Ah, the holidays… a time of tradition. Some of us celebrate Christmas, some of us celebrate Kwanzaa. Others celebrate Hanukkah. A few people may actually celebrate Festivus (December 23 is the traditional Festivus date if you don’t already know). Whatever you celebrate, an important part of it is the predictability… the comfort in knowing that traditions will be preserved. So what event recurs on December 17 (at least for the past few years)?
Answer: December 17 is the date that Senator Robert Mendendez (Dem NJ) introduces his legislation to regulate prepaid debit cards. (last year, he introduced substantially the same legislation on… December 17).
His proposed legislation this year is called “The Prepaid Card Consumer Protection Act”. In his press release, Sen. Menendez describes the legislation eliminating “some of the most egregious hidden fees and let consumers know what the fees are before they buy the cards. It will also let consumers get their money back if the cards are lost, stolen, or the company goes bankrupt. As it stands now, if the prepaid card is lost, stolen, or the company goes bankrupt, all monies on that card may be gone.”
The main features of the legislation include:
- Requires full disclosure of all fees before the consumer buys the card, including a wallet-sized summary of all fees and a toll-free telephone number for customer service
- Limits on the types of fees that can be charged, including a ban on overdraft fees, balance inquiry fees, customer service fees, fees for inactivity, account closure fees, and other types of fees.
- Consumer protections for prepaid cards such as (1) Regulation E protection against loss or theft (so that if you lose the card or it’s stolen, you’ll still get your money back) and (2) FDIC insurance to protect consumers’ money if the card company goes bankrupt. Debit cards already have these consumer protections, but prepaid cards don’t.
- The Consumer Financial Protection Bureau and the FDIC would issue regulations within 9 months of enactment.
Like last year’s proposal, it’s likely that this years legislation won’t make much progress before the holiday recess.
You gotta admire the tradition…