Protecting consumers from credit card fraud is a massive undertaking and is something that’s not likely taken lightly by the U.S. Consumer Financial Protection Bureau.
While an Oct. 2016 regulation was put in place by the bureau to help protect consumers from any hidden terms or overdraft fees on prepaid cards, Republicans introduced a resolution to help reverse it. Advocacy group Allied Progress is suing the bureau for information on why Republicans are trying to wipe out the regulation all together.
The suit alleges that the decision for Republicans’ efforts to reverse this prepaid credit card protection is a political favor to credit card processor Total System Services Inc. (TSYS). This comes as a result of TSYS donating large sums of money to Republican Senator David Perdue of Georgia, who also serves as a member of the Banking Committee leading the resolution. If the 2016 regulation stays in place, TSYS’s Georgia-based Netspend division could potentially lose $80 million in profits due to overdraft fees.
Senator Perdue’s spokeswoman, Caroline Vanvick, shared a comment on this issue: “While Allied Progress continues to recklessly defend this overreaching government agency, Senator Perdue will continue working fearlessly to provide congressional oversight and hold them accountable to the American people.”
Under the Congressional Review Act, Congress has a limited time to appeal any regulations from the Obama administration. As such, Perdue rushed the Republican’s appeal to the Senate for a vote. In response, Allied Progress asked the bureau for all documents pertaining to Perdue and others made during the regulation’s drafting and were denied. As a result, the advocacy group field a lawsuit with the U.S. District Court for the District of Columbia to force the bureau’s hand.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More