Prepaid Debit Cards Scrutinized by Regulators

May 19, 2012
Raleigh News & Observer (NC) 
credit card news

As free checking accounts become more scarce, prepaid debit cards are taking the spotlight. The reloadable cards have been one of the fastest-growing bank products for years as lower-income customers look to avoid overdraft charges and fees. According to a new survey by the National Foundation for Consumer Credit Counseling, there are currently more than 30 million Americans using such cards. Adam Rust of Reinvestment Partners said approximately $300 billion was put on the prepaid cards last year, up from $30 billion in 2006. However, many say the cards carry high fees of their own. Now, the Consumer Financial Protection Bureau (CFPB) is getting involved. The agency recently announced that it will hold a hearing about the cards in Durham, N.C. It is seeking consumer feedback. Those in attendance will include CFPB director Richard Cordray and Martin Eakes with the Center for Responsible Lending.
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