Prepaid Cards

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The CFPB wants financial institutions to post on their websites their marketing agreements with colleges and universities for financial products other than credit cards, such as deposit accounts, prepaid cards and financial aid disbursement accounts.  Pursuant to the CARD Act, card issuers must submit their campus credit card agreements annually to the CFPB together with their related marketing agreements and certain information, including the amount of compensation they paid to schools. … Continue Reading

Findings on campus banking products released this past Monday by the CFPB in conjunction with a Banking on Campus Forum held in Washington, D.C. appear to be a harbinger of new limitations on the marketing of these products.  The findings were based on comments the CFPB received in response to a January 2013 notice seeking input on a variety of issues with regard to these products, including the information shared between schools and financial institution providers, the way these products are marketed, the fee structures for these products, how marketing arrangements are established, and student experiences with these products. … Continue Reading

CFPB Director Richard Cordray was among the federal financial regulators who attended a closed door meeting yesterday with President Obama.  Other regulators attending the meeting included the Chairs of the Fed, FDIC and SEC.  At the meeting, President Obama was expected to urge the regulators to complete Dodd-Frank rulemaking. 

The Dodd-Frank rulemaking still on the CFPB’s “to do” list includes rules to implement the Dodd-Frank amendments to the Equal Credit Opportunity Act that require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses and to the Home Mortgage Disclosure Act that greatly increase the types of information that financial institutions must report. … Continue Reading

A New York Times report last month that the office of New York Attorney General Eric Schneiderman has commenced an investigation into the widening practice of employers paying hourly employees through the use of prepaid payroll cards has triggered a group of 16 Democratic U.S. Senators to send a letter to the CFPB raising concerns about fees paid by low-wage workers using payroll cards. … Continue Reading

In August, the CFPB issued a notice seeking public comment on its plans to determine whether certain provisions of Maine and Tennessee laws relating to unclaimed gift cards are preempted by federal law on gift card expiration dates.  We were pleased to see that the CFPB had invited public input and, in response to that invitation, the American Bankers Association submitted a comment letter earlier this week urging the CFPB to issue a broad preemption ruling. … Continue Reading

The CFPB intends to determine whether certain provisions of Maine and Tennessee laws relating to unclaimed gift cards are preempted by federal law on gift card expiration dates.  The CFPB’s rulings will represent the agency’s first preemption determinations.  According to the CFPB’s “notice of intent to make preemption determination” submitted for publication in the Federal Register, the Tennessee determination was requested by payment card industry representatives and the Maine determination was requested by Maine’s Office of the State Treasurer.　　… Continue Reading

Stephen Shinn, a staff lawyer at the CFPB, spoke Saturday morning at the ABA Annual Meeting in Chicago about the status of the Advance Notice of Proposed Rulemaking regarding general purpose reloadable prepaid cards.

He reported that the Bureau received 230 comment letters. He indicated that if the Bureau decides to issue a  proposed rule, that won’t occur until after the Bureau finalizes all of the regulations it is required to issue under Dodd-Frank.… Continue Reading

The staff of the FTC’s Bureau of Consumer Protection has weighed in on the CFPB’s Advance Notice of Proposed Rulemaking seeking information on extending Regulation E requirements to general purpose reloadable prepaid cards or GPR cards. While the staff’s letter notes that the FTC voted to authorize the staff to submit a comment letter, it contains the disclaimer that the comments represent the staff’s views and such views “are not necessarily the views” of the FTC or any individual Commissioner.… Continue Reading

Last week, a coalition of 26 consumer groups, civil rights advocates, and community organizations submitted comments to the CFPB urging it to issue regulations banning overdraft fees and short-term, small-dollar loan features on prepaid cards. Among those groups submitting comments were the National Consumer Law Center, the Consumer Federation of America, and the Center for Responsible Lending.… Continue Reading

On May 23, 2012, the CFPB published an advanced notice of proposed rulemaking (ANPR) that proposes to extend Regulation E protections to GPR cards. The CFPB’s release of this ANPR coincided with the CFPB’s scheduled hearing in Durham, North Carolina on the same subject. We previously issued an e-alert summarizing the ANPR and wanted to provide some further thoughts and commentary on the ANPR.… Continue Reading