Center for American Progress on the Consumer Financial Protection Bureau’s Proposed Rule on Prepaid Products

Washington, D.C. —(ENEWSPF)–November 13, 2014.  Today, the Consumer Financial Protection Bureau, or CFPB, announced new proposed rules for prepaid debit cards. Joe Valenti, Director of Asset Building at the Center for American Progress, issued the following statement:

The CFPB has put forth a strong proposed rule to bring more safety, transparency, and accountability to the prepaid market. This rule, if finalized, will give consumers new tools to easily compare prepaid cards before buying to avoid costly tricks and traps and will ensure that the funds loaded on these cards are secure. These protections will help keep these accounts true to their name by keeping credit features separate from a customer’s prepaid account and limiting available credit to reasonable amounts that the consumer will likely be able to repay over time.

Prepaid card use has grown dramatically, and some new cards in this market increasingly look and act a lot like bank accounts. For that reason, over the past two years, the Center for American Progress has proposed that regulators treat prepaid cards like bank accounts to ensure that consumers are protected—especially the millions of underserved consumers who use prepaid cards in place of traditional bank accounts. The rule announced today is a major step toward ensuring a safe and affordable financial system that works for all Americans.

Related resources:

Millions of Americans Are Outside the Financial System by Joe Valenti

Expanding Financial Access Through Mobile Banking by Joe Valenti

The End of Cash: The Rise of Prepaid Cards, Their Potential, and Their Pitfalls by Joe Valenti

It’s Time to Regulate Prepaid Cards as Bank Accounts by Gadi Dechter and Joe Valenti


Related Article:

Consumer Financial Protection Bureau Proposes Strong Federal Protections for Prepaid Products