Frank, Paul Introduce Bill to Prohibit UIGEA Enforcement
On April 10th, Chairman of the House Financial Services Committee Representative Barney Frank and senior Financial Services Committee member Representative Ron Paul introduced a bill that would block the enforcement of the UIGEA. The bill, H.R. 5756, would "prohibit the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from proposing, prescribing, or implementing any regulation under subchapter IV of chapter 53 of title 31, United States Code, and for other purposes."
"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 Barney Frank.
Ron Paul said, "The ban on Internet gambling infringes upon two freedoms that are important to many Americans: the ability to do with their money as they see fit, and the freedom from government interference with the Internet. The regulations and underlying bill also 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."
The bill's introduction came just eight days after a House Financial Services subcommittee held a hearing examining proposed UIGEA rules and regulations. During the hearing, entitled "Proposed UIGEA Regulations: Burden without Benefit?," both regulators and the financial institutions charged with enforcement under the UIGEA raised concerns about the efficacy of the proposed rules. Louise Roseman, Director of the Division of Reserve Bank Operations and Payment Systems, testified that comments relative to the proposed regulations "highlighted a number of limitations in using the payment system to combat unlawful internet gambling activity." She further stated that while modifications to the regulations were being considered, it was doubtful that they would ultimately "provide complete certainty is limited given the ambiguities of the underlying statues."
The bill has been referred to the House Committee on Financial Services.