U.S. Rep. Scott Tipton (R-CO) recently introduced a bill that seeks to delay a Consumer Financial Protection Bureau (CFPB) regulation that imposes consumer safeguards on prepaid cards.
In October 2016, the CFPB finalized a regulation for prepaid products that offer protections similar to those for credit cards. Specifically, it requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and give consumers access to account information. It also finalized “Know Before You Owe” disclosures for prepaid accounts to give consumers upfront information about fees and other details.
The rule was set to take effect on Oct. 1, 2017, but in March the CFPB said it would extend the effective date by six months to April 1, 2018.
Tipton’s bill, the Prepaid Account Compliance and Extension Relief (PACER) Act of 2017, would delay the effective date another six months to Oct. 1, 2018.
“Prepaid card products provide consumers with new ways to access, spend, and manage their money,” Tipton said. “The CFPB’s original proposed effective date of Oct. 1, 2017, was unrealistic given the new disclosure and packaging requirements and operational changes necessary to comply with the rule. While the CFPB has delayed the rule for six months, I believe that a delay until 2018 will be necessary to help ensure a balance between protecting consumers and supporting the continued growth of prepaid financial products.”