The Consumer Financial Protection Bureau has proposed delaying the effective date of its proposed prepaid accounts rule by six months to give the industry more time to comply with the rule’s provisions.
“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,” the bureau announced in a March 9 blog post by Kris Andreassen. The new effective date of the rule will be April 1, 2018.
“We believe that delaying the effective date by six months will be sufficient for industry participants to ensure they can comply with the rule,” the CFPB blog post continued. “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 CFPB’s prepaid rule establishes new consumer protections for prepaid accounts under Regulations E and Z. The new rule requires financial institutions to limit consumers’ losses when prepaid cards are lost or stolen, and provides new credit and fee disclosure protections for consumers, according to the CFPB.
The CFPB is seeking comments on its decision to delay the rule’s implementation and on whether any further changes to the rule will be needed. The deadline for comments is 21 days after publication in the Federal Register.
“If we determine that any substantive changes to the prepaid accounts rule are necessary and appropriate, we will issue a separate proposal and provide the public an opportunity to comment on those changes before finalizing,” the CFPB said in the blog post.
Carrie Hunt, executive vice president of government affairs and general counsel for the National Association of Federally-Insured Credit Unions, issued a statement March 10 about the CFPB’s announcement that it would extend the compliance deadline for the prepaid accounts final rule.
“Although the proposal to delay the prepaid accounts rule is a move in the right direction, NAFCU has stressed to the CFPB on several occasions that they should have adopted an extended implementation timeline from the outset,” Hunt said in the statement. “In addition, we remain disappointed that the rule – without substantial revision – would still fail to take into account credit unions’ unique structure and consumer-friendly reputation.”
To learn more about the provisions of the prepaid rule, see related article.