CFPB Proposes Rules For Prepaid Products

On November 13, the Consumer Financial Protection Bureau ("CFPB") released a proposed rule (the "Proposal") that would provide significant consumer protections for prepaid accounts through substantial amendments to Regulation E (Electronic Fund Transfer Act) and Regulation Z (Truth in Lending Act). Prepaid products, which are becoming viewed as a bridge between the unbanked and traditional deposit products, are consumer accounts typically loaded with funds by a consumer or by a third party, such as an employer. According to the CFPB, prepaid products are amongst the fastest growing types of consumer financial products in the United States. The Proposal would afford consumers using these emerging products the protections currently provided to existing financial products.