At the risk of looking really stupid, which I am, am I reading these rules correctly? If you do not deliver your preapplication disclosures electronically, you have to hand them to the consumer in paper form right? So if a consumer is at a teller window and wants a prepaid card, the teller will hand them three pieces of paper: The short form, the program information form and the long disclosure and THEN the consumer can get the card. Am I missing something? For payroll cards, its the same thing but the EMPLOYER is responsible for handing over the three pieces of paper.

Do I have this correct?

Can anyone confirm I am understanding this correctly? It just seems silly in reality so before I go and explain this to staff I want to be sure I have this 100% correct.

Yes, generally the disclosures are to be given in writing in a form the customer can keep. (There are a few exceptions for oral and electronic delivery.)

If you are the financial institution issuing the card and you own the account, the short form and long form disclosures have to be given prior to customer paying for and receiving the card. Other information required outside of the short form but in close proximity can be on the same paper as the short form. (I'm assuming that's what you mean by the program information.)

My bank sells cards, but we do not issue them or own the account. We are considered selling in a retail location. In our case we must provide the short form and the additional information in close proximity prior to acquisition, but the long form can be delivered after acquisition. The customer will receive it as part of the Terms and Conditions, which are handed over with the card.

The short form is on the packaging material, so we provide that and then grab it back and insert the card once the transaction is complete.

Thank you!! We are the issuer and sell prepaid cards at the teller window and payroll cards are sold to employers. So I will be training tellers to deliver the preapplication disclosures before collecting the fee and providing the card to the consumer. For commercial, they will be told to instruct the employer to (1) give the employee an option for payment of their pay; (2) provide the preapplication disclosures and then (3) allow to apply for and eventually receive the payroll card. Does that all sound right?

I did not think we could put the other information on the short form, but if we can that would be AWESOME!

Thank you deposit stuff is not my area, so I am just muddling along and I appreciate all of BOL's help- especially yours today!

Look at 1041.18(b)(5) to make sure we're talking about the same information. Then look at the commentary 1041.18(b)(5)-2 Location of Disclosure. The commentary has some examples.

Yes, we are talking about the same thing, but just in case someone else reads this thread, we are talking about 1005.18(b)(5) and -2.

Thank you so much!!!

Also - I was using the wrong word - it's pre-acquisition not pre-application.

Oh good grief. I'm bouncing back and forth between the Prepaid Rule and the Payday rule.

No worries! I knew what you were talking about but I personally am searching old threads for information all the time and could just imagine getting super confused if I looked up 1041 when I was thinking about Payroll cards!

Tesla, is there any difference in the requirements for the short form disclosure for payroll cards and other types of prepaid cards?

The short form for a payroll card must have a statement advising the customer that there are alternative methods for receiving there pay than the card.

(xiv) Additional content for payroll card accounts—(A) Statement regarding wage or salary payment options. For payroll card accounts, a statement that the consumer does not have to accept the payroll card account and directing the consumer to ask about other ways to receive wages or salary from the employer instead of receiving them via the payroll card account using the following clause or a substantially similar clause: “You do not have to accept this payroll card. Ask your employer about other ways to receive your wages.” Alternatively, a financial institution may provide a statement that the consumer has several options to receive wages or salary, followed by a list of the options available to the consumer, and directing the consumer to tell the employer which option the consumer chooses using the following clause or a substantially similar clause: “You have several options to receive your wages: [list of options available to the consumer]; or this payroll card. Tell your employer which option you choose.” This statement must be located above the information required by paragraphs (b)(2)(i) through (iv).

Thanks Brian! Sorry Bville, I was out of town over the weekend.

Thanks. If a customer purchases a prepaid card at our location (card is actually issued and the account is held by a different bank) and chooses to have her employer ACH wages to the card, that does not make it a payroll card, correct? There is a form that prints out with the terms and conditions for this particular purpose. The customer can choose to have all or a portion of her wages put on the card.

That might be a prepaid card under the definition since they use the word "indirectly":

(i) “Prepaid account” means:

(A) A “payroll card account,” which is an account that is directly or indirectly established through an employer and to which electronic fund transfers of the consumer’s wages, salary, or other employee compensation (such as commissions) are made on a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution, or any other person; or

Your vendor is printing out a form automatically?