Congressman Barney Frank has introduced a second version of his Payments System Protection Act as part of his effort to legalize online poker in the United States. According to new act, the Department of the Treasury and Federal Reserve System will have to work directly with the Attorney General, to create a formal process that classifies and clarifies the online gambling activities considered unlawful by the UIGEA.

The Democrat Congressman also expressed that his bill would allow US financial services industry to comply with the current ban on online gambling under the Internet Gambling Enforcement Act (UIGEA) of 2006. Several financial institutions including the Financial Services Roundtable, the Chamber of Commerce and the Credit Union National Association oppose the idea of enforcing the existing law; instead they are all backing up the idea of regulating the online gambling industry proposed by Frank.

“Chairman Frank is doing the right thing by saying it is unfair to burden US financial service companies with the job of the Internet gambling police at a time when their undivided attention ought to be on the economy. The reality is that UIGEA is dangerous to the payments system and unlikely to stop anyone from using the Internet to play poker, bet on horses or engage in other types of wagering.” said Jeffrey Sandman, Spokesperson for the Safe and Secure Internet Gambling Initiative.

Not long ago, Congressman Frank presented a version of this legislation in cooperation with Republican Representative Ron Paul of Texas. Unfortunately their bill, along with a correction made by Republican Representative Peter King of New York, found a series of problems in the House Committee on Financial Services that kill the proposal before it was even voted.

Barney Frank says he’s confident that Democrats will vote for his bill in 2009. If the bill gets approved, it will set a new precedent that could change the future of online gambling in the U.S. However, the bill also proposes a series of measures to prevent underage gambling and money laundering. The proposed safeguards include age checking, prevention of identity theft and solutions to prevent pathological gamblers from abusing the service.