The Consumer Financial Protection Bureau is going to publish an Advanced Notice of Proposed Rule Making to consider giving prepaid debit cards full coverage under Regulation E of the Electronic Funds Transfer Act.
The announcement was released at midnight, hours before the CFPB's field hearing on prepaid debit cards
scheduled for noon in Durham, North Carolina.
Regulation E governs consumer protections. Generally speaking, payroll cards are already covered under Reg E. Gift cards are generally not covered, with several exceptions. Prepaid general purpose reloadable cards are currently not covered at all.
Reg E provides several protections
- some disclosure requirements
- the option to get paper statements
- protections against liability in the event of fraud
- the ability to contest unauthorized charges
We want prepaid debit cards to be equivalent to standard checking accounts. Until these cards have full Reg E protection, they cannot claim to meet that standard.