First Data 2011 Annual Report Download - page 14

Kingdom, FDRL has a license under the Consumer Credit Act of 1974 ("CCA") to enable it to undertake, among other things, credit
administration and debt collections activities on behalf of its card issuing customers through calls and correspondence with the
cardholders. FDRL is also licensed under the CCA to carry on the activity of a consumer hire business for the purpose of leasing
terminals to merchants. The CCA establishes a comprehensive code of regulations for the origination, administration and enforcement
of credit and hire agreements.
TeleCheck or TRS may become subject to further regulation in the future as legislatures and government agencies, both federal
and state, enact additional legislation or issue regulations aimed at regulating collection activities, the collection, storage and use of
data and databases regarding consumers. In particular, laws regulating activities with respect to current or emerging technology such
as the use of automated dialers or pre-recorded messaging or calls to cellular phones could impair the collection by TRS of returned
checks, including those purchased under TeleCheck's guarantee services. Moreover, reducing or eliminating access to and use of
information on drivers licenses, requiring blocking of access to credit reports or scores, mandating score or scoring methodology
disclosure and proscribing the maintenance or use of consumer databases, including a consumer's rights to affect the usable content of
databases, could reduce the effectiveness of TeleCheck's risk management tools or otherwise increase its costs of doing business. Such
legislation could also affect the business of First Data Solutions, Inc., which provides access to non-FCRA data for identity
verification and fraud-prevention purposes, by imposing new regulatory requirements or restricting the availability and completeness
of consumer data.
In addition, several subsidiaries in the Company's International segment are subject to comparable local laws regarding
collection activities and obtaining credit reports.
Anti-money laundering and counter terrorist regulation. Certain of the Company's businesses are subject to regulation by
the U.S., including anti-money laundering laws and regulations, including the Bank Secrecy Act, as amended by the USA PATRIOT
Act of 2001 (collectively, the "BSA"). The BSA, among other things, requires money services businesses (such as money transmitters,
issuers of money orders and official checks, and providers of prepaid access) to develop and implement risk-based anti-money
laundering programs, report large cash transactions and suspicious activity, and to maintain transaction records. Recently, the
Financial Crimes Enforcement Network, the agency that enforces the BSA, finalized its rule that defines Stored Value under the BSA,
and places requirements on entities that are either the Provider or Seller of Prepaid Access. Money Network, a First Data entity, will
be the Provider of Prepaid Access for various open loop prepaid programs for which it is the Program Manager.
The Company is also subject to certain economic and trade sanctions programs that are administered by the Treasury
Department's Office of Foreign Assets Control ("OFAC") that prohibit or restrict transactions to or from or dealings with specified
countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially-
designated nationals of those countries, narcotics traffickers, and terrorists or terrorist organizations.
Similar anti-money laundering and counter terrorist financing and proceeds of crime laws apply to movements of currency and
payments through electronic transactions and to dealings with persons specified in lists maintained by the country equivalents to the
OFAC lists in several other countries and require specific data retention obligations to be observed by intermediaries in the payment
process. The Company's businesses in those jurisdictions are subject to those data retention obligations.
The Company has developed and is enhancing global compliance programs to monitor and address legal and regulatory
requirements and developments.
Money transmission and payment instrument licensing and regulation. The Company is subject to various U.S. federal,
state and foreign laws and regulations governing money transmission and the issuance and sale of payment instruments.
In the U.S., most states license money transmitters and issuers of payment instruments. Many states exercise authority over the
operations of the Company's services related to money transmission and payment instruments and, as part of this authority, subject the
Company to periodic examinations. Many states require, among other things, that proceeds from money transmission activity and
payment instrument sales be invested in high-quality marketable securities prior to the settlement of the transactions. Such licensing
laws also may cover matters such as regulatory approval of consumer forms, consumer disclosures and the filing of periodic reports by
the licensee, and require the licensee to demonstrate and maintain levels of net worth. Many states also require money transmitters,
issuers of payment instruments and their agents to comply with federal and/or state anti-money laundering laws and regulations.
Government agencies may impose new or additional rules on money transmission and sales of payment instruments, including
regulations which (i) impose additional identification, reporting or recordkeeping requirements; (ii) limit the entities capable of
providing the sale of payment instruments; and (iii) require additional consumer disclosures.
Escheat regulations. The Company is subject to unclaimed or abandoned property (escheat) laws in the U.S. and abroad which
require the Company to turn over to certain government authorities the property of others held by the Company that has been
unclaimed for a specified period of time such as, in the Integrated Payment Systems business, payment instruments that have not been
presented for payment or, in the Retail and Alliance Services segment, account balances that cannot be returned to a merchant
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