II 

113TH CONGRESS 

1ST SESSION S. 1867 

To provide protection for consumers who have prepaid cards, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 19, 2013 

Mr. MENENDEZ (for himself and Mr. BLUMENTHAL) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To provide protection for consumers who have prepaid cards, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prepaid Card Con5 sumer Protection Act of 2013’’. 

6 SEC. 2. DEFINITIONS. 

7 (a) DEFINITION OF ‘‘ACCOUNT’’.—Section 903 of the 

8 Electronic Fund Transfer Act (15 U.S.C. 1693a) is 

9 amended by striking paragraph (2) and inserting the fol10 lowing: 


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1 ‘‘(2) the term ‘account’— 

2 ‘‘(A) means— 

3 ‘‘(i) a demand deposit, savings de4 posit, or other asset account (other than 

5 an occasional or incidental credit balance 

6 in an open end credit plan, as defined in 

7 section 103(j)), as described in regulations 

8 of the Bureau, established primarily for 

9 personal, family, or household purposes, as 

10 defined by the Bureau, by rule; and 

11 ‘‘(ii) a spending account, as defined in 

12 section 924(a); and 

13 ‘‘(B) does not include an account held by 

14 a financial institution pursuant to a bona fide 

15 trust agreement;’’. 

16 (b) DEFINITION OF ‘‘FINANCIAL INSTITUTION’’.— 

17 Section 903(9) of the Electronic Fund Transfer Act (15 

18 U.S.C. 1693a(9)) is amended by striking ‘‘holds an ac19 count’’ and inserting ‘‘manages, provides, or holds an ac20 count containing funds’’. 

21 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

22 Section 903 of the Electronic Fund Transfer Act (15 

23 U.S.C. 1693a) is amended— 

24 (1) by redesignating paragraph (4) (relating to 

25 the Board of Governors of the Federal Reserve SysVerDate Mar 15 2010 22:53 Dec 26, 2013 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1867.IS S1867

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1 tem), as so designated by section 1084(2)(A) of the 

2 Dodd-Frank Wall Street Reform and Consumer Pro3 tection Act (Public Law 111–203; 124 Stat. 2081), 

4 as paragraph (3); and 

5 (2) in paragraph (3), as so redesignated, by 

6 striking ‘‘term ‘Bureau’ means the Bureau of Gov7 ernors’’ and inserting ‘‘term ‘Board’ means the 

8 Board of Governors’’. 

9 SEC. 3. SPENDING ACCOUNTS. 

10 (a) SPENDING ACCOUNTS.—The Electronic Fund 

11 Transfer Act (15 U.S.C. 1693 et seq.) is amended— 

12 (1) by redesignating section 923 (15 U.S.C. 

13 1693 note), relating to the effective date of the Elec14 tronic Fund Transfer Act, as so designated by sec15 tion 1073 of the Dodd-Frank Wall Street Reform 

16 and Consumer Protection Act (Public Law 111–203; 

17 124 Stat. 2060), as section 925; 

18 (2) by redesignating section 922 (15 U.S.C. 

19 1693r), relating to exemptions for State regulation, 

20 as so designated by section 1073 of the Dodd-Frank 

21 Wall Street Reform and Consumer Protection Act 

22 (Public Law 111–203; 124 Stat. 2060), as section 

23 923; and 

24 (3) by inserting after section 923, as so redesig25 nated, the following: 


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1 ‘‘§ 924. Spending accounts 

2 ‘‘(a) DEFINITIONS.—For purposes of this section— 

3 ‘‘(1) the term ‘insured credit union’ has the 

4 same meaning as in section 101 of the Federal 

5 Credit Union Act (12 U.S.C. 1752); 

6 ‘‘(2) the term ‘insured depository institution’ 

7 has the same meaning as in section 3 of the Federal 

8 Deposit Insurance Act (12 U.S.C. 1813); and 

9 ‘‘(3) the term ‘spending account’— 

10 ‘‘(A) means a deposit account— 

11 ‘‘(i) that is established by a consumer 

12 or on behalf of a consumer at an insured 

13 depository institution or an insured credit 

14 union; 

