CFPB delays implementation of final prepaid rule, citing complaints
The Consumer Financial Protection Bureau said Thursday that it is seeking to delay the effective date of its final rule on prepaid cards by six months because industry participants need more time to comply.
"We have learned that some industry participants believe they will have difficulty complying with certain provisions of the rule by the current October 1, 2017 effective date," Kris Andreassen, a CFPB senior counsel, wrote in a blog post.
The agency is issuing a proposal that would extend the effective date to April 1, 2018, a CFPB spokesman said.
The bureau is not proposing any other changes to the rule. Rather, it is asking for public comment about any implementation challenges that may affect consumers, and how additional time would impact companies, consumers and other stakeholders, Andreassen wrote.
Last month, Sen. David Perdue, R-Ga., introduced legislation to roll back the prepaid rule. So far, however, Perdue has found little support for his efforts.
“From its initial stages, this rule was shortsighted and so sweeping that it would have stifled innovation in a growing marketplace millions of consumers rely on," Perdue said in a press release. "Ultimately, the CFPB should scrap this rule altogether."
If substantive changes to the rule are necessary, the CFPB will issue a separate proposal and provide an opportunity for public comment before the rule is implemented.
The final rule is expected to improve fraud protection and provide greater transparency of costs, but it drew the ire of bankers and consumer advocates alike over its treatment of overdraft fees.
The rule requires companies to disclose the fees on prepaid cards and cooperate with consumers who discover unauthorized charges or errors.