Compass Point on Washington Policy: CFPB Looks at Prepaid Card

May 23, 2012 9:40 AM EDT
Compass Point on Washington Policy: CFPB Looks at Prepaid Card

Analyst, Isaac Boltansky, said, "Today, the Consumer Financial Protection Bureau (CFPB) turns its eyes towards the prepaid card market. It has released an Advance Notice of Proposed Rulemaking (ANPR) aimed at gathering more information on the industry and will hold a field hearing today at 12:00pm EST in North Carolina on the same subject. An ANPR is an optional step in the rulemaking process whereby an agency will describe some of the underlying issues surrounding a topic and solicit public comment. This ANPR is aimed at gathering information in advance of a proposal to extend Regulation E protections to a specific prepaid product: general purpose reloadable (GPR) prepaid cards. This action coincides with a field hearing in Durham, North Carolina where prepaid market participants, consumer groups, and the CFPB staff will examine the impacts and issues surrounding GPR cards. We continue to believe that the prepaid industry will benefit from CFPB oversight for two reasons: (1) The likely introduction of industry-wide fee and term disclosures; and (2) The implied benefits of a single regulator as compared to the fractured regulatory landscape the industry currently faces. Today’s ANPR is a targeted step aimed at extending certain consumer protections to GPR cards. The more far-reaching changes to the industry will come after it is designated as a “larger participant,” which we expect to happen through rulemaking this summer."

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