Federal Prepaid Cards: FDIC Deposit Insurance Eligibility

What's Next In Payments®
2:00 PM EDT September 17th, 2010

Author:

Sarah Jane Hughes (Indiana University Bloomington School of Law)

Abstract:    
Prepaid and other stored-value products have grown into major tools for making retail payments and payments of wages to employees. This article discusses two major developments in federal law that pertain to stored-value products – the November 2008 – revision of primary guidance from the Federal Deposit Insurance Corporation on the scope of eligibility of payroll cards for deposit insurance, and Congress’ May, 2009 enactment of the CARD Act, which takes effect on February 22, 2010. The CARD Act is the first effort by the federal government to regulate gift cards. It established federal standards relating to subjects on which state laws varied widely, and preempts state laws. In addition, the CARD Act gave to the Board of Governors of the Federal Reserve System rule making authority over gift cards, general-use prepaid cards, and electronic gift certificates. The Act also grants to the Department of the Treasury authority to adopt comprehensive regulations concerning the issuance, sale, redemption and international transport of stored-value cards. This authority reflects growing concerns that money launderers are increasingly able to move funds through stored-value products. Read Paper


Related Content

 

What the CARD Act Means for the Payments Business

Research and Markets: Payment Card Issuer Strategies 2010: The Rise of The Cautious Consumer

NAFCU Highlights New Credit Card Rules & Smart Money Moves in 2010

Comments
Also by This Author
What's Hot
News
Square Launches Register App Platform
News
Etsy Debuts mPOS Solution
Merchant Innovation
Ron Johnson’s New Company To Focus On Shopper Decisions
B2B Payments
WEX and Sinclair Oil Strike Long Term Contract
View All Articles ››
You May Also Like
Company Spotlight
Different mPOS Strokes for Different mPOS Folks
International
Digital River Offers A Sneak Peak At Mobile eCommerce Trends
Mobile Commerce
Trustwave Buys Cenzic To Beef Up App Testing Capability
B2B Payments
Tungsten Spent $6.5 Million for DocuSphere
Company Spotlight
Inside the Future of Commerce, Post Apple Pay
Alternative Financial Services
Death Threats, Fraudsters and Lawsuits
News
How to Overcome the 10 Most Common Cyber Threats
View All Articles ››