On March 25, the Network Branded Prepaid Card Association (“NBPCA”) announced that it had lodged a formal request with the Consumer Financial Protection Bureau to prevent the imposition of overly broad restrictions on prepaid accounts.  The NBPCA is a non-profit trade association that supports the growth and success of network branded prepaid cards and represents the interests of companies operating in this growing payments category.

According to the NBPCA, restrictions could limit consumer access to popular features and functionality, and potentially eliminate entire categories of prepaid cards from the market.  While it recognizes the CFPB’s efforts to work with industry leaders during the rulemaking process, the NBPCA warned that additional efforts and dialogue are necessary to craft a workable rule for both consumers and the industry.

“We appreciate the efforts of the CFPB staff to better understand the prepaid market, but we have concerns with several provisions in the proposed rule that we believe will limit consumer access to and choice among prepaid products at a time when consumer demand is at an all-time high,” stated Brad Fauss, interim executive director and general counsel of NBPCA.  “The imposition of unnecessary compliance burdens – when trying to fashion a one-size-fits-all rule – could ultimately limit consumer access to safe and reliable prepaid products and drive users to seek out riskier and less consumer-friendly alternatives,” he added.

In a comment letter submitted on March 23, the NBPCA suggested a number of proposed solutions to issues being addressed by the CFPB.  The complete comment letter is available here.