The need for consumer protections
Prepaid cards, also known as prepaid accounts, are the fastest-growing payment product in the United States. These cards allow consumers to conveniently direct-deposit their wages, withdraw money at ATMs, and pay bills online. Easily purchased at banks, retail stores, and online, prepaid cards can be affordable money management tools, particularly for the nearly 9.6 million American households without bank accounts. However, the cards lack basic protections to ensure that they are a safe and transparent financial product for all consumers.
Over the past three years, Pew has documented the financial risks borne by prepaid card customers and has proposed policy changes to improve this increasingly popular product. In November 2014, the Consumer Financial Protection Bureau proposed rules to make the cards safer and their policies more transparent for consumers.