Pub. 8 2017 Issue 1

www.wvbankers.org 10 West Virginia Banker New Rules for Prepaid Financial Products By Patrick A. McGraw, CPA, Arnett Carbis Toothman LLP T he final rule creates amendments to extend Regulation E coverage to prepaid accounts and to adopt provisions specific to such accounts, and to generally expand Regulation Z’s coverage to overdraft credit features that are sometimes offered in conjunction with prepaid accounts. The final rule’s definition of prepaid accounts specifically includes payroll card accounts and government benefit accounts that are currently subject to Regulation E, but also covers accounts that are marketed as “prepaid” that are redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or that are usable at automated teller machines (ATMs). It also covers accounts that are issued on a prepaid basis or are capable of being loaded with funds to conduct transactions with multiple, unaffiliated merchants for goods or services, or at ATMs, or to conduct person-to-person transfers, and that are not checking accounts, share draft accounts, or negotiable order of withdrawal accounts. Certain accounts are not considered prepaid accounts under the new rule, including gift cards, gift certificates, an account loaded with funds Effective October 1, 2017, financial institutions are required to comply with new rules issued by the Consumer Financial Protection Bureau governing disclosures, limited liability and error resolution protections, credit features, and making account agreement information publicly available for certain prepaid accounts. The rule is effective October 1, 2017, but the requirement to submit prepaid account agreements to the Bureau is delayed one year until October 1, 2018.