Sen. Robert Menendez (D-N.J.) introduced legislation last week aimed at curbing hidden fees and strengthening consumer financial protections for prepaid cards.
The Prepaid Card Consumer Protection Act would require issuers to issue a wallet-sized summary of all fees associated with the card, and the bill would limit the types of fees that can be charged, banning overdraft fees, customer service fees, inactivity fees and balance inquiry fees.
Additionally, the legislation would ensure that consumers are refunded in the event that the card is lost or stolen or if the company goes bankrupt. The CFPB will also be required to complete a study on prepaid cards no later than one year after the effective date of the bill, if it is passed.
“I am reintroducing this legislation to give prepaid card users guaranteed federal consumer protections similar to those debit card users enjoy—for example, protections if a card is lost or stolen—and prevent card companies from hiding behind the fine print to raise their bottom lines at the expense of responsible consumers,” Menendez said.