Prepaid Cards and the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has taken an interest in prepaid cards. They are looking at the regulations and the safety of the money on the card. The Consumer Financial Protection Bureau is considering new rules to help protect the customer and their money.
The Consumer Financial Protection Bureau has put out an Advance Notice of Proposed Rulemaking. This is seeking to make sure that all terms, fees, and costs are transparent enough for the customer to understand. This is a big deal, the more the customer understand the fees, terms and conditions, and costs the better the customer has on making a decision to get one, and how much to put on it.
Bank accounts, debit cards, and credit cards have much more regulatory protections than prepaid cards have. This is one thing that the Consumer Financial Protection Bureau is working to change. They want there to be more regulatory protections for the customer.
The Consumer Financial Protection Bureau is focusing their rulemaking on the general purpose prepaid cards. These are cards that allow consumers to load the cards with money. The customer then can use these cards like checking account debit cards.
The prepaid card market is largely unregulated at the federal level, despite the growth that it has seen recently. The Consumer Financial Protection Bureau is working to change that. They are focusing on a few different things to make these cards safer for the consumer.
Fees and terms disclosure is one thing that they will be focusing on. There is a lack of industry wide standards for the fees on prepaid cards. This makes it difficult for the consumer to understand the cost of the product. It also makes it difficult for the consumer to compare fees. The bureau is trying to make regulations to make it much easier for the consumer to understand.
Another thing that the bureau is focusing on is unauthorized transactions. When it comes to credit and debit cards there are regulations in place to protect the consumer. The card issuers are required to limit the consumers’ liability when there is an unauthorized transaction on the card. Unfortunately these protections do not extend to the prepaid cards. This leaves the consumers who use these cards without protection in the event of unauthorized purchases. The new rules will make it so there is more protection for the card holders of prepaid cards.
The Consumer Financial Protection Bureau is working hard to make new rules for prepaid cards. The goal is to make it safer to use and easier to understand. With the new rules in place, these cards may become even more popular, sending this industry booming forward.