On December 3, 2013, the Georgia Department of Banking and Finance adopted Final Rules implementing the Georgia Merchant Acquirer Limited Purpose Bank Act. The Final Rules contained several revisions to the second draft of proposed regulations published on October 31, 2013, including revisions to the definition of “public company” that will be used to exempt specified holding companies from certain of the approval and background check requirements generally applicable in the Final Rules.
On the date of adoption, the Department filed the Final Rules with the Georgia Secretary of State. Under Georgia law, the Final Rules will become effective on December 23, 2013, twenty days following the filing with the Secretary of State.
The Georgia Merchant Acquirer Limited Purpose Bank Act was adopted by the legislature in its 2012 session. It created a new state charter for merchant acquirer limited purpose banks (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 click here for our prior Legal Alerts on the Act and Department rulemaking. A copy of the Final Rules, which includes a listing of changes made by the Department to the October 31, 2013, proposed rules, is also available here.