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Russel B. Stevenson, Jr. 1 (October 24, 1997)

handle is hein.nccusl/nccpub01174 and id is 1 raw text is: National Conference of Commissioners on Uniform State Laws Drafting Committee for Proposed Non Depository Providers of Financial Services Act Statement of Russell B. Stevenson, Jr. General Counsel, CyberCash, Inc. October 24, 1997 Introduction CyberCash, Inc., provides software and services to enable secure financial transactions on the Internet. Its services are used by merchants and financial institutions both in the United States and abroad. CyberCash's strategy is to provide on the Internet a full range of the payment services that are available in the physical world. Its current services include a secure credit card payment service; CyberCoin®, which enables small cash-like payments; and PayNowTM, which enables payments from consumer checking accounts. Because some of CyberCash's services involve the transfer of funds, it has an interest in state laws related to money transmission services. During the time I have served as CyberCash's General Counsel, I have had the opportunity to study state regulation of money transmitters as it applies to the new world of electronic funds transfer over the Internet. I have also become familiar with federal law and policy related to money laundering. It is clear to me that current state laws, all of which were drafted before the Internet and electronic commerce had even been conceived, are ill-adapted to deal with the questions raised by this new phenomenon. The same is generally true of federal law relating to money laundering. I am pleased, therefore, to have the opportunity to act as an observer to the work of the Committee and to assist in the shaping of model legislation that will address the important policy issues with which both conventional money transmitter regulation and federal money laundering laws are concerned. I would like to address, at this first substantive meeting of the Committee, four topics, one relatively trivial, and the other three quite important. First Things Let me address the trivial concern first. It is the name of the proposed uniform law. I urge that the Committee find some name other than Non Depository Providers. The class of institution in question already has more names than it can profitably use. One would have thought that money transmitters, a denomination that has served adequately for many years, would have been sufficient. In the Money Laundering Suppression Act, Congress created two new appellations. And FinCEN, not satisfied, has created two more terms. (None of them, of course, are non depository providers.) One can agree that money transmitter is less than an entirely satisfactory term and still be of the opinion that it is not necessary to make up new ones. At a minimum, non depository provider fails to give any suggestion of what is being provided, which should, one would think, be a critical element of a satisfactory name. Policy Now let me turn to more significant issues. As this Committee is fully aware, it owes its existence to the Money Laundering Suppression Act, a federal statute that embodies federal policy concerns. And yet it is charged with drafting a uniform state law. And money laundering is not a

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