Senator Robert Menendez (D-NJ) has introduced legislation to amend the Electronic Fund Transfer Act (EFTA) to require greater protections for certain prepaid card users. The legislation builds on the “Durbin Amendment” to bring an additional class of retail-payment instruments under statutory fee protection. S. 2030, the Prepaid Card Consumer Protection Act of 2011, would accomplish this by bringing a greater number of prepaid-card issuers within the CFPB’s jurisdiction by amending the EFTA’s definition of account to include “spending accounts,” a newly defined account specific to prepaid cards. It would also impose new fee-disclosure requirements and, importantly, limit the types of fees that could be charged to prepaid-card users. In addition, the bill would require issuers to obtain FDIC coverage for each spending account, a provision going beyond fee regulation to redefine the regulatory framework for these retail payment instruments.
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