Release date:
4/5/2017
Attorney General Josh Stein today urged U.S. Congressional leadership to oppose resolutions that would circumvent Consumer Financial Protection Bureau (CPFB) rules that protect consumers from prepaid card fraud and hidden fees. These additional consumer protections were scheduled to go into effect on April 1, 2018, and would help millions of prepaid card users.
Prepaid cards are a rapidly growing market and are often used by consumers who have limited or no access to a traditional bank account. Today, more people are paid with prepaid cards than with paper checks. Consumers frequently incur hidden or undisclosed fees, even when the cards are used to receive their salary or student loans. Although most consumers use these cards to avoid overdraft fees, some of the payday lenders who provide funds through these cards also subject consumers to overdraft fees.
“Prepaid cards make it easier for consumers to get paid and make purchases – especially for those who don’t have a checking account,” said AG Stein. “But what’s not easier is figuring out the hidden or undisclosed fees. I urge members of Congress to remember the importance of protecting consumers as they work to promote access to credit.”
The CFPB’s Final Rule will:
- Protect prepaid card users against fraud and unauthorized charges;
- Help consumers avoid hidden fees and comparison shop with a simple chart of common fees;
- Provide convenient, free access to account transactions and account balances;
- Require employers to inform employees they do not have to receive wages on a payroll card; and
- Require prepaid credit cards to comply with existing credit card laws (including an ability to pay analysis, limits on overdraft fees in the first year, and safeguards on how funds are repaid).
Contact:
Laura Brewer (919) 716-6484
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