N.J. Senate Passes Measure Urging Fed To Regulate Prepaid Debit Cards

debitjpg-0b9a8b05b0ad98f2_mediumState lawmakers passed a resolution Thursday urging the Federal Reserve to push for regulations to bring more transparency to the prepaid debit card industry. The state Senate voted 36-0 in favor of the resolution, which calls on the Fed’s board of governors to regulate the industry in the same way it monitors traditional debit cards and gift cards, by requiring all issuers to clearly disclose any activation and reloading fees. While recent legislation signed by President Obama tightened rules on fees for¬†credit cards and gift cards, it did not address prepaid debit cards.

The Senate measure Thursday also recommends extending FDIC insurance and other federal protections to safeguard users from any unauthorized use of the cards.

The resolution was introduced in November by Senate President Richard Codey (D-Essex), who alleged that prepaid debit cards, which are readily available at major supermarkets and drugstores, often bury their fees in fine print.

He added the cards essentially tax “the young and poor” because they appeal largely to consumers with little or no credit who don’t qualify for traditional bank accounts. Star Ledger.

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