Subpart A Prepaid Accts – Under Regulation E, what are the pre-acquisition disclosures?

Compliance > Regulation E - EFTA
Q:  Under Regulation E, what are the pre-acquisition disclosures?
 
A:     Generally, the Prepaid Rule requires a financial institution to provide a consumer with the following before the consumer acquires the prepaid account: 
 
  • A short form disclosure;
  • Certain information disclosed outside but in close proximity to the short form disclosure; and
  • A long form disclosure.
     
     
The short form disclosure must set forth certain key fees and other information about the prepaid account, and must be in a specific format.  The CFPB has provided a variety of model forms, here is one: 
 
 
Outside but in close proximity to the short form disclosure, a financial institution must disclose its name, the name of the prepaid account program, any purchase price for the prepaid account, and any fee for activating the prepaid account. 
 
The long form disclosure must set forth all fees that may be imposed in connection with the prepaid account, and the conditions under which they may be imposed, as well as certain other information about the prepaid account.  The long form disclosure also has certain formatting requirements.  12 CFR 1005.18(b).  The CFPB has provided a variety of model forms, here is one: 
 
 
 
 
ADDITIONAL INFORMATION:
This information was obtained from the CFPB’s Prepaid Rule, Small Entity Compliance Guide and related materials for model and sample disclosures, which may be accessed here:  http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/prepaid-rule/
 

Add Feedback