Whether it is because of a bankruptcy or for some other reason, many people who live in Tennessee do not use of or have access to credit cards. Instead, they rely on prepaid cards, which are preloaded with a certain amount of money. Each transaction a person uses the card for subtracts from the total amount remaining on the card.
In the past, these types of prepaid cards did not afford consumers with very many protections. However, thanks to new rules announced by the Consumer Financial Protection Bureau, that is changing. According to The Washington Post, prepaid card users will now have some of the protections that previously were only given to credit and debit card holders.
Among these protections are clearer disclosures about fees and terms, a limit on losses for stolen cards, as well as limits on overdraft fees. The protections will apply to several different types of prepaid cards, including:
- Cards containing benefits from the government
- Cards purchased in retail stores
- Online accounts such as Google Wallet and PayPal
- Cards containing payroll earnings
While there is much support for the new rules, there are also some detractors. Prepaid cards will not be insured by the Federal Deposit Insurance Company in cases where a person does not chose to register their card, some point out. In addition, industry representatives worry that the rules are confusing and not specific enough.
The new rules are scheduled to go into effect in October 2017, reports CNBC. During the public comment period on the rules, the CFPB received approximately 65,000 letters.
