A rule affecting prepaid cards and accounts has been extended by one year (to April 2019), reflecting comments that those affected “need more time” to put the rule to work – especially card issuers who need to package cards sold in stores, the Consumer Financial Protection Bureau (CFPB) announced Thursday.
In a release, the CFPB said it is also “finalizing updates” to the rule (issued in 2016) to adjust requirements for resolving errors on unregistered accounts and to “provide greater flexibility for credit cards linked to digital wallets.”
According to the bureau, the one-year extension of the overall rule resulted from the agency’s sensitivity to “concerns raised by commenters about needing more time to implement the rule, especially where they are making changes to packaging for prepaid cards sold in stores.”
The error resolution requirement adjustments will apply prospectively, after a consumer’s identity has been verified. The agency said that amendments proposed last June would have required consumers to register their accounts to receive fraud and error protection benefits, such as the right to dispute charges and have stolen money restored, and to extend the protections retroactively to suspected thefts or disputes occurring before registration was successfully completed. “These changes will help encourage prompt registration and streamline compliance for financial institutions as well as ensure continued availability and utility of prepaid accounts for consumers,” the bureau stated.
The changes for credit cards linked to digital wallets, the bureau said, “ensure that consumers continue to receive full federal credit card protections on their traditional credit card accounts while making it easier for them to link those accounts to digital wallets that can store funds.” The bureau also said the changes would reduce “potentially unnecessary complications” and expense to consumers who link credit cards to digital wallets.
CFPB final rule: Rules Concerning Prepaid Accounts Under the Electronic Fund Transfer Act
(Regulation E) and the Truth in Lending Act (Regulation Z)