The Consumer Financial Protection Bureau (CFPB) has started a
consultation period aimed at addressing the regulation of the
prepaid card market.
The Federal Agency has launched an Advance
Notice of Proposed Rulemaking the goal of which is to ensure
security and transparency for consumers in this fast-growing
sector.
CFPB Director Richard Cordray said: “The people who use prepaid
cards are, in many instances, the most vulnerable among us. Yet
right now prepaid cards have far fewer regulatory protections than
bank accounts or debit or credit cards.”
According to a 2009 study by the Federal Deposit Insurance
Corporation (FDIC), the prepaid market totalled USD57 billion and
was expected to grow at an annual rate of 42% from 2010-2014.
The CFPB estimates that the two largest prepaid card programme
managers currently have seven million active cards, compared to 3.4
million in 2009.
According to data by the CFPB, funds deposited onto those
prepaid cards increased by nearly 70% and 40% from 2010 to
2011.
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By GlobalDataAround USD167 billion will have be loaded onto prepaid cards by
2014, the CFPB estimates.