Several organizations have weighed in on the CFPB's proposed changes to prepaid card governance.
The bureau would standardize disclosures with a new requirement that prepaid companies adopt model disclosure forms that enable consumers to make better choices between prepaid options, Eric Goldberg, senior counsel at CFPB, wrote Nov. 13 in a post on the bureau's blog.
The disclosures would require a short form highlighting key information about the account's fees and a long form listing all fees, he said.
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"It's time for consumer protections to catch up with this fast growing new way to pay," Christina Tetreault, staff attorney for the Consumers Union, said in a press release. "The CFPB has proposed some important new safeguards that will make a real difference for consumers. But there's more work to be done to ensure consumers get the protections they deserve when they rely on prepaid cards."
Other consumer advocates have praised the CFPB for taking steps to protect card holders.
"The proposal offers strong protections for prepaid and payroll cards that will help ensure that funds are safe, costs are transparent, and prepaid cards are free from abusive overdraft fee practices," Lauren Saunders, associate director of the National Consumer Law Center, said in a press release. "The rules will increase consumer and employee confidence when they use prepaid and payroll cards."
Under the CFPB's proposal, prepaid card issuers will be required to provide consumers with clear and simple disclosures of fees before purchase. It would also be easier for consumers to check their account records and dispute errors.
A consumer's financial liability for fraudulent or erroneous charges on their cards would be capped at $50 as long as they report them in a timely manner, according to the Consumers Union. This protection already exists for credit and debit card transactions.
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