While proposed changes to the Consumer Financial Protection Bureau’s (CFPB) prepaid accounts rule provide some clarity, it will not be helpful for most prepaid card users and CUNA remains opposed to the rule’s application of Regulation Z to certain prepaid cards. CUNA also urged the bureau in its comment letter to delay the proposed effective date.
“We ask the bureau to revisit the final rule to determine areas that can be modified to provide greater relief to credit unions and other issuers, while at the same time ensuring consumer access to prepaid accounts is not unduly restricted,” the letter reads. “In addition, we urge the bureau to further delay the effective date until at least October 2018. This will provide issuers and vendors adequate time to make remaining changes required by the final rule as well as substantive changes resulting from this proposal.”
The bureau finalized the rule in October 2016, extending Regulation E coverage to prepaid accounts and generally expanded Regulation Z’s coverage to overdraft features that may be offered in conjunction with prepaid accounts.
CUNA raised a number of concerns with the rule, particularly regarding the unintended impact the rule may have on the ability of issuers to continue providing prepaid account access.
“We continue to urge the Bureau to limit new regulatory requirements on credit unions that offer prepaid accounts, so such accounts remain accessible and so credit unions and other issuers remain innovative in the payments space,” the letter reads.
CUNA also urged the bureau to offer assurance in the form of a safe harbor that card issuers working to comply with the rule prior to its effective date, protecting them from potential liability.