prepaid accounts

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On January 25, the CFPB finalized certain changes to the original Final Prepaid Rule (the “Rule”) proposed last summer.  The amended Rule still contains onerous restrictions on credit features and complicated disclosure requirements, but the changes are generally positive for prepaid providers and incorporate feedback from industry representatives.  Importantly, due to concerns about implementation difficulties, the effective date of the Rule, which was originally October 1, 2017 and delayed to April 1, 2018, is now further delayed to April 1, 2019.… Continue Reading

As we previewed earlier this year, the CFPB, on June 15, proposed substantive changes to the Prepaid Final Rule (the “Rule”).  The proposed changes are generally positive for prepaid providers and incorporate feedback and comments from industry representatives.  The proposal, however, does not lift the onerous restrictions on credit features currently in the Rule. … Continue Reading

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.”… Continue Reading

Since the CFPB issued its final rule for general purpose prepaid accounts on October 5, 2016, it has faced attacks from Congress and criticism from industry participants

On April 5, in a letter to Congressional leaders, attorneys general (AGs) from 17 states (Iowa, California, Maine, Hawaii, Maryland, Massachusetts, Illinois, Minnesota, Mississippi, Vermont, New York, Virginia, North Carolina, Washington, Oregon, Pennsylvania, and Rhode Island) and the District of Columbia urged Congress to cease its efforts to nullify the rule under the Congressional Review Act (CRA).… Continue Reading

Since the CFPB issued its final rule for general purpose prepaid accounts on October 5, 2016, it has faced challenges from Congress and criticism from industry participants.  In recognition of the numerous compliance difficulties posed by the rule, the CFPB has indicated that it is amenable to making substantive changes to the rule, and on March 9, the CFPB proposed to delay the rule’s implementation date in response to feedback from the prepaid industry.… Continue Reading

We have previously written about the Congressional Review Act (“CRA”), a law that establishes a procedure by which Congress can nullify a covered rule adopted by a federal agency.  According to a memorandum prepared by the Congressional Research Service (“CRS”), the CRA “was largely intended to assert control over agency rulemaking by establishing a special set of expedited or ‘fast track’ legislative procedures for this purpose, primarily in the Senate.”… Continue Reading

At a panel discussion today on the prepaid account rule, held as part of the meeting of the American Bar Association Committee on Consumer Financial Services in Carlsbad, CA, Kristine Andreassen, the team leader for the CFPB prepaid account rule, left the door open for changes to be made and said that the Bureau wants to hear about problems or issues with the rule.… Continue Reading

Ballard Spahr to hold a webinar on the proposal at 12 p.m. ET on December 12th. A link to register is available here.

Yesterday I attended the Consumer Financial Protection Bureau’s (CFPB) field hearing in Wilmington, Delaware, at which the CFPB unveiled and accepted public comment on its long-awaited proposed rule for prepaid accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z) (the Rule). … Continue Reading