Thursday, December 30, 2010
In a letter sent to Elizabeth Warren, head of the newly created Consumer Financial Protection Bureau, Sen. Dick Durbin, D-Ill., author of the Durbin Amendment to the Dodd-Frank Wall Street Reform Act, said the CFPB should regulate the prepaid card industry, especially as it concerns reloadable prepaid cards.
"These products are often loaded with deceptive and abusive fees, and are frequently marketed to appeal to younger Americans who may not be wise to their dangers," Durbin wrote. "I urge the Bureau to closely monitor the marketing, fees and terms of these products and to alert businesses and consumers about deceptive and abusive products."
Durbin believes that reloadable prepaid cards show "great potential" for helping the unbanked, but that they need to be "properly regulated." Durbin wants to "strike the right regulatory balance so we can protect innovation and competition in this industry, while protecting consumers from less scrupulous actors."
Durbin and Sen. Robert Menendez, D-N.J., recently introduced The Prepaid Card Consumer Protection Act.
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