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Prepaid Card Providers Should Encourage Cardholders to Speak Up

May 31, 2012
Prepaid|Banking_Channels
Ben Jackson
Mercator Advisory Group
The Consumer Financial Protection Bureau recently published an Advance Notice of Proposed Rulemaking asking for the public’s comment on how they think prepaid cards should be regulated. It almost goes without saying that consumer advocacy groups will comment, industry groups will comment, and private companies will comment. But the one voice that is the most necessary and the least likely to be heard is that of the cardholders.

The unbanked and underserved in particular are not likely to flood the regulators with comment letters. Yet, in today’s electronic age, it is easier to take part in these discussions than ever before, and the CFPB even has a link on its site that directs people to the notice and an online comment form. This link explains what is going on and this one goes to the comment form.

Prepaid card providers should encourage their customers to visit these links and leave comments. It would be an easy matter to include links on Web pages that provide account information and in electronic communications to clients.

While there will doubtlessly be some grumbling from disgruntled cardholders, nonetheless, having cardholders explain what they like and don’t like, and why they chose to use prepaid cards will help to protect the industry against unreasonable regulation and may start to change the conversation around prepaid cards in comparison with other financial services.

Enough cardholders explaining that they chose prepaid cards because the cards were less expensive than bank accounts would put to end this assertion that these customers should just get a free checking account somewhere. Enough cardholders describing how there are more prepaid card reload locations in their neighborhoods than bank branches will start to show that the decision to select prepaid cards is driven by the value the cards offer. The list extends beyond these two reasons, but they give a sense of the possibilities for having customers comment.

Encourage your happy customers to comment so that the discussion is not driven by just those people with an axe to grind.

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