Vendor and Third Party Management – CFPB Study on Prepaid Cards: What You Need to Know

Prepaid Cards include general purpose programs; cards marketed for specific purposes such as travel or receipt of tax refunds; cards for specific users such as teenagers and seniors; payroll cards; cards for distribution of certain government benefits; and programs specifically designed for person-to-person transfers. The majority of these cards are issued by MasterCard, Visa, and NerdWallets.  All of these Prepaid Cards are covered by proposed rules governing prepaid accounts in the Regulation E (Electronic Fund Transfer Act) and Regulation Z (Truth in Lending Act). While Payroll and Government Benefits cards were found to be substantially compliant, most Prepaid Card Agreements are not in full compliance with Reg E and Reg Z.

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