FinCEN issued a final rule amending Bank Secrecy Act provisions regarding money services businesses. The rule renames “stored value” as “prepaid access” without changing the meaning of the term. The obligations of parties that distribute “prepaid access" have been expanded by replacing the terms “issuer” and "redeemer" of stored value with a new, broader category of participant termed “providers of prepaid access.” The rule puts in place suspicious activity reporting and customer and transaction information recordkeeping requirements on both "providers" and "sellers" of prepaid access. The rule exempts from its coverage (1) prepaid access products of $1,000 or less and payroll products if they cannot be used internationally, do not permit transfers among users, and cannot be reloaded from a non-depository source; (2) closed-loop prepaid access products sold in amounts of $2,000 or less; and (3) government funded and pre-tax flexible spending for health and dependent care funded prepaid access programs. Under the rule, “providers of prepaid access" must register with FinCEN. The rule becomes effective September 27, 2011, and compliance is mandatory on January 29, 2012. Click here for the rule.
Alert August 09, 2011