As we hinted at in an article last week, Pre-Paid Cards, which up to now had little or no regulation, are next in line for a Consumer Financial Protection Board (CFPB) review.  The CFPB requests input for an increasingly popular method of payment:  Pre-Paid Cards.  Specifically they are “seeking information on general purpose reloadable cards.”

In statistics cited in the post on the Federal Register (from the Mercator Advisory Group, Prepaid Market Forecast, Nov. 2011) the amount of money expected to be loaded onto pre-paid cards is expected to exceed $166 billion in 2014.  That number stood at $12 billion in 2007.

The CFPB wants input on many aspects of pre-paid cards, including their costs, benefits and potential customer harm.  The Bureau also will investigate what level of regulation should be or will be imposed; with areas of focus including making fees transparent, FDIC insurance on the cards, and whether savings account options can or should be built into the cards.  There is currently no such option.

Many of the cards offer a consumer opt-in option for them to use the cards as a way to rebuild their poor credit.  The Bureau will investigate whether some regulation of this option is necessary.

There are number of other aspects of pre-paid cards that the Bureau will investigate and we will keep you posted on any news from that front.

Original source of this article is the United States Federal Register.