CFPB Releases Updates to Prepaid Account Rule


The Consumer Financial Protection Bureau (CFPB) released information regarding final rule amendments they are making to the prepaid account rule. The amendments are designed to provide more flexibility and extend the effective date to April 2019.

The CFPB’s prepaid account rule implemented requirements for treatment of funds on lost or stolen cards, error resolution and investigation, upfront fee disclosures, access to account information, and overdraft features if offered in conjunction with prepaid accounts. The recently announced changes adjust requirements for resolving errors on unregistered accounts, provide greater flexibility for credit cards linked to digital wallets, and extend the effective date of the rule by one year.

Here are more details on the changes to the prepaid rule. The changes will:

  • Adjust error resolution requirements: In June 2017, the Bureau proposed amendments to require consumers to register their accounts to receive fraud and error protection benefits, such as the right to dispute charges and have stolen money restored, and to extend the protections retroactively to suspected thefts or disputes occurring before registration was successfully completed. The rule changes provide that the error resolution and liability limitation protections apply prospectively, after a consumer’s identity has been verified. These changes will help encourage prompt registration and streamline compliance for financial institutions, and ensure continued availability and utility of prepaid accounts for consumers.
  • Provide more flexibility concerning credit cards linked to digital wallets: Digital wallets provide consumers with an electronic way to use their debit and credit cards. Some digital wallets are also prepaid accounts because consumers can use them to store and access funds directly. The rule changes ensure that consumers continue to receive full federal credit card protections on their traditional credit card accounts while making it easier for them to link those accounts to digital wallets that can store funds. The changes also reduce potentially unnecessary complications and expense to consumers who link credit cards to digital wallets.
  • Extend the overall effective date of the rule by one year: The Bureau is sensitive to the concerns raised by commenters about needing more time to implement the rule, especially where they are making changes to packaging for prepaid cards sold in stores. The Bureau is thus extending the overall effective date of the rule by an additional year, to April 1, 2019.

The NWCUA Compliance team is currently reviewing the final rule update and will release a Compliance Bulletin with more details in the near future.

Question of the Week

We suspect an individual has brought in a fraudulent check from the U.S. Treasury. Is there a way we can verify the legitimacy of the check?

Yes. The Treasury has a website that allows financial institutions to verify the check online.  In addition to the verification website, the Treasury also has a guide that explains the security features that should be visible on the check.


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Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.