Breaking News: Sen. Menendez Introduces Prepaid Card Bill (Dec. 20, 2013)
Most folks this week are concentrating on tracking down last-second gifts or holiday dinner menu items. Not U.S. Sen. Robert Menendez (D-N.J.). He is, again, looking to “rein in hidden fees and strengthen financial protections offered by prepaid card companies” with new legislation announced today. He had introduced similar prepaid card-related bills in 2009 and 2011.
The Prepaid Card Consumer Protection Act Of 2013, co-sponsored by Sen. Richard Blumenthal (D-Conn.), would restrict fees prepaid card issuers can charge, require that all fees are clearly disclosed before customers buy a card, and protect consumers’ money if cards are lost, stolen or the card company goes bankrupt. The legislation also would direct the CFPB to issue regulations within a year of enactment, as well as a study to determine the benefits to consumers of prepaid cards versus traditional bank accounts or other substitutes.
The Network Branded Prepaid Card Association agrees “consumers should have access to terms and conditions before purchase so they can comparison shop,” according to Crystal Wright, NBPCA spokesperson. The association also supports FDIC insurance on a pass-through basis.
“Where we have concerns and are going to focus on talking more with the senator is about the fee caps in the bill,” Wright tells Paybefore. “Traditionally, we’ve not supported fee caps because we feel consumers do a great job of marching toward the features they like and are willing to pay for. We want more choices on the cards, instead of less. We’ve had concerns about any legislation or regulations that seek to tell the industry to eliminate certain fees because [such directives] remove choice from the marketplace.”
High fees are an anomaly and pass-through FDIC insurance is becoming more common, according to a study released last month by Bretton Woods Inc.
