Bluebird card may come under CFPB scrutiny

April 01, 2013

Bluebird card may come under CFPB scrutiny

April 2, 2013 – Funds consumers download to the "Bluebird" prepaid card launched jointly by Walmart and American Express last year are now federally insured by the FDIC, a development that NAFCU President and CEO Fred Becker notes makes this product open to scrutiny of the FDIC and CFPB.

The Bluebird card was launched last year as an alternative to financial institution debit cards and checking accounts. As unveiled last year, using and adding value to the cards involves no or very low fees. The card was introduced in a pilot program in 2011.

The card was initially unveiled with no federal insurance behind it, but FDIC insurance was added recently so the card could also accept federal benefit payments.

Becker told Credit Union Times that consumers were put at risk when they were allowed to think the cards were federally insured when they were not.

The CFPB, having completed most of its final rules on mortgage lending (the TILA/RESPA rule is still pending), is now looking at how to address prepaid cards, overdraft protection, private student loans and other products offered by financial institutions.

"Trades largely quiet on Bluebird FDIC insurance,"Credit Union Times, 4/1

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