Removing Barriers Blog

CFPB Proposes Changes to Prepaid Rule
Posted June 15,2017 by vgawali

Today, the CFPB issued proposed changes to the prepaid accounts final rule published last November. The final rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, provide free and easy access to account information, and give prepaid consumers new “Know Before You Owe” disclosures. 

The final rule also generally requires companies to offer protections similar to those for credit cards if consumers are allowed to use credit on their accounts to pay for transactions that they lack the money to cover.  

The proposal would make changes with respect to application of credit-related provisions to digital wallets that can store funds, error resolution and limitations on liability for unverified prepaid accounts, and other clarifications and minor adjustments. 

This April, the CFPB delayed the general effective date of the prepaid rule by six months, to April 1, 2018. In the proposal, the CFPB is requesting comment on whether a further delay would be necessary and whether an express provision addressing early compliance is needed. 

The CFPB also published an updated version of the prepaid rule Small Entity Compliance Guide, available on the CFPB’s prepaid accounts rule resource page

The CFPB will be accepting comments for 45 days once the proposal is issued in the Federal Register. CUNA will be releasing a summary of the proposal and Comment Call shortly.