BankBryanCave.com

Bank Bryan Cave

Prepaid Cards

Main Content

CFPB’s Delay in Announcing Further Delay of the Prepaid Card Rule

December 28, 2017

Authors

Stan Koppel

CFPB’s Delay in Announcing Further Delay of the Prepaid Card Rule

December 28, 2017

by: Stan Koppel

The Consumer Financial Protection Bureau has issued a brief press announcement that the Prepaid Card Rule would be further revised and that the effective date for compliance will be further postponed from the current deadline in April 2018.

The announcement creates more worry than relief – it’s just a tease. The announcement did not say what changes would be made or when the new deadline will be. It only said that amendments to “certain aspects” of the rule would be coming “soon after the new year.”  No doubt the Bureau meant for this announcement to be helpful to someone, but it is not clear if anyone is actually helped.

Prepaid card issuers are scrambling to implement the systems changes and new business processes necessary to support the sweeping changes required by the rule. With

Read More

New Regs Will Change How Colleges Offer Bank Accounts to Students

December 31, 2015

Authors

Bryan Cave

New Regs Will Change How Colleges Offer Bank Accounts to Students

December 31, 2015

by: Bryan Cave

On October 30, 2015, the Department of Education issued regulations to impose requirements on the marketing and terms of deposit and prepaid accounts offered to students at educational institutions that participate in Federal student aid programs. According to the DOE, the regulations are intended to ensure that students have convenient access to their title IV, Higher Education Act program funds, do not incur unreasonable and uncommon account fees on their title IV funds, and are not led to believe that they must open a particular financial account to receive Federal student aid. Most of these new rules take effect on July 1, 2016.

On December 16, the CFPB published a Safe Student Account Toolkit “to help colleges evaluate whether to co-sponsor a prepaid or checking account with a financial institution.” The Toolkit includes a Scorecard that can be used by schools when selecting a third-party vendor for student

Read More

Welcome to 2015: Another Big Year for Consumer Financial Services Regulation

January 9, 2015

Authors

Seyi Iwarere

Welcome to 2015: Another Big Year for Consumer Financial Services Regulation

January 9, 2015

by: Seyi Iwarere

As we begin 2015, it is worth noting the various federal regulations that will or might take effect. This article summarizes the key regulations that took effect late in 2014, that will take effect in 2015, and that have at least some potential of taking effect in 2015. We focus here on those regulations directly impacting consumer financial services.

Rules Taking Effect in 2015 (and Late 2014)

Integrated Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z)

Perhaps the most significant new consumer regulations to take effect in 2015 are the integrated disclosure regulations under the Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) (the Final Integrated Disclosure Rule). Released on November 20, 2013, by the CFPB, the Final Integrated Disclosure Rule will be effective on August 1, 2015. 78 Fed.Reg. 79730, December 31, 2013. For

Read More

CFPB Warns Employers Against Mandatory Use of Payroll Cards

October 1, 2013

Authors

Bryan Cave

CFPB Warns Employers Against Mandatory Use of Payroll Cards

October 1, 2013

by: Bryan Cave

While Employers Can Mandate Electronic Direct Deposit, Employers Are Prohibited From Requiring the Use of a Specific Payroll Card Selected by the Employer.

On September 12, 2013, the Consumer Financial Protection Bureau (“CFPB”) published Bulletin 2013-10 (“Bulletin”) establishing that any “financial institution or other person” is prohibited from requiring that an employee receive wages only on a payroll card issued a particular financial institution of the employer’s choosing, based on the application of federal law to payroll card accounts. In particular, the Bulletin affirms that the Electronic Fund Transfer Act (“EFTA”) and its implementing regulation Regulation E (“Reg E”), prohibit mandatory payment of wages through a payroll card issued by a particular financial institution. Although “Regulation E permits an employer to require direct deposit of wages by electronic means,” the employee must be “allowed to choose the institution that will receive the direct deposit.” The CFPB explicitly

Read More

Payments Team Presents on 2012 Year in Review

March 27, 2013

Authors

Bryan Cave

Payments Team Presents on 2012 Year in Review

March 27, 2013

by: Bryan Cave

PlayPlay

PlayPlay

The Bryan Cave Payments Team recently held a webinar providing an overview of major legal and regulatory events impacting both open and closed looped credit cards and other emerging payments.

Topics included a review of key Consumer Financial Protection Bureau activities for prepaid and payments; new regulatory concerns and open issues for 2013 from FinCEN on anti-money laundering issues; an update on FinCen’s cross-border reporting regulation for prepaid cards; an update on the “Durbin Amendment,” including effective dates on routing restrictions; a 2012 bank regulatory overview; recent trends in social media, mobile products, E-sign and PCI DSS in privacy and data security; and new

Read More

Illinois Orders Six Unlicensed Money Transmitters to Cease & Desist

March 21, 2013

Authors

Bryan Cave

Illinois Orders Six Unlicensed Money Transmitters to Cease & Desist

March 21, 2013

by: Bryan Cave

The Illinois Department of Financial & Professional Regulation recently released five cease and desist orders from January 2013 against six entities charging each with unlicensed activities under the state’s Transmitters of Money Act. These six entities offer a variety of services in Illinois, including domestic and international money transfer, bill payment services and prepaid cards.

