Overnight Regulation: Feds delay prepaid card rule by 6 months
Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, courts, Capitol Hill, and beyond. It’s Monday evening here in a wet Washington where lawmakers are trickling back into town after a two-week recess with only days to prevent a government shutdown.
Here’s the latest.
THE BIG STORY
The Consumer Financial Protection Bureau (CFPB) is postponing new rules for prepaid cards, the latest delay for the controversial Obama-era regulations.
The prepaid rules will be delayed by six months to give industry more time to comply with the changes, according to Tuesday’s edition of the Federal Register. They are now slated to go into effect on April 1, 2018.
Similar to gift cards, prepaid cards allow consumers to store money to spend later. But they often come with high fees.
{mosads}The CFPB’s 1,700-page rule is intended to give consumers who used prepaid cards more protections. It would require industry to provide easy-to-read disclosures about late fees and other charges. These disclosures would be posted online.
The prepaid rules would also give consumers a 21-day grace period before being hit with late fees. And card issuers would be prohibited from targeting low-income people who cannot afford to repay debts.
The rules have long sparked pushback from industry since the consumer agency first announced plans for the regulations nearly five years ago, but they weren’t finalized until last October.
Industry groups fought to limit the prepaid cards covered under the rule. But consumer advocates also pressured the CFPB to crack down on what they see as abuses by prepaid card issuers, calling on the agency to ban late fees and overdrafts.
The CFPB delayed the prepaid rule Monday.
The stakes are high, with prepaid cards experiencing a boom.
In October, the CFPB said balances on prepaid cards have grown from less than $1 billion in 2003 to $65 billion in 2012. The figure is projected to grow to $112 billion by next year.
TOMORROW’S REGS TODAY
Keep an eye on these rules in Tuesday’s edition of the Federal Register:
–The Consumer Financial Protection Bureau (CFPB) will propose changes to a disclosure rule on mortgage practices.
The CFPB issued the home mortgage disclosure regulation in October 2015, but will propose amendments to the rule to clarify requirements and correct errors. The rule addresses the information that financial institutions must collect and disclose under the Home Mortgage Disclosure Act.
The public has 30 days to comment.
–The Environmental Protection Agency (EPA) will delay a controversial Obama-era regulation for steam electric power plants. The regulation seeks to limit toxins and other pollutants in power plant wastewater.
The power plant regulation was issued in November 2015, but is facing court challenge. The EPA will postpone the rule until the case is resolved.
The EPA previously announced the postponement in a letter earlier this month, but will formalize the delay in the Federal Register.
The postponement goes into effect immediately.
NEWS RIGHT NOW
Liberal group warns of ‘corporate takeover’ at White House
Trump eyeing second Supreme Court seat
Watchdog clears EPA in water pollution campaign
Trump will ramp up action on executive orders this week: reports
Banking index finds regs slowing under Trump
Doctors look to Price for tweaks in Medicare rule
Treasury sanctions Syria for chemical weapons attack
FCC to create advisory panel on diversity
Bloomberg: Nations should continue climate work despite Trump
Trump order could undo designation of national monuments: report
BY THE NUMBERS
6: Proposed rules
12: Final rules
(Tuesday’s Federal Register)
QUOTE OF THE DAY
“It’s clear that there has been a wholesale corporate takeover of the government,” said Robert Weissman, president of Public Citizen. The liberal group in a report Monday raises concerns about the dozens of former business leaders serving in key Cabinet positions and the hundreds of meetings between Trump and industry groups. Click here to read more on their report.
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