On April 20, the CFPB finalized a proposed rule to delay the effective date of the final rule governing Prepaid Accounts (Prepaid Account Final Rule) by six months, from October 1, 2017 to April 1, 2018 (Effective Date Final Rule). According to the CFPB, the delay was adopted “to facilitate compliance with the Prepaid Account Final Rule, and to allow an opportunity for the Bureau to assess whether any additional adjustments to the Rule are appropriate.”
The preamble to the Effective Date Final Rule previews that the CFPB will propose rules for “at least two issues that have been identified as areas where the Prepaid Accounts Final Rule may be posing particular complexities for implementation,” and at that time, a further delay may be proposed as well. The two issues relate to: (1) the linking of credit cards to digital wallets that are capable of storing funds; and (2) error resolution and limitations on liability for unregistered prepaid accounts.
Over the past few months, the Prepaid Account Final Rule has faced attacks from industry representatives, such as the American Bankers Association, and from Congress under the Congressional Review Act – Representatives Tom Graves (R-Ga) and Roger Williams (R-Tx) introduced House Joint Resolution 62 and House Joint Resolution 73, respectively, and Senator David Perdue (R-Ga) introduced Senate Joint Resolution 19. The Senate Joint Resolution was recently brought out of Committee and to the floor for consideration by way of a discharge petition filed by Senate Banking Chairman Mike Crapo. The Prepaid Account Final Rule has also been defended by attorney generals from 17 states and the District of Columbia.
We will continue to monitor the status of the Prepaid Account Final Rule in relation to the substantive changes previewed by the CFPB and the progress of the congressional joint resolutions.