Prepaid Cards to See First-Time U.S. Rules: Consumer Agency

Prepaid cards that can be reloaded and often carry a litany of hidden fees are about to get their first dose of U.S. regulatory oversight, just as the market for such a payment method is surging.
The Consumer Financial Protection Bureau is considering rules that should apply to these cards, used by more than 7 million consumers.
The total dollar value of funds loaded onto these cards is growing at an annual rate of 42 percent.
The amount on prepaid cards is expected to reach $167 billion in 2014, more than 13 times the total of $12 billion for 2007.
But the CFPB is also looking for the public input before issuing its rules.
“As the market continues to grow, we want to learn more about the costs, benefits, and risks so that we can determine what protections are needed and what consumers need to know to make the best decisions for themselves,” the CFPB said in a statement.
The agency is looking for guidance on how to “provide the consumer with transparent, useful, and timely fee disclosures” for prepaid cards.
Click on the full “Advance Notice of Proposed Rulemaking” to see the specific questions on which the CFPB is seeking input.

One thought on “Prepaid Cards to See First-Time U.S. Rules: Consumer Agency

  • May 23, 2012 at 7:00 pm
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    With bank regulations cutting profits in other areas, banks are looking to new value-added services to fill their coffers. Reloadable cards are one area where consumers say they want the service, and are willing to pay for it. According to a new Integrated Study on Service Fees by Market Rates Insight (http://tinyurl.com/7huwbto), 47% of those surveyed want reloadable bank cards for convenience and other purposes, and they will pay on average $4.26 per month for the service. It’s one way for banks to increase revenue as they are squeezed by regulations.

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