There has been a lot of chatter lately by the CFPB about prepaid cards and payroll cards (which are generally a form of a reloadable prepaid card used by an employer). We should expect a lot more chatter by “late spring” when the CFPB issues proposed rules.
The CFPB issued two versions of model forms in March asking for feedback. Both forms are a way of disclosing information for prepaid cards in a more straightforward, uniform manner. Currently, most prepaid cards (unless they are a payroll card or a gift card) are not subject to Regulation E. So, there is a lot of confusion on what and how information should be disclosed. The CFPB is trying to change this, which is a good thing. We hope this will bring clarification to the market and consistency among financial institutions and non-financial institutions in how they provide disclosures for these products.
If your credit union provides prepaid cards or payroll cards, you should expect to see rules from the CFPB soon. And, if your credit union is not yet providing these, I would encourage you to look at the opportunities to serve new markets with these products.