I heard that the new rule that goes into effect in 2019 can apply even if the FI does not issue prepaid cards. If the FI does not issue prepaid cards or credit cards and only issues ATM and debit cards, please direct me to the sections in the revised Reg. E/Reg. Z that could apply.

I would go back to whom you "heard" this from and ask them for an explanation. It is better than chasing windmills. If you don't issue pre-paid cards directly or those from a third party - the new paid rules will have no impact on your organization.

It was a firm offering a webinar. Thanks for confirming that it would not apply, which is what I thought.

You may not have physical pre-paid cards, but do you offer a digital wallet that can store funds? Those are covered by the rule.

Yes, we offer digital wallets. It is not clear to me what our obligations would be under the new prepaid card rule, though. The model forms don't seem to apply.

My bank offers HSA accounts. Withdrawals from these accounts can be via electronic transfer, check or by using a "prepaid card". The card can be used as a debit/credit card, at an ATM, is nontransferable and may be canceled, repossessed or revoked at anytime. If the account from which the funds are coming from is considered a deposit account, does the new prepaid card rule apply?

No. From Reg E new section 1005.3(b)(3)(ii)(A) --
(ii) For purposes of paragraph (b)(3)(i)(C) and (D) of this section, the term “prepaid account” does not include:

(A) An account that is loaded only with funds from a health savings account, flexible spending arrangement, medical savings account, health reimbursement arrangement, dependent care assistance program, or transit or parking reimbursement arrangement;

Woo Hoo!!!

Thanks John

Glad to hear you smile!

Hello.

My first post.

Would the definition of a payroll card account include a regular employee checking account where their
Pay is deposited each month electronically & that account is opened when their employment with the bank commences

Our compliance consulting service has said the prepaid rule would apply to these accounts. No prepaid cards associated with it only a normal debit card they can use whenever & whenever. Thanks

What is the bank's obligation for digital wallets?

Bump ^

Hey e6edd,

I did a few hours of research on this topic and my understanding is that such an account would not be a "payroll card account." The Regulatory language on this topic seems simple enough and if you read it literally, it would seem that such an account woulf be a "payroll card account." However, when you read the Final Rule and all of the background and history regarding payroll card accounts, it seems clear that this refers to a type of loadable card product that functions as an alternative to a traditional deposit account. I am open to being wrong on this, but the preponderance of evidence I am finding in the Final Rule discussion makes me uncomfortable in concluding that a checking account where the customer can make ATM withdrawals, write checks, deposit checks, and do all the other transactions that a checking account can do would be considered a "payroll card account" for purposes of Reg. E.

Can someone explain how the new rules affect digital wallets? I've been trying to research how (if) this will affect us.

Thanks!

Does your digital wallet permit a consumer to store funds "in" the wallet, or does it only serve as a conduit for transactions via card accounts accessible via the wallet (debit card, credit cards)?

It only allows for transactions via card accounts.