New plan for protections on reloadable cards expected today

November 12, 2014

WASHINGTON (11/13/14)--The Consumer Financial Protection Bureau is widely expected to release proposed rules today to strengthen consumer protections associated with prepaid cards.

The bureau began accepting consumer complaints involving reloadable cards and nonbank services in July--including gift cards, benefit cards and general purpose reloadable cards, along with debt-settlement services, credit-repair services, pawn and title loans and other nonbank products.

CFPB Director Richard Cordray said at the time, "By accepting consumer complaints about prepaid products and certain other services we will be giving people a greater voice in these markets and a place to turn to when they encounter problems."

According to the CFPB, prepaid cards can have fewer consumer protections than debit or credit cards.

The bureau issued an advanced notice of proposed rulemaking in 2012, and the Credit Union National Association will be scrutinizing the new plan closely to determine its impact on credit unions.

The CFPB is hosting a public field hearing today in Wilmington, Delaware, where it is expected to unveil the new rules for prepaid cards.