Cordray Goes Before House Committee, Says Overdraft Will Be Part of Prepaid Rules (June 19, 2014)
CFPB Director Richard Cordray headed to the House yesterday to present his bureau’s semi-annual report to the House Financial Services Committee, headed by Jeb Hensarling (R-Texas). As expected, Cordray used his appearance to advocate much of the same agenda as he did before the Senate Banking Committee last week, where he also confirmed that the CFPB’s release of proposed prepaid card rules would be delayed until late summer.
Key themes in Cordray’s report included protecting student borrowers when a loan co-signer dies, cracking down on payday lenders and collecting data on millions of consumers.
Cordray touched on the CFPB’s coming prepaid rule proposals in his replies to questioning from Rep. Carolyn Maloney (D-N.Y.), who asked Cordray about feedback the CFPB has received on model prepaid disclosures the agency posted in April. Presenting the fee disclosures inside the card packaging “is not helpful” to consumers, she said. Cordray responded that the agency’s proposed rules will try to provide for “clear, straightforward, apples-to-apples disclosures, so people can look at different prepaid cards and get a good sense for the key fees.”
Maloney also noted that some prepaid cards allow for overdraft—a feature she said she opposes. “[Overdraft] is one of the main issues that’s being considered,” by the agency with respect to prepaid, Cordray said, adding that overdraft provisions will be covered in the agency’s proposed prepaid rules.
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