Comment letter to the Consumer Financial Protection Bureau on regulating prepaid cards

Woodstock Instituted submitted comments to the Consumer Financial Protection Bureau (CFPB) regarding its proposed rule to regulate the prepaid card market. Despite being one of the fastest growing payment types in the country, the industry remains largely unregulated. Woodstock commends the CFPB for proposing strong rules to ensure consumers have access to safe and affordable financial products. Though we support the CFPB’s work and believe that the proposed rules are a strong start, Woodstock encourages the CFPB to further strengthen them by: banning overdraft on prepaid cards; mandating that any credit on, or linked to, a prepaid card be fully covered by credit card laws; strengthening disclosure requirements to ensure a consumer has access to all fees in advance; increase protections for specific prepaid cards, including payroll, student loan, prison, and all government benefit cards; and, requiring that all prepaid cards have FDIC or NCUA insurance.