15 ‘‘(ii) that contains the funds of a con16 sumer; 

17 ‘‘(iii) to which payments are to be 

18 made by a consumer, or at the direction of 

19 a consumer; 

20 ‘‘(iv) to which recurring electronic 

21 fund transfers may be made, at the direc22 tion of a consumer; or 

23 ‘‘(v) from which payments may be 

24 made at the direction of a consumer 

25 through the use of a card, code, or device; 


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1 ‘‘(B) includes a deposit account described 

2 in subparagraph (A)— 

3 ‘‘(i) that is operated or managed by a 

4 financial institution, or any other person; 

5 and 

6 ‘‘(ii) the funds of which are— 

7 ‘‘(I) pooled with the funds of a 

8 person other than the person who es9 tablished the account; or 

10 ‘‘(II) held in a name other than 

11 that of the person who established the 

12 account; and 

13 ‘‘(C) does not include— 

14 ‘‘(i) an account described in section 

15 903(2)(A)(i); 

16 ‘‘(ii) an account held by a financial in17 stitution pursuant to a bona fide trust 

18 agreement; 

19 ‘‘(iii) a nonreloadable, general-use pre20 paid card, as defined in section 

21 915(a)(2)(A), in an amount that does not 

22 exceed $250; 

23 ‘‘(iv) a general-use prepaid card, as 

24 defined in section 915(a)(2)(A), that is 

25 solely associated with— 


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1 ‘‘(I) a health plan to which sec2 tion 105 of the Internal Revenue Code 

3 of 1986 applies; 

4 ‘‘(II) a qualified transportation 

5 fringe, as defined in section 132(f) of 

6 the Internal Revenue Code of 1986; 

7 ‘‘(III) a health savings account, 

8 as defined in section 223(d) of the In9 ternal Revenue Code of 1986; or 

10 ‘‘(IV) any other healthcare ben11 efit account, including a healthcare 

12 account relating to Medicare or Med13 icaid benefits; 

14 ‘‘(v) a gift certificate, as defined in 

15 section 915(a)(2)(B); 

16 ‘‘(vi) a store gift card, as defined in 

17 section 915(a)(2)(C); 

18 ‘‘(vii) an electronic promise, plastic 

19 card, or payment code or device described 

20 in clause (i), (v), or (vi) of section 

21 915(a)(2)(D); 

22 ‘‘(viii) a nonreloadable card labeled as 

23 a gift card and marketed solely as a gift 

24 card; or 


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1 ‘‘(ix) a nonreloadable loyalty, rebate, 

2 or promotional card. 

3 ‘‘(b) FDIC OR NCUA INSURANCE.— 

4 ‘‘(1) INSURANCE REQUIRED.—Spending ac5 counts shall be structured to provide and maintain 

6 separate deposit insurance coverage for the funds of 

7 each consumer under the applicable regulations of 

8 the Federal Deposit Insurance Corporation or the 

9 National Credit Union Administration. 

10 ‘‘(2) TRANSFER OF FUNDS.—Any person that 

11 receives funds in connection with an electronic fund 

12 transfer to a spending account shall promptly, and 

13 in no event later than 1 business day after the funds 

14 are activated— 

15 ‘‘(A) transfer such funds to an account at 

16 an insured depository institution or an insured 

17 credit union, as applicable; and 

18 ‘‘(B) credit the spending account in an 

19 amount equal to the amount of such funds. 

20 ‘‘(c) ALTERNATIVE TO PERIODIC STATEMENT.— 

21 ‘‘(1) PERIODIC STATEMENT NOT REQUIRED.— 

22 In the case of an electronic fund transfer from a 

23 spending account, a financial institution shall not be 

24 subject to the requirement under section 906(c) to 


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1 provide a periodic statement to a consumer, if the fi2 nancial institution provides to the consumer— 

3 ‘‘(A) access to the account balance of the 

4 consumer— 

5 ‘‘(i) through a readily available tele6 phone line; 

7 ‘‘(ii) through the Internet; 

8 ‘‘(iii) at an electronic terminal or 

9 other device that allows the consumer to 

10 make a balance inquiry, by providing bal11 ance information or, routinely or upon re12 quest, on a receipt provided at the elec13 tronic terminal at the time of an electronic 

