Prepaid accounts FAQ: Are gift cards covered?

We are getting to the final weeks before the CFPB’s prepaid account rule goes into effect. To help credit unions navigate the complexities of this rule, this month’s NAFCU Compliance Monitor article provides a deep dive into some of the key parts of the rule. As credit unions are implementing this rule, one question that the compliance team has been getting recently is whether gift cards are considered prepaid accounts. And the attorney says…

Yes, that’s right. It depends. If a credit union’s gift card program is considered a “gift card,” “gift certificate” or “general use prepaid card” under section 1005.20, then it may not be a prepaid account and not subject to the new rule. Revised section 1005.2(b)(3)(ii) provides a list of products that are not prepaid accounts. The list includes gift cards and certain general use prepaid cards that are subject to section 1005.20:

 

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