The Federal Deposit Insurance Corporation has released examination procedures for Prepaid Accounts to incorporate the Consumer Financial Protection Bureau’s (CFPB) amendments to Regulation E and Regulation Z. The examination procedures may be helpful to financial institutions seeking to better understand how examiners will evaluate an institution’s compliance with the prepaid account rule..
On October 3, 2016, the CFPB published its Final Rule for Prepaid Accounts to create comprehensive consumer protections for prepaid accounts. Specifically, the Rule expanded coverage of Regulation E to apply to prepaid accounts, established disclosure standards for prepaid accounts, and classified prepaid accounts that offer covered credit features as “hybrid prepaid-credit cards” subject to Regulation Z.
Subsequent amendments to the Final Rule were made addressing error resolution and limited liability on prepaid accounts where the bank has not completed its customer identification and verification; application of the rule’s credit-related provisions to digital wallets that are capable of storing funds; and other clarifications and minor updates. The effective date for the Final Rule is April 1, 2019.
The FDIC and other member agencies of the Federal Financial Institutions Examination Council developed the new procedures to ensure consistent application of these regulatory changes.
The agencies will begin using the revised procedures on April 1, 2019.
The FDIC released FIL-9-2019 on February 22, 2019.
Compliance Resource recently hosted a two-hour webinar entitled Prepaid Rule – Last Minute Update. Some financial institution are still struggling to learn how the new rule impacts their activities. This program is designed to help institutions understand what products and accounts are covered by the Prepaid Rule and how to achieve compliance with the rule by the April 1, 2019 effective date.