Washington, D.C. — Today, the Consumer Financial Protection Bureau, or CFPB, announced new proposed rules for prepaid debit cards. Joe Valenti, Director of Asset Building at the Center for American Progress, issued the following statement:
The CFPB has put forth a strong proposed rule to bring more safety, transparency, and accountability to the prepaid market. This rule, if finalized, will give consumers new tools to easily compare prepaid cards before buying to avoid costly tricks and traps and will ensure that the funds loaded on these cards are secure. These protections will help keep these accounts true to their name by keeping credit features separate from a customer’s prepaid account and limiting available credit to reasonable amounts that the consumer will likely be able to repay over time.
Prepaid card use has grown dramatically, and some new cards in this market increasingly look and act a lot like bank accounts. For that reason, over the past two years, the Center for American Progress has proposed that regulators treat prepaid cards like bank accounts to ensure that consumers are protected—especially the millions of underserved consumers who use prepaid cards in place of traditional bank accounts. The rule announced today is a major step toward ensuring a safe and affordable financial system that works for all Americans.
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For more information on this topic or to speak with an expert, contact Allison Preiss at 202.478.6331 or [email protected].
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