NEW RULES AHEAD FOR PREPAID DEBIT CARDS.
The Osgood File. Sponsored in part by EarPlanes, the only earplugs that relieve the ear discomfort caused by pressure changes when you fly. Enjoy a comfortable flight with EarPlanes. This is Charles Osgood.
One part of the financial industry that's doing well right now - making money, rapidly expanding - is prepaid debit cards.
Consumers like them. They're easy to buy and easy to use. Buyers load money on to the cards, and then use them like regular plastic without being linked to a bank.
The prepaid industry is growing at the rate of 40 percent a year and is expected to continue at that rate.
The government regulators aren't happy. They say the prepaid guys aren't being regulated enough.
VO - Alexis Christoforous, CBS News Correspondent
"So far, they've escaped the regulations that have cracked down on traditional cards. But now, the Consumer Financial Protection Bureau is preparing new rules to protect the public." (:10)
That's our CBS News colleague Alexis Christoforous.
More from her after this...
((( BREAK )))
The big banks have been sort of jealous of the prepaid industry, partly because it's relatively regulation free - and partly because of fees they get to charge.
In fact, says Alexis Christoforous...
VO - Alexis Christoforous
"Part of what's attracting the new oversight is that major banks are now getting into the prepaid market. JPMorgan Chase is one of them. American Express also offers prepaid cards. So does Bank of America and others. These bigger players are bringing more scrutiny ... Alex Matjanec follows banking trends and says one of the biggest pitfalls for consumers is the lack of transparency." (:25)
SOT - Alex Matjanec with MyBankTracker.Com
"What you don't realize is once you've opened up the packaging after you've bought the product is there's fees for customer service, there's limitations on deposits, there's limitations on transactions." (:09)
So, here comes the Federal Government...
VO - Alexis Christoforous
"The Consumer Financial Protection Bureau is holding hearings and asking for public feedback. It expects to propose new rules by early next year." (:09)
The Osgood File. Transcripts, podcasts, and Mp3s of these programs can be found at theosgoodfile.com. I'm Charles Osgood on the CBS Radio Network. |
|
|
