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Prepaid debit cards could also see new regs
WASHINGTON (12/21/10)--Legislation that would eliminate many hidden fees associated with prepaid debit cards and increase transparency regarding prepaid debit card fees was introduced late last week by Sen. Robert Menendez (D-N.J.) The legislation, which was co-sponsored by Sens. Richard Durbin (D-Ill.) and Jeff Merkley (D-Ore.) would focus on reloadable plastic cards that are often used as substitutes for checking accounts, debit cards, and credit cards. According to a release, the legislation would require full fee disclosures at the time of purchase, including a wallet-sized summary of all fees and a toll-free telephone number for customer service. The legislation would also ban the producers of these cards from charging overdraft fees, balance inquiry fees, customer service fees, inactivity fees, account closure fees, and other types of fees. Consumers would also be protected against loss or theft, and would have any funds attached to these cards backed by insurance in the event that the card provider goes bankrupt. The Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. would issue regulations within nine months of the legislation’s enactment. While the exact number that would be impacted isn’t known at this time, the legislation could impact credit unions, Credit Union National Association (CUNA) Senior Vice President for Compliance Kathy Thompson said. CUNA expects similar legislation to be re-introduced in the 112th Congress, and CUNA will meet with the legislation's sponsors to discuss their concerns. For the full release, use the resource link.
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