American Conference Institute's 10th National Forum on Prepaid Card Compliance

Registration and Continental Breakfast

Chairs’ Welcoming Remarks

The Evolving Federal Regulatory and Enforcement Waters:Current and Pending Initiatives and New Compliance Obligations,Preparing…

The federal regulatory and enforcement landscape is in a state of flux for the prepaid card industry. Industry participants must understand how the evolving federal conditions impact their businesses, their clients, and their interactions. Learn how to continue to innovate, pursue growth opportunities, and deliver profi tability while managing exposure to regulatory and compliance risks. This panel of government and industry speakers will address recent enforcement hot spots and regulatory and compliance challenges, including new and emerging issues. Topics include:

• The latest legislative developments in Washington
• Ensuring that your company has taken the necessary steps to satisfy regulatory scrutiny
• Best practices for working with regulators to determine how best to meet compliance obligations
• A practical, how-to guide for preparing for examinations by the different regulatory agencies: CFPB, FinCEN, OCC, FDIC, etc.
• Bank exams extending to the program manager
• Regulatory focus on bank oversight of program managers
• Best practices for supervisory oversight of prepaid programs
• Recent enforcement actions and trends
• The latest on fraud schemes: Government efforts to detect, identify and prevent fraud and cyber crime
• Fraud mitigation initiatives; ENR and tax payments fraud
• Working with law enforcement and preserving the chain of custody
• Lessons learned from the Target data breach
• Having a written post-breach response plan ready and tested
• Identifying a breach response team, training each member in their role and having a communications plan
• Knowing what regulations, statutes and contracts govern
• FinCEN’s prepaid access rule: Lessons learned; new and emerging guidance relating to prepaid access
• A second look at refund anticipation loans by the Department of Treasury: 2010 interim final rule that restricts ACH from federal government made to prepaid card accounts; View that refund anticipation loans are predatory
• Implementing technology for same day ACH transfer

Morning Break

Preparing for and Responding to Increased State Regulatory andEnforcement Efforts…

The states are moving rapidly on the legislative, regulatory and enforcement front and the challenges of operating in multiple states have grown dramatically. This panel of industry experts and state regulatory and compliance offi cials will provide you with practical guidance and best practices on how to shape your compliance program given the myriad state money transmission regulations and licensing requirements. Attend to keep abreast of the fast moving developments, legislation, regulation and enforcement at the state level including:

• Operational, compliance, and economic perspective of a licensee?
• What are regulators looking for from an operational perspective?
• How do money transmitters report transactions?
• What kind of exemptions are states looking for?
• Recent litigation in Delaware involving closing loop issuers
• Amending the California Money Transmitters Act (MTA)
• Unclaimed Property
• Escheatment/ Dormant Accounts and Their Intersection with Fraud
• Preemption
• Fees and Expiration Dates
• Cash Redemption
• And more

The CFPB and Prepaid: Disclosures in Connection with theProposed Rule…

• Disclosures in connection with a proposed prepaid card rule
• Proposed Rule on extending Regulation E to GPR prepaid cards and beyond
• Payments linked to general purpose reloadable prepaid cards: the effect of CFPB proposals for coverage; fi lling in regulatory gaps given that the unbanked population is increasing their use of GPR cards to make mobile payments
• Overdraft protection programs and other credit features available to GPR prepaid card holders
• GPR rulemaking on the extent overdraft and credit should be allowed in prepaid cards; what extent should issuers be allowed to use credit/overdraft
• Restrictions and cautions on adding overdraft features to the GPR card
• scrutiny of overdraft programs by regulators
• enforcement landscape for overdraft: looking ahead
• New interview and test materials related to GPR prepaid card disclosures
• Model disclosures for prepaid card packaging and forms that are being considered by the CFPB in connection with an upcoming proposed rulemaking:
• Presumption of safe harbor for using a model disclosure
• Practicality and suitability of using a model disclosure
• Standardizing fee tables
• Goal of informing the consumer
• CFPB’s defi nition of larger non bank participants
• CFPB looking into reward programs and ways in which reward points granted: Disclosure of reward programs and redemption of reward points and whether these are conducted fairly
• Proposals to promote more effective privacy disclosures
• CFPB’s initiatives on top of state activity and other bank
regulators on unsafe and deceptive practices
• Limiting cycle on acquiring new loans on top of old loans

Networking Luncheon for Speakers and Delegates

Given How AML and OFAC Laws Are Trending, How Do Banks,MSBs and Other Financial Institutions Develop, Implement andMaintain an Effective AML and OFAC Compliant Prepaid CardProgram in Today’s Landscape?

