The IndependentCommunity Bankers of America, long a credit union opponent anda leader in the effort to keep Wal-Mart from obtaining a bankcharter, takes a very dim view of FDIC insurance covering moneyadded to Bluebird cards.

Bluebird is the prepaid card jointly offered by American Expressand Wal-Mart that carries a number of different technologicalinnovations and, as of this week, also carries FDIC insurance and check writing capability.

“These cards are nothing more than checking accounts in prepaidclothing and need to be regulated as such,” declared Viveca Ware,the trade group's senior vice president for regulatory policy.

Ware recounted how the ICBA and individual banks and creditunions had opposed Wal-Mart being allowed to have a bank charter in2007, only to see the giant retailer launch many bank-like productsand services without a charter.

Wal-Mart has not commented on the addition of the insurance orabout the charter question, largely leaving the Bluebird news toAmerican Express.

When the card was launched in October 2012, Amex executives said the noted cardbrand, which already has three banks to help fund its cardofferings, would not seek to cover funds deposited on Bluebirdcards with FDIC insurance, but changed their position in order to enable cardholders todirectly deposit U.S. government funds onto their Bluebird cards,according to an Amex spokesman.

Government funds such Social Security and veterans benefits areonly allowed to be directly deposited into accounts which carryinsurance such as from the FDIC or NCUA.

The spokesman added that the funds on Bluebird cards would have“pass through” FDIC insurance through an arrangement Amex hadstruck with Wells Fargo Bank, which already had FDIC insurance.

Ware said the ICBA was still researching how to fight theretailer's recent Bluebird move, but noted that the CFPB iscurrently working on a rule covering prepaid cards.

“We certainly will do our best to make sure the CFPB knows aboutthese current developments,” Ware said.