CFPB’s Final Prepaid Rule Delayed Again
The prepaid industry will be playing the waiting game a while longer. The CFPB’s final rule for prepaid accounts has been pushed back to a summer release, according to the agency’s latest rulemaking agenda. The bureau’s previous rulemaking agenda predicted the rule would be out in spring 2016.
The release of the final rule will represent the end of a process that began four years ago. The regulations—which will govern many aspects of prepaid accounts—were first floated when the CFPB released an Advanced Notice of Proposed Rulemaking for prepaid in May 2012. In November 2014, just before a field hearing on prepaid, the agency released its proposed rule and solicited industry comment on the 870-page proposal. The final rule will bring prepaid accounts within the realm of Regulation E of the Electronic Fund Transfer Act and will add new provisions specific to such accounts. The bureau also proposed amending Regulation Z, which implements the Truth in Lending Act, to regulate prepaid accounts with overdraft services or credit features—a highly debated move that industry and some lawmakers fear will have negative consequences on consumer access to credit.
Numerous prepaid industry stakeholders and observers—including the Network Branded Prepaid Card Association, have lodged concerns about the rule’s overly broad definition of what constitutes a “prepaid” account, along with the potential for the rule’s onerous disclosure requirements to confuse consumers and make providing non-reloadable prepaid products a much more complicated process, among other issues. At several spring conferences industry leaders expressed optimism that the delay in releasing the proposal meant the bureau was trying to get it right.
“The NBPCA remains hopeful that the CFPB will develop a final rule with reasonable consumer protections that also supports the expansion and continued availability of this essential financial tool, which is utilized by millions of Americans,” says Brad Fauss, president and CEO of the trade group.
- Card Forum: Experts Look ahead to CFPB Final Prepaid Rule
- Prepaid Experts Talk CFPB Prepaid Rule: Possible Delay, Compliance
- CFPB Pushes Back Prepaid Final Rule Release