CFPB Quietly Launches Web Database of Prepaid and Payroll Card Fees and Disclosures but Some Cards with Overdraft Fees are Missing

FOR IMMEDIATE RELEASE: October 16, 2019

National Consumer Law Center contacts: Lauren Saunders (lsaunders@nclc.org) or Jan Kruse (jkruse@nclc.org)

Washington, D.C. – Advocates at the National Consumer Law Center urged the public to check out a new online tool from the Consumer Financial Protection Bureau (CFPB) where consumers, workers, researchers, employers, and others can see prepaid and payroll card fee schedules and agreements, creating greater transparency into prepaid and payroll card. But some payday lender prepaid cards have apparently not been submitted to the database. Advocates also questioned why the CFPB did not publicize the new website or make it more user-friendly.

“The prepaid agreements database will provide a one-stop place for the fees and other account terms for prepaid agreements,” said National Consumer Law Center Associate Director Lauren Saunders. “Together with the new fee disclosure rules that went into effect earlier this year, this online tool will shine sunlight onto the sometimes opaque world of prepaid card fees and encourage competition that may help lower prices for consumers and workers.”

“Greater transparency is especially welcome for payroll cards used by employers to pay workers, as those fee schedules are not otherwise public and are difficult to compare from company to company,” Saunders continued. “Workers and employers can compare other options and put pressure on payroll card companies that charge high fees.”

“Unfortunately, some payday lender prepaid cards with overdraft fees are not in the database, apparently claiming that their accounts are ‘bank accounts’ so that they can avoid the rules that limit overdraft fees on prepaid accounts. The payday lender ACE Cash Express offers the ‘ACE Flare Account by MetaBank’ through the prepaid card company NetSpend, but the card may incur up to $100 in overdraft fees a month, which is not allowed under the CFPB’s prepaid card rule,” Saunders explained. “The CFPB should crack down on these fake payday lender bank accounts and insist that they comply with the prepaid card rules,” she added.

The Prepaid product agreements database is searchable by card issuer, product name, program manager, or other relevant party, as well as by term. Prepaid products can be narrowed by these types:

  • Digital wallet/P2P
  • Government Benefit
  • GPR (General Purpose Reloadable)
  • Payroll
  • Prison release
  • Refunds
  • Student
  • Tax
  • Travels

Yet for some reason, the CFPB did not issue a press release or do anything to make the public aware of the new website. The database also requires consumers to scroll through the entire set of terms and conditions for each prepaid card rather than allowing them to simply click on the short form or long form fee disclosures.

For more information on NCLC’s extensive body of work on prepaid debit and payroll cards, visit: https://www.nclc.org/issues/prepaid-debit-cards.html

Related NCLC Resources




New California Law Targets Long-Term Payday Loans; Will Payday Lenders Evade it?

FOR IMMEDIATE RELEASE: October 11, 2019
National Consumer Law Center contacts: Lauren Saunders (lsaunders@nclc.org) or Jan Kruse (jkruse@nclc.org)

Washington, D.C. – Advocates at the National Consumer Law Center applauded news that California Governor Gavin Newsom late yesterday signed into law AB 539, a bill to stop outrageous interest rates that payday lenders in California are charging on their larger, long-term payday loans, but warned that the payday lenders are already plotting to evade the new law.

“California’s brand-new law targets payday lenders that are charging 135% and higher on long-term payday loans that put people into an even deeper and longer debt trap than short-term payday loans,” said Lauren Saunders, associate director of the National Consumer Law Center. “Payday lenders will exploit any crack you give them, and in California they are making loans of $2,501 and above because the state’s interest rate limits have applied only to loans of $2,500 or less. Clear, loophole-free interest rate caps are the simplest and most effective protection against predatory lending, and we applaud Assembly member Monique Limon for sponsoring and Governor Newsom for signing this law.”

Under the new law, which will go into effect January 1, 2020, interest rate limits will apply to loans of up to $10,000.

