The Consumer Financial Protection Bureau ("CFPB")
adopted a final rule to enhance consumer protections for
prepaid accounts subject to
Regulation E (which implements the Electronic Fund Transfer
Regulation Z (which implements the Truth in Lending Act).
The final rule:
extends the limited liability and error resolution requirements
under Regulation E to all prepaid accounts;
establishes pre-acquisition disclosure requirements for prepaid
accounts that require both short- and long-form disclosures before
consumers can buy the prepaid accounts;
creates an alternative to the periodic statement requirements
of Regulation E, under which financial institutions may give
customers electronic access to information about their prepaid
accounts, instead of sending periodic statements;
requires all issuers of prepaid accounts to submit, on an
ongoing basis, their prepaid account agreements to the CFPB;
regulates overdraft credit features that may be offered in
conjunction with prepaid accounts; and
establishes that, subject to certain exceptions, the
above-mentioned overdraft credit features will be covered under
Regulation Z when: (i) the prepaid account issuer, its affiliate or
its business partner offers the credit feature, and (ii) credit can
be accessed during the course of a transaction carried out with a
The final rule will become effective on October 1, 2017.
However, the CFPB specified that the requirement to submit prepaid
account agreements to the CFPB will be delayed until October 1,
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