{"id":36720,"date":"2023-03-07T17:56:43","date_gmt":"2023-03-07T22:56:43","guid":{"rendered":"https:\/\/d56fg8tfg.fitnews.club\/finance\/cfpb-proposes-strong-federal-protections-for-prepaid-products\/"},"modified":"2023-03-07T17:56:43","modified_gmt":"2023-03-07T22:56:43","slug":"cfpb-proposes-strong-federal-protections-for-prepaid-products","status":"publish","type":"post","link":"https:\/\/d56fg8tfg.fitnews.club\/finance\/cfpb-proposes-strong-federal-protections-for-prepaid-products\/","title":{"rendered":"CFPB Proposes Strong Federal Protections for Prepaid Products"},"content":{"rendered":"
Bureau\u2019s Proposal Includes New \u2018Know Before You Owe\u2019 Prepaid Disclosures<\/em><\/strong><\/p>\n WASHINGTON, D.C. \u2013<\/strong> Today the Consumer Financial Protection Bureau (CFPB) is proposing strong, new federal consumer protections for the prepaid market. The proposal would require prepaid companies to limit consumers\u2019 losses when funds are stolen or cards are lost, investigate and resolve errors, provide easy and free access to account information, and adhere to credit card protections if a credit product is offered in connection with a prepaid account. The Bureau is also proposing new \u201cKnow Before You Owe\u201d prepaid disclosures that would provide consumers with clear information about the costs and risks of prepaid products upfront.<\/p>\n \u201cConsumers are increasingly relying on prepaid products to make purchases and access funds, but they are not guaranteed the same protections or disclosures as traditional bank accounts,\u201d said CFPB Director Richard Cordray. \u201cOur proposal would close the loopholes in this market and ensure prepaid consumers are protected whether they are swiping a card, scanning their smartphone, or sending a payment.\u201d<\/p>\n Prepaid products are consumer accounts typically loaded with funds by a consumer or by a third party, such as an employer. Consumers can use these products to make payments, store funds, get cash at ATMs, receive direct deposits, and send funds to other consumers. Prepaid products are often bought at retail stores or online. Prepaid products are amongst the fastest growing types of consumer financial products in the United States. For example, the amount of money consumers loaded onto \u201cgeneral purpose reloadable\u201d prepaid cards grew from less than $1 billion in 2003 to nearly $65 billion in 2012. The total dollar value loaded onto general purpose reloadable cards is expected to continue to grow to nearly $100 billion through 2014.<\/p>\n This proposal would apply a number of specific federal consumer protections to broad swaths of the prepaid market for the first time. The proposal would cover traditional plastic prepaid cards, many of which are general purpose reloadable cards. In addition, the proposal would cover mobile and other electronic prepaid accounts that can store funds. The prepaid products covered by the proposal also include: payroll cards; certain federal, state, and local government benefit cards such as those used to distribute unemployment insurance, child support, and pension payments; student financial aid disbursement cards; tax refund cards; and peer-to-peer payment products.<\/p>\n Many consumers use prepaid products as an alternative to traditional checking accounts. Currently, however, there are limited federal consumer protections for most prepaid accounts. The proposal would ensure that most prepaid account consumers would have important protections under the Electronic Fund Transfer Act after registering their account. The protections are generally similar to those checking account consumers already receive and include:<\/p>\n The Bureau\u2019s proposal also includes new \u201cKnow Before You Owe\u201d prepaid disclosures that would provide consumers with standard, easy-to-understand information about the prepaid account. Consumers cannot always tell what fees apply to their prepaid cards before purchasing them because such disclosures are inside the packaging or hard to find online. The current lack of an industry-wide standard on prepaid-card fee disclosures can make it difficult for consumers to comparison shop and make well-informed decisions. Under the proposal, prepaid consumers would have access to:<\/p>\n The proposed disclosures are available at: https:\/\/files.consumerfinance.gov\/f\/201411_cfpb_prepaid-model-sample-disclosure-forms.pdf<\/span> Prepaid Protections<\/h3>\n
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Know Before You Owe: Prepaid Fees<\/h3>\n
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