On January 25, 2018, the Consumer Financial Protection Bureau (CFPB) issued the final prepaid accounts rule (which we wrote about here and here) under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z). The final rule, which will now become effective on April 1, 2019, modifies several aspects of the prepaid accounts rule initially issued on April 20, 2017.
In addition to extending the effective date of the rule, the latest revision tweaks the error resolution requirements such that the consumer must first register with financial institutions and verify their identity before the rule’s error resolution and limitation of liability protections become available. The rule also makes changes to rules concerning prepaid digital wallets—which enable consumers to upload and store funds—such that consumers will now retain full federal credit card protection when using digital wallets to store funds.
The CFPB also provides both consumers and providers with information about the changes to the rule in a user-friendly format on its website. The site includes a FAQ informing consumers about their rights, common fees associated with prepaid products, and advice about choosing the most suitable prepaid account. The site also links providers to information about the rule, including a small entity compliance guide and a guide to preparing the short form disclosure for prepaid accounts. Finally, the site links providers to model disclosure forms and a production-ready disclosure template—which, at minimum, provides providers with helpful guidance as to the CFPB’s expectations regarding the contents of such forms.
With the prepaid rule’s implementation date more than a year away, there is still plenty of time for providers to ensure that their processes will be in compliance with the rule. Toward that end, the CFPB’s website provides helpful resources and information that will help providers prepare for the implementation of the prepaid rule.