Attorneys general from multiple states have asked the Congress not to use the Congressional Review Act to get rid of the prepaid rules finalized by the Consumer Financial Protection Bureau late in 2016.
Last week, Congress trashed consumers’ right to browse the web in private. This week it’s considering a measure that would derail protections for consumers who use prepaid debit cards.
A coalition of attorneys general from the District of Columbia and 17 states are opposing three resolutions in the House and Senate that would throw out a new Consumer Financial Protection Bureau rule scheduled to go into effect in April 2018.
The coalition believes that the rules provide important protections for prepaid cardholder that put prepaid on a level playing field with debit and credit cards. There are provisions of the rule that actually make it harder for prepaid cards, such as those requiring prepaid cards in some instances to comply with both regulation E and regulation Z. The industry would like to see changes in the final rule, and has asked for a six-month extension for the effective date of the rule.
Read the article here:
The Network branded Prepaid Card Association has highlighted some of the struggles the rule could put upon the industry. In many cases, these are unintended consequences of a rule designed to protect people using prepaid as an account replacement being applied to card programs that are not designed to replace transaction accounts.
For example, the NBPCA is concerned about the rule being applied to unregistered cards and to low-dollar, non-reloadable prepaid cards. These kinds of cards are not supposed to serve the same role as checking accounts, and so they do not require the same Regulation E protections.
Read the NBPCA’s letter here:
Financial access for many of the country’s most vulnerable people will be affected by the final form of the rule. It is important that regulators take their time to make sure that no unintended consequences happen. Congress should also be sure that it will not trigger problems with a wholesale repeal of the rule.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group