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FBN's Liz MacDonald on the CFPB targeting banks on prepaid debit card fees and unauthorized transactions.
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XL's parent prepaid debit cards are the new cash cow for banks but the government is starting to crack down -- some outrageous fees for the -- is here with -- bottom line.
Yeah our financial protection bureau is seeing you know everybody piling into the prepaid debit card market.
This comes after Dodd-Frank did a crackdown on regular debit cards and credit -- -- the banks and companies said you know what.
We're gonna pile into Dodge City where there's virtually no regulation.
I mean even convicted of their Kardashians and Suzie Orman and even Zynga is Tennyson's reporting for issuing prepaid debit cards you know why because of the -- that -- submarines.
Into the disclosure documents for these prepaid debit cards that basically students -- -- low dollar amounts on Irving go traveling below dollar amounts on to the prepaid debit card.
Look at this activation bigger pay fifteen bucks statement feet ten bucks monthly use say ten bucks let's get this a monthly not a new C even if you don't use your prepaid debit -- gonna get dating for six bucks a month.
And then if you call customer service -- gonna get -- Three bucks guys so -- say something -- CF PB the government is cracking down there reservists and watch out visit dangers -- terrain for banks and companies and most of the -- to -- -- and consumers to watch out.
The Fed was -- -- these these are so popular and an ever growing exponentially what 40% I think you're saying yeah that's right I mean that's up huge number for these things -- nobody wants to go to the Bank of America anymore I guess.
But yet there's going to be obvious new roles that they're gonna -- that -- try to pass on the peace correct.
Yeah that's right and what we're seeing is -- the rules.
Are basically more.
Focused on disclosure take a look at the rules are they're gonna have to disclose more of what these fees are even though they -- still submarine these fee disclosures.
And -- you know fund type that the size of -- pharmaceutical font type.
Also that you got to tell that prepaid card customer whether or not the FDIC actually ensures your card.
Lot of these things are not insured also liability limits of the cards are still -- some of these cards do not have any liability.
Liability limits are going to be digging for that to -- stolen some starts using -- have to pay out that you -- GMAC but the bottom line from our -- -- -- -- such a -- market -- quick point here let's remember the reason fees on debit cards are now so all my -- they're too -- if if congress capped the fees that retailers were paying to banks for credit card use in -- and then credit card companies and banks had to make up money somewhere -- you have and then they're gonna have a big they're -- popularity because of the bank fees that nobody wants to pet right so -- --
