Removing Barriers Blog

CUNA Urges CFPB to Delay Prepaid Rule Effective Date

Today, CUNA’s Senior Director of Advocacy and Counsel Luke Martone, sent a letter to the CFPB in response to proposed amendments to the prepaid accounts rule under Regulations E and Z.

While we support the Bureau’s attempt to provide flexibility related to the prepaid rule, the relatively narrow application of the proposed revisions will provide only limited relief.

We continue to voice our disagreement with the Bureau’s decision in the rule to categorize prepaid cards that offer other services as credit cards, subjecting them to the requirements and limitations of Regulation Z. Characterizing a prepaid account as a credit account is clearly inappropriate due to the inherent differences of such products. As such, we urge the Bureau to eliminate the rule's application of Regulation Z to prepaid accounts.

We also urge the Bureau to delay the effective date until at least October 2018. This will provide issuers and vendors adequate time to make remaining changes required by the rule as well as substantive changes resulting from this recent proposal.