Cordray: Proposed Rules for Prepaid Cards Due by ‘End of Summer’ (June 11, 2014)
The Consumer Financial Protection Bureau (CFPB) has bumped plans to release its proposed rule on prepaid cards to “the end of the summer,” according to Richard Cordray, the agency’s director. Cordray provided a status report on the rulemaking process June 10 during the CFPB’s semi-annual report to the Senate Banking Committee.
“We had anticipated we’d have a rulemaking proposal out in June [but] it’s now taking us a bit longer,” Cordray said in response to a specific question from Sen. Robert Menendez (D-N.J.), who has sponsored legislation to regulate prepaid cards. The delay is due to routine issues, Cordray suggested. “It doesn’t indicate any particular problems about the rulemaking, just that it’s hard to work through some of these issues; we’re getting there and we’ll have something fairly soon.”
Later in the proceedings, Sen. Mike Crapo (R-Idaho) asked Cordray whether the CFPB is participating in Operation Choke Point, a U.S. Dept. of Justice (DOJ) initiative launched last year to investigate banks’ involvement with certain payment processors, payday lenders and gun dealers that could be at higher risk for fraud. Cordray said he is aware of the initiative from news reports but hasn’t advised the DOJ on the matter.
Cordray told committee members that to date, the CFPB has aided in efforts to refund more than $3.8 billion to consumers who fell victim to various violations of consumer financial protection laws. During the same period, the agency has fined violators more than $141 million, which feeds the Civil Penalty Fund, used to compensate wronged consumers and to fund consumer education and financial literacy programs. As of June 1, the CFPB had received nearly 375,000 consumer complaints on various financial services. Debt collection is the bureau’s most frequent source of consumer complaints, Cordray said.