At the same time, Saunders warned that California needs to be vigilant about enforcing its law and should push back against the payday lenders’ plans to evade the law through new rent-a-bank schemes. Banks are generally not subject to interest rate limits, and in rent-a-bank schemes, the payday lender passes the loan briefly through a bank that has little to do with the loan. In recent earnings calls, several of the largest, publicly traded payday lenders in California told investors that they were planning to use banks to help them continue making high-cost loans. Some courts have blocked these schemes, and litigation is pending in other states challenging these arrangements.

“It’s outrageous that predatory lenders in California, including  Curo (Speedy Cash), Elevate (Rise and Elastic) and Enova (NetCredit) are blatantly announcing plans to use rent-a-bank schemes so they can continue their predatory ‘business-as-usual’  with loans of 135% or more that California has just outlawed with bipartisan support,” said Saunders. “The attorney general, the Department of Business Oversight, and private litigators need to let the payday lenders know that they will fight to stop this evasion and uphold the law that protects Californians from predatory lending.”

“I also call on the federal banking regulators—especially the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC)–not to let banks enable payday lenders’ predatory ways,” Saunders added. At least two FDIC-supervised banks are currently helping payday lenders avoid interest rate limits in other states, and in January, a coalition of 88 groups called on the FDIC to crack down on that practice. Currently, no national banks (which are supervised by the OCC) are engaged in rent-a-bank lending, but the payday lender Curo told investors that it was in talks with MetaBank, a national bank that has a history of working with payday lenders.

NCLC Related Materials

Report: Misaligned Incentives: Why High-Rate Installment Lenders Want Borrowers Who Will Default, July 2016

Fact Sheet: State Annual Percentage Rate (APR) Caps for $500, $2,000, and $10,000 Installment Loans, March 2019

Op-Ed: Rent-a-bank schemes trample voters’ and states’ rights by Lauren Saunders, Feb. 8, 2018




Issue Brief: Payday Lenders Plan to Evade California’s New Interest Rate Cap Law Through Rent-A-Bank Partnership, October 2019




Legal Experts Decry Credit Bureaus’ Lawsuit to Invalidate Maine Laws Protecting Consumers from Medical Debt and Economic Abuse

FOR IMMEDIATE RELEASE:  October 4, 2019

National Consumer Law Center contact: Jan Kruse (jkruse@nclc.org), (617) 542-8010

Boston – Last week, the Consumer Data Industry Association (CDIA) sued the State of Maine over two laws recently passed to protect consumers from unfair credit reporting practices. CDIA is a trade association for the credit reporting industry, the biggest players, which are Equifax, Experian and TransUnion.

The first Maine law helps consumers who are facing credit reporting damage from medical debts. It requires credit bureaus to wait 180 days before reporting a medical debt to a credit bureau and to suppress paid or settled medical debt.

“Medical debt is one of the worst financial issues affecting American consumers today, burdening families with unaffordable bills and constituting over half of the black marks for debt collection on credit reports,” stated National Consumer Law Center attorney Chi Chi Wu. “Millions of Americans have their family budgets, and their credit scores, ruined by out-of-control medical bills. Instead of helping consumers, the credit bureaus are suing to prohibit the State of Maine from providing a limited measure of relief to this terrible problem.”

Wu noted that the Maine law’s requirement that credit bureaus wait 180 days before reporting a medical debt is something that the companies already agreed to as part of a 2015 settlement with the Attorneys General of more than 30 states. Wu remarked, “It’s absolutely baffling that Equifax, Experian, and TransUnion are attempting to invalidate this law when they already agreed to one of its key terms. Why are they suing over a requirement they’re already supposed to follow? Is there a problem with following it?”

The second law that CDIA sued to invalidate gives domestic violence survivors the right to dispute debts that are the result of economic abuse.

“October is Domestic Violence Awareness month,” noted Angela Littwin, a University of Texas School of Law professor who has studied this issue. “So it’s ironic that the credit reporting industry is trying to gut a law enacted to help domestic violence survivors recover from financial abuse. By bringing this lawsuit, Equifax, Experian, and TransUnion are hurting survivors by insisting they continue to suffer from the effects of economic exploitation.”




