CFPB Seeks to Standardize Prepaid Fee Disclosures (March 20, 2014)
The Consumer Financial Protection Bureau (CFPB) is developing a new fee disclosure format for prepaid cards, ahead of new rules on the topic the agency expects to propose this year. In a post on its blog, the CFPB noted that current fee disclosures can vary widely between prepaid companies, which often disclose different information in varying formats, making it difficult for consumers to do side-by-side comparisons of products.
To enable easier comparisons, the CFPB is developing a model disclosure form that will standardize what fee information is presented and in what format. To help design the model, the agency is canvassing consumers across the country, testing various versions of the forms. The bureau also is asking consumers and prepaid industry players to weigh in via the Web. The blog post displays a pair of model forms and asks for feedback on whether the fees are presented clearly and in an understandable way; if any other information should be added or changed; and if there is anything confusing about the models.
The CFPB said it will consider the feedback received as it continues testing new models over the coming weeks. Once a form is finalized, the agency expects to include as “part of a larger project that will provide a variety of protections for prepaid card users,” which will be the subject of a proposed rule later this spring.
Earlier this month, the Pew Charitable Trusts released its own model disclosure box for GPR cards, which borrowed some concepts from a model proposed by the Center for Financial Services Innovation in 2012.