CFPB Warns RushCard to 'Take Immediate Action' to Fix Problems
UniRush plans to lower the fees on its reloadable prepaid cards. The plan was disclosed Tuesday afternoon on the Twitter account of UniRush founder and music mogul Russell Simmons.
UniRush's transition to a new processor caused major service interruptions for users of its popular RushCard prepaid products.
A new rebate program from UniRush is the latest attempt by a prepaid card marketer to make its product as sticky as a bank account without generating a backlash from its fee-sensitive audience.
WASHINGTON — Consumer Financial Protection Bureau Director Richard Cordray issued a public rebuke of RushCard on Friday, warning that it must rapidly fix technical glitches that have left customers locked out of their accounts.
In a statement, Cordray said he had spoken with Rick Savard, the chief executive of RushCard's parent company UniRush.
"We have stressed that RushCard and its relevant business partners must ensure that no other consumers will be denied access to their funds," said Cordray, adding that he and Savard had agreed the company should "take immediate action to resolve these issues."
Cordray added that the CFPB is working with the Comptroller of the Currency and the Federal Trade Commission to develop a response that "holds accountable all of the parties involved to make consumers whole."
Cordray's comments made it apparent that RushCard and UniRush are likely to face a significant enforcement action as a result of the glitches, which have caused problems for many low-income consumers who depend on the card for groceries and other necessities.
The CFPB is using "all appropriate tools at our disposal to help ensure that consumers obtain the relief that they deserve," Cordray said.
The CFPB also issued a strongly-worded statement on Facebook Wednesday, noting that "It is outrageous that consumers have not had access to their money for more than a week."