WASHINGTON–The National Consumer Law Center is urging the public to check out a new online tool from the Consumer Financial Protection Bureau where they can find companies’ prepaid and payroll card fee schedules and agreements, ”creating greater transparency into prepaid and payroll card.
However, the NCLC said some payday lender prepaid cards have apparently not been submitted to the database.
The National Consumer Law Center said it is also questioning why the CFPB did not publicize the new website or make it more user friendly.
“The prepaid agreements database will provide a one-stop place for the fees and other account terms for prepaid agreements,” said National Consumer Law Center Associate Director Lauren Saunders. “Together with the new fee disclosure rules that went into effect earlier this year, this online tool will shine sunlight onto the sometimes opaque world of prepaid card fees and encourage competition that may help lower prices for consumers and workers.”
“Greater transparency is especially welcome for payroll cards used by employers to pay workers, as those fee schedules are not otherwise public and are difficult to compare from company to company,” Saunders continued. “Workers and employers can compare other options and put pressure on payroll card companies that charge high fees.”
Claiming to be Banks
Saunders went on to say, “Unfortunately, some payday lender prepaid cards with overdraft fees are not in the database, apparently claiming that their accounts are ‘bank accounts’ so that they can avoid the rules that limit overdraft fees on prepaid accounts. The payday lender ACE Cash Express offers the ‘ACE Flare Account by MetaBank’ through the prepaid card company NetSpend, but the card may incur up to $100 in overdraft fees a month, which is not allowed under the CFPB’s prepaid card rule. The CFPB should crack down on these fake payday lender bank accounts and insist that they comply with the prepaid card rules,” she added.
The Prepaid product agreements database is searchable by card issuer, product name, program manager, or other relevant party, as well as by term, as well as other criteria.
“Yet for some reason, the CFPB did not issue a press release or do anything to make the public aware of the new website,” the NCLC said. “The database also requires consumers to scroll through the entire set of terms and conditions for each prepaid card rather than allowing them to simply click on the short form or long form fee disclosures.”