The prepaid industry may beat the government to the disclosure punch. The Chicago-based Center for Financial Services Innovation has designed a disclosure box that it says will help consumers get the information they need to find a prepaid card that is fair for them. Major players in the prepaid industry seem interested in adopting it, and CFSI has presented to the industry at the Prepaid Expo conference happening this week in Las Vegas.
[Tuesday], the Center for Financial Services Innovation (CFSI) is proposing a standardized fee box for improving the transparency of general purpose reloadable (GPR) prepaid cards. A clear and effective fee disclosure box is an essential part of a high-quality prepaid product and bolsters prepaid as a valuable financial access tool. Three prepaid card providers — Green Dot, Plastyc, and Ready Credit – have committed to adopt or test CFSI’s proposed disclosure box. CFSI also calls on regulators to improve disclosures and other consumer protections for prepaid cards.
The ideal situation for the industry would be to avoid the government imposing regulations on it, since regulations, as the Durbin amendment clearly showed often are written by people who do not understand the industry and thus produce unintended consequences. By being proactive about testing the CFSI model, however, the industry may be able to put a box not only around its disclosure, but alos around proposed regulations.