U.S. Senator David Perdue (R-Ga.) introduced a Congressional Review Act (CRA) resolution that would repeal new rules on prepaid cards finalized by the Consumer Financial Protection Bureau (CFPB) last October. The rules were designed to protect low-income families, many of whom have no bank account and use prepaid cards to handle their financial transactions.
CRA is a legislative tool that allows lawmakers to undo federal regulation with a simple majority vote in both the House and Senate. If invoked, CRA prohibits a federal agency—like the CFPB—from rolling out regulations similar to those it reversed.
Center for Responsible Lending (CRL) Policy Counsel Yana Miles released the following statement:
Rescinding this important protection for prepaid cards will leave unbanked consumers with limited options for storing their money safely. The rule for prepaid cards went through extensive development and marked significant progress in consumer protection that brought this product closer to credit card protection standards. Often, people, including those with fixed or limited incomes, purchase prepaid cards because they don't want to risk getting harmed by overdraft charges.
It's unfortunate that members of Congress are letting Wall Street and the big banks persuade them to use the CRA to undo essential consumer protections. Such actions would do a serious disservice to the families and communities they serve.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at firstname.lastname@example.org.