First Data 2011 Annual Report Download - page 15

following discontinuation of its relationship with the Company. A number of the Company's subsidiaries hold property subject to
escheat laws and the Company has an ongoing program to comply with those laws. The Company is subject to audit by individual
U.S. states with regard to the Company's escheatment practices.
Other. Stored-value services offered to issuers by First Data Prepaid Services ("FDPS") in the U.S., and by First Data's
International businesses ("First Data International") outside the U.S. are subject to various federal, state and foreign laws and
regulations, which may include laws and regulations related to consumer and data protection, licensing, escheat, anti-money
laundering, banking, trade practices and competition and wage and employment. For example, the Credit Card Accountability
Responsibility and Disclosure Act of 2009 created new requirements applicable to general-use prepaid cards, store gift cards, and
electronic gift certificates effective August 22, 2010, and the Federal Reserve Board published on March 23, 2010 final rules to amend
Regulation E with respect to such cards and electronic certificates effective August 22, 2010. These laws and regulations are evolving,
unclear and sometimes inconsistent and subject to judicial and regulatory challenge and interpretation, and therefore the extent to
which these laws and rules have application to, and their impact on, FDPS, First Data International, financial institutions, merchants or
others is in flux. At this time the Company is unable to determine the impact that the clarification of these laws and their future
interpretations, as well as new laws, may have on FDPS, First Data International, financial institutions, merchants or others in a
number of jurisdictions. These services may also be subject to the rules and regulations of the various international, domestic and
regional schemes, Networks and Associations in which FDPS, First Data International and the card issuers participate. These schemes,
Networks or Associations may, generally in their discretion, modify these rules and regulations and such modifications could also
impact FDPS, First Data International, financial institutions, merchants and others.
In addition, the Housing Assistance Tax Act of 2008 included an amendment to the Internal Revenue Code that requires information
returns to be made for each calendar year by merchant acquiring entities and third-party settlement organizations with respect to
payments made in settlement of payment card transactions and third-party payment network transactions occurring in that calendar
year. This requirement to make information returns applies to returns for calendar years beginning after December 31, 2010.
Reportable transactions are also subject to backup withholding requirements. The Company could be liable for penalties if it is not in
compliance with the new regulations. In addition, these new regulations will require the Company to incur additional costs to modify
its systems so that the Company may provide compliant services but may also provide opportunities for the Company to offer
additional revenue producing services to its customers.
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