Letter to the House in Support of the Working Families Tax Relief Act




Letter to Senate in support of the Working Families Tax Relief Act




Comments to HUD Regarding Changes to the Loan Modification Programs for Victims of Natural Disasters




National Consumer Law Center Advocate Statement Opposing Sen. Alexander’s Legislation to Reform Higher Education Act

FOR IMMEDIATE RELEASE: September 26, 2019
National Consumer Law Center contact: Jan Kruse (jkruse@nclc.org) or (617) 542-8010

Boston – Statement of Persis Yu, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, in response to today’s introduction of a scaled-back higher education bill by Senator Lamar Alexander:

“Students and borrowers need real, wholesale reform of the Higher Education Act to make it easier for borrowers to succeed in student loan repayment and ensure that falling behind does not threaten families’ financial security. We also need to hold institutions accountable for misconduct as well as to provide relief to harmed students and empower students and borrowers to vindicate their rights. Senator Alexander’s piece-meal approach ignores this urgent need for reform and attempts to hold hostage funding that is expiring for historically black colleges and universities and other minority serving institutions that should be addressed separately. We hope that Congress will reject this bill and work towards a real solution for struggling students and borrowers.”

For NCLC’s recommendations on reauthorization of the Higher Education Act, see:

Comments on Reauthorization of the Higher Education Act of 1965 to the Senate Committee on Health, Education, Labor and Pensions, February 23, 2018




U.S. House Financial Services Committee Hearing on September 26 on Abusive Debt Collection with Testimony by National Consumer Law Center Attorney April Kuehnhoff

FOR IMMEDIATE RELEASE: September 25, 2019

National Consumer Law Center contact: Jan Kruse, jkruse@nclc.org or (617) 542-8010

National Consumer Law Center attorney April Kuehnhoff’s full testimony will be available by 10 am ET on September 26 at: http://bit.ly/testimony-kuehnhoff

Washington, D.C.- National Consumer Law Center attorney April Kuehnhoff will testify on Wednesday, September 26 at 10 am E.T. before the U.S. House Financial Services Committee at a hearing entitled “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices.”

“Nearly one-third of Americans have a debt in collection and third-party debt collectors contact consumers more than one  billion times each year,” says National Consumer Law Center attorney April Kuehnhoff. “For the vast majority of these consumers, it not an unwillingness to pay their debts but other factors that lead people into the hands of debt collectors, including stagnating wages, job losses, divorce, health problems, predatory lending, and a weakening financial safety net. Americans of all stripes face debt collection, but those with lower incomes or who live in communities of color, limited English speakers, older Americans, and servicemembers face special challenges and often a disproportionate burden from debt collection. It’s essential that the Consumer Financial Protection Bureau’s final debt collection rule include stronger consumer protections because its current proposal protects abusive debt collectors much more than consumers. Congress also has a role to play to clarify or improve the 42-year old Fair Debt Collection Practices Act through legislation.”

In her testimony, Kuehnhoff will discuss that data from a CFPB survey suggests that millions of  Americans were sued in debt collection lawsuits during the one-year period covered by the survey. Many of these lawsuits are filed by debt collection firms that churn out suits, clogging the courts. Collectors often win through default judgments when the consumer does not appear in court, often because the person did not receive notice of the lawsuit. Even when consumers do appear, more than 90% are not represented by an attorney, increasing the odds that they will lose. Collecting on time-barred “zombie” debt is another unfair, deceptive, and abusive tactic because the debt is so old that the deadline for a lawsuit has passed and records of who owes the debt and for how much may be lost.

In addition to discussing how the CFPB can strengthen its proposed rule, Kuehnhoff will discuss several bills before Congress that would provide clarity and update remedies for unfair and deceptive debt collection practices for consumers and small business owners, including:

Small Business Lending Fairness Act (H.R. 3490) would prohibit a serious problem created by the failure of consumer protection laws to cover credit extended to small businesses. High cost lenders offer loans to struggling small businesses throughout the U.S, often with a treacherous provision hidden in the fine print of the loan documents. If the small business fails to pay the loan back on time, the lender can trigger a “confession of judgment,” allowing the lender to seize all of the business’s assets, including emptying out bank accounts.

