We believe the CFPB’s recent RFI on the Bureau’s adopted regulations, which Acting Director Mulvaney discussed during his testimony before the House Financial Services and Senate Banking Committees, provides the prepaid industry an opportunity to persuade the Bureau to reconsider its prepaid rule that was issued in October 2016 and amended in January 2018.
As I stated during a panel discussion at the Network Branded Prepaid Card Association-American Banker Power of Prepaid Conference in Washington, DC earlier this week, this opportunity gives new life to industry officials who interpreted the Bureau’s decision to finalize the prepaid rule amendments without any significant changes to the amendments as proposed by former Director Cordray to mean that Acting Director Mulvaney would not reconsider any part of the prepaid rule.
We surmise that Acting Director Mulvaney’s finalization of the prepaid rule amendments was based on the mistaken belief that industry concerns were largely addressed by the amendments proposed in June 2017. Because the most recent comment period was limited to the proposed amendments, we believe that Acting Director Mulvaney did not have an opportunity to consider other aspects of the prepaid rule that were not addressed by the amendments, such as the inclusion of certain digital wallets and onerous restrictions on overdraft and credit features.
Because the CFPB rulemaking resources will be prioritized and deployed in the near future, companies who want the CFPB to reconsider the prepaid rule (as it announced it plans to do with the payday and HMDA rules) should submit responses to the RFI well before the June 19, 2018 deadline. We are working with clients and trade associations to submit responses to the various RFIs, including the RFI focusing on the adopted regulations.