NBPCA's Statement on the Final CFPB Prepaid Accounts Rule

October 05, 2016

“While we are still analyzing the lengthy final rule to determine its full impact, it is already clear that the CFPB has dismissed many of our serious concerns and moved forward with a rule that will harm the very consumers it aims to protect. Instead of fostering financial innovation and inclusion, the CFPB’s rule will ultimately limit access to an essential mainstream consumer product that helps millions of Americans participate in the digital economy, affordably manage funds, and safely hold money.”

  • Definition of “Prepaid Account” Remains Overly Broad: The NBPCA agrees with the bureau that prepaid products consumers use as their primary transaction accounts should have similar rights and protections as traditional checking accounts. However, the definition of prepaid account in the final rule is so broad that it encompasses many of the more than 15 different types of prepaid cards in market, some of which likely will not withstand the increased costs of compliance.
  • Confusing Pre-Acquisition Disclosures: The NBPCA strongly supports clear, consumer-friendly pre-acquisition disclosures. However, the final rule maintains the requirement to provide multiple similar, but not quite identical, fee disclosures which will likely serve to only further confuse consumers.
  • Eliminate or Increase Cost of Popular Card Features: The NBPCA is concerned that imposing Regulation Z requirements on overdraft products could lead to their elimination from the marketplace at a time when income variability is increasing consumer demand for and high satisfaction with these types of products.
  • Rushed Implementation: Based on the substantial operational and systems changes that will be required, the industry will be hard pressed to implement the required changes from a broad-sweeping new regulation within the time provided in the final rule.