5 things to know about new #prepaid regulations
Recent rules released by the Consumer Financial Protection Bureau state that prepaid issuers must provide consumers with new access and protections.
Prepaid cards are helping redefine the current and future consumer finance landscape. In fact, a recent study showed prepaid cards are the fastest growing non-cash payment method in the U.S. By 2018, the Consumer Financial Protection Bureau (CFPB) predicts as much as $121 billion will be loaded onto prepaid cards.
This increasing consumer interest in prepaid means community financial institutions (FIs) may want to include prepaid in their strategic plans for 2017. FIs currently offering prepaid cards, or planning to offer them in the future, should be aware of five new rules recently released by the CFPB. These rules state that, by October 1, 2017, prepaid card issuers must provide consumers with new access and protections – including:
- Up-front disclosures – These include terms, conditions and fees, both on card packaging and online, as well as easy access to account information. For prepaid issuers, this means consumers must be allowed to review all relevant disclosures before purchasing prepaid cards.
- Protections from unauthorized purchases – Prepaid cardholders will now be able to file a claim anytime they suspect fraud on their prepaid accounts. However, this only applies to those prepaid cards tied to a consumer’s financial account.
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