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CFPB Proposes Delay in Prepaid Rule Effective Date

By Kevin D. Leitão on March 10, 2017
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The CFPB has proposed to delay the effective date of the final rule governing Prepaid Accounts from October 1, 2017 to April 1, 2018. The CFPB’s action is a direct response to ongoing dialogue between companies in the prepaid industry and the CFPB staff. The CFPB proposal to delay the effective date has a twenty-one (21) day comment period from publication of the proposal in the Federal Register.

The Prepaid Account Rule covers a broad range of products – from reloadable cards offered through retail locations to digital-only accounts. One of the specific industry concerns cited by the CFPB in their proposal is challenges with the “pull and replace” of non-compliant packaging of card product in retail locations. The CFPB also noted that industry participants have “raised concerns about what they describe as unanticipated complexities arising from the interaction of certain aspects of the rule with certain business models and practices.”

The Prepaid Account Rule is also facing numerous challenges from Congress. We wrote last month that Senator David Perdue (R-Ga) had introduced a joint resolution that could lead to nullification of the rule. In addition, Representatives Tom Graves (R-Ga) and Roger Williams (R-Tx) have introduced House Joint Resolution 62 and House Joint Resolution 73, respectively, disapproving of the final rule.

Kevin D. Leitão

Kevin joined Ballard Spahr in 2015 following 15 years of in-house counsel and senior compliance officer experience in regulated industries. He has developed, led, and supported risk-based Bank Secrecy Act (BSA), Anti-Money Laundering (AML), compliance, security, and vendor management programs at leading financial…

Kevin joined Ballard Spahr in 2015 following 15 years of in-house counsel and senior compliance officer experience in regulated industries. He has developed, led, and supported risk-based Bank Secrecy Act (BSA), Anti-Money Laundering (AML), compliance, security, and vendor management programs at leading financial institutions and technology companies.

He advises clients in diverse industries on digital commerce, data security, privacy, compliance, and risk management/governance. Kevin also counsels banks, nonbank lenders, mortgage lenders, insurance companies, gaming companies, money services businesses, prepaid program managers, and precious metals dealers on matters related to BSA, AML, and the Office of Foreign Assets Control.

Read more about Kevin D. LeitãoEmail
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  • Posted in:
    Banking, Finance and Securities
  • Blog:
    Consumer Finance Monitor
  • Organization:
    Ballard Spahr LLP
  • Article: View Original Source

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