14 fund transfer; and 

15 ‘‘(iv) through text messaging; 

16 ‘‘(B) notice of the means by which the con17 sumer may access the account balance of the 

18 consumer, including any telephone number; 

19 ‘‘(C) in response to an oral or written re20 quest of the consumer, a written record of the 

21 account transactions of the consumer during 

22 the 2-year period ending on the date of the re23 quest that includes the information required to 

24 be provided to the consumer under section 

25 906(c); 


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1 ‘‘(D) an electronic record, such as a record 

2 available on the Internet, of the account trans3 actions of the consumer during the 2-year pe4 riod ending on the date on which the consumer 

5 accesses the electronic record that includes the 

6 information required to be provided to the con7 sumer under section 906(c); 

8 ‘‘(E) with at least the same frequency as 

9 a written periodic statement that would other10 wise be required under section 906, notification 

11 by email of the availability of an electronic his12 tory or an electronic periodic statement, unless 

13 the consumer has declined to provide an email 

14 address; 

15 ‘‘(F) the option to receive a written state16 ment, either a one-time paper statement or con17 tinuous regular monthly paper statements with 

18 a single request, and clear and conspicuous no19 tice of such option at the time of enrollment 

20 and on the website of the financial institution; 

21 ‘‘(G) annual notice of the error resolution 

22 procedure for the spending account, as pre23 scribed in regulations of the Bureau; and 

24 ‘‘(H) any other transaction information 

25 that the financial institution elects to make 


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1 available and that the consumer elects to re2 ceive, such as messages or alerts concerning 

3 other balance or transaction information. 

4 ‘‘(2) FEES PROHIBITED.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), a financial institution may 

7 not charge a fee for any service provided under 

8 paragraph (1). 

9 ‘‘(B) FEE FOR WRITTEN STATEMENT.—A 

10 financial institution may charge a fee of not 

11 more than $1 for each written statement pro12 vided under paragraph (1)(F). 

13 ‘‘(3) NO ELECTION BY CONSUMER.—If the con14 sumer has not elected to receive written periodic or 

15 annual statements, has not elected to receive another 

16 regular form of transaction information that the Bu17 reau has determined, by rule, to be equivalent to 

18 periodic statements, and has not accessed the ac19 count online in the preceding 12-month period, the 

20 financial institution shall provide notice to the con21 sumer at least annually of the means by which the 

22 consumer may access transaction information and 

23 the option to enroll in written periodic or annual 

24 statements. 


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1 ‘‘(d) LIMITATIONS ON LIABILITY.—For purposes of 

2 section 909(a), reimbursement need not be made to a con3 sumer for a loss relating to a spending account that a fi4 nancial institution establishes would not have occurred, 

5 but for the failure of the consumer to report any unau6 thorized electronic fund transfer or account error— 

7 ‘‘(1) not later than 60 days after the date on 

8 which account information that includes the unau9 thorized electronic fund transfer or account error is 

10 provided to or accessed by the consumer under sub11 section (c); or 

12 ‘‘(2) in extenuating circumstances, such as ex13 tended travel or hospitalization, within a longer time 

14 that is reasonable under the circumstances. 

15 ‘‘(e) FEES.— 

16 ‘‘(1) FEES PROHIBITED.—Except as provided 

17 in paragraph (2), a financial institution may not 

18 charge in connection with a spending account— 

19 ‘‘(A) an annual fee; 

20 ‘‘(B) an overdraft fee, including a fee for 

21 shortage or nonsufficient funds, or any other 

22 fee for a transaction processed for amounts ex23 ceeding the account balance; 

24 ‘‘(C) a usage fee for use at the point of 

25 sale; 


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1 ‘‘(D) a fee for a declined transaction; 

2 ‘‘(E) a fee for the use of an electronic ter3 minal that is in the network of the issuer; 

4 ‘‘(F) any fee during periods of inactivity or 

5 dormancy, including a periodic fee charged 

6 after more than 6 months of inactivity; 

7 ‘‘(G) a fee for a balance inquiry or access 

8 to transaction information; 

9 ‘‘(H) a fee for an inquiry to customer serv10 ice; 

11 ‘‘(I) a finance charge or other fee imposed 

12 in connection with an extension of credit; 

13 ‘‘(J) an account closing fee or a fee to ob14 tain the remaining balance in the spending ac15 count; 

16 ‘‘(K) a fee for any activity not described in 

17 paragraph (2); 

18 ‘‘(L) any fee prohibited by applicable State 

19 law; or 

20 ‘‘(M) any fee of any kind that would cause 

21 the balance to become negative. 