One of these companies, Square, Inc. is described in its order as providing “mobile card reading devices for the express purpose of transmitting money,” providing iPhone and Android apps to Illinois consumers “for the express purpose of transmitting money” through those devices and selling and issuing “digital gift cards to Illinois consumers for the express purpose of purchasing items from designated vendors on Square’s Website.”

Read More

CFPB Focusing on General Purpose Reloadable Prepaid Cards

July 2, 2012

Authors

Bryan Cave

CFPB Focusing on General Purpose Reloadable Prepaid Cards

July 2, 2012

by: Bryan Cave

As a precursor to further regulation of general purpose reloadable (GPR) cards, the Consumer Financial Protection Bureau (CFPB) is seeking responses to 10 questions before July 23, 2012.

The CFPB recently released an advance notice of proposed rulemaking (ANPR) seeking comments, data and information regarding GPR cards, including questions regarding costs, benefits and risks to consumers. The ANPR is the first step in the long-anticipated process of regulation by the CFPB over “open loop” or “general use” prepaid cards.

While the ANPR specifically discusses “cards,” other mechanisms that access a prepaid financial account are also encompassed, including key fobs and cell phone apps. The ANPR is focused on GPR cards which the CFPB defines loosely as a general use prepaid card “issued for a set amount in exchange for payment made by a consumer” that is reloadable by the consumer, “meaning the consumer can add funds to the card.” 

Read More

Prepaid & Emerging Payments Year in Review

January 23, 2012

Authors

Bryan Cave

Prepaid & Emerging Payments Year in Review

January 23, 2012

by: Bryan Cave

Looking back at 2011, on Wednesday, January 25, 2012, from 2:00 to 3:30 pm EST, the Bryan Cave Payments Team has prepared a “Prepaid Card in Reviewwebinar for Bryan Cave clients and friends.  In addition to an overview of major legal and regulatory events impacting both open and closed loop cards, the Team will offer their views on likely future developments.

We will provide an overview of major legal and regulatory events impacting both open and closed loop cards and other emerging payments, including:

  • The “Durbin Amendment” and the subsequent FAQs from the Fed
  • Prepaid Access AML regulations
  • The CFPB – Current activity and the recess appointment of Richard Cordray
  • Abandoned Property – the implications of the New Jersey abandoned property legislation and the recent Third Circuit Opinion
  • Consumer Protection Laws – Life after the CARD Act.
  • Remote Deposit Capture – Check Cashing or Deposit Taking? 
    Read More

FinCEN issues Proposed Rulemaking Regarding Cross-Border Reporting of Prepaid Cards

October 19, 2011

Authors

Bryan Cave

FinCEN issues Proposed Rulemaking Regarding Cross-Border Reporting of Prepaid Cards

October 19, 2011

by: Bryan Cave

FinCEN has released a proposed rulemaking that would require consumers holding prepaid cards that aggregate to more than $10,000 in value, to report such prepaid cards when crossing into or out of the U.S., in the same way they currently report cash, travelers checks and other monetary instruments. The notice of proposed rulemaking (NPRM) would add “tangible prepaid access devices” to the list of currency and monetary instruments that must be reported when transported, mailed or shipped into or out of the United States in aggregate amounts over $10,000.

Currently persons crossing into or out of the US must report cash and monetary instruments exceeding $10,000, using FinCEN Form 105, the Report of International Transportation of Currency or Monetary Instruments known as the “CMIR” form. The NPRM’s inclusion of tangible prepaid access devices as a type of monetary instrument applies only to the $10,000 CMIR filing obligation; it

Read More

FinCEN Extends Compliance Date for Many Aspects of Prepaid Access Rule

September 12, 2011

Authors

Bryan Cave

FinCEN Extends Compliance Date for Many Aspects of Prepaid Access Rule

September 12, 2011

by: Bryan Cave

The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced on September 9, 2011, that it is extending the compliance date for most aspects of its final rule on prepaid access (the Final Rule). The Final Rule, which was published on July 29, 2011, was set to go into effect on September 27.

Compliance Date for Sellers of Prepaid Access Extended Until March 31, 2012

The provisions of the Final Rule applicable to “sellers of prepaid access” (Sellers) will become effective March 31, 2012. FinCEN states it received compelling information from the industry on the compliance challenges faced by Sellers, given that the Final Rule’s original effective date coincides with the back-to-school season and the beginning of the holiday shopping season. Many retailers impose a “lockdown” on their IT systems at this time of year, to accommodate peak retail sales and consumer traffic, which prevents any systems changes until

Read More
The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.