Prepaid card providers have a lot of work to do in one year, but the industry will be able to take action and continue providing an important financial tool.
Boston, MA (PRWEB) November 08, 2016
A new report titled The CFPB Final Prepaid Rule Is Here: What Now? Start with Disclosures and Marketing provides a first look at the elements of the final prepaid rule published by the Consumer Financial Protection Bureau in October 2016. The nearly 1700-page rule covers a number of topics, including the definition of prepaid, disclosures, error resolution, and the relationship of prepaid and credit.
Mercator Advisory Group’s report focuses on the near-term concerns for prepaid providers, who need to bring programs into compliance by October 1, 2017. Because of the breadth and depth of the prepaid regulations, the report highlights the topics of disclosures, error resolutions, overdraft, and marketing concerns.
This report encourages providers to double check everything because, even though prepaid programs have done plenty of work in anticipation of the rule, fine tuning of the final rule by the CFPB means that the final versions of the disclosure forms are different than what was proposed earlier.
"Prepaid card providers have a lot of work to do in one year, but the industry will be able to take action and continue providing an important financial tool," Ben Jackson, director of Mercator Advisory Group's Prepaid Advisory Service, and author of the report, comments.
Highlights of the report include:
- The Consumer Financial Protection Bureau (CFPB) has released a proposed prepaid rule after two years and has asked the payments industry to respond in 90 days.
- The 1689-page rule is nearly three times as long as the rules that implemented Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act and is loaded with unintended consequences.
- The rule would lead to less access and more confusion for prepaid customers, thus harming the consumers it is designed to protect.
- The rule also would pull new types of payments companies under the prepaid umbrella and lead to further confusion and frustration among consumers.
- Prepaid providers should comment on the rules to address how individual provisions will harm their cardholders and propose alternative rules.
Members of Mercator Advisory Group's Prepaid Advisory Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.
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About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.