22 ‘‘(2) FEES PERMITTED.—A financial institution 

23 may charge in connection with a spending account— 

24 ‘‘(A) a fee for a replacement card— 


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1 ‘‘(i) of not more than $5 for the first 

2 replacement card requested by a consumer 

3 during any 12-month period; and 

4 ‘‘(ii) that is in addition to the replace5 ment card described in clause (i); 

6 ‘‘(B) a fee for expedited delivery of a re7 placement card; 

8 ‘‘(C) a periodic fee, not more frequently 

9 than monthly, provided that no periodic fee may 

10 be assessed if there has been no deposit or 

11 transaction activity in the account during the 

12 preceding 3 months; 

13 ‘‘(D) a reload fee, or any other fee for add14 ing value to the spending account, if the finan15 cial institution provides a reasonable alternate 

16 method for adding value to the spending ac17 count without a fee; 

18 ‘‘(E) a fee for a transfer from the spending 

19 account to another account; 

20 ‘‘(F) a fee for bill payment; 

21 ‘‘(G) a fee for a withdrawal by the con22 sumer from an electronic terminal that is— 

23 ‘‘(i) located outside the United States; 

24 or 


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1 ‘‘(ii) not in the network of the finan2 cial institution, including a fee to cover the 

3 costs of any charge to the financial institu4 tion by the owner of the electronic terminal 

5 relating to the use of the electronic ter6 minal by the consumer; 

7 ‘‘(H) a fee for a purchase or a withdrawal 

8 in a foreign currency; and 

9 ‘‘(I) an activation, initiation, or enrollment 

10 fee. 

11 ‘‘(3) DISCLOSURE OF FEE INFORMATION.— 

12 ‘‘(A) DISCLOSURE REQUIRED.—Each fi13 nancial institution that offers a spending ac14 count shall provide to a consumer— 

15 ‘‘(i) together with any application, 

16 offer, or solicitation for a spending ac17 count— 

18 ‘‘(I) a table of any fees that may 

19 be charged in connection with the 

20 spending account that— 

21 ‘‘(aa) can be easily under22 stood by the consumer; 

23 ‘‘(bb) is clearly and con24 spicuously displayed to the con25 sumer before purchase; and 


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1 ‘‘(cc) includes, at a min2 imum, the amount and a descrip3 tion of each fee that may be 

4 charged by the financial institu5 tion under paragraph (2); and 

6 ‘‘(II) an estimate of the average 

7 total monthly cost to a typical con8 sumer for using the spending account, 

9 based on a profile of the typical con10 sumer established by the Bureau; 

11 ‘‘(ii) on the card or other means of ac12 cess, a toll-free telephone number and 

13 website at which the consumer may access 

14 a clear and conspicuous disclosure of the 

15 fees that may be charged in connection 

16 with the spending account; and 

17 ‘‘(iii) a wallet-sized summary of any 

18 fees that may be charged in connection 

19 with the spending account and a toll-free 

20 telephone number for customer service re21 lating to the spending account. 

22 ‘‘(B) RULES.—Not later than 1 year after 

23 the date of enactment of the Prepaid Card Con24 sumer Protection Act of 2013, the Bureau shall 

25 establish, by rule, the headings, content, and 


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1 format of the fee table, estimate, and wallet2 sized fee summary required under subpara3 graph (A). 

4 ‘‘(f) CREDIT FEATURES.— 

5 ‘‘(1) IN GENERAL.—No person may offer or 

6 provide a spending account that has a credit feature 

7 or that can be linked to a credit account that is 

8 automatically repaid from the spending account. 

