The Consumer Financial Protection Bureau has issued a proposed rule that would bring prepaid products under the Electronic Fund Transfer Act and make the protections currently afforded to credit cardholders under Regulation Z applicable when credit features are obtained in connection with a prepaid account. The Proposed Rule would apply to traditional plastic prepaid cards as well as mobile and electronic prepaid accounts, payroll cards, tax refund cards, student financial aid disbursement cards, peer-to-peer payment products, and certain government benefit cards such as those used to distribute unemployment insurance, child support payments and pension payments. The protections under the Proposed Rule would be triggered upon the consumer’s registration of the prepaid product with the institution that provided it.
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