Federal Reserve Finalizes Gift Card Rules under Reg E
Written by Steve Van Beek
Yesterday, the Federal Reserve released its final rules on Gift Cards.  The rules are included under Regulation E and will be published in the Federal Register shortly.  NAFCU will prepare a Final Regulation summarizing the new rules.  As a reminder, NAFCU's Regulatory Alerts, Final Regulations, and Comment Letters can be found on our webpage (Alerts and Finals are NAFCU-member only).  After clicking on the type of document (i.e., Final Regulations) you are searching for, look to the left-hand column if you want to browse prior year Alerts and Finals.
The mandatory compliance date, as required by the Credit CARD Act, is August 22, 2010. Â Page 15 of the 177 page final rule makes it clear that any cards sold on or after August 22, 2010 must fully comply with the new requirement. Â
Due to time restraints from Compliance School, we have not been able to give a detailed look at the new rule but the Fed's summary in its press release provides a good starting point:
"The final rules prohibit dormancy, inactivity, and service fees on gift cards unless: (1) the consumer has not used the certificate or card for at least one year; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded."
Additionally, pages 11-15 of the final rule are a summary by the Federal Reserve. Â I have cut out those five pages and they can be found in this link.