Today, the Consumer Financial Protection Bureau is expected to issue new rules for prepaid debit cards, which tend to offer weaker consumer protections than those provided by traditional debit cards, yet are being used by many in the U.S. as a substitute for bank accounts.
At this time, the CFPB is holding a field hearing in Durham, North Carolina on prepaid cards.
Our recent analysis of prepaid cards (pdf) found that industry competition is beginning to help bring down fees, but that those same fees are not always disclosed up front and can still add up quickly.
Consumers Union, the advocacy arm of Consumer Reports, called on the CFPB to adopt rules that protect the people who regularly rely on prepaid cards.
"The prepaid card market has exploded in the U.S., but consumers still don't enjoy the protections they need to ensure they are getting a fair deal," says Michelle Jun, senior attorney for Consumers Union. "It's time for the CFPB to require clear disclosure of all fees in a simple format so consumers know the costs before they purchase a card. Prepaid cards should get the same strong protections as traditional debit cards so consumers have the peace of mind that their money is safe if their card is lost or stolen."
CFPB Urged to Require Better Disclosure & Protections For Prepaid Cards [Consumers Union]