NASCUS Comments: CFPB Proposal to Delay the Effective Date of the Prepaid Accounts Final Rule

April 5, 2017

Ms. Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

Re: Docket No. CFPB-2017-0008; Proposed Rule to Delay the Effective Date of the Prepaid Accounts Final Rule

Ms. Jackson:

The National Association of State Credit Union Supervisors (“NASCUS”) 1 welcomes the opportunity to comment on the Consumer Financial Protection Bureau’s (“Bureau”) proposed rule to delay the October 1, 2017 effective date of the Final Rule regarding Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z).  NASCUS supports the Bureau’s proposal to delay the effective date of the Final Rule by six months. We believe that adding a short extension to the effective date will ensure that credit unions and other industry participants will have ample opportunity to implement the policy and process adjustments necessary for compliance with the Final Prepaid Accounts Rule. 

As the Bureau is aware, industry participants have expressed concerns about the lack of sufficient time to implement the changes to policies and procedures that are needed in order to comply with the current effective date of the Final Rule.   Specifically, there is concern that additional time would be needed to ensure that prepaid account disclosure forms are provided in accordance with the Final Rule.  There is also concern that the current effective date does not provide for sufficient time to make certain that applicable third party vendors are able to implement the adjustments needed under the Final Rule.  In addition, industry participants are attempting to manage competing regulatory/compliance requirements with limited resources.  For example, several regulatory changes such as the increased data collection/reporting requirements under Home Mortgage Disclosure Act (“HMDA”) and additional identification requirements under the Bank Secrecy Act/Customer Due Diligence (“BSA/CDD”) rule will require significant investments in compliance resources in the coming years. 

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.  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. We believe that extending the time institutions will have to implement regulatory compliance changes in this instance strikes the right balance between ensuring proper consumer protections are in place and making certain that institutions have adequate time to respond to new regulatory requirements.   

Additionally, NASCUS commends the Bureau on its continued outreach to industry and other stakeholders to develop a better understanding of the possible challenges of implementing the Prepaid Accounts Final Rule, as well as the Bureau’s willingness to engage in amendments to the substantive provisions of the Final Rule if deemed warranted.   NASCUS appreciates this opportunity to share our insight and we reiterate our strong support of the Bureau’s proposal to delay the Prepaid Accounts Final Rule’s effective date to April 1, 2018.  

Nichole Seabron
NASCUS Legislative and Regulatory Counsel

1. NASCUS is the professional association of the nation’s state credit union regulatory agencies.