23 Million Prepaid Cardholders Could Be Protected
WASHINGTON, D.C. – It appears that the Consumer Financial Protection Bureau’s (CFPB) protections for prepaid cardholders will stand–if the office of Sen. David Perdue (R-GA) is to be believed. This evening, a spokesman for the Georgia Republican told Politico Pro that the senator’s “Congressional Review Act resolution that would have nullified the rule is not expected to get a vote this week.” The deadline for repealing the prepaid rule using such a resolution is Thursday.
If the Consumer Bureau’s prepaid rule is allowed to stand, it will ultimately protect an estimated 23 million Americans (about one in ten U.S. households) who use such cards for everything from hourly wages to Social Security benefits. The rule safeguards consumers from hidden fees and other predatory penalties by providing them with some of the same basic protections enjoyed by traditional debit and credit cardholders.
“While we will continue to monitor the Senate for any movement on the issue, it is encouraging that Sen. Perdue’s office is conceding defeat. The 23 million hard-working Americans who receive everything from hourly wages to Social Security payments on prepaid cards deserve to have these common-sense protections,” said Karl Frisch, executive director of Allied Progress.
He continued, “The Consumer Bureau was right to protect these working families from hidden fees and predatory penalties. Sen. Perdue and his allies were hoping to get away with their gambit using procedural gymnastics to push it through as quietly as possible. Thankfully, the American people spoke out and demanded an end to this type of swamp politics and it looks like they are on the cusp of winning.”
Last month, the Atlanta Journal Constitution reported that Sen. Perdue’s bill would benefit NetSpend, a major Perdue donor, to the tune of $80 million.
That same company has given Perdue more than $33,000 in campaign contributions since 2014 and has a troubling record of predatory practices. Just one day after Perdue filed his discharge petition to benefit NetSpend, the company agreed to refund consumers $53 million to settle Federal Trade Commission (FTC) charges that it had “deceived consumers . . . about access to funds deposited on defendants’ debit cards.”
Responding to Sen. Perdue’s legislative maneuvering, Allied Progress launched television ads in D.C., Alaska, Maine, and Nevada calling on senators to oppose the Georgia Republican’s push to gut prepaid card protections. The organization also ran digital ads targeting Perdue in Georgia, and filed suit in the U.S. District Court for the District of Columbia to obtain correspondence that could further expose efforts by NetSpend, Perdue, and their Senate allies to repeal prepaid card protections.
The Consumer Bureau’s prepaid rule is supported by industry trade groups including The Center for Financial Services Innovation and Green Dot, the largest provider of prepaid debit cards in the United States.
To speak with Karl Frisch about the prepaid rule, please contact Mike Czin at 202-286-7654 or firstname.lastname@example.org.
# # #
Allied Progress is a nationwide, progressive advocacy organization that uses hard-hitting research and creative campaigns to hold Wall Street and powerful special interests accountable. Since launching in 2015, the organization has led high-profile campaigns on several issues including reforming the payday lending industry and exposing the those working to cripple the Consumer Financial Protection Bureau (CFPB).