In an article published today in The Hill, Josh Rosenstein is cited as a corporate compliance expert regarding potential new Federal Reserve regulations regarding prepaid gift cards. The regulations, which are set to go into effect on Monday, require prepaid MasterCard and Visa-branded gift cards to have a PIN, much like a debit card. In the past, the PIN was an optional feature. And while the article points that while these new regulations are still considered “informal guidance” and does not hold legal weight, industries typically treat the guidance as if it does.”
According to Mr. Rosenstein, this feature is key: “Even though the guidance may not be ratified by the [Federal Reserve leadership], it can give you a pretty good idea how the regulators might likely respond to particular situations — which is critical if you’re in the regulated community. One of the fundamental purposes of informal guidance is to let the industry know how the agency intends to enforce its mandate.”
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