Frank, Paul Introduce Legislation to Stop UIGEA Regulations

Shortly following the Congressional hearing two weeks ago which addressed the feasibility of the proposed UIGEA regulations, two prominent Congressmen are aiming to block the implementation of those regulations.  House Financial Services Committee Chairman Barney Frank (D-MA) and senior Financial Services Committee member Ron Paul (R-TX) have introduced H.R. 5767 which will forbid the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from developing and implementing any regulations which require financial services companies from blocking online gambling transactions.

The problem that the men have with the regulations is that they leave it up to the financial institutions to determine what an “illegal” internet gambling transaction is and how they should block it.  This places an unreasonable burden on these companies, essentially making them law enforcement officials.  Should the companies take the easy way out and block every single online gambling transaction (and they likely won’t even know that many are for gambling), they will undoubtedly block “legal” transactions, as well.

“These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions, and while I do disagree with the underlying objective of the Act, I believe that even those who agree with it ought to be concerned about the regulations’ impact,” said Rep. Frank.

Rep. Paul said, “The regulations and underlying bill…force financial institutions to act as law enforcement officers. This is another pernicious trend that has accelerated in the aftermath of the Patriot Act, the deputization of private businesses to perform intrusive enforcement and surveillance functions that the federal government is unwilling to perform on its own.”