Regulatory Alerts2013-11-13
Administrative Ruling on Application of the Prepaid Access Rule to Closed Loop Prepaid Access Sold or Exchanged in a Secondary Market
The Financial Crimes Enforcement Network (FinCEN) issued this administrative ruling to clarify that trading closed loop prepaid access in a secondary market does not alter its regulatory status under the Bank Secrecy Act. The agency determined that such secondary market transactions do not cause the prepaid access to lose its closed loop classification or constitute a transfer between users within a prepaid program. Consequently, closed loop prepaid access that originally met exclusion criteria remains excluded from FinCEN regulations despite being bought or sold by third-party operators.
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