Accounts Excluded from Coverage
The Rule specifically excludes accounts which may otherwise
meet the general definitions such as:
■ ■ ■ An account loaded only with funds from a health savings account, flexible spending arrangement, medical savings account,
health reimbursement arrangement, dependent care assistance
program, or transit or parking reimbursement arrangement. 3
■ ■ ■ An account that is directly or indirectly established through
a third party and loaded only with qualified disaster relief
■ ■ ■ A gift certificate, store gift card, or a loyalty, award or promotional gift card;
■ ■ ■ A general-use prepaid card that is both marketed and labeled
as a gift card or gift certificate; or
■ ■ ■ An account established for distributing needs-tested benefits in
a program established under state or local law are administered
by a state or local agency.
Regulation E Disclosure Requirements for
Generally Regulation E’s standard disclosure and operational requirements apply to prepaid accounts, similar to what is currently
required for checking accounts, savings accounts or other consumer
asset accounts through which electronic fund transfers may be
made. However, in certain circumstances, the Prepaid Rule contains
additional or different requirements for prepaid accounts. Most
notably, this impacts the initial disclosures, the error resolution process, limitations on liability and the delivery of periodic statements.
Because prepaid accounts by their very nature have electronic
fund transfer (EFT) capability (the loading and spending of funds
through electronic means), banks need to provide appropriate
Regulation E-based disclosures prior to a consumer’s decision to
acquire a prepaid card. Generally these disclosure are intended to
allow for comparison shopping among various prepaid account
providers—something which has been difficult for consumers
without a prescribed set of required disclosures. The Prepaid Rule
requires the Bank to provide two separate disclosures before the
consumer “acquires” the prepaid account:
■ ■ ■ Short Form Disclosure. Banks must disclose certain key fees
and other information about the prepaid account in a specific
format. The Prepaid Rule includes model short form disclosures
for each type of prepaid account. Similar to the “Schumer Box”
disclosures required when marketing a credit card, the short
form disclosure mandates the disclosure of standard fee information, as well as other information, in a specific format. This
allows consumers to engage in comparison shopping among
competing prepaid account products. See Exhibit 1 for a list of
what must be included in the short form disclosure.
In close proximity to the short form disclosure, the Prepaid Rule
requires that other basic information be disclosed, including the
name of the issuing bank, the name of the prepaid account program, any purchase price for the prepaid account, and any fee
for activating the prepaid account.
■ ■ ■ Long Form Disclosure. The long form disclosure must include
comprehensive fee information (beyond only EFT-related fees
as typically required under Regulation E). In this way, the fee-related disclosures required for prepaid accounts closely resemble the Regulation DD fee disclosures. Generally, all the
short form disclosures must be provided again with additional
information and context specific to the prepaid account product.
See exhibit 2 for a list of all required Long Form Disclosures.
Timing of Disclosures
Pre-acquisition disclosures must generally be provided before a
consumer acquires a prepaid account. However, there are exceptions to the timing rules for the long form disclosure in situations
where a consumer acquires a prepaid account through a retail
location (such as a store) that is operated by an entity other than
THE CONSUMER FINANCIAL PROTECTION BUREAU’S PREPAID ACCOUNT RULE
Short Form Disclosure Checklist
■ ■ ■ Disclosure of the following “static” fees: periodic fees, customer service fees
and inactivity fees. Note that these fees must be included even if the amount
of the fee is zero or relates to a feature that is not offered as part of the account.
■ ■ ■ The number of fee types in addition to the static fees (excluding purchase
price, any activation fee and any finance charge related to credit).
■ ■ ■ Two additional fee types that generated the highest revenue from consumers
during the previous 24 months (excluding static fees, or any fees that generated less than 5 percent of the total revenue).
■ ■ ■ Statements regarding: linked overdraft credit features, registration and FDIC
insurance, and the URL for the Bureau’s website where consumers can get
more general information about prepaid accounts, and information on where
consumers can find the long form disclosure.
■ ■ ■ For payroll accounts and benefit accounts, statements that the consumer does
not have to accept the card account and that other options are available.
Long Form Disclosure Checklist
■ ■ ■ A title, including the name of the prepaid card account
■ ■ ■ Information about all fees that may be imposed in connection with the prepaid account—and not just fees
for electronic fund transfers) and the conditions under
which they may be imposed;
■ ■ ■ A statement regarding registration and FDIC insurance;
■ ■ ■ A statement regarding linked overdraft credit features
and, if credit features are offered, the disclosure must
also include the Regulation Z disclosures described in
■ ■ ■ the bank’s contact information;
■ ■ ■ A statement directing the consumer to Bureau.gov/pre-paid for general information about prepaid accounts; and
■ ■ ■ A statement directing the consumer to Bureau.gov/com-plaint and the Bureau’s telephone number (1-855-411-
2372) to submit a complaint related to a prepaid account.