• Integrating red fl ags into your AML and OFAC programs
• The latest on the trending of AML laws toward “Fraud Facilitation Theory” and how it affects Prepaid
• Evaluating your existing AML program and identifying areas of gap or weaknesses: Accountability for defi ciencies in AML programs; Effective ways to identify and verify customer information
• Developing and implementing effective AML procedures; Role of technology in AML programs
• Drafting contracts and agreements to support and enhance AML and OFAC compliance
• AML efforts when not part of a bank centric program
• Creating an OFAC risk assessment and compliance program within the context of prepaid: Prohibition on dealing with certain parties
• List of people, entities and organizations that US businesses and banks not allowed to deal with
• Assessing penalties for failing to comply with OFAC: Examining recent penalties issued by states; reaching settlement

Afternoon Break

New and Emerging Payment Platforms, Including Mobile,Virtual Currency and Cards and Cryptocurrencies, and the Roleof Prepaid in the Equation: Legal, Regulatory, and ComplianceConsiderations for New Technologies and Evolving Products

Virtual Currency as a Whole

• The market and market expectations
• Development of virtual currency service providers
• FinCEN and virtual currency, and prepaid access
• Money Transmitter Risks
• Scope of BSA/AML compliance and banking requirements for virtual currency customers
• U.S. regulation and outreach including NY Dep’t of Financial Services (new licensing regime?)
• Recent enforcement actions
• Development in international regulation

Virtual Currency and the Intersection With Prepaid

• Are programs involving points, minutes, credits, miles, swords or in-game currencies subject to the prepaid access rule or money transmitter regulations?
• What does it mean to have virtual currency in prepaid world? Is it a bank account? Is it a prepaid account? Is it Bitcoin?
• What is the difference between Bitcoin wallet and prepaid wallet?
• Will there be a prepaid card specifi cally for Bitcoin?
• Linking Bitcoin into major payment networks like Visa and Mastercard
• Converting Bitcoin to cash
• Using the block chain model to validate and track Bitcoin: Monetizing transactions; How consumers can limit and control data
• Virtual prepaid cards?

Mobile and Other New and Emerging Payment Systems

Payment processing on mobile devices… Prepaid mobile… Facebook credits… Social media environments as payments platforms… the list goes on. This part of the session will feature analysis of what is currently real and could reasonably become mainstream, or at least commercially viable, what are the “Next Big Things”, and how to determine the regulation that applies to them given that technologies are developing quicker than regulation can adapt and compliance obligations and policies are overlapping and still evolving. Topics include:

• Who are the stakeholders and what are their incentives?
• Bank-based versus non-bank business models
• Preparing for the evolving state and federal regulatory paradigms and their impact on emerging payment systems
• AML, consumer protection, and safety & soundness issues of novel business models
• The CFPB, the Durbin Amendment, FCC involvement, state money transmitter licensing, and more compliance issues
• FinCEN, and federal prudential regulation
• Data security considerations: Determining if you must be PCI compliant
• Privacy and marketing considerations

Critical Regulatory Challenges that Come with InternationalExpansion: Proposed Changes to Remittance Transfer Rules,Cash Disbursement Nuances, Travel Abroad Issues IncludingCross-Border Declaration Obligations and Loss/Theft of Card,and Beyond

• International payments moving onto cards and payments coming from abroad
• Federal Remittance Transfer: what now triggers it?
• Proposed changes to the remittance transfer rules: Depository institutions using estimations for exchange rates
• Is cash disbursement subject to the rule?
• FinCEN plan to make travelers declare prepaid cards: Currency declaration obligation; Extent to which value underlying prepaid cards must be declared at the border; Anticipating fi nal rule from FinCEN; Declaring certain amount across the border; Is carrying a prepaid card subject to declaration?
• New issues with prepaid cards issued domestically, but cardholder suffers a loss or theft of the card while traveling in a foreign country
• Issues with international reloading
• International synergies or lack thereof- what can we learn from the international community?
• E-money Directives in Europe: Practicality of adopting an e-money regime in the US to address a large segment of the market that traditional banks don’t

