CFPB Establishes Process to Submit Prepaid Account Agreements
Financial institutions issuing prepaid cards can register for the system now.
The CFPB has announced a streamlined electronic system for prepaid account issuers to submit their account agreements to the agency.
Financial institutions issuing prepaid cards can register for the system now; the rule goes into effect on April 1. All prepaid account agreements offered as of that date must be uploaded by May 1. After that, whenever a new account agreement is offered or amended, it must be uploaded to the system within 30 days.
The agreements must be submitted using the CFPB’s “Collect” system.
First issued in 2016, the rule had been scheduled to go into effect on Oct. 1, 2017. However, the bureau extended the effective date, citing comments it received about compliance difficulties.
At the time, credit union officials applauded the delay, but said that credit unions should be exempt from the rule altogether.
NAFCU had called for the rule to be withdrawn, saying that many underserved consumers rely on prepaid cards and that the cost of compliance could lead credit unions and others to stop offering the service.
At the time the rule was issued in 2016, it totaled nearly 1,700 pages.