Western Union 2012 Annual Report Download - page 23

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Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) became United States federal law
in 2010. The Dodd-Frank Act created a new Consumer Financial Protection Bureau (the “CFPB”) whose purpose is to issue and
enforce consumer protection initiatives governing financial products and services, including money transfer services. The CFPB
will create additional regulatory oversight for us. Regulations issued by the CFPB, which we anticipate may become effective in
mid-2013, will impact our business in a variety of areas. These include: a requirement to provide consumers sending funds
internationally from the United States enhanced pre-transaction disclosures, including the disclosure of third-party fees and taxes,
an obligation to resolve various errors, including certain errors that may be outside our control, and an obligation to cancel
transactions that have not been completed at a consumer's request. We have modified certain of our systems, business practices,
service offerings or procedures to comply with these regulations. We will face liability for the failure of our money transfer agents
to comply with the rules and are implementing additional policies, procedures, and oversight measures designed to assure
compliance by our agents. The extent of these policies, procedures, and measures may be considered by the CFPB in any action
or proceeding against us for noncompliance with the rules by our agents. Also, our Business Solutions business in the United
States will be subjected to increased regulatory oversight and reporting requirements relating to the foreign exchange derivative
products offered to certain of its customers. In addition, our implementation of these requirements could impact our business
relationships with banking and other financial institution partners who offer our Business Solutions services. We may also be
subject to examination by the CFPB. In addition, rules adopted under the Dodd-Frank Act by other governmental agencies will
likely subject certain of our future corporate interest rate and foreign exchange hedging transactions to centralized clearing, margin,
and other requirements. For further discussion of the risks associated with the Dodd Frank Act, see Part I, Item 1A, Risk Factors
- “The Dodd-Frank Act, as well as the regulations required by that Act and the actions of the Consumer Financial Protection
Bureau, could adversely affect us and the scope of our activities, and could adversely affect our operations, results of operations
and financial condition.”
Foreign Account Tax Compliance Act
We also expect that the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act
(“FATCA”) will likely result in increased compliance costs. FATCA, which is intended to address tax compliance issues related
to U.S. taxpayers holding non-U.S. accounts, will require certain of our licensed financial institutions and other entities outside
the United States to report to the United States Internal Revenue Service (“IRS”), directly or through foreign government agencies
cooperating with the IRS, information about financial transactions made by U.S. taxpayers and could impose withholding,
documentation and reporting requirements on such transactions. Full implementation will be phased in over a multi-year period.
The additional administrative requirements of FATCA will likely result in increased compliance costs and could have an adverse
effect on our business, financial condition, or results of operations. For further discussion of the risks associated with FATCA, see
Part I, Item 1A, Risk Factors - “Regulatory initiatives and changes in laws, regulations and industry practices and standards
affecting us, our agents or their subagents could require changes in our business model and increase our costs of operations,
which could adversely affect our operations, results of operations and financial condition.”
Unclaimed Property Regulations
Our Company is subject to unclaimed property laws in the United States and abroad. These laws require us to turn over to
certain government authorities the property of others held by our Company that has been unclaimed for a specified period of time,
such as unpaid money transfers and money orders. We hold property subject to unclaimed property laws and we have an ongoing
program to comply with the laws. We are subject to audits with regard to our escheatment practices.