December 18

The CFPB, prepaid cards and protecting consumers to death

first_imgby: Karen Webster“Just because consumers may not be able to afford or qualify for a bank account, or just because they do not want to be a part of the brick-and-mortar banking system, this does not mean they deserve to be treated as second-class citizens. Like anyone else, they deserve to have a safe place to store their money and a practical means of carrying out financial transactions,” CFPB Chairman Richard Cordray noted during a field hearing in November 2014. “Consumers deserve that from us. As Helen Keller once noted, ‘Alone we can do so little; together we can do so much.’ We agree wholeheartedly.”These remarks were made in the context of proposed CFPB rule changes that would reclassify a segment of prepaid cards – specifically those that offer overdraft protection – as a credit product instead of a banking product for the purposes of regulatory oversight. You’d have to read the nearly 900-page document released earlier this year to get to that punchline.There’s a lot of good stuff on those 900 pages – things that legitimately protect consumers by making disclosures more transparent.But the big bomb that was dropped within those 900 pages centers on a particular feature offered by some prepaid products – calling into question just what a prepaid product really is.That feature: overdraft protection. continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img read more