Study of Prepaid Account Agreements

In order to better understand the features and consumer protections currently provided by prepaid products, the Bureau conducted a study (the Study) of publicly available account agreements for prepaid products. The prepaid products included in the Study all appeared to meet the proposed definition of the term prepaid account in its proposed rule governing prepaid accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z), published concurrently herewith. Specifically, the Bureau sought to determine current industry practices in a number of areas to inform the Bureau's understanding of the potential benefits and costs of extending various Regulation E provisions to prepaid accounts. In conducting the Study, Bureau staff examined certain key provisions in the account agreements of prepaid cards and other similar prepaid programs currently available to consumers and compared those terms against the protections that would be required by the proposal. The Study covers 325 account agreements for prepaid programs that, Bureau staff believes, could be subject to the definition of prepaid account in the Bureau's proposed rule. This Study examines key provisions regarding error resolution protections (including provisional credit)
limited liability protections
access to account information
overdraft services and negative balance fees
Federal Deposit Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund (NCUSIF) pass-through deposit or share insurance
and general disclosure of fee information. The proposed rule explains in detail the issues related to these various provisions.