Regulation E provides a basic framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer's account (such as direct deposit and social security payments). The term "electronic fund transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's asset account.
Summary of Remaining Issues with the CFPB's Prepaid Account Rule
The CFPB's Final Rule for Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z), extends Regulation E coverage to several prepaid account products. As a result, prepaid account products must comply with a number of regulatory obligations including the provision of account opening disclosures, offering limited liability and error resolution protection, and providing periodic statements or transaction histories to account holders. The IPA worked with the CFPB throughout its rulemaking process to implement a number of positive changes to the Prepaid Rule. While our members appreciate the changes the CFPB made to the Prepaid Rule in response to our concerns, the IPA supports making additional changes to the Prepaid Rule to help streamline it and ease the myriad compliance challenges it presents while still retaining critically important consumer protections. In particular, the IPA and its members support changes to the Prepaid Rule’s disclosure requirements, restrictions for credit offered in connection with a prepaid account, and definition of “business partner”.
Full Statement on Summary of Remaining Issues with the CFPB's Prepaid Account Rule
