Subpart A Prepaid Accts – Under Regulation E, what is a prepaid account?

Compliance > Regulation E - EFTA
Q:  Under Regulation E, what is a prepaid account?
 
A:     Effective October 1, 2017, Regulation E will include a definition of “prepaid account.” 
 
A “prepaid account” is a product that is one or more of the following: 
 
1. A payroll card account.
 
2. A government benefit account.
 
3. An account that:
 
a. Is marketed or labeled as “prepaid;”
b. Is redeemable upon presentation at multiple, unaffiliated merchants for goods or services or usable at automated teller machines (ATMs); and
c. Does not satisfy a specific exclusion set forth in the Prepaid Rule. 
 
4. An account that: 
 
a. Is issued on a prepaid basis in a specified amount or is capable of being loaded with funds after issuance;
b. Has a primary function of conducting transactions with multiple, unaffiliated merchants for goods or services, conducting transactions at ATMs, or conducting person-to-person (P2P) transfers;  
c. Is not a checking account, a share draft account, or a negotiable order of withdrawal (NOW) account; and
d. Does not satisfy a specific exclusion set forth in the Prepaid Rule.
 
 
ADDITIONAL INFORMATION:
This information was obtained from the CFPB’s Prepaid Rule, Small Entity Compliance Guide , which may be accessed here:  http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/prepaid-rule/
 

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