The Consumer Financial Protection Bureau said Thursday that it will delay implementation of its prepaid rule and will consider new changes to the regulation before it goes into effect.
Moments after the CFPB had said it would reopen its mortgage disclosure rule earlier in the day, it released a statement announcing that the effective date for the prepaid rule — set for April 1, 2018 — would similarly be scrapped. The agency said it would announce changes after Jan. 1 to amend the prepaid rule.
The announcement was a further sign that acting CFPB Director Mick Mulvaney will seek to overhaul rules that had been issued under former CFPB Director Richard Cordray. The prepaid rule had been finalized in 2016, but implementation had already been delayed under Cordray.
“The bureau expects to issue a final rule amending certain aspects of its 2016 rule governing prepaid accounts soon after the new year," the CFPB said. "As part of that process, the bureau expects, based on its review of the comments received, to further extend the effective date of the 2016 rule to allow additional time for implementation of the final rule."
Republicans have tried to kill the prepaid rule but have been unable to muster enough support. The prepaid rule requires that companies disclose fees on prepaid cards and cooperate with consumers who discover unauthorized charges or errors. Financial institutions have raised concerns about the rule and whether they would be on the hook for fraud losses on unregistered cards.
Under Mulvaney, the CFPB has several tools it can use to stop a regulation from being implemented, including reopening a rulemaking or delaying its effective date.
But the prepaid rule was already subject to interruptions under Cordray. In June, the CFPB proposed making changes to the prepaid rule to resolve errors for unregistered accounts and for traditional credit card accounts linked to prepaid cards. The comment period on that proposal ended in August and is closed for public input.
In March, Cordray delayed the effective date of the prepaid rule to April 2018.