CFPB Researching Prepaid Cards
Prepaid cards were the topic of a field hearing by the Consumer Financial Protection Bureau on Wednesday in Durham, N.C. The hearing was organized to collect testimony on the topic from consumer groups, industry representatives, and members of the public.
The CFPB also announced Wednesday it would formally research prepaid cards, asking for comment on topics such as transparent and timely disclosures, fee disclosures to facilitate comparison shopping, and FDIC protection.
The bureau intends to extend federal consumer protections to prepaid cards, possibly mirroring the protections currently provided to debit cards linked to a deposit account, according to the CFPB’s website, because so many consumers use them as substitutes for checking accounts.
Prepaid cards are addressed to some extent in Regulation E, which transferred to the CFPB late last year.
An overdraft protection opt-in bill, HR 5691, introduced by Rep. Carolyn Maloney (D-N.Y.), calls for a CFPB study of overdraft fees on prepaid debit cards.
The Treasury Department is also testing the use of prepaid debit cards for federal tax refunds, according to NAFCU.