In advance of its Prepaid Card Field Hearing, held on May 23, 2012, in Durham, N.C., the CFPB published an advanced notice of proposed rulemaking for prepaid products, commonly referred to as general purpose reloadable (GPR) cards. The CFPB is seeking information on the costs, benefits, and risks to consumers of GPR cards and will consider, among other things, whether: (1) to expand the Electronic Funds Transfer Act and Regulation E to include all GPR cards; many consumers use GPR cards as substitutes for checking and other deposit accounts, which are currently governed by Regulation E; (2) banks that issue GPR cards should be required to meet FDIC “pass-through” requirements; (3) to develop standardized disclosures that can be read prior to purchasing or using a GPR card; and (4) whether GPR card issuers should be required to provide liability protection from unauthorized transactions. The CFPB also seeks input and data concerning the efficacy of credit reporting features on GPR cards in enabling consumers to improve or build credit. Comments are due July 22, 2012. The CFPB has also launched a series of Ask CFPB questions related to GPR cards designed to help educate consumers on these products. Click here for Mr. Cordray’s prepared remarks delivered during the hearing, here for the rulemaking notice, and here for the Ask CFPB web tool.
Alert May 29, 2012