NBPCA Issues Updated Guidance for AML Compliance (Feb. 4, 2014)
The Network Branded Prepaid Card Association (NBPCA) has released an updated version of its Recommended Practices for Anti-Money Laundering Compliance. Originally issued in 2008, the guide is aimed at making providers of U.S.-based prepaid programs aware of their AML responsibilities under law and encouraging providers to implement appropriate practices to ensure compliance with regulations.
Since the NBPCA’s original recommendations were released, a number of important regulatory developments have taken place, necessitating an update, says Terry Maher, NBPCA general counsel. “Since [2008], the Financial Crimes Enforcement Network [FinCEN] issued its prepaid access regulations, which address nonbank-centered prepaid access programs,” Maher tells Paybefore. “In addition, the Financial Action Task Force on Money Laundering issued its guidance addressing prepaid cards, and the banking regulators have refined their guidance on managing third-party risks. It was time to refresh the leading practices to address the new guidance, as well as update best practices and red flags.”
Issued in 2011, The FinCEN prepaid access rule places requirements for suspicious activity reporting and customer and transactional data collection on providers of certain types of prepaid access. The rule was enacted to address “regulatory gaps” that resulted from the many prepaid access innovations and the increasing use of prepaid products over the previous decade. In June 2013, the inter-governmental Financial Action Task Force issued guidance on implementing a risk-based approach to combating money laundering and terrorist financing with prepaid cards, mobile payments and Internet-based payment services. Additional regulations covering prepaid cards are on the way from the Consumer Financial Protection Bureau, which is expected to issue new rules covering GPR prepaid cards this May.
