Western Union 2013 Annual Report Download - page 156

2013 FORM 10-K
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In addition, in connection with regulatory requirements to assist in the prevention of money laundering and terrorist financing
and pursuant to legal obligations and authorizations, Western Union makes information available to certain United States federal
and state, as well as certain foreign, government agencies when required by law. In recent years, Western Union has experienced
increasing data sharing requests by these agencies, particularly in connection with efforts to prevent terrorist financing or reduce
the risk of identity theft. During the same period, there has also been increased public attention to the corporate use and disclosure
of personal information, accompanied by legislation and regulations intended to strengthen data protection, information security
and consumer privacy. These regulatory goals - the prevention of money laundering, terrorist financing and identity theft and the
protection of the individual's right to privacy - may conflict, and the law in these areas is not consistent or settled. While we believe
that Western Union is compliant with its regulatory responsibilities, the legal, political and business environments in these areas
are rapidly changing, and subsequent legislation, regulation, litigation, court rulings or other events could expose Western Union
to increased program costs, liability and reputational damage.
We are subject to unclaimed property laws, and differences between the amounts we have accrued for unclaimed property and
amounts that are claimed by a state or foreign jurisdiction could have a significant impact on our results of operations and
cash flows.
We are subject to unclaimed property laws in the United States and abroad which require us to turn over to certain government
authorities the property of others held by us that has been unclaimed for a specified period of time, such as unpaid money transfers.
We have an ongoing program to comply with those laws. In addition, we are subject to audits with regard to our escheatment
practices. Any difference between the amounts we have accrued for unclaimed property and amounts that are claimed by a state
or foreign jurisdiction could have a significant impact on our results of operations and cash flows. See "Unclaimed Property
Regulations" for further discussion.
Our consolidated balance sheet may not contain sufficient amounts or types of regulatory capital to meet the changing
requirements of our various regulators worldwide, which could adversely affect our business, financial condition and results
of operations.
Our regulators expect us to possess sufficient financial soundness and strength to adequately support our regulated subsidiaries.
We have substantial indebtedness as of December 31, 2013, which could make it more difficult to meet these requirements if such
requirements are increased. In addition, although we are not a bank holding company for purposes of United States law or the law
of any other jurisdiction, as a global provider of payments services and in light of the changing regulatory environment in various
jurisdictions, we could become subject to new capital requirements introduced or imposed by our regulators that could require us
to issue securities that would qualify as Tier 1 regulatory capital under the Basel Committee accords or retain earnings over a
period of time. Also, our regulators specify the amount and composition of settlement assets that certain of our subsidiaries must
hold in order to satisfy our outstanding settlement obligations. These regulators could further restrict the type of instruments that
qualify as settlement assets or these regulators could require our regulated subsidiaries to maintain higher levels of settlement
assets. For example, we have seen increased scrutiny from government regulators regarding the sufficiency of our capitalization
and the appropriateness of our investments held in order to comply with state and other licensing requirements. Any change or
increase in these regulatory requirements could have a material adverse effect on our business, financial condition and results of
operations.