U.S. Rep. Tipton Pushes for Longer CFPB Prepaid Rule Delay
The CFPB accepted comments on its proposed delay of the effective date for its final rule on prepaid accounts through April 5. Rep. Scott Tipton (R-Colo.) likes the idea of a delay so much, he’s proposing giving the industry even more time. On March 30, Rep. Tipton introduced a bill in the House of Representatives that would delay the effective date until Oct. 1, 2018—a full year from its original effective date.
His bill, H.R. 1801, called the Prepaid Account Compliance and Extension Relief (PACER) Act of 2017, also would give issuers until Oct. 1, 2019, to submit prepaid account agreements to the CFPB. The bill was referred to the House Committee on Financial Services on March 30, where it remains.
“The CFPB’s original proposed effective date of Oct. 1, 2017, was unrealistic given the new disclosure and packaging requirements and operational changes necessary to comply with the rule,” Rep. Tipton said. “I believe that a delay until 2018 will be necessary to help ensure a balance between protecting consumers and supporting the continued growth of prepaid financial products.”
The CPFB already has proposed delaying its prepaid rule by six months, until April 1, 2018. Citing industry concerns about difficulties complying with certain provisions of the rule, the bureau characterized the potential six-month delay as a way to “facilitate compliance … and to allow an opportunity for the bureau to assess whether any additional adjustments to the rule are appropriate.” The CFPB was seeking industry input on the proposed delay and whether six months is the appropriate amount of time for such an extension. The deadline for comments was April 5.
In its comment letter, the NBPCA requested that the proposed delay be extended. Like Tipton, the association is requesting an effective date of Oct. 1, 2018. While expressing appreciation for the CFPB’s proposed six-month extension, the prepaid industry association said the “technical and logistical challenges” presented by the rule will require more time for implementation. The association also voiced concerns about the need to pull and replace noncompliant card packaging and materials before the rule takes effect.