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.
An amended version of a long-delayed U.S. Treasury Department proposal to place new controls on the international transport of prepaid cards is under White House review and slated for introduction within three months.
An apparent decision by White House officials to postpone the issuance of final rules governing the cross-border transport of prepaid access products has once again drawn criticism from U.S. lawmakers.
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.
U.S. lawmakers Thursday criticized federal officials for delays in finalizing anti-money laundering rules and failing to prosecute banks and bankers that facilitate billions of dollars in illicit transactions.
As U.S. officials work to shield American prepaid cards from abuse by financial crooks, foreign-issued stored value products remain a relatively easy avenue to move money into the United States anonymously.
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.
Displeased with proposed regulations, federal and state law enforcement officials are asking lawmakers and the U.S. Treasury Department to strengthen controls on the cross-border movement of prepaid access products.
The U.S. Treasury Department is weighing whether to shift at least some responsibility for drafting anti-money laundering regulations out of the hands of the nations financial intelligence unit, according to sources.
A dearth of U.S. Treasury Department regulations governing the cross-border transportation of prepaid access products has hamstrung American efforts to combat Mexican drug-trafficking organizations, according to lawmakers.
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 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.
Merchants and automatic teller machines that help customers reload stored value cards do not necessarily qualify as money services businesses subject to anti-money laundering regulations, the U.S. Treasury Department said.
The U.S. Treasury Department's financial intelligence unit did not meet a number of its 2007 goals, including finalizing anti-money laundering rules for investment and commodity trading advisors, a government report released Wednesday revealed.
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.
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.