Eliminating the regulations on prepaid cards could lead to all financial services products being unregulated, according to the Director of Consumer Finance at the Center for American Progress.
So it isn’t surprising that during the last Congress, financial interests spent $2.3 million per day on campaign contributions and lobbying to attempt to undo Wall Street reform. Starting with the attempt to roll back the CFPB’s prepaid rule, policymakers must decide whether they stand with commonsense rules to keep banks accountable or a return to rollbacks and risky practices that put all Americans’ wallets at risk.
The problem is that Valenti repeats the old canard that prepaid cards were completely unregulated before the Consumer Financial Protection Bureau put its rules in place. The Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and even Bureau of the Fiscal Service all had rules that applied to prepaid cards.
But real problem is one of perception. Prepaid providers have quietly expressed concerns that wholesale rollback of the CFPB prepaid rules will be a public relations disaster. It is not clear whether the rules will be overturned or not, but despite a desire to change the regulations, prepaid providers do not think that overturning the rule will be a pure win for the industry.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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