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Payday lending, predatory mortgage loans, overdraft fees, high interest rates, an economy nearing recession, are all issues the Financial Services Committee must hold the banking sectors accountable for at the moment. At the same time the banking institutions must determine what illegal Internet gambling is, block those transactions, thus imposing penalties to customers of theirs. This, to American Banking Association Vice President, Wayne Abernathy, is ridiculous.
Mr. Ted Kitada from Wells Fargo stated in his testimony at the Hearing for the Proposed UIGEA Regulations that his company completes more than 30 million transactions a day and deciphering which of those 30 million transactions would be illegal Internet gambling transactions would be not only cumbersome, but also a major hindrance to the quality of service his company offers its customers.
Each of the banking witnesses at today’s second portion of the Financial Services Committee Hearing agreed that if forced to comply with this law the banking systems would likely block any transaction that may appear illegal, even if, in fact, it was perfectly legal.
Barney Frank pointed out that if a customer’s legal transactions are blocked by their banks or credit card companies, it could have an adverse effect on the competition of American banking systems with the rest of the world’s banking systems. ABA representative, Wayne Abernathy, agreed that enforcing this law could weaken America’s competitive advantages over international banks.
The key to Rep. Luis V. Gutierrez (D-IL), chairman of the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, was not so much whether this all could or could not be efficiently done and enforced, but rather, that the Congress, through the UIGEA, had put the burden of policing the people on banks, when in fact, the government should be policing the banks.