Prepaid Accounts

Pre-acquisition Disclosures

There are two distinct pre-acquisition disclosures for prepaid accounts – a short form disclosure and a long form disclosure. There is also certain information that must be provided in close proximity to the short form disclosure. Generally, these disclosures must be provided before a consumer acquires a prepaid account.

Short Form Disclosure and Information in Close Proximity

The short form disclosure includes key fees and other information about the prepaid account, and must be in a specific, tabular format. The Prepaid Rule includes several model forms for the short form disclosure.

The short form disclosure includes information on a periodic fee, per purchase fee, ATM withdrawal fees, cash reload fee, ATM balance inquiry fees, customer service fees, and inactivity fee. The short form must list all these fees (known as static fees) on the short form disclosure, even if the amount of the fee is zero or the fee relates to a feature that is not offered as part of the specific prepaid account program. The short form also includes the number of fee types in addition to the static fees (excluding any purchase price, any activation fee, and any finance charges related to credit) that the consumer may be charged under the specific prepaid account program. And it must disclose the two additional fee types that generated the highest revenue from consumers during the previous 24 months. Other information that must be provided in the short form includes a statement regarding linked overdraft credit features, registration and FDIC/NCUA insurance, the URL for the Bureau’s website where the consumer can obtain general information about prepaid accounts (i.e., cfpb.gov/prepaid), and information on where the consumer can find the long form disclosure. There are also special disclosures related to payroll cards and government benefit accounts. In close proximity to the short form disclosure, a financial institution must disclose its name, the name of the prepaid account program, any purchase price for the prepaid account, and any fee for activating the prepaid account.

Long Form Disclosure

The long form disclosure includes comprehensive fee information and other key information about the prepaid account� The rule includes a sample form for the long form disclosure� The long form disclosure must include: a title, information about all fees that may be imposed in connection with the account (not just fees for electronic fund transfers) and the conditions under which they may be imposed; a statement regarding registration and FDIC/NCUA insurance; a statement regarding linked overdraft credit features; a statement containing the financial institution’s contact information; a statement directing the consumer to cfpbgov/prepaid for general information about prepaid accounts; and a statement directing the consumer to cfpbgov/complaint and the Bureau’s telephone number (1-855-411-2372) to submit a complaint related to a prepaid account For prepaid accounts offering an overdraft credit feature, the long form disclosure must also include specific Regulation Z disclosures

Initial Disclosures

The initial disclosure requirements (12 CFR 10057) also apply to prepaid accounts In addition to the other disclosure requirements, the initial disclosure must contain all of the information contained the long form disclosure