More consumers are using prepaid cards, but the industry is still lightly regulated, meaning consumers can be hit with unexpected fees and other harmful features. In 2012, consumers loaded $65 billion onto prepaid cards with 9.2 billion transactions. Fees can occur in a variety of ways, including balance inquiries, ATM withdrawals, and customer service calls. Essentially, some consumers have to pay to manage their money and access card features.
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.
We believe the proposed rules are a good start and commend the CFPB for their work. There are ways to make the rules even stronger, but the CFPB needs to hear from advocates for that to happen. Comments are due on March 23, and we urge you to take action now by:
Prepaid cards are one of the fastest growing payment types in the U.S. According to a 2014 study by the PEW Charitable Trusts, consumers loaded over $64 billion onto prepaid cards in 2012, up from $56.8 billion in 2011.
The CFPB hosted a hearing in Chicago on the impact of the Credit Card Accountability Responsibility and Disclosure (CARD) Act on the credit card market, the same day it released a report on the CARD Act.