WASHINGTON (5/29/12)--Information on the costs, benefits, and risks of prepaid card use has been requested in a new Consumer Financial Protection Bureau (CFPB) Advanced Notice of Proposed Rulemaking (ANPR).
The CFPB last week announced it would begin the process of regulating prepaid cards under Regulation E, Electronic Fund Transfers. Collecting public comment on prepaid cards is the first step, and the CFPB has not said when it will begin writing new prepaid card rules. Improving the safety and transparency of prepaid cards and their providers will be two main goals of the CFPB's rulemaking effort, the agency said.
The CFPB ANPR specifically asks:
- How prepaid cards should be defined under Reg E, and whether certain cards, such as university or health spending cards, should be included under this definition;
- Which parts of Reg E should and should not be applied to prepaid cards;
- How prepaid card fee disclosures could be improved for consumers;
- How the CFPB could help consumers better compare the terms of various prepaid cards; and
- How prepaid card contract terms are communicated to consumers that have purchased the cards.
The CFPB's prepaid card info web page provides information on prepaid card market share and other facts. (CFPB graphic)
The CFPB also asked for information on the costs and benefits that adding overdraft protections or tying savings accounts to prepaid cards could create. Some prepaid cards also claim they will help consumers build their credit, and the CFPB has asked if these claims are true, and whether or not the agency should regulate how such claims are marketed to consumers.
Current information on the prepaid card market, and how the CFPB plans to address prepaid card market issues in the future, is laid out on a new CFPB web page, entitled "What's the deal with prepaid cards?"
For that web page, and the CFPB's prepaid card ANPR, use the resource links.