The Consumer Financial Protection Bureau, that agency that has been doing such a great job lately of standing up for regular Americans against Wall Street (which is why Republicans want to destroy it) is back at it, this time helping people who use prepaid debit cards, many of whom don't have bank accounts.
The market for prepaid debit cards has grown dramatically in recent years: The number of people using the cards in addition to their checking accounts increased by 50 percent between 2012 and 2014. According to a report from Pew by 2014, around 23 million Americans were regularly using reloadable cards, and more than one-quarter of those users were Americans who didn’t have bank accounts and were mostly low-income and black. For all their shortcomings, prepaid debit cards fill an important role for Americans who don’t have access to traditional checking or credit accounts. […]
Read just a few complaints about these cards on the CFPB website, and it’s easy to understand why many Americans are frustrated. “I proceeded to use my card to pay bills and do things I needed to do for my family. Tonight I looked over my charges because I was short and couldn't figure out why. I have various fees for every time I used that card … I counted over $30.00 in fees in TWO DAYS,” reads one complaint from a prepaid card user in North Carolina. Another complaint alleges that after a card expired, the owner simply lost the remaining funds instead of being sent a new card for the account: “I saved this card to spend on something special. $50.00 is a lot of money to lose.” [...]
The CFPB has received more than 4,000 complaints about prepaid cards since July 2011, and the bulk of those have been about issues with unauthorized transactions, fraud or scams, and managing, opening, and closing accounts.
So the CFPB has done something about it, creating new rules that go into effect on October 1, 2017 that requires companies offering these prepaid cards provide more transparency about fees charged, about whether their customer's funds are insured, and to clearly provide the terms of user agreements and respond more effectively to consumer complaints.
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The rules require that if a complaint isn't resolved within 10 business days, the company issuing the card has to credit the customer's account until it is resolved, and in case of lost card or fraud to limit the customer's liability. The companies will also have to inform customers if they have overdraft policies, and if so act as credit card companies do—work out terms of repayment based on "a customer’s ability to pay, provide a monthly statement, and offer reasonable payment terms and fees." Those fees can't exceed 25 percent of the total credit line.
What all this means is that the people who use prepaid debit cards, reloadable cards, cards used for government benefits, payroll cards, systems like Venmo and PayPal, and digital wallet options—often because they can't afford the fees that opening and maintaining a checking account entail—have basic financial protections. Which will make the Republicans even more pissed off at the CFPB. Because why should poor people have anything at all nice.
Just one more reason that we need Democrats in the White House and Senate. The CFBP is actually helping people who need it most, demonstrating how government can be a force for good. It has to be protected from the Republicans.