Could this be a case of good intentions gone awry? Time will tell.
According to Brad Fauss, president and CEO of the Network Branded Prepaid Card Association, the recently released regulations on prepaid cards from the Consumer Finance Protection Board could be another instance of good intentions gone wrong.
PYMNTS recently caught up with Fauss as he and his team were working their way through the more than 1,700 pages of the recently released regulations.
He said that his initial impression was that, while he believes prepaid cards were in need of further oversight, the CFPB’s new rules may have gone too far due to what may be an overly inclusive determination of what actually constitutes a prepaid account and the costly compliance requirements, which could stifle the industry and hurt the same consumers the regulations are designed to protect.
The updated regulations are slated to take effect Oct. 1, 2017.
Here’s a preview:
One of the biggest problems with the new rule is the broad definition of a prepaid account, Fauss said.
He noted that the rule covers many of the more than 15 different types of prepaid card products in the market, including non-reloadable prepaid cards and other card products that consumers don’t rely on as their primary transaction account.
“We thought the definition of prepaid account was too broad in the proposed rule, and we were disappointed that it was not scaled back,” Fauss said. “While we were encouraged by the additional carve-outs for prepaid cards issued for dependent care assistance, transit and parking reimbursement and disaster relief, we thought that the same rationale underlying these exceptions should have been extended to exclude all non-reloadable prepaid card products.”
Around the Digital Banking world
As smartphones become a more crucial part of consumers’ financial lives, companies around the digital banking space recently rolled out improvements or upgrades to the security and financial features to their mobile apps.
TD Bank Group recently launched a new mobile app designed to keep customers up-to-date with real-time offers and tips from the bank. Meanwhile, ING Netherlands announced that its customers would now be able to use the bank’s mobile app to send money via social media.
The increase in mobile banking usage is also causing companies to rethink their security needs. First National Bank of Pennsylvania, the largest subsidiary of F.N.B. Corporation, recently introduced a new upgrade to the FNB Direct mobile banking app, which includes a new security feature called CardGuard.
Similarly, according to a press release from Lloyds, its customers, along with Halifax UK and the Bank of Scotland, will now be able to log into their mobile banking accounts via fingerprint or thumbprint scans.
The October edition of the Digital Banking Tracker™ features the latest news and analysis across the FinTech and consumer banking space, along with the rankings of 98 players in the industry — including 10 new profiles — for their readiness to seize this new banking reality.
To download the October edition of the Digital Banking Tracker™, click the button below.
About The Tracker
The PYMNTS Digital Banking Tracker™, powered by Urban FT, brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with the rankings of 98 companies serving or powering the digital banking sector.