The CFPB has announced that it will be holding a field hearing on prepaid cards in Durham, North Carolina on Wednesday, May 23, 2012. Director Cordray will be delivering remarks and testimony is expected from consumer and civil rights groups, industry representatives, and members of the public. The event is open to the public but an RSVP is required, which can be sent to firstname.lastname@example.org
We view the CFPB’s announcement as a likely precursor to the CFPB’s issuance of a proposal for it to supervise “larger participants” in the prepaid cards market. In the June 2011 notice the CFPB published to solicit comments for developing a “larger participant” proposal, the prepaid cards market was identified by the CFPB as one of the potential markets in which it would supervise “larger participants.” While the CFPB has only targeted the debt collection and credit reporting industries in its initial “larger participant” proposal issued in February 2012, the CFPB made clear in the background discussion of the proposal that it anticipates further rulemaking to define larger participants in other markets.
Companies in the prepaid cards industry should begin preparing for CFPB exams by reviewing their practices and procedures for federal law compliance with experienced counsel. Lawyers in Ballard Spahr’s Consumer Financial Services Group are currently assisting clients in preparing for the expected CFPB examinations.