Since the CFPB issued its final rule for general purpose prepaid accounts on October 5, 2016, it has faced challenges from Congress and criticism from industry participants.  In recognition of the numerous compliance difficulties posed by the rule, the CFPB has indicated that it is amenable to making substantive changes to the rule, and on March 9, the CFPB proposed to delay the rule’s implementation date in response to feedback from the prepaid industry.

On April 3, the American Bankers Association (ABA) joined the chorus, urging the CFPB in a comment letter to adopt a more objective definition of “prepaid account” to further clarify the distinction between checking accounts and prepaid accounts.  The ABA noted that a bank could face significant compliance risk and civil liability if a bank’s checking account were perceived to fall under the definition of a prepaid account and be subject to the rule’s requirements.  The ABA also asked the CFPB to clarify whether “model safe accounts” and other checkless checking accounts are covered under the rule, cautioning the CFPB that this ambiguity could discourage the use of these innovative products and cause consumers to “lose choices.”  The ABA proposed an alternative definition of prepaid accounts, and urged the CFPB to encourage card issuers to start complying with the rule prior to the effective date.

In the meantime, members of Congress continue to pursue nullification of the final rule under the Congressional Review Act (CRA).  The CRA establishes a special set of procedures through which Congress can nullify final regulations issued by a federal agency.  In February, joint resolutions were introduced in both the Senate and the House to disapprove of the final rule under the CRA – Representatives Tom Graves (R-Ga) and Roger Williams (R-Tx) introduced House Joint Resolution 62 and House Joint Resolution 73, respectively, and Senator David Perdue (R-Ga) introduced Senate Joint Resolution 19.  The Senate Joint Resolution was then referred to the Senate Committee on Banking, Housing and Urban Affairs for consideration.  On March 30, Senators led by Senate Banking Chairman Mike Crapo issued a petition to discharge the resolution from further consideration, thereby bringing it out of Committee and to the floor for consideration without a report from the Committee, and one step closer to enactment.