CFPB Prepaid NPRM: 5,000+ Comments and Counting; NBPCA Comment Letter Urges Restraint, More Dialogue (March 23, 2015)
The NBPCA is calling on the CFPB to limit the scope of its proposed prepaid regulations to focus on primary transaction accounts and to, among other things, simplify disclosures rather than adding complexity for consumers. In its comment letter responding to the bureau’s notice of proposed rulemaking for prepaid accounts, the trade group says it’s hoping to head off a final rule mandating broad restrictions that could limit consumer access and potentially eliminate entire categories of prepaid cards. Comments on the NPRM are due today, and as of 12:30 p.m. EDT, the CFPB had received more than 5,000 responses. Click here if you need help finalizing yours.
“While we appreciate the efforts of the bureau to better understand the prepaid card industry before drafting such a complex rule, we have serious concerns about many of its policy decisions, such as the breadth of prepaid products covered by the proposed rule, the redundant disclosure requirements and the decision to place overdraft features under Regulation Z, which greatly threatens the continued viability of an increasingly popular consumer product feature,” Brad Fauss, NBPCA’s interim executive director and general counsel, tells Paybefore.
In its 94-page comment letter submitted today, the NBPCA addresses several areas of concern with the NPRM the CFPB issued in November. For example, the NBPCA says the agency has expanded its definition of prepaid accounts, beyond what it covered in its 2012 advanced notice of proposed rulemaking. The new definition could pertain to more than 15 types of prepaid cards. The NBPCA contends that the proposed rule only should cover prepaid products consumers use as primary transaction accounts and where consumers would reasonably expect to receive protections similar to debit cards attached to traditional checking accounts.
“A one-size-fits-all approach to regulating the more than 15 separate categories of prepaid card products could have the unintended consequence of eliminating entire product categories from the market,” Fauss says.
In addition, the NBPCA supports a single, consumer-friendly, pre-acquisition fee disclosure rather than multiple fee disclosures—a short form disclosure and a long form disclosure—which are required by the proposed rule. The NBPCA also is requesting that the effective date of the final rules be extended from nine months after publication in the Federal Register to 18 to 24 months to give the industry more time to implement required rules.
To submit your comments—online: the Federal eRulemaking Portal; Email: [email protected] and include Docket No. CFPB-2014-0031 and/or RIN 3170-AA22 in the subject line of the email; or hand delivery/courier: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1275 First Street NE, Washington, DC 20002.
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