What are reasonably designed procedures with respect to card systems?
The only designated payment systems that use a merchant and transaction coding framework that allows participants to identify and block restricted transactions during processing are debit cards (including credit cards, pre-paid cards, and stored value cards) and cash advances.The Agencies believe that a coding system to identify and block prohibited transactions will be the most common technique for card system participants to fulfill the standard.
The rule is about how the person who owns a card system has to make sure that they have a list of codes. Codes are things that show what kind of place you want to buy from. If a code is gambling and a code is not present, then it cannot be authorized.
UIGEA lets people in the payment system do what they need to for UIGEA. If you are in a payment system that has policies, then you can follow those policies if they are the same as UIGEA's.The rule also states that if you are a member of a designated payment system (such as a card network), you may rely on an operator's written statement or notice stating that the operator has established or organized the system's policies and procedures for identifying and blocking or otherwise preventing or prohibiting restricted transactions.You must comply with the requirements of the rule, and if you do not, you will be notified by your Federal regulatory agency.
If you are a depository institution and participate in a card system, then you should be able to rely on the policies and procedures of the operator of the card system when developing your own compliance procedure.To decide which card transactions you will refuse approval for, you may utilize (and follow) the merchant and transaction coding of the card system to identify which purchases might be restricted.
Again, you may build and enforce rules suited to your organization that are distinct from those given in section 6.