Debt Collection Practices Harmonization Act (H.R. 3948) would expand the definition of debt covered under the FDCPA to include money “owed to a State,” clarifying that private  collectors who pursue debts such as municipal utility bills, tolls, traffic tickets, and court debts are covered by the FDCPA. It would also modernize FDCPA remedies by adjusting monetary penalties for inflation and clarifying that courts can award injunctive relief.

Stop Debt Collection Abuse Act of 2019 (H.R. 4403) would clarify FDCPA coverage for debt buyers after the Supreme Court’s decision in Henson v. Santander Consumer USA, Inc. and clarify coverage for certain debts owed to the federal government that are currently collected by private debt collectors.

The National Consumer Law Center has additional resources regarding debt collection and the debt collection rulemaking at the CFPB, including extensive comments on the CFPB proposed rule, fact sheets, and infographics regarding how military families and veterans, older consumers, people of color, and students are affected by debt collection.




In the Wake of HUD Major Policy Change on Non-Borrowing Spouses, National Consumer Law Center Attorney to Testify on September 25 before U.S. House on Risks to Elders from Reverse Mortgage Abuses

FOR IMMEDIATE RELEASE: September 24, 2019

National Consumer Law Center contact: Jan Kruse, jkruse@nclc.org or (617) 542-8010

National Consumer Law Center attorney Sarah Bolling Mancini’s full testimony will be available by 2 pm ET on September 25 at: http://bit.ly/testimony-mancini

Washington, D.C.- National Consumer Law Center attorney Sarah Bolling Mancini will testify on Wednesday, September 25 at 2pm E.T. before the U.S. House Financial Services Committee Housing, Community Development, and Insurance Subcommittee at a hearing entitled “Protecting Seniors: A Review of the FHA’s Home Equity Conversion Mortgage (HECM) Program.”

The hearing follows a major policy shift by HUD announced on Monday aimed at helping widows and widowers remain in their homes after the death of a spouse who had taken out a reverse mortgage on the home. These so-called non-borrowing spouses had been blocked from a foreclosure deferral program by unworkable deadlines. Mancini will testify about the importance of this announcement from HUD, which will benefit many vulnerable surviving spouses. Mancini will also highlight the challenges that remain.

The reverse mortgage foreclosure crisis we are facing was caused by problematic origination practices that largely predated 2015,” says National Consumer Law Center attorney Sarah Bolling Mancini. “Yet, nearly 90,000 HECM mortgage loans are at risk of foreclosure and if changes are not implemented, those older borrowers could soon be evicted and homeless.”

Mancini will testify that, although reverse mortgages play an important role as a safety net for older adults, many reverse mortgage borrowers, especially in communities of color, are losing their homes to foreclosure due to mortgage servicing and oversight failures, and reforms are needed. According to the U.S. Department of Housing and Urban Development (HUD) data, nearly 90,000 reverse mortgage loans are at risk of foreclosure due to a default on the obligation to pay property taxes and homeowner’s insurance. HUD auditors project that 18% of existing HECM reverse mortgages will eventually go into default on property charges. Even when comparing only lower income areas, reverse mortgage foreclosure rates are six times higher in predominantly African American neighborhoods than in majority white ones, according to a 2019 investigation by USA Today.

With 80% of those aged 65 or older owning their own homes, it is critical that HUD make reforms to allow older consumers to age in place with stable housing. NCLC makes the following recommendations, explained in more detail during Mancini’s testimony:

  • Make loss mitigation mandatory for new HECMs that go into default on property charges;
  • Expand loss mitigation options for existing HECMs and provide for a clear extension of foreclosure deadlines while servicers evaluate loss mitigation;
  • Expand the Mortgagee Optional Election (MOE) Assignment program to cover situations where the borrower moves out of the home for health reasons;
  • Clarify the procedures for post-2014 non-borrowing spouses entering a deferral period after the death of the borrower; and
  • Improve servicer communications with borrowers.

Related Resources