Reg GG: Unlawful Internet Gambling

Question 1

Under Regulation GG, banks should:

a. Notify all consumer accountholders that internet gambling is prohibited under the Act
b. Identify all customers that conduct internet gambling and notify them of the Act’s prohibitions
c. Provide a written notice to all commercial accountholders that their accounts may not be used for illegal internet gambling
d. Provide a written notice to all credit card accountholders informing them that they may not use their credit cards to conduct illegal gambling

Answer 1

c. Provide a written notice to all commercial accountholders that their accounts may not be used for illegal internet gambling

Question 2

A financial institution will be in compliance with the blocking requirements of Regulation GG if:

a. It monitors debit card transactions to block any Internet gambling transactions
b. It notifies all customers that Internet gambling transactions are illegal
c. It restricts transactions to accept only those not originated on the Internet
d. It relies on compliance procedures implemented by the payment system operator

Answer 2

d. It relies on compliance procedures implemented by the payment system operator

Financial institutions may relay on the policies and procedures of payment systems that are reasonably designed to block prohibited transactions.

Question 3

Under Regulation GG which is a responsibility of regulated depository institutions?

a. Review check transactions on consumer accounts that regularly have large checks deposited
b. Screen ACH transactions of commercial accounts
c. Implement due diligence procedures for new commercial accounts
d. Monitor wire transfer instructions

Answer 3

c. Implement due diligence procedures for new commercial accounts

A financial institution that is a non-exempt participant in a payment system must have policies and procedures to conduct due diligence on new commercial accounts to be deemed to be in compliance with Regulation GG. Institutions are not required to monitor individual transactions.

Question 4

Bank policies and procedures for check collection must include what procedure to follow when a bank has actual knowledge that checks for restricted transactions have been received from a bank customer:

a. Procedures for determining the action to take, including when the account should be closed
b. Procedures for determining when all checks on the account must be monitored
c. Procedures for circumstances when only certified checks may be accepted
d. Procedures for circumstances when no checks on foreign accounts may be accepted

Answer 4

a. Procedures for determining the action to take, including when the account should be closed

If a bank has actual knowledge that restricted transactions have occurred its policies should include procedures for determining what action should be taken. The regulation does not require specific actions a bank must take when this occurs, but does require the bank to establish its own policies and procedures that describe the action it will take in this event.