CFPB wants input on how to disclose the terms of prepaid cards

Some contributors to this blog have expressed general skepticism about the value of disclosure as a means of consumer protection (and have argued that some types of disclosure are more likely to be effective than others).

The Consumer Financial Protection Bureau is interested in improving disclosures for prepaid cards. Here's how the CFPB describes the attributes of a prepaid card:

A prepaid card is a card that you use to access money you have paid in advance. A prepaid card can refer to a number of different types of cards. For example, gift cards are prepaid cards that typically are used up after you deplete the value on the card. But you can also buy a prepaid debit card that you can add money to and continue using over and over. You “load” money on the card by paying in advance, and then you spend that money by using the card. Some types of prepaid cards also allow you to take money out at an ATM.

Last week, the CFPB was on the road in LA "to show people potential disclosures that [it] may propose [for] …  the packaging of prepaid cards …, as part of a larger project that will provide a variety of protections for prepaid card users." The agency says it expects to propose a rule on this topic later this spring.

Read all about the goings-on in LA, or just take a look at two disclosure models that the CFPB was testing there: