This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Concerns About Prepaid Cards, Wal-Mart Dominate CFPB Town Hall

NEW YORK ( MainStreet) -- The Consumer Financial Protection Bureau hosted a town hall in New York City on Wednesday intended to elicit feedback on banks' overdraft policies, but the event's focus shifted when under-banked consumers took to the microphone to express discontent with their alternatives to traditional checking accounts, namely prepaid debit cards and check-cashing services.

The town hall, held at Hunter College, followed a roundtable discussion that day in which consumer advocates and bank representatives shared their thoughts on the CFPB'S inquiry into the overdraft practices being used by the nation's financial institutions.
The Consumer Financial Protection Bureau's Richard Cordray says the agency will look into concerns about merchants such as Wal-Mart taking part in financial services.

"I switched to a prepaid account [to escape overdraft fees]," said Stacey Thompson, a New York resident, in the open forum. "I ended up with a negative balance on that card."

Agency head Richard Cordray did not respond directly to Thompson's complaints about her prepaid account, instead acknowledging that problems with traditional checking accounts can lead consumers to seek out oftentimes inferior solutions.

"Different banks charge different fees," he added later, when another consumer bought up high checking account minimums. "We want it to be easy for consumer to navigate the financial marketplace."

Retail giant Wal-Mart, which both prepaid debit cards and check cashing services, also incurred some criticism with several customers specifically asking the CFPB Director to regulate the retailer.

Cordray explained that federal law does not give the CFPB jurisdiction over merchants, but that the bureau does have the authority to regulate the financial services offered by merchants. He said the CFPB was going to look into the concerns and would "act, if appropriate."

Cordray did not say whether the CFPB planned to regulate the prepaid debit card industry, which has long been criticized by consumer advocates who say the cards offer high fees and low incentives to the unbanked or those who aren't creditworthy.

He did say the bureau would provide guidance to federal and state government agencies in terms of dealing with prepaid providers, after another consumer complained he was required to load his child support payments onto a prepaid debit card that was subject to fees.

"Some of these products are better than others," Cordray said, acknowledging these cards were often used in unemployment benefit programs.

The CFPB did not provide details as to whether additional inquiries into the complaints expressed by consumers at the town hall would be announced formally. CFPB spokeswoman Jennifer Howard did say the bureau expects to have a report and an action plan based on the overdraft inquiry's results available by the end of the year.

>To submit a news tip, email:

Follow TheStreet on Twitter and become a fan on Facebook.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.57 -0.72%
FB $118.09 0.24%
GOOG $705.18 0.53%
TSLA $209.54 -0.94%
YHOO $36.82 -0.31%


Chart of I:DJI
DOW 17,590.58 -70.13 -0.40%
S&P 500 2,042.16 -8.47 -0.41%
NASDAQ 4,689.8610 -27.2330 -0.58%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs