CFPB Issues Amendments to Rules Concerning Prepaid Accounts
The CFPB recently posted a series of amendments to Regulation E, implementing the Electronic Fund Transfer Act, and Regulation Z, implementing the Truth in Lending Act (“TILA”), specifically covering modifications to the Prepaid Accounts Rule (“Rule”).
The latest in a series of rulemakings concerning prepaid accounts, the CFPB has submitted a proposed rule with a request period for public comment running through the end of July. The CFPB has asked for comments on potential modifications to several aspects of the prepaid rule. Previously, the CFPB had extended the final rule deadline from October 1, 2017 to April 1, 2018.
In this round, the CFPB is proposing three main changes to which it will receive comments, including:
- Revising the “error resolution and limited liability” provisions of Regulation E so that financial institutions would be required to limit liability and resolve errors with regard to disputed transactions once the consumer’s identity is verified, even if the dispute occurred before their identity was verified.
- Creating a limited exception for the credit-related provisions of the Rule in Regulation Z concerning arrangements between prepaid account issuers and credit card issuers. This exception deals with the credit provisions of the Rule when a credit account is linked with a digital wallet.
- Clarifying and making minor adjustments to provisions of the Rule related to an exclusion from the definition of a prepaid account, unsolicited issuance of access devices, several aspects of the rule’s pre-acquisition disclosure requirements, and submission of prepaid account agreements to the CFPB.
The entire Amendments to the Rule, along with instructions on how to file comments, may be found here.
