Click to return to BOL home page
Banker Store Read A Reg BOL Insiders Career Connect Learning Connect Bankers Information Network






Topic Options
#1791218 - 03/04/13 04:48 PM Reg E Disputes for GPR prepaid cards
mll Offline
100 Club

Registered: 05/25/10
Posts: 131
From what I've been reading, Reg E's dispute process would be applicable to gift cards and payroll cards, but not general purpose reloadable prepaid cards? Is this correct?

Top
Deposits and Payments
#1791223 - 03/04/13 05:02 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30535
Loc: Cape Cod
There is no connection between the Regulation E dispute process and gift cards, in spite of the fact that the gift card rules on disclosures and limits on fees find themselves within the regulation. Gift cards are not considered accounts for the purposes of Regulation E.

There is a modified error resolution or dispute process that applies to payroll card accounts.

General purpose re-loadable prepaid cards are not covered in any way by Regulation E. The CFPB has floated a trial balloon in the form of an Advance Notice of Proposed Rulemaking (ANPRM) that could provide some Regulation E coverage. Comments on the ANPRM closed on July 23, 2012. The Bureau may issue something now that it has issued major pieces of the Dodd-Frank final rules, but it may wait until after it finalizes the final rule on combining the front-end disclosures under RESPA and TILA.


Edited by John Burnett (03/04/13 05:03 PM)
_________________________
John S Burnett
BankersOnline.com

Top
#1791236 - 03/04/13 05:17 PM Re: Reg E Disputes for GPR prepaid cards [Re: John Burnett]
mll Offline
100 Club

Registered: 05/25/10
Posts: 131
John,
Thanks so much for clarifying this.

Top
#1818300 - 05/29/13 03:09 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
GenerousLife Offline
Diamond Poster

Registered: 02/12/02
Posts: 1434
Loc: USA
FYI

September 23, 2011 Treasury finalized an amendment to 31 CFR Part 210 that permits delivery of Federal payments by direct deposit to prepaid debit cards only if they meet certain consumer protection requirements.
1. Be held at an insured financial institution
2. Provide the cardholder with pass-through deposit insurance
3. Not have an attached line of credit or loan feature where repayment is triggered upon delivery of the Federal payment, and
4. Complies with the consumer protections of Reg E that apply to payroll cards.

Thus far, the CFPB has not amended Reg E to reflect this change so it has kind of flown under the radar.
_________________________
"No problem can withstand the assault of sustained thinking." ~ Voltaire
"Sustained thinking gives me a headache." ~Me

Top
#1827352 - 06/25/13 03:08 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
GenerousLife Offline
Diamond Poster

Registered: 02/12/02
Posts: 1434
Loc: USA
Any opinion on whether a tax refund would be considered in the definition of "federal payment" in 31 CFR 210?

It does come from a federal agency.

It could be defined as an "overpayment reimbursement".

The reason that I ask that question is that it is not federal funds, it is the taxpayer's own funds (oh wait, there is that whole Earned Income Credit thing).

Never mind, I think I just answered my own question. But please weigh in with discussion. I am all ears.
_________________________
"No problem can withstand the assault of sustained thinking." ~ Voltaire
"Sustained thinking gives me a headache." ~Me

Top
#1827373 - 06/25/13 03:24 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30535
Loc: Cape Cod
I'll swap questions with you. Are you certain you're asking about a payment to the card account directly from Treasury (on behalf of the IRS)? Or is it actually a tax refund anticipation card issued by someone like H&R Block?
_________________________
John S Burnett
BankersOnline.com

Top
#1827388 - 06/25/13 03:33 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
GenerousLife Offline
Diamond Poster

Registered: 02/12/02
Posts: 1434
Loc: USA
Payment to a card account directly from Treasury. Would that transaction fit under the definition of federal payment as per 31 CFR 210?
_________________________
"No problem can withstand the assault of sustained thinking." ~ Voltaire
"Sustained thinking gives me a headache." ~Me

Top
#1827407 - 06/25/13 04:02 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30535
Loc: Cape Cod
Yes, after reading through the definitions and section 210.5 of those regulations, I believe that if the tax refund is direct deposited to a prepaid card the payroll card account requirements of Reg E will be implicated, and the issuing FI will be bound by them.
_________________________
John S Burnett
BankersOnline.com

Top
#1877506 - 12/10/13 03:41 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
GenerousLife Offline
Diamond Poster

Registered: 02/12/02
Posts: 1434
Loc: USA
New question: I have a client insisting that this rule only applies to Federal Payments made in the last 30 days. I have read and re-read the language and can find no reference to any kind of limitation.

Which means, a GPR prepaid card that received a tax refund last year, is still entitled to Reg E payroll card protections today.

I think the authors expected that most consumers getting federal payments would be getting recurring payments, not just once a year payments.

Even if there was an expectation of a look-back period, I would think it would need to be longer than 30 days.

Any ideas? Thoughts or comments?
_________________________
"No problem can withstand the assault of sustained thinking." ~ Voltaire
"Sustained thinking gives me a headache." ~Me

Top
#1877554 - 12/10/13 04:40 PM Re: Reg E Disputes for GPR prepaid cards [Re: mll]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2844
Loc: Illinois
And where in the regulation does the client claim this 30 day timeframe appears? (It's not there)

You read it the same way I do, the only modification to 1005.6 is when the 60 day clock for consumer liability begins based on when the consumer accesses an electronic history or receives a requested statment history.
_________________________
I can do all things through Him who gives me strength. (Phillipians 4:13)

Top


Moderator:  John Burnett, Ken_Pegasus