CFPB Issued Prepaid Regs That Are Three Times Longer than Durbin

by Ben Jackson 0

The Consumer Financial Protection Bureau has released itsproposed rules for the prepaid industry. The rule is 870 pages. By way ofcomparison, the final rules to implement the provisions of the DurbinAmendment, which covered the entire debit industry and prepaid cards was only307 pages. The proposed rule touches on the Electronic Funds Transfer Act (Reg.E) and the Truth in Lending Act (Reg.Z). While the stories about what thismeans have already started to come out, it seems a little premature for anyoneto claim they understand what is in the regulation.

The breadth and depth of the proposed rule is somewhatintimidating. It will require careful reading to make sure that everything isfully understood. But the industry should devote the necessary time to look atthe proposed rule and comment, since it seems to be rather comprehensive, evengoing so far as to try to regulate the length of the URLs for program managers’Web sites.

The Bureau further proposes in §1005.18(b)(4)(i)(A)that the URL of the website disclosed pursuant to proposed§1005.18(b)(2)(i)(B)(11) would not be permitted to exceed twenty-two characters,and that it must be meaningfully named. By meaningfully named, the Bureau meansa URL that uses real words or phrases, particularly those related to the actualprepaid account product.

The text of the proposed rule can be found here.Mercator Advisory Group will be reading through it over the next few days andwill try to provide additional commentary. It will be interesting to readthrough and see the results of multiple delays and extensive research when itcomes time to actually regulate the business.


Overview by Ben Jackson, Director of the Prepaid Advisory Service for Mercator Advisory Group

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