On October 31, 2013, the Georgia Department of Banking and Finance published a modified set of proposed regulations to implement the Georgia Merchant Acquirer Limited Purpose Bank Act. These regulations are a revised version of the Department’s July 31, 2013 proposed regulations based upon comments received. The revised regulations reflect significant changes from the July 31 version, including changes to the Department’s proposed capital requirements for merchant acquirer limited purpose banks (MALPBs).
The Act, which became effective on March 28, 2012, creates a new state charter for MALPBs.1 These new banks are eligible for (but not required to obtain) FDIC insurance, thereby facilitating their membership in payment card networks (e.g., Visa, MasterCard). It is anticipated that MALPBs will be utilized by payment processors and other participants in the payments industry to avoid the necessity of establishing separate sponsoring arrangements with Visa/MasterCard member banks, or to supplement sponsor bank arrangements.
Please see our prior Legal Alerts on the Georgia Merchant Acquirer Limited Purpose Bank Act, and click here for more information on this new law.
A copy of the Georgia Department of Banking and Finance’s proposed regulations is available here.
