Victory! Rule Protecting Twenty-Three Million Prepaid Cardholders Survives Attempted Repeal
Sen. David Perdue, Who Took $33,000 from Major Predatory Prepaid Card Company, Unsuccessful Despite His Use of Obscure Legislative Procedures
WASHINGTON, D.C. – The Consumer Financial Protection Bureau’s (CFPB) prepaid rule has survived an attempted repeal by Sen. David Perdue (R-GA), who tried to pass a Congressional Review Act resolution gutting these important protections for millions of American prepaid cardholders. The deadline for repealing the rule using this obscure legislative procedure was today, although Perdue’s office confirmed on Tuesday that the measure was unlikely to be brought up for a vote because it lacked sufficient support.
“This is a huge win for the 23 million hard-working Americans–many without bank accounts–who rely on prepaid cards to receive everything from hourly wages to Social Security payments. These prepared card protections spell an end to the deceptive, often hidden, nickel-and-diming that too any families have experienced at the hands of some of the predatory providers of these cards,” said Karl Frisch, executive director of Allied Progress.
He continued, “The Consumer Bureau was right to protect prepaid cardholders from hidden fees and predatory penalties. Sen. Perdue was hoping to get away with his gambit using procedural gymnastics to push repeal through as quickly and quietly as possible–a move that would benefit one of his major donors. Thankfully, the American people spoke out and demanded an end to this type of swamp politics and they won.”
News reports have quoted Republican Senate staffers blaming the failure of Perdue’s effort on “collapsing Senate Republican support following advertisement campaigns by liberal advocacy groups.” 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.
Additional Background:
- Who Benefits? How? The Consumer Bureau’s prepaid rule 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.
- Perdue’s Big Donor and Its $53 Million Settlement for Defrauding Customers: 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.”
- Supported by Industry Trade Groups and Leading Card Sellers: 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.
- Other Efforts Fighting Perdue’s Legislation: In addition to launching television ads responding to Sen. Perdue’s legislative maneuvering, Allied Progress 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 group also delivered more than 1,000 parody prepaid cards from First Beltway Swamp Bank to Senate offices encouraging recipients to call 1-844-SWAMP-DC to check their balances.
To speak with Karl Frisch about the prepaid rule, please contact Tucker Middleton at 202-644-8526 or tucker@alliedprogress.org.
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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.