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Prepaid companies have lowered their card fees over the past few years, but now regulators may give the still-fractured industry another push towards simpler prices.
May 30 -
Bankers and prepaid card executives defended the industry’s much-criticized fees on Wednesday, saying that prices and practices have improved as the industry has matured.
May 9 -
WASHINGTON — The Consumer Financial Protection Bureau issued a final rule Friday that will impose new disclosure requirements for remittance transfers.
January 20
SAN FRANCISCO — The prepaid card industry has a reputation problem — even within its own ranks.
High fees and bad marketing of prepaid cards have made them unattractive to many potential customers, a senior Western Union (WU) executive said on Wednesday evening. Western Union sells a general-purpose reloadable prepaid card issued by MetaBank (CASH).
"I'm a big critic of the industry," Stewart Stockdale, the remittance company's head of global consumer services, said in a speech Wednesday.
"You can't have a product where attrition is 30 or 40% … you just can't," he added.
In an interview after his speech, Stockdale called the
"I'm not suggesting that people don't have to have good returns. I'm in the business of making money too," he said.
But by charging "inordinate amounts of fees," some prepaid card providers have "set the industry back," Stockdale said, because potential customers stop using the cards once they find out how much they've been charged.
Western Union's
Stockdale was speaking at the
Many of those consumers rely heavily on non-bank financial companies, including Western Union, for services like check-cashing, remittances and short-term loans. New regulation of those products, especially from the Consumer Financial Protection Bureau, dominated many discussions at the conference.
The CFPB in January
"We're in the process of still sizing the impact. Obviously we're working towards making sure that we're compliant by early next year," he said in the interview. "We already do a ton of regulation and a ton of disclosure, so what we're doing is taking all of our retail establishments in the United States and making sure that we comply with the intent and the spirit of the law."