The Consumer Financial Protection Board has issued a request for comments about how it should regulate prepaid cards, citing the lack of a “comprehensive federal regulatory regime.” The Advanced Notice of Proposed Rulemaking asks about the regulatory coverage of products, product fees and disclosure, product features, and other information. The agency says its request is driven by the growth of the cards.
Given the Growth in the GPR card market and risk of consumer harm, the Bureau is seeking information to determine how best to implement consumer protection rules for this product. This information will help inform the Bureau as to the contours or any proposed rulemaking concerning GPR cards.
The tone of future regulatory discussions will likely be set by the comments received to this request. While the industry, consumer advocacy groups, and other institutions will doubtlessly respond, the danger is that the new rules will be made without the input of those who stand to gain or lose the most – the cardholders. Many of these people, especially the so-called unbanked and underserved, are not the kinds of people who respond to an Advance Notice of Proposed Rulemaking.
Click here to download the CFPB’s document.