Visa limits fees, strengthens protections for prepaid cards
AML AND COMPLIANCE NEWS |
Visa recently sent out a press release regarding its reloadable prepaid card program. They announced a new set of standards which limit fees and simplify disclosures. The changes were developed in collaboration with the Center for Financial Services Innovation and the Pew Charitable Trusts. The changes come in advance of actions by the Consumer Financial Protection Bureau (CFPB), which is expected to issue proposed rules on prepaid cards by the end of summer. See the article entitled, "Agency rule list" within this newsletter for the timing of this and other rulemaking action by the CFPB.
To qualify for the new Visa prepaid designation, programs must provide for a flat monthly fee to cover all standard user activity. This charge would replace per-use fees for declined transactions, customer service, in-network ATM withdrawals, balance inquiries, PIN or signature transactions and cash back at point-of-sale transactions. In addition, the program designation eliminates overdraft fees while requiring consumer-friendly fee communication. The move also strengthens consumer protections, since the new prepaid designation would cover these cards under Visa's Zero Liability policy and provide dispute resolution rights under Regulation E (Electronic Funds Transfers).