CFPB follows state system advice;
delays pre-paid rule by 6 months
April 20, 2017 -- Following NASCUS’ recommendation, the CFPB has delayed by six months the effective date of its rule on prepaid accounts, under a final rule issued by the agency Thursday. The rule on pre-paid accounts will now take effect April 1, 2018 (rather than Oct. 1 of this year).
About three weeks ago, NASCUS filed a comment letter with the consumer bureau favoring the six-month delay (as proposed by CFPB), stating that length of delay will ensure credit unions and other industry participants have the time to prepare for the rule. In its comment letter on the bureau’s final rule regarding Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z), NASCUS noted that concerns have been raised about the lack of sufficient time to implement the changes to policies and procedures that are needed in order to comply with the former effective date of the final rule (Oct. 1).
“NASCUS believes it is important to strike a balance between enforcing reasonable regulation while not stifling institutions’ ability to provide the products and services that are beneficial and desired by consumers,” wrote NASCUS Vice President and Legislative and Regulatory Counsel Nichole Seabron. “State regulators are often required to balance ensuring the safety and soundness of the state banking system with the need to not quell or stifle innovation and delivery of products/services,” she added.
In its blog posting announcing the effective date final rule, CFPB also stated that it would revisit at least two substantive issues through a separate notice and comment rulemaking process: The linking of credit cards to digital wallets that are capable of storing funds, and; error resolution and limitations on liability for prepaid accounts that cannot be registered, have not yet been registered, or for which consumers have attempted but have not successfully completed the registration process.
“We are continuing to evaluate other concerns raised by industry and other stakeholders and may address a limited number of other topics in the proposal as well,” the bureau wrote.