Because of an array of other compliance requirements, credit unions and other financial institutions should have at least six more months to comply with new rules on the use of prepaid debit cards for the distribution of federal benefits.
CUNA wrote in a comment letter to the Treasury Department that the rule, for which the compliance date is June 16, will require considerable technical adjustments. In addition, the uncertainly over interchange fees, even though the cards won’t be subject to them, is making this an especially difficult time for credit union compliance.
CUNA opposed the provision that would make a financial institution liable if recipients get federal benefits on prepaid cards in error. It also urged the Treasury Department to provide operational and compliance guidance.
The association also urged the department to update its website to specifically mention credit card issuers as one of the possible providers of the prepaid debit cards.