Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z)
The Bureau of Consumer Financial Protection (Bureau) issued this final rule to create comprehensive consumer protections for prepaid accounts under Regulation E, which implements the Electronic Fund Transfer Act (EFTA); Regulation Z, which implements the Truth in Lending Act; and the official interpretations to those regulations. The final rule modifies general Regulation E requirements to create tailored provisions governing disclosures, limited liability and error resolution, and periodic statements, and adds new requirements regarding the posting of account agreements. Additionally, the final rule regulates overdraft credit features that may be offered in conjunction with prepaid accounts. Subject to certain exceptions, such credit features will be covered under Regulation Z where the credit feature is offered by the prepaid account issuer, its affiliate, or its business partner and credit can be accessed in the course of a transaction conducted with a prepaid card.
On April 20, 2017, the Bureau issued a final rule to extend the Oct. 1, 2017 effective date of the prepaid accounts rule by six months, to April 1, 2018.
On Jan. 25, 2018, the Bureau issued a final rule modifying several aspects of the prepaid accounts rule and extending the overall effective date to April 1, 2019.
On Feb. 27, 2019, the Bureau issued technical specifications for submissions of prepaid account agreements pursuant to the prepaid accounts rule.
On April 13, 2020, the Bureau issued an interpretive rule governing treatment of pandemic relief payments under Regulation E and application of the compulsory use prohibition.
Advance notice of proposed rulemaking
On February 15, 2022, the Bureau issued a Compliance Bulletin on EFTA’s compulsory use prohibition. Section 913 of EFTA provides, among other things, that no person may require a consumer to establish an account for receipt of electronic fund transfers with a particular financial institution as a condition of receipt of a government benefit. The Bureau issued the Compliance Bulletin to reiterate that this prohibition in EFTA applies to government benefit accounts.