The Department of Education has proposed new rules on how colleges and universities can use prepaid cards as a way of delivering money to students, the Consumerist reports.
“The Department’s proposed rules – published in the Federal Register [PDF] – aim to regulate the way colleges can enter into marketing agreements with banks and prepaid card issuers who wish to access their student populations, as well as provide certain restrictions when it comes to allowable fees assessed on the cards.”
The industry and other interested parties have 45 days from when the rules were published to provide comments. The rules were published on May 18.
It appears that neither the Consumerist nor the Department of Education trust the Consumer Financial Protection Bureau’s 900 pages of prepaid regulations to end troubles for students.
The comment period on these rules is terribly short, and it is difficult to reconcile the impact and even the necessity of these rules when the CFPB prepaid rules have not been finalized. It is not clear what will happen if the two rules conflict. Despite the headaches, the industry should examine these rules carefully and comment quickly, with the knowledge that there may be conflicts between the two sets of rules and try to highlight them when possible.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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