The Consumer Financial Protection Bureau has proposed a six-month delay in the effective date for its final rule on prepaid accounts to allow more time for industry participants to comply with the requirements.
The rule is currently set to take effect on Oct. 1, 2017. If the CFPB’s proposal is approved, the rule would instead take effect on April 1, 2018.
“The CFPB’s prepaid accounts rule will provide strong consumer protections and we want the rule to become effective as soon as possible,” according to a blog post from Kris Andreassen, senior counsel at the CFPB. “However, through our efforts to support industry implementation, we have learned that some industry participants believe they will have difficulty complying with certain provisions of the rule by the current Oct. 1, 2017 effective date. We believe that delaying the effective date by six months will be sufficient for industry participants to ensure they can comply with the rule.”
The rule applies to traditional prepaid cards, general purpose reloadable cards, mobile wallets, person-to-person payment products and other electronic prepaid accounts that store funds. The current Oct. 17, 2017 effective date has some exceptions on disclosures and fee information for consumers’ existing prepaid card accounts, ACA International previously reported.
According to Andreassen, the CFPB is not proposing changes to other portions of the rule at this time.
“If we determine that any substantive changes to the prepaid accounts rule are necessary and appropriate, we will issue a separate proposal and provide the public an opportunity to comment on those changes before finalizing,” she wrote in the blog post.
The proposed delay comes as a group of Republican members of Congress are attempting to block implementation of the new regulations through a joint resolution under the Congressional Review Act (CRA). Up until recently, the CRA was a rarely used vehicle that allows legislators overturn an agency’s rule based on a simple majority vote and the president’s approval, ACA International previously reported. Given the currently Republican-controlled Congress and White House, the CRA has garnered renewed interest as a tool to rollback agency regulations unpopular with Republicans.
Comments on the CFPB’s proposal to delay the rule’s effective date are due 21 days after it is published in the Federal Register. The notice was published in the Federal Register on March 15.
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