Federal Reserve Publishes Rules Implementing Provisions of the CARD Act Relating to Gift Cards, Gift Certificates and Prepaid Cards


The Federal Reserve Board has published final rules implementing the provisions of the Credit Card Act of 2009 relating to gift cards, gift certificates and "general use prepaid cards.” The rule applies to all covered products sold or issued to a consumer on or after August 22, 2010.

Summary of New Rules

The new rules impose fee restrictions and new disclosure requirements on prepaid cards, including gift cards and “general use prepaid cards,” defined to mean cards that are issued to consumers for household or personal use in a specified amount and are redeemable at multiple, unaffiliated merchants. The definition of “general use prepaid card” specifically excludes any card that is (1) reloadable and (2) "not marketed or labeled as a gift card". For purposes of the exclusion, temporary cards are considered "reloadable" as long as they are issued solely in connection with a reloadable card.

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