On November 15, the Consumer Financial Protection Bureau issued a fact sheet to highlight the new requirements and deadlines imposed by the Bureau’s latest Prepaid Rule, which was finalized last month. The fact sheet notes the effective dates of new requirements under the Rule and lists any related exceptions or accommodations.
The Bureau issued the new Prepaid Rule on October 5 to amend Regulation E, which implements the Electronic Fund Transfer Act, and Regulation Z, which implements the Truth in Lending Act. These amendments reflect an effort to create comprehensive consumer protections for prepaid accounts, including payroll card accounts and government benefit accounts. According to the CFPB, the Prepaid Rule modifies general Regulation E requirements to create tailored provisions governing disclosures, limited liability and error resolution, and periodic statements. Additionally, the Rule adds new requirements regarding the posting of account agreements and regulates overdraft credit features that may be offered in conjunction with prepaid accounts.
Most new requirements imposed by the Rule take effect on October 1, 2017. A notable exception, however, is the Rule’s October 1, 2018 deadline for financial institutions to submit prepaid account agreements to the Bureau. The Prepaid Rule does not require financial institutions to remove and replace prepaid account access devices or packaging materials that were produced in the normal course of business prior to October 1, 2017, but those institutions must provide consumers with notice of changes in terms and updated initial disclosures in certain circumstances. Additionally, the Rule provides an accommodation for financial institutions that do not have readily accessible data to comply with the Rule’s requirement to provide electronic and written account transaction histories or summary totals of fees. Those institutions may instead make available or provide histories and summary totals using the information they have until the necessary data is available.
A copy of the Prepaid Rule fact sheet is available here.