Payroll Card Programs: Ensuring Regulatory Compliance

• Types of pay cards used by employers
• Where this expanding market has been and where it is going, especially in light of the evolving regulatory landscape, at both the state and federal levels
• Key factors for successfully creating a new payroll program or improving upon an existing one; gain strategic insights into the payroll card chain and the entities involved
• Determining the key messages, education needs, and value propositions for each of these groups
• Assessing the increasing state activity in the area of payroll cards
• Compliance with the panoply of state laws and regulations
• Legal issues specifi cally associated with pay cards
• Legality of payroll cards in states without express state payroll card laws
• Comparison of payroll cards with other prepaid cards
• State payroll card laws and state employment laws
• Structuring payroll card relationships and drafting agreements
• The CFPB’s potential impact on payroll cards
• Compliance challenges as to loads on payroll cards
• Money Transmitter Licensing Issues
• Interchange Restrictions under Durbin Amendment

Conference Adjourns

Continental Breakfast

UDAAP Issues and Managing and Maintaining Oversightof Third Parties Who Market and Sell Prepaid Cards

• Growing “abusive” doctrine through case law
• Actions involving vulnerable consumer segments: Students; Service members; various categories of consumers
• Actions involving novel theories or aggressive legal theories
• Managing UDAAP Risk in the prepaid marketplace:
Risk allocation through contract; Implementing a certifi cation or attestation requirement; Practical strategies for collaboratively managing UDAAP risk; Monitoring for UDAAP risk
• How are regulators responding to third parties who engage in UDAAP?: Public policy underpinnings; Enforcement trends; What are the fi nes and penalties?
• Fee structures and related disclosures
• Potentially deceptive sales and marketing practices: Loyalty, identify theft protection, credit life, credit disability and other add-ons; Beyond fees and marketing – emerging trends in UDAAP risk; Implementing a UDAAP Risk Management program; Practical considerations for all players in the value chain
• Agent Location visits
• Third party payment processor considerations
• Reviewing the recent ITT case and how it affects issues related to deceptive marketing and student loans
• Target data breach caused by hackers breaching data at point of sale where information was processed by third parties
• Oversight of third party payment processors: Due diligence

Morning Break

Add On Credit Features and Enhancements Coupled with PrepaidAccess: A Focus on the Regulatory, Risk and ComplianceChallenges Associated With Consumer Remote Deposit Capture,Payday Lending and Deposit Advance

Remote Deposit Capture: Liability Issues with Consumer RDC

• Remote Deposit Capture of checks into prepaid cards: lessons learned
• Preventing duplicate check presentment and check alteration
• Detecting counterfeit items
• Mitigating money laundering and privacy risk

Payday Lending and Deposit Advance

• Recent enforcement actions for payday and deposit advance
• Recent regulatory guidance: OCC action against prepaid card-payday lending partnership; bank regulator actions on deposit advance products; FDIC proposed guidance
• Payday close watch by CFPB and DOJ
• Recent action by the NY DFS regarding payday lending through debit card networks
• The clamp down on pay day loan credit features tied with prepaid cards
• The future of offering deposit advance or pay day advance

Durbin 2.0 on the Prepaid Market: Latest on Regulation II’sInterchange-Fee Limitations and Network-Exclusivity Prohibition

• How recent changes are impacting compliance initiatives – interchange fee limitation: practical effects and exemptions, future legislation and regulation and more
• NACS litigation and the exemptions
• Developing prepaid products that qualify for exemption:
• small issuer exemption issues
• exemption for government-administered programs and related Issues
• GPR Card Exemption:
• Network Routing Issues: Two Unaffi liated Networks per Card
• When is a PIN Network “Enabled”?

Main Conference Ends Lunch for Master Class Participants

Mergers and Acquisitions in the Prepaid Card Industry:How the Industry is Changing and Key Legal and RegulatoryConsiderations When Program Managers Buy Banks, Banks areBought and Sold, and Blocks of Prepaid Card Portfolios Are Sold

• Buying and selling program managers/processors
• Buying and selling prepaid card portfolio which implicates Bank Merger Act
• Buying and selling banks
• What are the issues, risks, and challenges when mergers and acquisitions take place in the prepaid card industry?
• Best practices for conducting due diligence
• What needs to be reviewed and investigated?
• Strategies for negotiating contracts
• Avoiding pitfalls
• Contract drafting
• Ensuring that the appropriate reps and warranties are made
• Regulatory reps and warranties
• Navigating the closing
• Overcoming the hurdles associated with integrating an acquired business into your company
• Managing regulatory issues that can arise after the closing
• Special considerations when dealing with private equity investments