WASHINGTON (4/23/08)—Some congressional heavy hitters urged the Federal Reserve Board and U.S. Treasury Department to set aside their endless and toilsome efforts to implement the Unlawful Internet Gambling Enforcement Act (UIGEA).
House Financial Services Committee Chairman Barney Frank (D-Mass), and three other of the panel's members, sent an April 21 letter to Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke regarding what they termed "the unworkable regulations" of UIGEA. Treasury and the Fed are charged by the law to issue rules to implement its provisions.
The letter noted an April 2 House Financial Services subcommittee hearing on the internet gambling law, at which representatives from both the implementing agencies, as well as financial services industry, testified.
Through that hearing "the Federal Reserve, the Treasury and the industry made clear that regulations from the UIGEA are vague, confusing, burdensome, and generally unworkable," the letter said.
The hearing resulted in the introduction of a bill, H.R. 5767, which would prohibit the implementation of UIGEA regulations. The bill is sponsored by Frank and Rep. Ron Paul (R-Texas), who is also a House Financial Services Committee member.
"The regulations, like the underlying legislation, fail to define the term 'unlawful internet gambling,' leaving it to each financial institution to reconcile conflicting state and federal laws, court decisions and inconsistent Department of Justice interpretations, when determining whether to process a transaction.
"Furthermore, some of the information needed to make this determination would likely be unavailable to banks, because customers or financial institutions in foreign jurisdictions will likely be unwilling or unable to provide it," the letter noted.
It went on to say that given the implementation difficulties, other national priorities that demand the agency's attention, such as the mortgage crisis, and the pending legislation that would prohibit implementation of the law, "(W)e believe it would be imprudent for you to devote additional agency resources to this Sisyphean task." Sisyphus is the sinner in Greek mythology condemned to the endless toil of rolling a boulder uphill then watching it roll back down again--for eternity.
The letter was signed by Frank, Rep. Luis Gutierrez (D-Ill.), who heads the House subcommittee on domestic and international monetary policy, Paul, who is ranking member of that subcommittee, and Rep. Peter King (R-N.Y.), who is former chairman of the House Homeland Security Committee.
The Credit Union National Association (CUNA) was among the witnesses at the UIGEA hearing. CUNA board member Harriet May, CEO of GECU, El Paso, Texas,, testified on the compliance burden for credit unions that would be associated with UIGEA. She urged the subcommittee to halt current efforts to implement the law.
courtesy of cuna.org