Changes coming to prepaid card market

Associated Press

Federal regulators recently announced new rules governing the prepaid debit-card industry. It’s a big change more than two years in the making that’s expected to bring some basic account protections to its customers.

WHAT ARE PREPAID CARDS?

Prepaid accounts are among the fastest growing consumer financial products in the United States, according to the Consumer Financial Protection Bureau, which led the change.

Sold widely in grocery stores, convenience stores and online, consumers load money onto these cards and use them as they do a debit card, making everyday purchases or to get cash.

WHAT’S NEW

Under the new rules, prepaid debit-card issuers will have to provide their users with basic account information such as balances and transaction history free of charge. Protections for lost or stolen cards also will be extended to prepaid debit cards. Fees for the cards will have to be more clearly disclosed on the packaging.

The new rules apply to traditional prepaid cards as well as other electronic accounts that can store funds.

The rules cover payroll cards, student financial aid disbursement cards and tax refund cards, as well as cards used to distribute Social Security benefits and unemployment insurance.