New date guidelines issued by CFPB for final Prepaid Rule
The Consumer Financial Protection Bureau has released additional information on effective dates and required disclosures for the prepaid card rule that generally becomes effective on Oct. 1, 2017.
The CFPB has now released a new Fact Sheet that highlights effective date guidelines under the final Prepaid Card rule including, for example, how to handle providing disclosure and fee information for consumers with existing prepaid accounts on or before Oct. 1, 2017. In general, financial institutions must issue short and long-form disclosures for prepaid accounts opened starting Oct. 1, 2017.
Prepaid account packaging materials or “access devices” produced before Oct. 1, 2017, do not need to be recalled and replaced for the purpose of updating disclosure requirements or other information, according to the CFPB. However, any products produced after the general effective date must follow disclosure requirements.
Financial institutions must also alert consumers to any changes in their prepaid accounts terms and conditions from the final prepaid card rule, according to the CFPB. Notices and disclosures under the final prepaid card rule must be available to consumers within 30 days of receiving their contact information.
The CFPB finalized a new rule to create comprehensive consumer protections for prepaid accounts on Oct. 5, 2016. The rule applies to traditional prepaid cards, general purpose reloadable cards, mobile wallets, person-to-person payment products, and other electronic prepaid accounts that store funds, according to a news release from the CFPB. The CFPB’s final rule also applies to prepaid accounts including payroll cards, student financial aid disbursement cards, tax refund cards, and some government benefit cards like unemployment insurance and child support.