WASHINGTON–The CFPB is seeking comment on proposed updates to its prepaid rule.
The CFPB issued the prepaid rule in 2016, requiring financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, give consumers free and easy access to account information, and provide protections if credit is offered. The proposal would adjust requirements for resolving errors on unregistered accounts and provide greater flexibility for credit cards linked to digital wallets.
“We know that effective implementation helps our rules deliver their intended value to consumers,” said CFPB Director Richard Cordray in a statement. “Today’s request for comment shows we are listening closely to feedback on our rules to decide whether certain adjustments will help to achieve that goal.”
The CFPB’s proposal is available at: http://files.consumerfinance.gov/f/documents/20170615_cfpb_NPRM_Prepaid-Accounts-Amendments.pdf
The CFPB’s rule, which was finalized in October 2016, applies specific federal consumer protections to broad swaths of the prepaid market for the first time. The rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and provide free and easy access to account information. The rule also requires companies to give prepaid consumers new “Know Before You Owe” disclosures with clear, upfront information about fees and other key details. Finally, the rule generally requires companies to offer protections similar to those for credit cards if consumers are allowed to use credit on their accounts to pay for transactions that they lack the money to cover, the CFPB said.
The proposal addresses concerns raised by prepaid companies about what they described as unanticipated complexities with certain aspects of the rule that were not fully addressed in their comment letters on the 2014 prepaid proposal, the CFPB said.
- Adjust error resolution requirements
- Provide more flexibility concerning credit cards linked to digital wallets
The revised guide, which includes a summary of the updates, can be found on the Bureau’s regulatory implementation website for the prepaid rule at: https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/prepaid-rule/