The Consumer Financial Protection Bureau has issued a proposal to delay the effective date of a recent rule governing prepaid accounts.
The proposal would delay effectiveness of the prepaid accounts rule by six months.
On Oct. 5, 2016, the Bureau released a final rule to create comprehensive consumer protections for prepaid accounts under Regulation E, which implements the Electronic Fund Transfer Act, and Regulation Z, which implements the Truth in Lending Act.
The new rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and give consumers free and easy access to account information.
The Bureau also finalized new “Know Before You Owe” disclosures for prepaid accounts to give consumers clear, upfront information about fees and other key details. Also, prepaid companies must now generally offer protections similar to those for credit cards if consumers are allowed to use credit on their accounts to pay for transactions that they lack the money to cover.
In the Bureau’s initial outreach to covered firms, it found compliance difficulties.
“Through our efforts to support industry implementation, we have learned that some industry participants believe they will have difficulty complying with certain provisions of the rule by the current Oct. 1, 2017 effective date,” a blog post on the CFPB’s website explains. “We believe that delaying the effective date by six months will be sufficient for industry participants to ensure they can comply with the rule.”
“While we are not proposing to change any other part of the prepaid accounts rule at this time, we are asking the public to provide comments about any implementation challenges that may affect consumers, and how additional time will impact industry, consumers, and other stakeholders,” the statement adds.
If the Bureau determines that any substantive changes to the prepaid accounts rule are necessary and appropriate, it will issue a separate proposal and provide the public an opportunity to comment on those changes before finalizing.
Comments on the proposal will be due by April 5, 2017, 21 days after its publication date in the Federal Register.