1 Report on Outreach to Money Services Businesses ... - FinCEN

Financial Crimes Enforcement Network
Additional guidance requested
Prepaid Access
At the time of the outreach visits in 2009, FinCEN was in the process of seeking
comments on its existing stored value regulatory provisions and developing a
proposal with respect to stored value.
During our meetings, one MSB noted that one of its challenges lies in the differing
ways State regulators view stored value, or prepaid access. The MSB also has an
interest in whether there will be any differentiation between prepaid access and
payroll cards from a regulatory perspective.
Another MSB also expressed an interest in more guidance on prepaid access because
compliance personnel are having trouble explaining to company executives why they
believe that this is a risky line of business to enter. From a purely compliance model,
these individuals believe that a U.S.-only card might be easier to manage.
One MSB noted that around 2004 it noticed that “smarter” criminals were moving
to prepaid access. The MSB is challenged to identify prepaid cards that act like
credit cards. The MSB stated that credit card networks do not identify which Bank
Identification Numbers (BINs) 45 represent prepaid cards; though the MSB indicated
that it does not know whether this is because the networks cannot identify such BINs,
or because they do not want to provide this information to a competitor.
Another MSB indicated it would be interested in guidance on the treatment of
prepaid access. Currently the MSB is treating prepaid access products as negotiable
instruments, and is filing SARs when those products are used in a manner that it
deems suspicious.
On June 28, 2010, FinCEN issued a Notice of Proposed Rulemaking (NPRM) that
proposed new rules to establish a more comprehensive regulatory framework for nonbank
prepaid access. 46 The proposed changes are intended to address regulatory gaps
that have resulted from the proliferation of prepaid innovations over the last 10 years
and their increasing use as accepted payment methods.
45. BINs are the primary account numbers found on cards such as credit cards, debit cards, and prepaid
access cards. BINs can be used to identify the card issuing institution.
46. See http://www.fincen.gov/news_room/nr/pdf/20100618.pdf
<strong>Report</strong> on Outreach to Money Services Businesses
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