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Policy, Regulations, and Rulings:
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CFPB issued final rule amending Reg E and Reg Z related to Prepaid Accounts

The CFPB issued its final rule amending Reg E and Reg Z related to Prepaid Accounts (e.g. credit or debit cards that are pre loaded)  to address certain issues that were raised in response to the 2016 Final Rule as follows:

(1) revised the error resolution and limited liability provisions of Prepaid Account Rule in Reg E - for unverified accounts by providing that financial institutions are NOT required to resolve errors or limit consumers' liability on unverified prepaid accounts and NOT required to resolve errors or limit consumers' liability for disputed transactions that occurred PRIOR to verification.

(2) created a limited exception to credit-related provisions of the Prepaid Accounts Rule in Reg Z for certain business arrangements between prepaid account issuers and credit card issuers that offer traditional credit card products.  Specifically to address complications in applying the credit provisions under the Prepaid Accounts Rule to credit card accounts linked to digital wallets that store funds where the credit card accounts are already subject to Reg Z's open-end credit card rules in circumstances that pose lower risks to consumers.  Also expands the situations in which prepaid account issuers are permitted to run negative balances on prepaid accounts provided certain conditions are met.

(3) extends the overall effective date of the Prepaid Accounts Rule to April 1, 2019

(4) makes minor modifications to the language related to (i) exclusions from the definition of prepaid account, (ii) unsolicited issuance of access devices, (iii) pre-acquisition disclosure requirements, (iv) submission of prepaid account agreements to the CFPB

Complete redlne copy is available here: 

https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_prepaid_unofficial-redline_2018-amendments.pdf