Potential Major Change for U.S. Prepaid Products: Paypal vs CFPB Court Vacates Two Significant Restrictions in CFPB’s Prepaid Account Rule
By Judith Rinearson, Andrew C. Glass, Gregory N. Blase, and Hollee M. Boudreau
On 30 December 2020, the United States District Court for the District of Columbia entered an order invalidating two provisions of the “Prepaid Account Rule” (the Rule) promulgated by the Consumer Financial Protection Bureau (CFPB). Specifically, the order invalidated the Rule’s mandatory short form disclosure requirement and the requirement for a thirty-day delay before linking prepaid products to credit, on the basis that the CFPB had exceeded its statutory authority.1
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