ALEXANDRIA, VA - NACS sent a letter last week to the Financial Crimes Enforcement Network (FinCEN) regarding its proposed regulations on prepaid access gift cards, which it maintains would create an undue burden for retailers under its current form.

FinCEN??s Bank Secrecy Act proposes an exemption for closed-loop prepaid access and prepaid access, limited to a $1,000 maximum. However, those exemptions would only apply if a prepaid access device does not permit international transmission, which creates problems for Internet redemptions , redemptions outside of the U.S., and transfers among users.

Accordingly, as written, the rules would require retailers to register with FinCEN as a Money Services Business, with Providers and sellers of prepaid access required to verify, collect, store, and retrieve personal information, file suspicious activity reports and current transaction reports, and maintain anti-money laundering (AML) programs.

NACS urged FinCEN to construct the Act with a reasonable balance between the regulatory burdens and the anticipated benefits, commenting that the proposed exemptions "are drawn too narrowly to benefit those retailers engaging in transactions that pose a low risk of illicit activity." It also said that the network should not impose a $1,000 threshold aggregated across all types of prepaid access, maintaining that such a requirement " would be impossible to administer, and even if it could be implemented, would threaten the continued viability of prepaid access products."