The Consumer Financial Protection Bureau has issued its final prepaid rules, which it has been working on since 2012. The final document is 1689 page sand can be found here:
The rule takes a broad definition of prepaid, and included person-to-person transfer services and electronic wallets under its purview.
The final rule’s definition of prepaid accounts specifically includes payroll card accounts and government benefit accounts that are currently subject to Regulation E. In addition, it covers accounts that are marketed or labeled as “prepaid” that are redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or that are usable at automated teller machines (ATMs). It also covers accounts that are issued on a prepaid basis or capable of being loaded with funds, whose primary function is to conduct transactions with multiple, unaffiliated merchants for goods or services, or at ATMs, or to conduct person-to-person (P2P) transfers, and that are not checking accounts, share draft accounts, or negotiable order of withdrawal (NOW) accounts.
The rule will have the industry working overtime to figure out what this means for their businesses and how they will be able to comply. They have one year to get things ready.
Mercator Advisory Group is in the process of reading the rules and will publish its analysis of the implications.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group