PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Prepaid Regulations Should Go on a Diet Before the New Year

By Ben Jackson
December 2, 2015
in Mercator Insights
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

The Consumer Financial Protection Bureau needs to return to its original plans on prepaid regulations and put its proposed rules on a post-Thanksgiving diet. For much of 2014 the CFPB was researching the prepaid industry and said that it planned to produce regulations that would focus primarily on prepaid card disclosures. Then in December 2014 it gave us 870 pages of proposed regulations that covered everything from prepaid card disclosure to overdraft to person-to-person payments to (possibly) virtual currency. Note that the entire Durbin Amendment regulations were implemented with only 307 pages.

In a November 20 post on its website, the CFPB said that it expects “to issue the final rule in spring 2016.” It is not clear why the CFPB is taking so long to digest the comments, nor do we know what direction they are taking based on those comments. But, we do know that the delay came after the troubles that RushCard and its customers had, and the concern is that the CFPB is going to try to somehow regulate away technical glitches that aren’t unique to prepaid cards.

If the rules come out in spring 2016 as proposed, then we are looking a major disruption to the prepaid card business. Depending on the implementation time frame given for compliance, program managers may need to recall and destroy mountains of cards and marketing materials. We know the CFPB is not the Environmental Protection Agency (given the reams of paper needed to print out its last regs, it might be the EPA’s sworn enemy). All the same, it would be nice to avoid a repeat of the CARD Act, which led to piles of unusable cardstock being landfilled.

What the CFPB should do is issue a slimmed down version of its prepaid regulations that focuses on disclosure. The industry already has made steps to improve the information customers have for making decisions. Organizations like the Center for Financial Services Innovation and Pew have done good work in developing valuable, workable models.

By issuing rules that focus solely on disclosure, the CFPB could issue guidance before the end of the year that would bring help to consumers earlier in 2016, and prevent disruptions to their prepaid access caused by regulatory deadlines. The improved disclosure would let consumers avoid many of the other problems CFPB seeks to solve through savvy shopping.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Compliance and RegulationPrepaid

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    gift card programs

    The Gift Card Boom—and What’s Driving It

    May 21, 2025
    Fleet Management payments

    Driving Into Digital: How Modernized Payments Platforms Impact Fleet Management

    May 20, 2025
    emerging payment trends

    From the Name on the Cup to Custom Hotel Lighting: The Future of Loyalty Programs

    May 19, 2025
    push notification bank

    From Bland to Beneficial: Using Push Notifications to Reach Business Customers

    May 16, 2025
    recurring payments, PCI Compliance for small business, Fintech for Underserved Small Businesses

    Tariffs May Create an Opportunity in Small-Business Cards

    May 15, 2025
    Using the Card “Beyond” Payments to find the Holy Grail

    Using the Card “Beyond” Payments to find the Holy Grail

    May 14, 2025
    Payments Modernization

    Playing Offense and Defense: Why Now Is the Time for Payments Modernization

    May 13, 2025
    Authorization Rates

    Boosting Revenue for Merchants by Optimizing Authorization Rates

    May 12, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result