Removing Barriers Blog

CFPB Issues Compliance Guide for Prepaid Rule

Earlier this week, the CFPB issued a small entity compliance guide for its rule on prepaid accounts, which was finalized in October of last year. The 158-page compliance guide is intended to help financial institutions understand how the rule applies to their operations. 

While CUNA had several concerns with the prepaid rule when proposed, the final rule includes several improvements urged in CUNA’s comment letter to the Bureau. One such improvement relates to the proposed “incidence-based fees” section (renamed “disclosure of additional fee types” in the final rule), which would have required financial institutions to include in the short form disclosure the three fees most frequently incurred during the prior 12-month period by consumers using a particular prepaid account. The final rule adopts several other CUNA-backed changes, including extending the frequency of which financial institutions must review and update disclosures from 12 to 24 months, as well as decreasing the number of fee types that must be disclosed from three to (up to) two.