The CFPB May Propose Standard Prepaid Card Fee Disclosure Rules

Earlier this week, the Consumer Financial Protection Bureau (CFPB) announced that it is working on potential new consumer disclosure requirements for prepaid cards to standardize fee disclosures. The new disclosure requirements are being developed as part of a larger project by the CFPB to provide a variety of protections for prepaid card users. The CFPB expects to propose a rule on the topic later this spring. 

The CFPB notes that each prepaid card company’s retail package discloses different information, which makes it difficult for consumers to do a side-by-side comparison of the costs of different prepaid products. The goal of the potential new disclosure requirements is to standardize the fee information provided for prepaid cards so that consumers can better understand and compare how much different prepaid cards cost. The CFPB is testing two model disclosure forms with consumers in select markets, with testing last month in Baltimore and testing this month in Los Angeles.  The types of fees included in the model forms include monthly maintenance fees, reload fees, per purchase fees, ATM withdrawal fees, balance inquiry fees, and inactivity fees, among others.

With significant growth in the use of prepaid cards in the past five years (approximately $65 billion loaded to prepaid cards in 2012, which is more than double the amount of funds loaded to prepaid cards in 2009),1  the CFPB’s proposed fee disclosure requirements reflect a growing interest in consumer prepaid card protections. For example, earlier this year Senator Mark R. Warner (D-VA) introduced the Prepaid Card Disclosure Act of 2014,2 which would require the CFPB to adopt rules requiring prepaid card companies to provide fee disclosures similar to those being proposed by the CFPB. Senator Warner’s bill is still in committee, but the CFPB’s announcement this week demonstrates that it intends to get in front of this issue prior to a legislative mandate. 

The prepaid card industry has also shown a willingness to address fee disclosures.  In February of this year, The Pew Charitable Trusts developed a model disclosure box for use by prepaid card companies at the point of sale to provide information to consumers about key fees, terms, and conditions in an easy-to-read format, and some banks have already adopted this model. Senator Warner, for one, commended Pew for its work on this issue, but it is not yet clear if the CFPB’s proposed rule will complement or conflict with the Pew model.  

1 The Pew Charitable Trusts, “Why Americans Use Prepaid Cards: a Survey of Cardholders’ Motivations and Views” (Feb. 2014); available at:

2 S. 1903, 113th Congress (2014).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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