The Consumer Financial Protection Bureau issued its final rule to amend provisions of Regulation E and Regulation Z to further regulate prepaid card products, or “prepaid accounts.” As discussed below, the rule generally takes effect on Oct. 1, 2017 (the effective date).

The final rule generally tracks the proposed rule issued by the CFPB in November 2014, but the CFPB made several important revisions, including clarifications relating to the scope of the final rule, whether a prepaid card issuer needs to verify a cardholder’s identity at the time the cardholder asserts an error, and whether an incidental overdraft would be considered a credit extension under the final rule.

Originally published in Law 360 on November 1, 2016.