Menendez Applauds CFPB Movement to Regulate Prepaid Cards

Menendez Applauds CFPB Movement to Regulate Prepaid Cards

WASHINGTON, DC - U.S. Senator Robert Menendez (D-NJ), the author of the Prepaid Card Consumer Protection Act, today applauded the Consumer Financial Protection Bureau (CFPB) on moving forward with plans to regulate prepaid cards and payment products. Menendez is a longtime proponent of reining in harmful and hidden fees and strengthening financial protections for consumers who use prepaid cards.

"Right before consumers swarm to the stores on Black Friday, I'm glad we're talking about protections for a form of payment that is soaring in use," said Sen. Menendez. "As the market for prepaid products continues to grow, the need for strong consumer protections and clear guidelines grows as well. Companies should not be able to hide behind the fine print to raise their bottom lines at the expense of responsible consumers."

Menendez added: "I look forward to reviewing the proposal and continuing to work with the CFPB to make sure consumers are not fooled - regardless of whether they're paying ahead of time or at the cash register."

Consumers are expected to load nearly $100 billion onto general-purpose prepaid cards this year, up from $19.5 billion six years ago, according to Mercator Advisory Group Inc. Along with other regulations, the CFPB's newly-proposed measures would limit consumers' exposure if their card is lost, stolen, or fraudulently used. Right now, these protections exist for credit and debit cards, but not for prepaid cards.

Menendez's prepaid card legislation - first introduced in 2010 and reintroduced in December 2013 in the 113th Congress - proposed protections for consumers if their prepaid card gets lost, stolen or the card company goes bankrupt. The legislation also restricts the fees prepaid card issuers can charge and makes prepaid card issuers clearly disclose all fees before customers buy a card. The full text of the Prepaid Card Consumer Act of 2013 can be download here.