming the identity of bank customers while documenting and reporting suspicious transactions.
ICBA believes that community banks need to focus their resources where risks to national safety and financial soundness are greatest. If enacted, H.R. 4777 would change a community bank's role from one of reporting suspicious activity to identifying transaction type and blocking payments on a system not designed for these purposes. Moreover Vallandingham said the added burden of monitoring all payment transactions for Internet gambling coupled with resources currently used to comply with anti-terrorism and anti-money laundering regulations will leave community banks with little resources to serve their customers' financial needs.
"While we share concerns about Internet gambling, it is highly doubtful that the pending legislation, if passed, would affect the popularity of Internet gambling," Vallandingham said. "Ultimately, we question whether the Internet gambling bills currently before the House will efficiently and effectively regulate the targeted behavior at a level which will justify the time and expense required by community banks to comply with another layer of regulation."
ICBA's full testimony can be found by visiting www.icba.org.