CFPB, Federal Agencies, State Agencies, and Attorneys General
The D.C. federal district court has granted PayPal’s motion for summary judgment in its lawsuit challenging the CFPB’s prepaid card rule (Prepaid Rule) and vacated the Prepaid Rule’s short-form disclosure requirement as applied to digital wallets.
In 2016, the CFPB promulgated the Prepaid Rule, which requires a short- form and long- form account disclosure and requires an issuer to disclose its “most important fees” in the short-form disclosure.… Continue Reading
A new CFPB report, “Issue Spotlight: Public Benefits Delivery & Consumer Protection,” looks at what it describes as “the challenges that recipients of public benefits programs offering cash assistance encounter in accessing funds.” The report focuses on cash assistance provided on prepaid cards because the CFPB has observed “specific recurring issues arising with the provision of benefits by that method.”… Continue Reading
The U. S. Court of Appeals for the D.C. Circuit held that the CFPB’s prepaid card rule (Prepaid Rule) does not mandate a “model clause.” The ruling was made in the lawsuit that PayPal, one of the largest digital wallet providers, filed against the CFPB in December 2019 to challenge the Prepaid Rule. … Continue Reading
The CFPB has filed an amicus brief in Mohamed v. Bank of America, N.A. in which it argues that a prepaid card loaded with pandemic-related unemployment benefits is a “prepaid account” subject to Regulation E, including its error resolution requirements for investigation of consumer disputes.
Regulation E, which implements the Electronic Fund Transfer Act, defines the scope of a covered “account” to include “a prepaid account,” and specifically identifies a “government benefit account” as a category of “prepaid account.”… Continue Reading
The CFPB has released the Spring 2022 edition of its Supervisory Highlights. The report discusses the Bureau’s examinations in the areas of auto servicing, consumer reporting, credit card account management, debt collection, deposits, mortgage origination, prepaid accounts, remittance transfers, and student loan servicing that were completed between July 2021 and December 2021. … Continue Reading
In filings submitted last week, the Consumer Financial Protection Bureau (the Bureau) both opposed and moved for summary judgment in PayPal, Inc. v. Consumer Financial Protection Bureau, asking the court to put an end to PayPal, Inc.’s lawsuit challenging the prepaid card rule (Rule), which took effect last year. The Rule set out certain fee disclosure requirements, credit-linking restrictions, and other consumer protections for “prepaid accounts.”… Continue Reading
The CFPB has published its Spring 2020 rulemaking agenda as part of the Spring 2020 Unified Agenda of Federal Regulatory and Deregulatory Actions. It represents the CFPB’s third rulemaking agenda under Director Kraninger’s leadership. The agenda’s preamble indicates that the information in the agenda is current as of March 5, 2020 and identifies the regulatory matters that the Bureau “reasonably anticipates having under consideration during the period from May 1, 2020 to April 30, 2021.”… Continue Reading
PayPal has filed a motion for summary judgment in its lawsuit against the CFPB seeking to invalidate the Bureau’s prepaid card rule (“Rule”). The Rule became effective on April 1, 2019. The relief sought by PayPal in the lawsuit, which was filed in December 2019 in the D.C. federal district court, includes vacating the Rule and enjoining the Bureau from enforcing the Rule.… Continue Reading
The Montana Supreme Court, in Bratton v. Sisters of Charity of Leavenworth Health System, Inc., has ruled that a health care provider’s use of prepaid cards to make refunds to patients did not violate Montana law.
In the lawsuit, the plaintiff alleged that SCL Health (SCL), her healthcare provider, violated Montana law by directing its bank to issue two prepaid cards to the plaintiff to refund credit balances on her account with SCL. … Continue Reading
The CFPB has issued an interpretive rule addressing the application of the Electronic Fund Transfer Act/Regulation E compulsory use prohibition to COVID-19 relief payments made by federal, state, or local government agencies.
The prohibition makes it unlawful for any person to require a consumer to establish an account for the receipt of electronic funds with a particular financial institution as a condition of employment or receipt of a government benefit.… Continue Reading
