WASHINGTON – With high school and college graduations underway, many young adults are ready to take their next steps into the “real world.” Moving for a job or internship, thinking about the future and organizing financial logistics weigh heavily on recent graduates and their parents.

For many high school graduates headed to college, this will be their first time balancing a personal budget, setting aside money for textbooks, extracurricular activities and free time. This season can be even more overwhelming for recent college graduates, as many enter financial independence for the first time.

One of the easiest ways recent graduates and young adults can effectively manage their money is through prepaid cards and other convenient fintech options that help keep everything in order. The benefit of prepaid cards, especially relevant for young people, is the fact that they allow individuals participate in the modern, digital economy—even without a bank account or a credit card.

“Prepaid cards and other innovative payments options are simple, efficient and responsible means for young adults to effectively manage their budget and spending habits, especially as they head off to college or start a new job,” said Brian Tate, President and CEO of the Innovative Payments Association (IPA). “Everything from real time spending alerts to mobile wallets can help parents and students manage the day-to-day of spending and saving.”

Prepaid cards are flexible—allowing cardholders to use them anywhere debit cards are accepted. Additionally, cards help users avoid debt and overspending through easy to use features that allow for effective budgeting. Prepaid cards can also be loaded by individuals or friends and families to fit certain parameters and ensure spending is on the right track.

Because prepaid cards are protected by zero liability provisions, FDIC insurance and anti-overdraft protections, they can be a great tool for young adults starting out with little or no credit. Whatever your individual circumstances are, opting to utilize prepaid technology offers flexibility that can put many young people at ease. When selecting a prepaid card there are a multitude of great options, allowing you to pick one best suited to your needs.

“This is a busy, hectic time for teens, young adults and, of course, their parents. Luckily, prepaid technology is available to help new graduates and young adults get their financial footing in the world,” said Tate.

For more information,check out our infographic.

In the latest episode of the Innovative Payments Association Podcast, we present highlights from our members-only publications and cover industry developments, federal regulation, state legislation, and more. And we explain how a reduction in regulatory actions could lead to a false sense of security. The future of enforcement may start to look a lot like traffic stops.

Learn more about the IPA’s Lobbying day.

If you are a current member, make sure you are getting the full value of your membership by subscribing to our podcast, Payments Update Newsletter, and our Government Update Newsletter. Also make sure that you are following our blog, twitter feed, and LinkedIn page for regular intelligence on the industry, regulation and legislation. And make sure that we are getting your company’s news.

If you are not member, give this episode a listen, and if you want to stay up to date on the innovative payments world, join today.

The payments industry continues to change, and regulators are working to keep up. The Innovative Payments Association continues to monitor develops in the payments world and bring information to our members that they need to know. Everyone is busy trying to keep up with their day jobs, so we want to make it easier to keep up with the world’s developments.

In this episode of the Innovative Payments Association Podcast, we present highlights from our members-only publications and cover industry developments, federal regulation, state legislation, and more. And we explain how ice fishing shacks and prepaid cards can sometimes fall under the same law.

If you are a current member, make sure you are getting the full value of your membership by subscribing to our podcast, Payments Update Newsletter, and our Government Update Newsletter. Also make sure that you are following our blog, twitter feed, and LinkedIn page for regular intelligence on the industry, regulation and legislation. And make sure that we are getting your company’s news.

If you are not member, give this episode a listen, and if you want to stay up to date on the innovative payments world, join today. You can find out more at http://www.ipa.org.

The average American has access to a variety of payments tools, but which ones get use the most? To understand the payments market, the Federal Reserve conducts a number of studies to learn what choices Americans are making and why.

To learn more about this research, in this episode of the Innovative Payments Association Podcast, we talk with Jessica Washington, Payments Risk Expert at the Federal Reserve Bank of Atlanta. Jessica gives us a recap of her presentation from this year’s IPA conference. She talks about what payments consumers are using, delves into fraud data, and describes what’s in an average wallet.

The information in the podcast is drawn primarily from three studies: the Federal Reserve Payments Study, the Survey of Consumer Payments Choice, and the Diary of Consumer Payments Choice. You can also find more information on payments and payments risk at the Atlanta Fed’s site: https://www.takeonpayments.frbatlanta.org.

These studies are worth reviewing for anyone who wants to understand their customers. The big picture of American payments is a complicated one, and learning what is happening can help companies evaluate their strategies and their competitors.

Looking at the numbers, it is undeniable that the number of enforcement actions from the Consumer Financial Protection Bureau (CFPB) have dropped over the last two years.

A report from Bloomberg BNA in October 2018 shows that enforcement actions went from 56 in 2015 to 6 in the first three quarters of 2018. Additionally, USA Today reported on March 13, 2019, that the CFPB issued no enforcement actions from November 2017, when previous director Richard Cordray stepped down, through April of 2018. It also said average monetary relief fell by 96%.

All of this may lull the financial services industry into a false sense of security. The regulators seem to be lightening up, and so does that mean that compliance is less of a concern?

The answer is ‘no.’ It means that when the regulators decide its time to enforce the rules, they are going to make sure they have good reasons to do so.

Rather than breathing a sigh of relief, financial services providers should be double checking that they are doing more than just checking the compliance boxes. They need to ensure that their compliance regimes are substantively working to protect customers.

While the regulators may be showing less enforcement zeal, they have not stopped doing their jobs. In a speech at the Bipartisan Policy Center on April 17, 2019, CFPB Director Kathleen Kraninger made it clear that enforcement remained an important part of the Bureau’s toolkit.

“Let me state emphatically my view that enforcement is an essential tool Congress gave the Bureau – particularly because education, rulemaking, and supervision will not prevent every violation,” Director Kraninger said. “There will always be bad actors who don’t comply with the law.”

This enforcement likely will look a little different than companies expect. It will be more like a traffic stop than a raid – meaning one enforcement issue will likely lead to others.

Instead of pulling someone over, writing them a ticket with a small fine, and sending them on their way, the “cops” of the CFPB probably will use the first violation as a starting point.

So, it will start with a stop for speeding, and, oh look, the taillight is broken. Are you wearing your seat belt? Is that a handgun poking out of the glovebox?

Except in the case of financial services it will start with a consumer complaint, and, oh look, your product is actually a prepaid account. Did you provide the proper disclosures? Is that a credit feature poking out of the terms and conditions?

Providers should not look at the numbers on enforcement and conclude that compliance has become a formality or easily completed checklist. They should look at the purposes underlying the regulations and ensure that they are working with their operations teams, inside and outside counsel, and, where appropriate, the regulators to make sure that they have a substantive, effective compliance program.

It's either that or be prepared for a simple traffic stop to turn into a cascade of violations.