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Frank introduces new version of H.R. 5767
Congressman Barney Frank reintroduced his Payments System Protection Act of 2008 this week. He now intends it to formalize a process for defining illegal online gambling, rather than to fulfill its original purpose - preventing the implementation of the Unlawful Internet Gambling Enforcement Act.
Frank has been working against the UIGEA since it was passed into law. Initially he introduced a bill that would legalize online gambling, but it hasn't gained much footing yet.
After a committee hearing earlier this year that outlined the problems the Federal Reserve and the Department of the Treasury are having implementing the UIGEA, Frank and Senator Ron Paul jointly introduced H.R. 5767, the Payments Systems Protection Act.
They wanted to prevent the UIGEA from being implemented, but the bill was defeated in the House Committee on Financial Services.
During the vote on the Payment PSPA on June 25, 2008, Frank told the committee members that Congress is putting the U.S. financial services industry at risk by not clarifying the regulations for enforcing the UIGEA and by not defining unlawful Internet gambling activities.
"Hijacking the financial payment system at a time when it is under major stress and giving [it] the job of carrying out an unclear mandate doesn't make sense," he said.
Frank's opinion was supported by representatives from the Chamber of Commerce, the Financial Services Roundtable, the Credit Union National Association and the National Association of Federal Credit Unions. Representatives from those organizations showed their support for the original PSPA as well as for an amendment that would further define illegal online gambling.
"I wish to be clear that we do not support the notion that financial services companies should be 'deputized' to police gambling activity in any form or function," wrote Steve Barlett, president and CEO of the Financial Services Roundtable on June 23 of this year.
"While we would support the passage of H.R. 5767 as introduced, I agree that the King Amendment makes essential improvements to a deeply flawed law and therefore support its inclusion."
Despite support from the banking industry, the bill received a tie vote in the House Committee on Financial Services and therefore couldn't be passed.
"Chairman Frank is doing the right thing by saying it is unfair to burden U.S. financial service companies with the job of the Internet gambling police at a time when their undivided attention ought to be on the economy," said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.
"The reality is that UIGEA is dangerous to the payments system and unlikely to stop anyone from using the Internet to play poker, bet on horses, or engage in other types of wagering."
However, Frank is taking a new tack with the PSPA by making it a bill that would require federal regulators to appoint a special Administrative Law Judge to define unlawful Internet gambling activities and conduct an economic impact study on the costs for compliance with the UIGEA.
If passed, this bill would help alleviate the ambiguity in the UIGEA as to what constitutes illegal online gambling.