CFPB Prepaid Accounts Rule
United States
1987
Payments
Overview
The CFPB Prepaid Accounts Rule, finalized in 2016 and effective from April 1, 2019, extends consumer protections under Regulation E (EFTA) and certain provisions of Regulation Z (TILA) to prepaid accounts. It ensures transparency, fair access, and error resolution rights for users of prepaid cards and digital wallets.The rule applies to prepaid card issuers, mobile wallet providers, peer-to-peer payment apps, neobanks, and other non-bank fintech platforms offering prepaid accounts used for consumer purposes. These entities must implement comprehensive bank account verification systems that provide clear fee disclosures, account access protections, and streamlined error resolution procedures to ensure consumer protection and regulatory compliance across all prepaid payment services.
Key Obligations
- Provide short- and long-form fee disclosures before account acquisition
- Limit consumer liability for unauthorized transactions if reported promptly
- Investigate and resolve errors within specified timeframes
- Offer free access to account balances and transaction histories
- Disclose credit features clearly and comply with Reg Z if credit is offered
- Prohibit overdraft services unless consumers affirmatively opt-in
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