Both bank and credit union trade associations have remained largely quiet about the news that Wal-Mart and American Express have added FDIC insurance to money deposited on their Bluebird prepaid card.
NAFCU CEO Fred Becker sidestepped the question of whether Wal-Mart was trying to obtain banking powers without having to take a bank charter and expressed approval for the fact that Bluebird cards would now carry federal insurance. Becker made the point that consumers are put at risk when they are allowed to think that funds deposited on the card carried FDIC insurance when in fact they did not.
He also noted that having the Bluebird funds carry FDIC insurance opened the cards up to regulation from the FDIC and from the Consumer Financial Protection Bureau, which has already come down on American Express about discrepancies in disclosures around some of its products.
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