9 ‘‘(2) EXCEPTIONS.—Nothing in this subsection 

10 prohibits— 

11 ‘‘(A) a consumer from making an elec12 tronic fund transfer from a spending account to 

13 pay a credit account or from setting up 

14 preauthorized electronic fund transfers to pay a 

15 credit account; or 

16 ‘‘(B) a financial institution from offsetting 

17 an inadvertent negative balance in a spending 

18 account against the next deposit to that ac19 count, provided that the consumer is not 

20 charged a fee or finance charge. 

21 ‘‘(g) CLOSURE OF DORMANT ACCOUNTS.—A finan22 cial institution or other person that provides, holds, or 

23 manages a spending account shall close the account and 

24 refund any remaining funds to the consumer— 


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1 ‘‘(1) if the account has been inactive for 12 

2 months, or such other period as the Bureau shall es3 tablish, by regulation; and 

4 ‘‘(2) upon request of the consumer to the finan5 cial institution or other person using an easily acces6 sible method of contact, that the account be closed.’’. 

7 (b) CONSUMER CHOICE.—Section 913 of the Elec8 tronic Fund Transfer Act (15 U.S.C. 1693k) is amend9 ed— 

10 (1) by striking ‘‘No person may—’’ and insert11 ing the following: 

12 ‘‘(a) IN GENERAL.—No person may—’’; 

13 (2) in paragraph (1), by striking ‘‘or’’ at the 

14 end; 

15 (3) in paragraph (2), by striking the period and 

16 inserting ‘‘; or’’; 

17 (4) by inserting after paragraph (2) the fol18 lowing: 

19 ‘‘(3) issue a card or other means of access for 

20 receipt of electronic fund transfers of wages or gov21 ernment benefits unless the recipient has first been 

22 offered the option of receiving the funds in a form 

23 selected by the recipient from among a set of options 

24 specified by the Bureau.’’; and 

25 (5) by adding at the end the following: 


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1 ‘‘(b) FORMS OF RECEIPT.—The options for forms of 

2 receipt of electronic fund transfers of wages or govern3 ment benefits under subsection (a)(3) specified by the Bu4 reau shall include at least 1 of the following forms: 

5 ‘‘(1) direct deposit into an account designated 

6 by the recipient; 

7 ‘‘(2) in cash; and 

8 ‘‘(3) by check.’’. 

9 (c) STUDY.—The Bureau shall establish an imple10 mentation plan and timeline for a prepaid card research 

11 study to be completed not later than 1 year after the date 

12 of enactment of this Act, to determine what, if any, dif13 ferences there are for both the short- and long-term eco14 nomic well being of consumers at different income levels 

15 who use spending accounts versus those who use tradi16 tional bank accounts for their primary means of making 

17 financial transactions. 

18 (d) TECHNICAL AND CONFORMING AMENDMENTS.— 

19 (1) WRITTEN PERIODIC STATEMENTS.—Section 

20 906(c) of the Electronic Fund Transfer Act (15 

21 U.S.C. 1693d(c)) is amended in the first sentence of 

22 the matter preceding paragraph (1), by striking ‘‘A 

23 financial’’ and inserting ‘‘Except as provided in sec24 tion 924(c), a financial’’. 


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1 (2) ERROR RESOLUTION.—Section 908(a) of 

2 the Electronic Fund Transfer Act (15 U.S.C. 

3 1693f(a)) is amended by striking ‘‘or notification 

4 pursuant to section 906(b)’’ and inserting ‘‘, notifi5 cation pursuant to section 906(b), or written or elec6 tronic documentation pursuant to section 924(c)’’. 

7 SEC. 4. SEVERABILITY. 

8 If any provision of this Act or an amendment made 

9 by this Act, or the application of the provision or amend10 ment to any person or circumstance, is held to be uncon11 stitutional, the remainder of this Act and the amendments 

12 made by this Act, and the application of the provisions 

13 of this Act and the amendments made by this Act to any 

14 other person or circumstance, shall not be affected. 

15 SEC. 5. EFFECTIVE DATE. 

16 This Act and the amendments made by this Act shall 

17 become effective 9 months after the date of enactment of 

18 this Act. 

Æ 


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