The Consumer Financial Protection Bureau has issued a formal request for public commentary on proposed changes to the Prepaid Rule, which was issued in October 2016. According to the Bureau, the proposed changes address those concerns raised by prepaid card issuers about potential problem areas for compliance.
The Bureau's suggested changes would adjust error resolution requirements and provide more flexibility for accounts linked to digital wallets. In the CFPB's proposal, it noted that some companies claimed that fraud concerns could require them to make changes that might be problematic for those consumers who chose not to register their accounts. Under the Bureau's new proposal, consumers would be required to register their accounts to receive full fraud and error protection, including the right to dispute charges and restore stolen funds. The proposed changes would also require companies to provide these protections to consumers with registered accounts even if the consumer had not fully completed the registration process when the theft or dispute occurred. The CFPB's suggested modifications to the Prepaid Rule would also address digital wallets, to ensure that consumers continue to receive full CARD Act protections on traditional credit card accounts if they choose to link those accounts to their digital wallet prepaid accounts.
In addition to the call for comments, the Bureau also released a revised small entity compliance guide for the Prepaid Rule. The updated guide includes information on the Bureau's recent decision to delay the Prepaid Rule's effective date, a change we covered here. In addition, the guide also clarifies other areas of concern with the Rule, in response to feedback from prepaid account companies.
Comments on the CFPB's proposed changes are due 45 days following the proposal's publish date in the Federal Register. The full text of the proposal is available here.
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