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CFPB yesterday announced new proposed federal consumer protections for the prepaid market that would require market participants to limit consumers' losses when funds are stolen or cards are lost, investigate and fix errors and provide free access to account information, among other things.

The bureau, during a field hearing held in Wilmington, Del., also said it was proposing new "Know Before You Owe" prepaid disclosures "that would provide consumers with clear information about the costs and risks of prepaid products upfront."

NAFCU Regulatory Affairs Counsel Alicia Nealon attended Thursday's field hearing. She noted that the proposal does not make share insurance a requirement to offer prepaid cards, a move welcomed by NAFCU. The association has strongly pushed against setting share insurance as a requirement for prepaid cards in discussions with CFPB.

Alicia Nealon

"NAFCU supports ensuring that consumers have protections for prepaid cards," Nealon said. "Credit unions have a strong track record of regulatory compliance and constantly strive to provide consumers with the appropriate information and protections for all their products to better serve the needs of their unique memberships."

CFPB noted the growing use of prepaid cards, from less than $1 billion in 2003 to nearly $65 billion in 2012. The bureau's proposal would cover plastic prepaid cards as well as mobile and other electronic prepaid accounts that can store funds.

CFPB's proposal will have a 90-day comment period from its publication date in the Federal Register. NAFCU will be releasing a Regulatory Alert on the proposal as well.