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Holy Redeemer students visit St. Jude’s

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Happy birthday Jude and Graham Norris!

<p>For users of prepaid cards, there&#8217;s good news on the horizon.</p><p>Starting in October 2017, new rules covering these increasingly popular forms of payment will ensure that you&#8217;re supplied with upfront, easy-to-read information on potential fees for using the cards, and minimize your financial setback if a card is promptly reported lost or stolen.</p><p>Until then, however, the best advice is &#8211; to borrow a phrase &#8211; know what&#8217;s in your wallet.</p><p>Prepaid cards, unlike debit cards, are not connected to a bank account. Known in the financial industry as &#8220;general purpose reloadable cards,&#8221; they&#8217;ve become a must-have for some millennials, who&#8217;ve helped to propel their fast growth (from $1 billion placed on prepaids in 2003 to, only nine years later, about $65 billion.)</p><p>The cards might carry the name of a well-known company such as Visa or Discover, but they had not been subject to the same regulations as credit cards or even checking accounts. That soon will change, as the Consumer Financial Protection Bureau announced this month it would be applying federal safeguards under the Electronic Fund Transfer Act.</p><p>Among other things, the tougher regulation means users of the products commonly sold at groceries and drugstores will be given &#8220;free and easy access to account information,&#8221; according to <a href="http://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-strong-federal-protections-prepaid-account-consumers/" target="_blank">the bureau&#8217;s announcement</a>.</p><p>Consumer advocates long had warned that certain prepaid cards could nickel-and-dime the purchaser with a seemingly endless string of fees: activation fees, monthly fees, balance inquiry fees, and fees for withdrawing cash at an ATM. Low-income individuals, many of whom gravitate to the cards because those spenders don&#8217;t have access to traditional banks, sometimes came out on the losing end.</p><p>A typical prepaid card user is between ages 30 and 49, earns less than $50,000 a year, and is more likely to be black and female, according to a survey conducted for The Pew Charitable Trusts. Its 2015 report, &#8220;<a href="http://www.pewtrusts.org/~/media/assets/2015/06/bankingonprepaidreport.pdf" target="_blank">Banking on Prepaid</a>,&#8221; indicated that many users of the products say they choose to make transactions with them to avoid overdraft fees and stay out of debt.</p><p>Many customers probably loaded money onto the cards without questioning how much liability they assumed for unauthorized charges. The new rule clarifies that issue. &#8220;As long as the consumer promptly notifies their financial institution,&#8221; according to the CFPB, &#8220;the consumer&#8217;s responsibility for unauthorized charges will be limited to $50.&#8221;</p><p>Aside from the traditional prepaid cards, the bureau stated its expanded protections in 2017 will apply to &#8220;payroll cards; student financial aid disbursement cards; tax refund cards; and certain federal, state, and local government benefit cards such as those used to distribute unemployment insurance and child support.&#8221;</p><p>Basic <a href="http://www.consumerfinance.gov/askcfpb/search/?selected_facets=category_exact:prepaid-cards" target="_blank">questions about prepaid cards</a> are answered at the bureau&#8217;s website, accessible at <a href="http://www.consumerfinance.gov/" target="_blank">consumerfinance.gov</a>.</p><p>Regardless of which card you reach for, always read the fine print.</p><style>
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<div class="metaInfo"><bylineMeta><p>Consumer Watchdog</p><p>Mark Jones</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Mark Jones is the Times Leader&#8217;s opinion page editor. Reach him at 570-991-6122 or mjones@www.timesleader.com.</p></shirttailMeta></div>

Consumer Watchdog: Prepaid cards get improved protection