CFPB Issues Update to Prepaid Rule Small Entity Compliance Guide
Last week, the CFPB released its most recent update to the Prepaid Rule Small Entity Compliance Guide. The new version includes expanded information regarding the process for complying with the Prepaid Rule’s requirement to submit prepaid account agreements and certain other information to the CFPB.
Under the Prepaid Rule, prepaid issuers must make submissions to the CFPB on a rolling basis, including new prepaid accounts agreements and updates to reflect changes to existing agreements submitted in the past. Issuers must also submit notifications when withdrawing an existing prepaid account agreement. All submissions must occur within thirty days of the triggering event (e.g., the effective date of an amendment).
Because the Prepaid Rule requires submission to occur in the form and manner specified by the CFPB rather than according to requirements built into the Rule itself, prepaid issuers waited until recently for information regarding the submission process. The CFPB’s submission implementation materials released in recent weeks define those requirements, particularly around use of the submission portal and technical specifications for document formatting.
Building the implementation materials and requirements into the Small Entity Compliance Guide will help prepaid issuers satisfy the account agreement submission requirements, particularly in light of the range of complex and nuanced new compliance challenges that issuers are simultaneously addressing now that the Prepaid Rule has come into force.