February 17, 2020

February 17, 2020

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CFPB’s Prepaid Cards Rule Escapes Coverage Under the Congressional Review Act

Under the Congressional Review Act (CRA), Congress can review and overrule any federal regulations imposed during the final six months of the previous administration with a simple majority vote in each branch of Congress. However, Congress’ power is limited under the CRA because it can only introduce and vote on a CRA resolution within 60 legislative days after the regulation was finalized. Once a rule is repealed, the CRA also prohibits the reissuing of the rule in the same form or the issuing of a new rule which is substantially the same as the repealed rule, unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.

In February, joint resolutions were introduced in both the Senate and the House to repeal the final Consumer Financial Protection Bureau (CFPB) Prepaid Cards Rule under the CRA. The joint resolutions would nullify the rule finalized by the CFPB on November 22, 2016, relating to prepaid accounts under the Electronic Fund Transfer Act and the Truth in Lending Act. The rule establishes various consumer protections with respect to prepaid accounts. Neither the Senate nor the House voted on these resolutions, and the CRA voting deadline for this year passed on May 11.

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About this Author

Christina J. Grigorian, Banking legal Specialist, Katten Muchin Law firm
Special Counsel

Christina J. Grigorian counsels clients in all matters related to banks, bank holding companies, and state and foreign-licensed consumer and commercial lenders. Ms. Grigorian provides advice to the firm’s financial institution clients concerning structural and operational issues, including legislative developments impacting such operations, and has worked with companies and individuals in the establishment of de novo entities, including national banks, federal savings banks and state-chartered institutions, as well as state-licensed lenders. She has also counseled clients with respect to...

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Lauren Haahr, Katten Law Firm, Financial Services Attorney
Associate

Lauren Haahr is an associate in the Financial Services practice. She is admitted only in Maryland, and is supervised by principals of the Firm who are admitted to the District of Columbia Bar.

202-625-3511