|Agency||Consumer Financial Protection Bureau|
|Rule Name||Prepaid Accounts|
|Comment Due Date||03/23/15|
The Consumer Financial Protection Bureau (CFPB) recently issued a proposed rule that applies to prepaid accounts (including general purpose reloadable cards as well as other types of prepaid accounts such as digital wallets) that are offered to consumers. Prepaid products are amongst the fastest growing types of consumer financial products in the U.S.; the total dollar value loaded onto general purpose reloadable cards is expected to grow to nearly $100 billion through 2014. The CFPB also included a related blog post and press release.
Specifically, the proposed rule would extend to prepaid accounts many consumer protections under Regulation E, as well as protections under Regulation Z for prepaid accounts that offer credit options.
CUNA has a variety of concerns about the impact of the proposal on these financial products now and into the future, such as treating overdraft coverage on prepaid cards as loans. While only a limited number of credit unions directly offer prepaid cards as issuers, we will be working with the CUNA Consumer Protection Subcommittee, the CUNA Payments Subcommittee, and CUNA Council members to identify all concerns and develop recommendations to improve various provisions in the proposal. In 2012, CUNA submitted a comment letter to the CFPB on its advance notice of proposed rulemaking on prepaid products outlining concerns from credit unions.
Comments are due to the CFPB by March 23, 2015; please submit your comments to CUNA by March 9, 2015.
For further details, please review the CFPB’s proposed rule in the Federal Register, as well as the proposed model disclosures, and the agency’s study on prepaid card agreements, which includes a spreadsheet of the prepaid cards they studied.
If you have any questions or comments, please contact CUNA Senior Assistant General Counsel Luke Martone.